Rustichini, A.
Radner, R
We study repeated partnerships with imperfect monitoring and risk neutrality. The interval between the partners' decisions, the delay, is given but can be arbitrarily small. Each stage-game's output is Gaussian, with mean and variance depending on the partners' actions, making the sequence of outcomes a discretization of a diffusion. A sharing rule is efficient if there is an equilibrium of the corresponding game whose outcomes are Pareto efficient; it is stable if these equilibria approach a limit as;he delay approaches zero. We characterize partnerships for which there exist stable, efficient sharing rules, and describe the corresponding equilibria. (C) 1996 Academic Press, Inc.
Bibliographic reference |
Rustichini, A. ; Radner, R. The design and performance of sharing rules for a partnership in continuous time. In: Games and Economic Behavior, Vol. 12, no. 2, p. 245-265 (1996) |
Permanent URL |
http://hdl.handle.net/2078.1/47539 |