Bagwell's paradox, forward induction and outside option games

José Luis Ferreira

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: In Stackelberg-like games there is an advantage of moving first. However, Bagwell (1995) shows that this result may not hold if the second player can make only imperfect observations. We explore whether this paradox also holds when the advantage comes from forward induction arguments in the class of outside option games.

Keywords: Bagwell's; paradox; Commitment; Observability; Noise; Outside; option; games; Forward; induction (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
Date: 2010-12
New Economics Papers: this item is included in nep-gth and nep-hpe
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we1035

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