Advanced Search
MyIDEAS: Login to save this paper or follow this series

The effect of options on coordination

Contents:

Author Info

  • GUIMARAES, Bernardo
  • ARAUJO, Luis

Abstract

This paper studies how constraints on the timing of actions affect equilibrium in intertemporalcoordination problems. The model exhibits a unique symmetric equilibrium in cut-o¤ strategies.The risk-dominant action of the underlying one-shot game is selected when the option to delayeffort is commensurate with the option to wait longer for others' actions. The possibility of waitinglonger for the actions of others enhances coordination, but the option of delaying one s actionscan induce severe coordination failures: if agents are very patient, they might get arbitrarily lowexpected payoffs even in cases where coordination would yield arbitrarily large returns.

Download Info

If 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.
File URL: http://bibliotecadigital.fgv.br/dspace/bitstream/10438/11016/1/TD%20324%20-%20Bernardo%20Guimar%c3%a3es%20-%20Luis%20Araujo.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil) in its series Textos para discussão with number 324.

as in new window
Length:
Date of creation: 02 Aug 2013
Date of revision:
Handle: RePEc:fgv:eesptd:324

Contact details of provider:
Postal: Rua Itapeva, 474, 13o andar, CEP 01332-000, São Paulo - SP
Phone: 55 (011) 3799-3350
Fax: 55 (011) 3799-3357
Email:
Web page: http://eesp.fgv.br
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Eugen Kovac & Jakub Steiner, 2008. "Reversibility in Dynamic Coordination Problems," CERGE-EI Working Papers, The Center for Economic Research and Graduate Education - Economic Institute, Prague wp374, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  2. Gorton, Gary B., 2010. "Slapped by the Invisible Hand: The Panic of 2007," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199734153, October.
  3. Frankel, David M. & Morris, Stephen & Pauzner, Ady, 2003. "Equilibrium selection in global games with strategic complementarities," Journal of Economic Theory, Elsevier, Elsevier, vol. 108(1), pages 1-44, January.
  4. Carlsson, H. & Damme, E.E.C. van, 1993. "Global games and equilibrium selection," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-154416, Tilburg University.
  5. Dasgupta, Amil, 2007. "Coordination and delay in global games," Journal of Economic Theory, Elsevier, Elsevier, vol. 134(1), pages 195-225, May.
  6. Jakub Steiner, 2006. "Coordination Cycles," ESE Discussion Papers, Edinburgh School of Economics, University of Edinburgh 162, Edinburgh School of Economics, University of Edinburgh.
  7. Murphy, Kevin M. & Shleifer, Andrei & Vishny, Robert W., 1989. "Industrialization and the Big Push," Scholarly Articles 3606235, Harvard University Department of Economics.
  8. Guimaraes, Bernardo, 2006. "Dynamics of currency crises with asset market frictions," Journal of International Economics, Elsevier, Elsevier, vol. 68(1), pages 141-158, January.
  9. Frankel, David M. & Pauzner, Ady, 2000. "Resolving Indeterminacy in Dynamic Settings: The Role of Shocks," Staff General Research Papers, Iowa State University, Department of Economics 11924, Iowa State University, Department of Economics.
  10. Zoltan Pozsar & Tobias Adrian & Adam Ashcraft & Hayley Boesky, 2010. "Shadow banking," Staff Reports, Federal Reserve Bank of New York 458, Federal Reserve Bank of New York.
  11. Ted O'Donoghue & Matthew Rabin, 1999. "Incentives For Procrastinators," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(3), pages 769-816, August.
  12. Araujo, Luis & Guimarães, Bernardo, 2011. "Equilibrium selection in a fundamental model of money," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8200, C.E.P.R. Discussion Papers.
  13. George-Marios Angeletos & Christian Hellwig & Alessandro Pavan, 2007. "Dynamic Global Games of Regime Change: Learning, Multiplicity, and the Timing of Attacks," Econometrica, Econometric Society, Econometric Society, vol. 75(3), pages 711-756, 05.
  14. Steven N. Durlauf, 1991. "Nonergodic Economic Growth," NBER Working Papers 3719, National Bureau of Economic Research, Inc.
  15. Ciccone, Antonio, 2002. "Input Chains and Industrialization," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 69(3), pages 565-87, July.
  16. Zhiguo He & Wei Xiong, 2012. "Dynamic Debt Runs," Review of Financial Studies, Society for Financial Studies, Society for Financial Studies, vol. 25(6), pages 1799-1843.
  17. GUIMARAES, Bernardo & ARAUJO, Luis, 2013. "Coordination in the use of money," Textos para discussão, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil) 325, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
  18. Nicholas Bloom, 2007. "The Impact of Uncertainty Shocks," NBER Working Papers 13385, National Bureau of Economic Research, Inc.
  19. Sylvain Chassang, 2010. "Fear of Miscoordination and the Robustness of Cooperation in Dynamic Global Games With Exit," Econometrica, Econometric Society, Econometric Society, vol. 78(3), pages 973-1006, 05.
  20. Frankel, David M. & Burdzy, Krzysztof & Pauzner, Ady, 2001. "Fast Equilibrium Selection by Rational Players Living in a Changing World," Staff General Research Papers, Iowa State University, Department of Economics 11923, Iowa State University, Department of Economics.
  21. Kiyotaki, Nobuhiro, 1988. "Multiple Expectational Equilibria under Monopolistic Competition," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 103(4), pages 695-713, November.
  22. Charles I. Jones, 2011. "Intermediate Goods and Weak Links in the Theory of Economic Development," American Economic Journal: Macroeconomics, American Economic Association, American Economic Association, vol. 3(2), pages 1-28, April.
  23. Mathevet, Laurent & Steiner, Jakub, 2013. "Tractable dynamic global games and applications," Journal of Economic Theory, Elsevier, Elsevier, vol. 148(6), pages 2583-2619.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:fgv:eesptd:324. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Núcleo de Computação da EPGE).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.