IDEAS home Printed from https://ideas.repec.org/a/eee/gamebe/v144y2024icp141-166.html
   My bibliography  Save this article

Dynamic coordination with payoff and informational externalities

Author

Listed:
  • Zhou, Beixi

Abstract

I study a two-player continuous-time dynamic coordination game with observational learning. Each player has one opportunity to make a reversible investment with an uncertain return that is realized only when both players invest. Each player learns about the potential return by observing a private signal and the actions of the other player. In equilibrium, players' roles as leader and follower are endogenously determined. Information aggregates in a single burst initially, then gradually through delayed investment and disinvestment over time. More precise signals lead to faster coordination conditional on initial disagreement, but might also increase the probability of initial disagreement.

Suggested Citation

  • Zhou, Beixi, 2024. "Dynamic coordination with payoff and informational externalities," Games and Economic Behavior, Elsevier, vol. 144(C), pages 141-166.
    • Handle: RePEc:eee:gamebe:v:144:y:2024:i:c:p:141-166
    DOI: 10.1016/j.geb.2024.01.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S089982562400006X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.geb.2024.01.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Dynamic coordination; Observational learning; Real option; Reversible actions;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:144:y:2024:i:c:p:141-166. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622836 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.