Impossibility of Collusion under Imperfect Monitoring with Flexible Production

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Reputation in Continuous‐Time Games (2011, methodology): “Sannikov and Skrzypacz (2007) and Fudenberg and Levine (2007) showed that, under Brownian signals, the log-likelihood ratio for a test against any particular deviation is normally distributed and that a deviation shifts the mean of this distribution by O( √ Δ).”
Reputation for Quality (2013, result): “In this sense, this result is weaker than the one in Sannikov and Skrzypacz (2007). This seems to be a matter of analytic tractability rather than economic substance: Consider the incentives in a shirk-work-shirk equilibrium with cutoffs x < x for high values of λ.”
Games with Imperfectly Observable Actions in Continuous Time (2007, background): “Sannikov and Skrzypacz (2005) show that this is also true in discrete-time games with frequent actions. continuation values must be extreme points).”