Overcoming the Coordination Problem: Dynamic Formation of Networks

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Overcoming the Coordination Problem: Dynamic Formation of Networks

Author Info

Ochs, Jack
Park, In-Uck

Additional information is available for the following registered author(s):

In-Uck Park

Abstract

We analyze an entry game with multiple periods. In each period privately informed agents who have not yet joined decide whether to subscribe to a network. Subscribers derive benefits in future periods depending on the network size. We study the case where agents are sufficiently patient and show that there exists a unique symmetric equilibrium if the number of existing subscribers is common knowledge in each period. This resolves the coordination problem which is prevalent in markets with network externalities.

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Publisher Info
Paper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2004-18.

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Length: 20 p.
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:hit:hitcei:2004-18

Note: July, 2004
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Paper
- Jack Ochs & In-Uck Park, 2005. "Overcoming the Coordination Problem: Dynamic Formation of Networks," Levine's Bibliography 172782000000000046, UCLA Department of Economics. [Downloadable!]

Find related papers by JEL classification:
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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.:

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Other versions:
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Other versions:
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Other versions:
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repec:bep:thecon:v:4:y:2004:i:1:p:1103-1103 is not listed on IDEAS
Other versions:
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Other versions:
- Andreas Park & Lones Smith, 2006. "Caller Number Five: Timing Games that Morph from One Form to Another," Cowles Foundation Discussion Papers 1554, Cowles Foundation, Yale University. [Downloadable!]
Michael Ostrovsky & Michael Schwarz, 2003. "Adoption of Standards under Uncertainty," Harvard Institute of Economic Research Working Papers 2013, Harvard - Institute of Economic Research. [Downloadable!]
Other versions:
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Other versions:
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Full references

Cited by:
(explanations, 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.)

Steven A. Matthews, 2006. "Smooth Monotone Contribution Games," PIER Working Paper Archive 06-018, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
Steven A. Matthews, 2008. "Achievable Outcomes in Smooth Dynamic Contribution Games," PIER Working Paper Archive 08-028, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
Gennaioli, Nicola & Rossi, Stefano, 2008. "Judicial Discretion in Corporate Bankruptcy," CEI Working Paper Series 2008-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
Gennaioli, Nicola & Rossi, Stefano, 2008. "Optimal Resolutions of Financial Distress by Contract," CEI Working Paper Series 2008-6, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University. [Downloadable!]

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