Dynamic Deception

TitleDynamic Deception
Publication TypeJournal Article
Year of Publication2013
AuthorsAnderson A., Smith L.
JournalAmerican Economic Review
Date PublishedDec
Type of ArticleArticle
ISBN Number0002-8282
Accession NumberWOS:000328054200006
Keywordscontinuous-time, demand, GAMES, information, private, reputation

We characterize the unique equilibrium of a competitive continuous time game between a resource-constrained informed player and a sequence of rivals who partially observe his action intensity. Our game adds noisy monitoring and impatient players to Aumann and Maschler (1966), and also subsumes insider trading models. The intensity bound induces a novel strategic bias and serial mean reversion by uninformed players. We compute the duration of the informed player's informational edge. The uninformed player's value of information is concave if the intensity bound is large enough. Costly obfuscation by the informed player optimally rises in the public deception.