Building Routines: Learning, Cooperation, and the Dynamics of Incomplete Relational Contracts

Posted: 25 May 2018

See all articles by Sylvain Chassang

Sylvain Chassang

New York University (NYU) - Department of Economics

Date Written: March 1, 2010

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 efficient equilibria can be path-dependent.

JEL Classification: C73, D82, D83, D86

Suggested Citation

Chassang, Sylvain, Building Routines: Learning, Cooperation, and the Dynamics of Incomplete Relational Contracts (March 1, 2010). American Economic Review, Vol. 100, No. 1, 2010. Available at SSRN: https://ssrn.com/abstract=3179197

Sylvain Chassang (Contact Author)

New York University (NYU) - Department of Economics ( email )

19 West 4th Street
New York, NY 10012
United States

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