IDEAS home Printed from https://ideas.repec.org/p/nwu/cmsems/1014.html

Commitment and Observability in Games

Author

Listed:
  • Kyle Bagwell

Abstract

Models of commitment make two assumptions: there is a first mover, and his action is perfectly observed by the subsequent mover. The purpose of this paper is to disentangle these two assumptions, in order to see if a strategic benefit from commitment remains when the first-mover's choice is imperfectly observed. The basic finding is that the first-mover advantage is eliminated when there is even a slight amount of noise associated with the observation of the first-mover's selection.

Suggested Citation

  • Kyle Bagwell, 1992. "Commitment and Observability in Games," Discussion Papers 1014, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:1014
    as

    Download full text from publisher

    File URL: http://www.kellogg.northwestern.edu/research/math/papers/1014.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August.
    2. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, December.
    3. Drew Fudenberg & David M. Kreps & David K. Levine, 2008. "On the Robustness of Equilibrium Refinements," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 5, pages 67-93, World Scientific Publishing Co. Pte. Ltd..
    4. Barbara J. Spencer & James A. Brander, 1983. "International R & D Rivalry and Industrial Strategy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(4), pages 707-722.
    5. 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..
    6. Matthews, Steven A & Mirman, Leonard J, 1983. "Equilibrium Limit Pricing: The Effects of Private Information and Stochastic Demand," Econometrica, Econometric Society, vol. 51(4), pages 981-996, July.
    7. Kreps, David M & Wilson, Robert, 1982. "Sequential Equilibria," Econometrica, Econometric Society, vol. 50(4), pages 863-894, July.
    8. Chaim Fershtman & Kenneth L. Judd, 2006. "Equilibrium Incentives in Oligopoly: Corrigendum," American Economic Review, American Economic Association, vol. 96(4), pages 1367-1367, September.
    9. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107069978, January.
    2. Sexton, Richard J., 1991. "Game Theory: A Review With Applications To Vertical Control In Agricultural Markets," Working Papers 225865, University of California, Davis, Department of Agricultural and Resource Economics.
    3. Anderhub, Vital & Engelmann, Dirk & Guth, Werner, 2002. "An experimental study of the repeated trust game with incomplete information," Journal of Economic Behavior & Organization, Elsevier, vol. 48(2), pages 197-216, June.
    4. Melkonian, Tigran A., 1998. "Two essays on reputation effects in economic models," ISU General Staff Papers 1998010108000012873, Iowa State University, Department of Economics.
    5. Dekel, Eddie & Fudenberg, Drew & Levine, David K., 1999. "Payoff Information and Self-Confirming Equilibrium," Journal of Economic Theory, Elsevier, vol. 89(2), pages 165-185, December.
    6. Tigran Melkonyan & Surajeet Chakravarty, 2024. "Pre‐play promises, threats and commitments under partial credibility," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 308-328, January.
    7. David Ettinger & Philippe Jehiel, 2004. "Towards a Theory of Deception," Levine's Bibliography 122247000000000247, UCLA Department of Economics.
    8. Jehiel, Philippe, 2005. "Analogy-based expectation equilibrium," Journal of Economic Theory, Elsevier, vol. 123(2), pages 81-104, August.
    9. Etro, Federico, 2017. "Research in economics and game theory. A 70th anniversary," Research in Economics, Elsevier, vol. 71(1), pages 1-7.
    10. Vincent P. Crawford, 1985. "Dynamic Games and Dynamic Contract Theory," Journal of Conflict Resolution, Peace Science Society (International), vol. 29(2), pages 195-224, June.
    11. Pedro Dal Bo, 2002. "Three Essays on Repeated Games," Levine's Working Paper Archive 618897000000000038, David K. Levine.
    12. Newbery, David M. & Greve, Thomas, 2017. "The strategic robustness of oligopoly electricity market models," Energy Economics, Elsevier, vol. 68(C), pages 124-132.
    13. Varoufakis, Yanis, 2013. "Finite dynamic games with full rationality and inconsistently aligned beliefs: Can the N-person backward induction deliver a solution?," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 3(1), pages 63-70.
    14. Kanagaretnam, Kiridaran & Mestelman, Stuart & Khalid Nainar, S.M. & Shehata, Mohamed, 2012. "The impact of empowering investors on trust and trustworthiness," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 566-577.
    15. Cong Pan & DongJoon Lee & Kangsik Choi, 2020. "Firms’ strategic delegation with heterogeneous consumers," Journal of Economics, Springer, vol. 131(3), pages 199-221, December.
    16. Gonzalez-Maestre, Miguel & Lopez-Cunat, Javier, 2001. "Delegation and mergers in oligopoly," International Journal of Industrial Organization, Elsevier, vol. 19(8), pages 1263-1279, September.
    17. Julio González-Díaz & Federica Briata & Ignacio García-Jurado & Fioravante Patrone, 2012. "Essential collections for equilibrium concepts," International Journal of Game Theory, Springer;Game Theory Society, vol. 41(3), pages 517-552, August.
    18. Mahmoud Elamin, 2015. "Can Reputation Ensure Efficiency in the Structured Finance Market? Majority Voting: A Quantitative Investigation," Working Papers (Old Series) 1441, Federal Reserve Bank of Cleveland.
    19. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    20. Peha, Jon M. & Tewari, Saurabh, 1998. "The results of competition between integrated-services telecommunications carriers1," Information Economics and Policy, Elsevier, vol. 10(1), pages 127-155, March.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nwu:cmsems:1014. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fran Walker The email address of this maintainer does not seem to be valid anymore. Please ask Fran Walker to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/cmnwuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.