Overcoming the coordination problem: Dynamic formation of networks

• 成果类型: Article
• 署名作者: Ochs, Jack; Park, In-Uck
• 署名单位: University of Bristol; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2009.11.006
• 发表日期: 2010
• 页码: 689-720
• 关键词: Strategic complementarity; Network externality; COORDINATION

摘要

We analyze a multi-period entry game among privately informed agents who differ with respect to the number of agents who must enter in order for their own entry to be profitable. In each period agents who have not yet joined decide whether to subscribe to a network. There exists a unique equilibrium that approximates any symmetric equilibrium arbitrarily closely as the discount factor approaches one. This resolves the coordination problem. Ex-post efficiency is necessarily achieved asymptotically as the population size grows large. These results do not hold if subscribers can reverse their decisions without cost. (C) 2009 Elsevier Inc. All rights reserved.