A risk-neutral principal wishes to exact a payment from a risk-neutral agent whose wealth he does not know, but may verify thro ugh a costly auditing procedure. The authors characterize efficient s chemes for the principal when he is allowed to choose schedules for p reaudit and postaudit...

There are typically multiple equilibrium outcomes in the Crawford-Sobel (CS) model of strategic information transmission. This paper identifies a simple condition on equilibrium payoffs, called NITS (no incentive to separate), that selects among CS equilibria. Under a commonly used regularity...

We add a round of pre-play communication to a finite two-player game played by a population of players. Pre-play communication is cheap talk in the sense that it does not directly enter the payoffs. The paper characterizes the set of strategies that are stable with respect to a stochastic...

A dynamic monopolist produces at constant unit cost. Each period a new cohort of consumers enters the market. Each entering cohort is identical. Consumers within a cohort have different tastes. The paper shows that if players are sufficiently patient, any positive average profit less than the...