Equilibria in a Dynamic Global Game: The role of cohort effects
We introduce strategic waiting in a global game setting. Players can wait in order to take a better informed decision. We allow for cohort effects, which naturally arise if the network externality in a given period depends on the mass of players who are actively using the technology at this point in time. Formally, cohort effects lead to intra-period network effects being greater than inter-period network effects. In the absence of cohort effects, our model has a unique rationalizable equilibrium. Cohort effects, however, can lead to multiple equilibria within the class of symmetric switching strategies.
|Date of creation:||04 Jun 2003|
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