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Coordination in complex environments

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Abstract

Coordination is an important aspect of innovative contexts, where: the more innovative a course of action, the more uncertain its outcome. To study the interplay of coordination and informational “complexity”, I embed a beauty-contest game into a complex environment. I identify a new conformity phenomenon. This effect may push towards exploration of unknown alternatives, or constitute a status quo bias, depending on the network structure of the players’ interaction. In an application, I show that an organization with decentralized authority can implement profit maximization in a sufficiently complex environment.

Suggested Citation

  • Pietro Dall’ Ara, 2026. "Coordination in complex environments," CSEF Working Papers 779, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:779
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    References listed on IDEAS

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    1. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    2. Arjada Bardhi, 2024. "Attributes: Selective Learning and Influence," Econometrica, Econometric Society, vol. 92(2), pages 311-353, March.
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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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