Dynamic coordination with payoff and informational externalities

• 成果类型: Article
• 署名作者: Zhou, Beixi
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2024.01.006
• 发表日期: 2024
• 页码: 141-166
• 关键词: Dynamic coordination; Observational learning; Real option; Reversible actions

摘要

I study a two -player continuous -time dynamic coordination game with observational learning. Each player has one opportunity to make a reversible investment with an uncertain return that is realized only when both players invest. Each player learns about the potential return by observing a private signal and the actions of the other player. In equilibrium, players' roles as leader and follower are endogenously determined. Information aggregates in a single burst initially, then gradually through delayed investment and disinvestment over time. More precise signals lead to faster coordination conditional on initial disagreement, but might also increase the probability of initial disagreement.