Gradual Adjustment and Equilibrium Uniqueness under Noisy Monitoring

Iijima, Ryota; Kasahara, Akitada

Gradual Adjustment and Equilibrium Uniqueness under Noisy Monitoring

Iijima, Ryota; Kasahara, Akitada

Institute of Social and Economic Research Discussion Papers, 2016, 965, 1-54

Number of Access:357（2025-09-04 08:30 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/56982

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Title	Gradual Adjustment and Equilibrium Uniqueness under Noisy Monitoring
Creator	CreatorName Iijima, Ryota
Creator	NRID 1000050811410 1000050811410 researchmap permalink csakjh_m_nczljhas csakjh_m_nczljhas Scopus Author ID 57210795941 57210795941 CreatorName Kasahara, Akitada
Subject	continuous-time game
	gradual adjustment
	equilibrium uniqueness
	coordination problem
	team production
	hold-up problem
	contest
Abstract	We study the implications of ﬂexible adjustment in strategic interactions using a class of ﬁnite-horizon models in continuous time. Players take costly actions to aﬀect the evolution of state variables that are commonly observable and perturbed by Brownian noise. The values of these state variables inﬂuence players’ terminal payoﬀs at the deadline, as well as their ﬂow payoﬀs. In contrast to the static case, the equilibrium is unique under a general class of terminal payoﬀ functions. Our characterization of the equilibrium builds on recent developments in the theory of backward stochastic diﬀerential equations (BSDEs). We use this tool to analyze applications, including team production, hold-up problems, and dynamic contests. In a team production model, the unique equilibrium selects an eﬃcient outcome when frictions vanish.
Publisher	The Institute of Social and Economic Research, Osaka University
Source Title	Institute of Social and Economic Research Discussion Papers
Volume (Issue)	965
Page	1-54
Date of Issued	2016-03
Language	English
Handle URL	https://hdl.handle.net/11094/56982
Relation.references	URI https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2016/DP0965.pdf
Access Rights	metadata only access
Category	ディスカッション／ワーキング・ペーパー DP/WP
Category	Institute of Social and Economic Research Discussion Papers

Resource Type	technical report
Local Type	DP/WP
DCMI Type	Text
DCTERMS.bibliographicCitation	Institute of Social and Economic Research Discussion Papers. 2016, 965, p. 1-54
DC.title	Gradual Adjustment and Equilibrium Uniqueness under Noisy Monitoring
DC.creator	Iijima, Ryota
DC.creator	Kasahara, Akitada
DC.publisher	The Institute of Social and Economic Research, Osaka University
DC.language' scheme='DCTERMS.RFC1766	English
DC.type' scheme='DCTERMS.DCMIType	Text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2016-03
DC.relation' scheme='DCTERMS.URI	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2016/DP0965.pdf
DC.subject	continuous-time game
	gradual adjustment
	equilibrium uniqueness
	coordination problem
	team production
	hold-up problem
	contest
DCTERMS.abstract	We study the implications of ﬂexible adjustment in strategic interactions using a class of ﬁnite-horizon models in continuous time. Players take costly actions to aﬀect the evolution of state variables that are commonly observable and perturbed by Brownian noise. The values of these state variables inﬂuence players’ terminal payoﬀs at the deadline, as well as their ﬂow payoﬀs. In contrast to the static case, the equilibrium is unique under a general class of terminal payoﬀ functions. Our characterization of the equilibrium builds on recent developments in the theory of backward stochastic diﬀerential equations (BSDEs). We use this tool to analyze applications, including team production, hold-up problems, and dynamic contests. In a team production model, the unique equilibrium selects an eﬃcient outcome when frictions vanish.
DC.format	56982
citation_title	Gradual Adjustment and Equilibrium Uniqueness under Noisy Monitoring
citation_author	Iijima, Ryota
citation_author	Kasahara, Akitada
citation_publisher	The Institute of Social and Economic Research, Osaka University
citation_language	English
citation_date	2016-03
citation_journal_title	Institute of Social and Economic Research Discussion Papers
citation_volume	965
citation_firstpage	1
citation_lastpage	54
citation_public_url	https://hdl.handle.net/11094/56982
citation_abstract_html_url	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2016/DP0965.pdf

Gradual Adjustment and Equilibrium Uniqueness under Noisy Monitoring

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