We study a repeated principal–agent model with subjective evaluations. We construct simple bonus-or-terminate incentive schemes. In these schemes, the principal evaluates the agent every T periods. The principal pays a bonus and asks the agent to work for T more periods if the evaluation is...

We experimentally assess the predictive power of two equilibrium selection principles for binary N-player entry games with strategic complementarities. In static entry games, we test the theory of global games which posits that players play games of complete information as if they were playing a...

Renegotiation and conflict resolution are studied in relational contracting under subjective evaluation. Renegotiation has three effects. First, it makes the incentive pay scheme low powered: the maximum variation of compensation across performance levels is compressed and the contract is less...

In an individual experimentation problem a decision maker learns only from his own experience. It is well known that an optimal experimentation strategy for such problems sometimes results in the best alternative being dropped altogether, which is the so-called “Rothschild effect.” Many...

We prove a folk theorem for stochastic games with private, almost-perfect monitoring and observable states when the limit set of feasible and individually rational payoffs is independent of the state. This asymptotic state independence holds, for example, for irreducible stochastic games. Our...

We study a communication game of common interest in which the sender observes one of infinite types and sends one of finite messages which is interpreted by the receiver. In equilibrium there is no full separation but types are clustered into contiguous cells. We give a full characterization of...

We consider the voluntarily separable repeated Prisonerʼs Dilemma model in which players randomly meet and form pairs to repeatedly play Prisonerʼs Dilemma only by mutual agreement. While the literature has dealt with the case of no information flow across partnerships, we consider the case in...

This paper constructs the equilibrium for a specific code that can be seen as a “universal grammar” in a class of common interest Sender–Receiver games where players communicate through a noisy channel. We propose a Senderʼs signaling strategy which does not depend on either the game...

We analyze a toy class of two-player repeated games with two-sided incomplete information. In our model, two players are facing independent decision problems and each of them holds information that is potentially valuable to the other player. We study to what extent, and how, information can be...

We study a preemption game in which two potential competitors come into play at some random secret times. The presence of a competitor is revealed to her opponent only when the former moves, which terminates the game. We show that all perfect Bayesian equilibria give rise to the same...