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Public announcements and coordination in dynamic global games: Experimental evidence

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  • Shurchkov, Olga

Abstract

This paper uses a two-stage variant of a dynamic global game often used to model speculative attacks to study experimentally whether and when the introduction of an announcement by an uninformed outsider facilitates coordination. Consistent with previous findings, when multiplicity is theoretically possible, the announcement serves as a coordination device and significantly affects the probability of a successful speculative attack. On the other hand, importantly, when the model predicts a unique equilibrium in the same environment, I find that the announcement has no effect on behavior. Beliefs about others’ actions appear to play a crucial role in the differential effect of the announcement on attacking behavior under different information conditions.

Suggested Citation

  • Shurchkov, Olga, 2016. "Public announcements and coordination in dynamic global games: Experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 61(C), pages 20-30.
  • Handle: RePEc:eee:soceco:v:61:y:2016:i:c:p:20-30
    DOI: 10.1016/j.socec.2016.01.004
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    References listed on IDEAS

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    Cited by:

    1. Andreas Blume & Peter H. Kriss & Roberto A. Weber, 2017. "Pre-play communication with forgone costly messages: experimental evidence on forward induction," Experimental Economics, Springer;Economic Science Association, vol. 20(2), pages 368-395, June.

    More about this item

    Keywords

    Coordination; Dynamic global games; Equilibrium selection; Beliefs;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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