Preopening and equilibrium selection
AbstractIn this paper, the authors introduce a form of pre-play communication that we call "preopening". During the preopening, players announce their tentative actions to be played in the underlying game. Announcements are made using a posting system which is subject to stochastic failures. Posted actions are publicly observable and players payo¤s only depend on the opening outcome, i.e. the action pro…le that is posted at the end of the preopening phase. We show that when the posting failures hit players idiosyncratically all equilibria of the preopening game lead to the same opening outcome that corresponds to the most "sensible" pure Nash equilibrium of the underlying game. By contrast preopening does not operate an equilibrium selection when posting failure hits players simultaneously.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HEC Paris in its series Les Cahiers de Recherche with number 927.
Length: 51 pages
Date of creation: 16 Feb 2010
Date of revision:
Preopening; equilibrium selection; bargaining; cheap talk;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-28 (All new papers)
- NEP-CTA-2010-03-28 (Contract Theory & Applications)
- NEP-GTH-2010-03-28 (Game Theory)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Dutta, Prajit K., 2012. "Coordination need not be a problem," Games and Economic Behavior, Elsevier, vol. 76(2), pages 519-534.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sandra Dupouy).
If references are entirely missing, you can add them using this form.