AbstractWe study a coordination problem where agents act sequentially. Agents are embedded in anobservation network that allows them to observe the actions of their neighbors. We find thatcoordination failures do not occur if there exists a sufficiently large clique. Its existence isnecessary and sufficient when agents are homogenous and sufficient when agents differ and theirtypes are private. Other structures guarantee coordination when agents decide in some particularsequences or for particular payoffs. The coordination problem embodied in our game is appliedto the problems of revolts and bank runs.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2012-12.
Length: 50 pages
Date of creation: Apr 2012
Date of revision:
Publication status: Published by Ivie
Social networks; coordination failures; multiple equilibria; revolts; bank runs.;
Other versions of this item:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-15 (All new papers)
- NEP-CTA-2012-05-15 (Contract Theory & Applications)
- NEP-GTH-2012-05-15 (Game Theory)
- NEP-MIC-2012-05-15 (Microeconomics)
- NEP-NET-2012-05-15 (Network Economics)
- NEP-SOC-2012-05-15 (Social Norms & Social Capital)
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