Advertisement

Review of Economic Design

, Volume 12, Issue 4, pp 293–313 | Cite as

Coordinating under incomplete information

  • Geir B. Asheim
  • Seung Han YooEmail author
Original Paper
  • 74 Downloads

Abstract

We show that, in a minimum effort game with incomplete information where player types are independently drawn, there is a largest and smallest Bayesian equilibrium, leading to the set of equilibrium payoffs (as evaluated at the interim stage) having a lattice structure. Furthermore, the range of equilibrium payoffs converges to those of the deterministic complete information version of the game, in the limit as the incomplete information vanishes. This entails that such incomplete information alone cannot explain the equilibrium selection suggested by experimental evidence.

Keywords

Minimum effort games Coordination games Incomplete information 

JEL Classification

C72 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Anderson SP, Goeree JK, Holt CA (2001) Minimum-effort coordination games: stochastic potential and logit equilibrium. Games Econ Behav 34: 177–199CrossRefGoogle Scholar
  2. Athey S (2001) Single crossing properties and the existence of pure strategy equilibria in games of incomplete information. Econometrica 69: 861–889CrossRefGoogle Scholar
  3. Bryant J (1983) A simple rational expectations Keynes-type model. Q J Econ 98: 525–528CrossRefGoogle Scholar
  4. Carlsson H, Ganslandt M (1998) Noisy equilibrium selection in coordination games. Econ Lett 60: 23–34CrossRefGoogle Scholar
  5. Carlsson H, van Damme E (1993) Global games and equilibrium selection. Econometrica 61: 989–1018CrossRefGoogle Scholar
  6. Frankel DM, Morris S, Pauzner A (2003) Equilibrium selection in global games with strategic complementarities. J Econ Theory 108: 1–44CrossRefGoogle Scholar
  7. Hvide HK (2001) Some comments on free-riding in Leontief partnerships. Econ Inq 39: 467–473CrossRefGoogle Scholar
  8. Legros P, Matthews SA (1993) Efficient and nearly-efficient partnerships. Rev Econ Stud 68: 599–611Google Scholar
  9. Milgrom P, Roberts J (1990) Rationalizability, learning, and equilibrium in games with strategic complementarities. Econometrica 58: 1255–1277CrossRefGoogle Scholar
  10. Morris S, Shin HS (2003) Global games: theory and applications. In: Dewatripont M, Hansen L, Turnovsky S (eds) Advances in economics and econometrics. Proceedings of the eighth World congress of the econometric society. Cambridge University Press, Cambridge, pp 56–114Google Scholar
  11. Topkis D (1979) Equilibrium points in nonzero-sum n-person submodular games. SIAM J Control Optim 17: 773–787CrossRefGoogle Scholar
  12. van Damme E (1991) Stability and perfection of Nash equilibria, 2nd edn. Springer, BerlinGoogle Scholar
  13. van Huyck JB, Battalio RC, Beil RO (1990) Tacit coordination games, strategic uncertainty, and coordination failure. Am Econ Rev 80: 234–248Google Scholar
  14. Vislie J (1994) Efficiency and equilibria in complementary teams. J Econ Behav Organ 23: 83–91CrossRefGoogle Scholar
  15. Vives X (1990) Nash equilibrium with strategic complementaries. J Math Econ 19: 305–321CrossRefGoogle Scholar
  16. Van Zandt T, Vives X (2007) Monotone equilibria in Bayesian games of strategic complementarities. J Econ Theory 134: 339–360CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of OsloOsloNorway
  2. 2.Department of EconomicsNational University of SingaporeSingaporeSingapore

Personalised recommendations