scholarly journals Building Routines: Learning, Cooperation, and the Dynamics of Incomplete Relational Contracts

2010 ◽  
Vol 100 (1) ◽  
pp. 448-465 ◽  
Author(s):  
Sylvain Chassang
Keyword(s):  
Incomplete Information ◽  
Common Knowledge ◽  
Repeated Game ◽  
Relational Contracts ◽  
Conflicting Interests ◽  
Path Dependent

This paper studies how agents with conflicting interests learn to cooperate when the details of cooperation are not common knowledge. It considers a repeated game in which one player has incomplete information about when and how her partner can provide benefits. Initially, monitoring is imperfect and cooperation requires inefficient punishment. As the players' common history grows, the uninformed player can learn to monitor her partner's actions, which allows players to establish more efficient cooperative routines. Because revealing information is costly, it may be optimal not to reveal all the existing information, and efficient equilibria can be path-dependent. (JEL C73, D82, D83, D86)

scholarly journals Civil strife and economic and social policies

2006 ◽  
Vol 1 (1) ◽  
Author(s):  
Joseph E. Stiglitz
Keyword(s):  
Conflict Management ◽  
Incomplete Information ◽  
Social Policies ◽  
Civil Strife ◽  
The Public ◽  
Labor Strikes ◽  
Game Theoretic ◽  
Path Dependent ◽  
The One ◽  
Conflict Mitigation

The article compares civil strife in the public arena to labor strikes in the private arena. Both are predicated on incomplete information (both sides believing they can "win," when one - and possibly both - must "lose"). Reasons for conflict, especially in Africa, include the rent-based nature of the economies, the "nothing-much-to-lose" position of many of its participants, the "one-shot" game-theoretic nature of many of its conflicts, and the lack of "voice" of most of its people. The article then draws out six implications for those interested in conflict management and conflict mitigation and comments, for example, on path-dependent irreversibilities of initial policydecisions.

scholarly journals Agency Equilibrium

Games ◽  
2019 ◽  
Vol 10 (1) ◽  
pp. 14 ◽  
Author(s):  
Jonathan Newton
Keyword(s):  
Standard Model ◽  
Incomplete Information ◽  
Common Knowledge ◽  
Multiple Agents ◽  
The Standard Model ◽  
Form Part

Agency may be exercised by different entities (e.g., individuals, firms, households). A given individual can form part of multiple agents (e.g., he may belong to a firm and a household). The set of agents that act in a given situation might not be common knowledge. We adapt the standard model of incomplete information to model such situations.

scholarly journals Convergence method, properties and computational complexity for Lyapunov games

2011 ◽  
Vol 21 (2) ◽  
pp. 349-361 ◽  
Author(s):  
Julio Clempner ◽  
Alexander Poznyak
Keyword(s):  
Computational Complexity ◽  
Equilibrium Point ◽  
Repeated Games ◽  
Common Knowledge ◽  
Repeated Game ◽  
Graph Structure ◽  
Natural Evolution ◽  
Nash Equilibrium Point ◽  
Convergence Method ◽  
Differentiable Vector

Convergence method, properties and computational complexity for Lyapunov gamesWe introduce the concept of a Lyapunov game as a subclass of strictly dominated games and potential games. The advantage of this approach is that every ergodic system (repeated game) can be represented by a Lyapunov-like function. A direct acyclic graph is associated with a game. The graph structure represents the dependencies existing between the strategy profiles. By definition, a Lyapunov-like function monotonically decreases and converges to a single Lyapunov equilibrium point identified by the sink of the game graph. It is important to note that in previous works this convergence has not been guaranteed even if the Nash equilibrium point exists. The best reply dynamics result in a natural implementation of the behavior of a Lyapunov-like function. Therefore, a Lyapunov game has also the benefit that it is common knowledge of the players that only best replies are chosen. By the natural evolution of a Lyapunov-like function, no matter what, a strategy played once is not played again. As a construction example, we show that, for repeated games with bounded nonnegative cost functions within the class of differentiable vector functions whose derivatives satisfy the Lipschitz condition, a complex vector-function can be built, where each component is a function of the corresponding cost value and satisfies the condition of the Lyapunov-like function. The resulting vector Lyapunov-like function is a monotonic function which can only decrease over time. Then, a repeated game can be represented by a one-shot game. The functionality of the suggested method is successfully demonstrated by a simulated experiment.

Knowledge, Awareness and Probabilistic Beliefs

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Tomasz Sadzik
Keyword(s):  
Game Theory ◽  
Incomplete Information ◽  
Common Knowledge ◽  
Strategic Interaction ◽  
Bayesian Game ◽  
Bayesian Equilibrium ◽  
Common Prior ◽  
Probabilistic Beliefs ◽  
Common Knowledge Of Rationality ◽  
Axiom Systems

Abstract Bayesian game theory investigates strategic interaction of players with full awareness but incomplete information about their environment. We extend the analysis to players with incomplete awareness, who might not be able to reason about all contingencies in the first place. We develop three logical systems for knowledge, probabilistic beliefs and awareness, and characterize their axiom systems. Bayesian equilibrium is extended to games with incomplete awareness and we show that it is consistent with common prior and speculative trade, when common knowledge of rationality is violated.

scholarly journals Legislative coalitions with incomplete information

2017 ◽  
Vol 114 (11) ◽  
pp. 2876-2880 ◽  
Author(s):  
Tiberiu Dragu ◽  
Michael Laver
Keyword(s):  
Incomplete Information ◽  
Private Information ◽  
Common Knowledge ◽  
Public Information ◽  
Theoretical Framework ◽  
The Other ◽  
Policy Preferences ◽  
Electoral Rules ◽  
Parliamentary Democracies ◽  
The Common

In most parliamentary democracies, proportional representation electoral rules mean that no single party controls a majority of seats in the legislature. This in turn means that the formation of majority legislative coalitions in such settings is of critical political importance. Conventional approaches to modeling the formation of such legislative coalitions typically make the “common knowledge” assumption that the preferences of all politicians are public information. In this paper, we develop a theoretical framework to investigate which legislative coalitions form when politicians’ policy preferences are private information, not known with certainty by the other politicians with whom they are negotiating over what policies to implement. The model we develop has distinctive implications. It suggests that legislative coalitions should typically be either of the center left or the center right. In other words our model, distinctively, predicts only center-left or center-right policy coalitions, not coalitions comprising the median party plus parties both to its left and to its right.

Conservation Agreements: Relational Contracts with Endogenous Monitoring

2020 ◽  
Author(s):  
Heidi Gjertsen ◽  
Theodore Groves ◽  
David A Miller ◽  
Eduard Niesten ◽  
Dale Squires ◽  
...  
Keyword(s):  
Local Community ◽  
Repeated Game ◽  
Nongovernmental Organization ◽  
Game Model ◽  
Relational Contracts ◽  
Short Term ◽  
The World ◽  
Costly Monitoring ◽  
And Performance ◽  
Self Enforcement

Abstract This article examines the structure and performance of conservation agreements, which are relational contracts used across the world to protect natural resources. Key elements of these agreements are (1) they are ongoing arrangements between a local community and an outside party, typically a nongovernmental organization (NGO); (2) they feature payments in exchange for conservation services; (3) the prospects for success depend on the NGO engaging in costly monitoring to detect whether the community is foregoing short-term gains to protect the resource; (4) lacking a strong external enforcement system, they rely on self-enforcement; and (5) the parties have the opportunity to renegotiate at any time. A repeated-game model is developed and utilized to organize an evaluation of real conservation agreements, using three case studies as representative examples. (JEL D74, D86, Q20, Q56)

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