We study coordination failures in many simultaneously occurring coordination problems. Players encounter one of the problems but have the outside option of migrating to one of the remaining ones. Drawing on the global games approach, we show that such a mobile game has a unique equilibrium that allows us to examine comparative statics. The endogeneity of the outside option value and of the migration activity leads to non-monotonicity of welfare with respect to mobility friction; high mobility may hurt players. We apply these "general equilibrium'' findings to the problem of the labor market during industrialization as described by Matsuyama [Increasing returns, industrialization and indeterminacy of equilibrium, Quart. J. Econ. 106 (1991) 617-650].
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Volume (Year): 139 (2008) Issue (Month): 1 (March) Pages: 25-46 Download reference. The following formats are available: HTML
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Jakub Steiner, 2005.
"Coordination Cycles,"
CERGE-EI Working Papers
wp274, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
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George J. Mailath & Larry Samuelson & Avner Shaked, 1997.
"Endogenous Interactions,"
CARESS Working Papres
endo-one, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
[Downloadable!]
Carlsson, Hans & van Damme, Eric, 1993.
"Global Games and Equilibrium Selection,"
Econometrica,
Econometric Society, vol. 61(5), pages 989-1018, September.
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