Larson, N.; (2003) Strategic delay and efficiency in global games. (ELSE Working Papers 74). ESRC Centre for Economic Learning and Social Evolution: London, UK.

Preview

PDF 14594.pdf Download (432kB)

Abstract

The global games literature shows that perturbing a complete information coordination game with correlated private information unleashes strategic uncertainty that can act, in domino fashion, to rule out all but a single dominance-solvable equilibrium. We show (in a two-player model) that when players also have the option to delay acting, the domino chain is broken, and multiple equilibria resurface. Furthermore, the combination of strategic uncertainty and the option to delay can have a salubrious effect — inefficiency in all equilibria is lower than without delay and vanishes as the delay cost goes to zero.

Download activity - last month

Export as JSONXMLCSV

Download activity - last 12 months

Export as JSONCSVXML

Downloads by country - last 12 months

Export as XMLCSVJSON

Archive Staff Only

View Item