Signaling with private monitoring

Arbeitspapier

We study dynamic signaling when the informed party does not observe the signals generated by her actions. A forward-looking sender signals her type continuously over time to a myopic receiver who privately monitors her behavior; in turn, the receiver transmits his private inferences back through an imperfect public signal of his actions. Preferences are linear-quadratic and the information structure is Gaussian. We construct linear Markov equilibria using belief states up to the sender's second-order belief. Because of the private monitoring, this state is an explicit function of the sender's past play, leading to a novel separation effect through the second-order belief channel. Applications to models of organizations and reputation are examined.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Staff Report ; No. 994

Classification and Topics

• Classification: Wirtschaft ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Asymmetric and Private Information; Mechanism Design ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Subject: signaling ; private monitoring ; continuous time

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cisternas, Gonzalo ; Kolb, Aaron
• Event: Veröffentlichung
• (who): Federal Reserve Bank of New York
• (where): New York, NY
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/262044
• Last update: 10.03.2025, 11:42 AM CET