Who Matters in Coordination Problems?

József Sákovics and Jakub Steiner

American Economic Review, 2012, vol. 102, issue 7, 3439-61

Abstract: Agents face a coordination problem akin to the adoption of a network technology. A principal announces investment subsidies that, at minimal cost, attain a given likelihood of successful coordination. Optimal subsidies target agents who impose high externalities on others and on whom others impose low externalities. Based on the analysis of the role of strategic uncertainty in coordination processes, we provide a methodology that can be used to find the optimal targets for a variety of interventions in a large class of coordination problems with heterogeneous agents. (JEL D81, D82, D83, O33)

JEL-codes: D81 D82 D83 O33 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/aer.102.7.3439
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Citations: View citations in EconPapers (87)

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Related works:
Working Paper: Who Matters in Coordination Problems? (2009)
Working Paper: Who Matters in Coordination Problems? (2008)
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