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Reputation with one-sided monitoring: Ignorance as a commitment device

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  • Monte, Daniel

Abstract

I analyze a repeated two-sided incomplete information game with two long-run players in which only one of them can observe the history of the game. Using standard reputation arguments, I prove that if players are sufficiently patient, then the player with no monitoring device can secure a payoff arbitrarily close to her Stackelberg payoff; providing a novel form of equilibrium selection.

Suggested Citation

  • Monte, Daniel, 2016. "Reputation with one-sided monitoring: Ignorance as a commitment device," Economics Letters, Elsevier, vol. 144(C), pages 18-21.
    • Handle: RePEc:eee:ecolet:v:144:y:2016:i:c:p:18-21
    DOI: 10.1016/j.econlet.2016.04.017
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    References listed on IDEAS

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    1. Milgrom, Paul & Roberts, John, 1982. "Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis," Econometrica, Econometric Society, vol. 50(2), pages 443-459, March.
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    4. Cripps, Martin W. & Dekel, Eddie & Pesendorfer, Wolfgang, 2005. "Reputation with equal discounting in repeated games with strictly conflicting interests," Journal of Economic Theory, Elsevier, vol. 121(2), pages 259-272, April.
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    6. Drew Fudenberg & David K. Levine, 2008. "Maintaining a Reputation when Strategies are Imperfectly Observed," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 8, pages 143-161, World Scientific Publishing Co. Pte. Ltd..
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    More about this item

    Keywords

    Reputation; One-sided monitoring; Commitment;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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