Coordinating by Not Committing : Efficiency as the Unique Outcome
AbstractAn important form of commitment is the ability to restrict the set of future actions from which choices can be made. We study a simple dynamic game of complete information which incorporates this type of commitment. For a given initial game, the players engage in an endogenously determined number of commitment periods before choosing from the remaining actions. We show the existence of equilibria with pure strategies in the commitment periods. For important classes of games, including pure coordination games and the staghunt game the equilibrium outcome is unique and efficient. This is despite the synchronous move structure. Moreover, efficient coordination does not necessarily involve commitments on the equilibrium path: the option alone is sufficient.
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Bibliographic InfoPaper provided by Centre interuniversitaire de recherche en économie quantitative, CIREQ in its series Cahiers de recherche with number 10-2013.
Length: 38 pages
Date of creation: 2013
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Dynamic Commitment; Endogenous Timing; Coordination Games; Uniqueness; Payoff Dominance; Stag Hunt;
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
- NEP-GTH-2013-10-18 (Game Theory)
- NEP-HPE-2013-10-18 (History & Philosophy of Economics)
- NEP-MIC-2013-10-18 (Microeconomics)
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