Building routines: Learning, cooperation, and the dynamics of incomplete relational contracts

Sylvain Chassang

    Research output: Contribution to journalArticlepeer-review

    Abstract

    This paper studies how agents with conflicting interests learn to cooperate when the details of cooperation are not common knowledge. It considers a repeated game in which one player has incomplete information about when and how her partner can provide benefits. Initially, monitoring is imperfect and cooperation requires inefficient punishment. As the players' common history grows, the uninformed player can learn to monitor her partner's actions, which allows players to establish more efficient cooperative routines. Because revealing information is costly, it may be optimal not to reveal all the existing information, and effcient equilibria can be path-dependent.

    Original languageEnglish (US)
    Pages (from-to)448-465
    Number of pages18
    JournalAmerican Economic Review
    Volume100
    Issue number1
    DOIs
    StatePublished - Mar 2010

    ASJC Scopus subject areas

    • Economics and Econometrics

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