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Community repeated interaction and strategic delegation

Author

Listed:
  • Ottorino Chillemi

    (University of Padua)

  • Benedetto Gui

    (Istituto Universitario Sophia)

  • Lorenzo Rocco

    (University of Padua)

Abstract

A large population of fixed-type agents engage in exclusive pairwise relationships in a decentralized setting. At the onset, agents randomly meet in pairs under private information of individual time-invariant types. They play a voluntary contribution game. At the end of the first period, members of each pair either stay together in the second period, in which case reported information is common knowledge, or quit and meet randomly new partners, under private information of individual types. Thus, either long-term or short-term relationships may arise. We show that there are values of the parameters such that information extracted in the first period has a positive effect on social efficiency. We give an interpretation of our results in terms of advantageous delegation of decisions to uninformed agents. Finally, we consider several extensions of the model in which our results still hold.

Suggested Citation

  • Ottorino Chillemi & Benedetto Gui & Lorenzo Rocco, 2017. "Community repeated interaction and strategic delegation," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(3), pages 737-760, August.
    • Handle: RePEc:spr:jogath:v:46:y:2017:i:3:d:10.1007_s00182-016-0553-7
    DOI: 10.1007/s00182-016-0553-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Dynamic agency; Endogenous selection; Local information; Delegation;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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