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Perfect and Imperfect Real-Time Monitoring in a Minimum-Effort Game

  • Cary Deck

    ()

    (University of Arkansas and Economic Science Institute)

  • Nikos Nikiforakis

    ()

    (Department of Economics, University of Melbourne)

This paper presents the results from a minimum-effort game in which individuals can observe the choices of others in real time. We find that under perfect monitoring almost all groups coordinate at the payoff-dominant equilibrium. However, when individuals can only observe the actions of their immediate neighbors in a circle network, monitoring improves neither coordination nor efficiency relative to a baseline treatment without real-time monitoring. We argue that the inefficiency of imperfect monitoring is due to information uncertainty, that is, uncertainty about the interpretation of the information available regarding the actions of others.

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File URL: http://www.chapman.edu/ESI/wp/Deck_Real-TimeMonitoringMinimum-EffortGame.pdf
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Paper provided by Chapman University, Economic Science Institute in its series Working Papers with number 10-18.

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Length: 24 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:chu:wpaper:10-18
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  1. Daniel Friedman & Ryan Oprea, 2012. "A Continuous Dilemma," American Economic Review, American Economic Association, vol. 102(1), pages 337-63, February.
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  18. repec:hou:wpaper:2004-01 is not listed on IDEAS
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