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Inspection games

In: Handbook of Game Theory with Economic Applications

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Author Info

  • Avenhaus, Rudolf
  • Von Stengel, Bernhard
  • Zamir, Shmuel

Abstract

Starting with the analysis of arms control and disarmament problems in the sixties, inspection games have evolved into a special area of game theory with specific theoretical aspects, and, equally important, practical applications in various fields of human activity where inspection is mandatory. In this contribution, a survey of applications is given first. These include arms control and disarmament, theoretical approaches to auditing and accounting, for example in insurance, and problems of environmental surveillance. Then, the general problem of inspection is presented in a game-theoretic framework that extends a statistical hypothesis testing problem. This defines a game since the data can be strategically manipulated by an inspectee who wants to conceal illegal actions. Using this framework, two models are solved, which are practically significant and technically interesting: material accountancy and data verification. A second important aspect of inspection games is the fact that inspection resources are limited and have to be used strategically. This is demonstrated in the context of sequential inspection games, where many mathematically challenging models have been studied. Finally, the important concept of leadership, where the inspector becomes a leader by announcing and committing himself to his strategy, is shown to apply naturally to inspection games.

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This chapter was published in:

  • R.J. Aumann & S. Hart (ed.), 2002. "Handbook of Game Theory with Economic Applications," Handbook of Game Theory with Economic Applications, Elsevier, edition 1, volume 3, number 3, 00.
    This item is provided by Elsevier in its series Handbook of Game Theory with Economic Applications with number 3-51.

    Handle: RePEc:eee:gamchp:3-51

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    Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description

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    Cited by:
    1. Daniele Nosenzo & Theo Offerman & Martin Sefton & Ailko van der Veen, 2012. "Discretionary Sanctions and Reward in the Repeated Inspection Game," Discussion Papers 2012-10, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    2. Martin Dufwenberg & J. Todd Swarthout, 2009. "Play to Learn? An Experiment," Experimental Economics Center Working Paper Series 2009-08, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    3. Antoni Cunyat & Randolph Sloof, 2009. "Employee types and endofenous organizational design: An experiment," Working Papers. Serie AD 2009-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    4. Yim, Andrew, 2009. "Efficient Committed Budget for Implementing Target Audit Probability for Many Inspectees," MPRA Paper 27856, University Library of Munich, Germany.
    5. MAULEON, Ana & VANNETELBOSCH, Vincent, 1999. "Coalitional negotiation," CORE Discussion Papers 1999020, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. Fandel, Günter & Trockel, Jan, 2011. "Optimal lot sizing in a non-cooperative material manager-controller game," International Journal of Production Economics, Elsevier, vol. 133(1), pages 256-261, September.
    7. Sasaki, Yasuo, 2014. "Optimal choices of fare collection systems for public transportations: Barrier versus barrier-free," Transportation Research Part B: Methodological, Elsevier, vol. 60(C), pages 107-114.
    8. Buechel, Berno & Emrich, Eike & Pohlkamp, Stefanie, 2013. "Nobody's innocent: the role of customers in the doping dilemma," MPRA Paper 44627, University Library of Munich, Germany.
    9. von Stengel, Bernhard & Zamir, Shmuel, 2010. "Leadership games with convex strategy sets," Games and Economic Behavior, Elsevier, vol. 69(2), pages 446-457, July.
    10. Zoroa, N. & Fernández-Sáez, M.J. & Zoroa, P., 2012. "Patrolling a perimeter," European Journal of Operational Research, Elsevier, vol. 222(3), pages 571-582.
    11. Aleksander Berentsen & Esther Brügger & Simon Lörtscher, . "On Cheating and Whistle-Blowing," IEW - Working Papers 153, Institute for Empirical Research in Economics - University of Zurich.
    12. Meijerink, Gerdien W., 2007. "If services aren't delivered, people won't pay: the role of measurement problems and monitoring in Payments for Environmental Services," 106th Seminar, October 25-27, 2007, Montpellier, France 7948, European Association of Agricultural Economists.
    13. Berentsen, Aleksander & Bruegger, Esther & Loertscher, Simon, 2008. "On cheating, doping and whistleblowing," European Journal of Political Economy, Elsevier, vol. 24(2), pages 415-436, June.

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