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On the cooperative and competitive aspects of strategic monitoring

Author

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  • Daniel G. Arce

    (The University of Texas at Dallas, USA)

Abstract

Strategic monitoring occurs in myriad situations such as principal–agent relationships, law enforcement and treaty verification. Such situations are generally known as enforcement or inspection games, with the focus largely being on the (counterintuitive) properties of their associated mixed strategy Nash equilibrium. This article instead characterizes the cooperative resolution of the mixed motives of the players involved. It does so through an illustrative decomposition of the enforcement/inspection game into its cooperative and competitive constituent parts. The results are interpreted within an efficiency wage context and the distribution of the saved monitoring costs that cooperation engenders.

Suggested Citation

  • Daniel G. Arce, 2018. "On the cooperative and competitive aspects of strategic monitoring," Rationality and Society, , vol. 30(3), pages 377-390, August.
    • Handle: RePEc:sae:ratsoc:v:30:y:2018:i:3:p:377-390
    DOI: 10.1177/1043463118774785
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    References listed on IDEAS

    as
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