In this paper, I study the dynamic delegation problem in a principal–agent model wherein an agent privately observes a persistently evolving state, and the principal commits to actions based on the agent's reported state. There are no transfers. While the agent has state-independent...

A revision game of experimentation is examined in which players search for an unknown threshold. Players encounter individual random opportunities to revise actions. Lower actions save flow cost, but the player whose action falls below the threshold suffers a costly breakdown and exits the game....

We consider a dynamic model featuring two firms that test a regulator’s enforcement propensity through their misconduct and a regulator that disciplines them to build a reputation for strict enforcement. We show that when the regulator has full discretion over the enforcement criterion, peer...