Dynamic Coordination with Private Learning

Amil Dasgupta, Jakub Steiner, Colin Stewart

Research output: Contribution to journalArticlepeer-review

Abstract

We study coordination in dynamic global games with private learning. Players choose whether and when to invest irreversibly in a project whose success depends on its quality and the timing of investment. Players gradually learn about project quality. We identify conditions on temporal incentives under which, in sufficiently long games, players coordinate on investing whenever doing so is not dominated. Roughly speaking, this outcome occurs whenever playersʼ payoffs are sufficiently tolerant of non-simultaneous coordination. We also identify conditions under which players coordinate on the risk-dominant action. We provide foundations for these results in terms of higher order beliefs.
Original languageEnglish
Pages (from-to)83–101
JournalGames and Economic Behavior
Volume74
Issue number1
DOIs
Publication statusPublished - Jan 2012

Keywords

  • Coordination
  • Global games
  • Learning
  • Common knowledge
  • Delay
  • D82
  • D83
  • C72

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