AbstractWe study a coordination problem where agents act sequentially. Agents are embedded in an observation network that allows them to observe the actions of their neighbors. We find that coordination failures do not occur if there exists a sufficiently large clique. Its existence is necessary and sufficient when agents are homogenous and sufficient when agents differ and their types are private. Other structures guarantee coordination when agents decide in some particular sequences or for particular payoffs. The coordination problem embodied in our game is applied to the problems of revolts and bank runs.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 30463.
Date of creation: 23 Apr 2011
Date of revision:
social networks; coordination failures; multiple equilibria; revolts; bank runs;
Other versions of this item:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-07 (All new papers)
- NEP-CTA-2011-05-07 (Contract Theory & Applications)
- NEP-GTH-2011-05-07 (Game Theory)
- NEP-NET-2011-05-07 (Network Economics)
- NEP-SOC-2011-05-07 (Social Norms & Social Capital)
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