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Perfect and imperfect real-time monitoring in a minimum-effort game

Published online by Cambridge University Press:  14 March 2025

Cary Deck  and
Nikos Nikiforakis
Cary Deck*
Affiliation:
Department of Economics, Walton College of Business, University of Arkansas, Fayetteville, USA
Nikos Nikiforakis*
Affiliation:
Department of Economics, University of Melbourne, Melbourne, Australia
*
cdeck@walton.uark.edu
n.nikiforakis@unimelb.edu.au
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Abstract

This paper presents the results from a minimum-effort game in which individuals can observe the choices of others in real time. We find that under perfect monitoring almost all groups coordinate at the payoff-dominant equilibrium. However, when individuals can only observe the actions of their immediate neighbors in a circle network, monitoring improves neither coordination nor efficiency relative to a baseline treatment without real-time monitoring. We argue that the inefficacy of imperfect monitoring is due to information uncertainty, that is, uncertainty about the correct interpretation of a neighbor's actions. Information uncertainty prevents individuals from inferring safely that their group has managed to coordinate from the available information.

Keywords

Information uncertaintyReal-time monitoringImperfect monitoringCircle networkCheap talk

JEL classification

C92: Laboratory, Group Behavior C72: Noncooperative Games D82: Asymmetric and Private Information • Mechanism Design
Type
Original Paper
Information
Experimental Economics , Volume 15 , Issue 1 , March 2012 , pp. 71 - 88
Copyright
Copyright © 2011 Economic Science Association

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