ISSN:
1432-0479
Keywords:
Coordination
;
delay
;
strategic complementarities
;
dynamic games
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Summary Gains from coordination provide incentives for delay. In this paper, the extent of delay is studied in a dynamic,N-person, coordination game. There is no social gain from delay, so an equilibrium with delay is always inefficient. For fixedN, there is no coordination failure when the period length is short: all equilibrium outcomes converge to the Pareto efficient outcome as the period length converges to zero. On the other hand, holding period length fixed, there exist equilibria in which delay is proportional toN, for arbitrarily large values ofN. In addition, it can be shown that the possibility of delay depends on the “timing” of strategic complementarities. However, under certain conditions, delay is shown to be a robust phenomenon, in the sense that “well-behaved” equilibria exhibit infinite delay forN sufficiently large.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF01213641
