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4. Reputation in continuous-time games

Type:	Artigo Científico
Title:	Reputation in continuous-time games
Author:	Faingold, Eduardo Sannikov, Yuliy
Publication Date:	2011
Abstract:	We study reputation dynamics in continuous-time games in which a large player (e.g., government) faces a population of small players (e.g., households) and the large player's actions are imperfectly observable. The major part of our analysis examines the case in which public signals about the large player's actions are distorted by a Brownian motion and the large player is either a normal type, who plays strategically, or a behavioral type, who is committed to playing a stationary strategy. We obtain a clean characterization of sequential equilibria using ordinary differential equations and identify general conditions for the sequential equilibrium to be unique and Markovian in the small players' posterior belief. We find that a rich equilibrium dynamics arises when the small players assign positive prior probability to the behavioral type. By contrast, when it is common knowledge that the large player is the normal type, every public equilibrium of the continuous-time game is payoff-equivalent to one in which a static Nash equilibrium is played after every history. Finally, we examine variations of the model with Poisson signals and multiple behavioral types.
Keywords (english terms):	Reputation Repeated games Incomplete information Continuous time
Language:	Inglês
CNPq Area:	Ciências Sociais Aplicadas
URI:	https://www.jstor.org/stable/41237770
Copyright:	O INSPER E ESTE REPOSITÓRIO NÃO DETÊM OS DIREITOS DE USO E REPRODUÇÃO DOS CONTEÚDOS AQUI REGISTRADOS. É RESPONSABILIDADE DOS USUÁRIOS INDIVIDUAIS VERIFICAR OS USOS PERMITIDOS NA FONTE ORIGINAL, RESPEITANDO-SE OS DIREITOS DE AUTOR OU EDITOR
Notes:	Texto completo
Appears in Collections:	Coleção de Artigos Científicos

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