Coordination games and the option to wait

Andrew Wait () and Vladimir Smirnov

Economics Bulletin, 2005, vol. 3, issue 18, 1-4

Abstract: We take a coordination game and add the option to wait each player can opt to take an action in the standard game or they can decide to wait. If one player has taken a standard option, the waiting player can adopt their best response to this action. Interpreting the payoff in the final period (when there is no waiting possible) as a outside option or default, we show that a party's equilibrium payoff can be decreasing in their default. Further, a player''s role of leader or follower alternates as the number of waiting periods changes.

JEL-codes: C7 (search for similar items in EconPapers)
Date: 2005-03-29
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