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Brownian Signals: Information Quality, Quantity and Timing in Repeated Games

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  • Osório, António (António Miguel)

Abstract

This paper examines different Brownian information structures for varying time intervals. We focus on the non-limit case and on the trade-offs between information quantity and quality to efficiently establish incentives. These two dimensions of information tend to complement each other when signals quality is sufficiently high. Otherwise, information quantity tends to replace information quality. Any conclusion depends crucially on the rate at which information quality improves or decays with respect to the discounting incentives. JEL: C73, D82, D86. KEYWORDS: Repeated Games, Frequent Monitoring, Information Quantity, Information Quality.

Suggested Citation

  • Osório, António (António Miguel), 2015. "Brownian Signals: Information Quality, Quantity and Timing in Repeated Games," Working Papers 2072/260962, Universitat Rovira i Virgili, Department of Economics.
    • Handle: RePEc:urv:wpaper:2072/260962
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    References listed on IDEAS

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    1. Fudenberg, Drew & Ishii, Yuhta & Kominers, Scott Duke, 2014. "Delayed-response strategies in repeated games with observation lags," Journal of Economic Theory, Elsevier, vol. 150(C), pages 487-514.
    2. Yuliy Sannikov & Andrzej Skrzypacz, 2007. "Impossibility of Collusion under Imperfect Monitoring with Flexible Production," American Economic Review, American Economic Association, vol. 97(5), pages 1794-1823, December.
    3. Yuliy Sannikov, 2007. "Games with Imperfectly Observable Actions in Continuous Time," Econometrica, Econometric Society, vol. 75(5), pages 1285-1329, September.
    4. Eduardo Faingold & Yuliy Sannikov, 2011. "Reputation in Continuous‐Time Games," Econometrica, Econometric Society, vol. 79(3), pages 773-876, May.
    5. Fudenberg, Drew & Olszewski, Wojciech, 2011. "Repeated games with asynchronous monitoring of an imperfect signal," Games and Economic Behavior, Elsevier, vol. 72(1), pages 86-99, May.
    6. Drew Fudenberg & David K. Levine, 2008. "Continuous time limits of repeated games with imperfect public monitoring," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 17, pages 369-388, World Scientific Publishing Co. Pte. Ltd..
    7. Osório António M., 2012. "A Folk Theorem for Games when Frequent Monitoring Decreases Noise," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-27, April.
    8. Michihiro Kandori, 1992. "The Use of Information in Repeated Games with Imperfect Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(3), pages 581-593.
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    More about this item

    Keywords

    Jocs; Teoria de; Teoria de la informació (Economia); Contractes -- Aspectes econòmics; 33 - Economia;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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