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Incomplete written contracts: undescribable states of nature

Anderlini, Luca and Felli, Leonardo (1993) Incomplete written contracts: undescribable states of nature. . Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.

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This paper extends the classic two-armed bandit problem to a many-agent setting in which N players each face the same experimentation problem. The difference with the single-agent problem is that agents can now learn from the experiments of others. Thus, experiementation produces a public good and a free-rider problem in experimentation naturally arises. More interestingly, future experimentation by others encourages current individual experimentation. The paper provides an analysis of the set of Markov equilibria in terms of the free-rider effect and the encouragement effect.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 1993 Luca Anderlini, Leonardo Felli
Divisions: Financial Markets Group
Subjects: H Social Sciences > HD Industries. Land use. Labor
K Law > K Law (General)
Date Deposited: 28 Feb 2008
Last Modified: 09 Feb 2021 00:23

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