Subsidization to induce tipping

Aric Shafran and Jason J. Lepore

Economics Letters, 2011, vol. 110, issue 1, 32-35

Abstract: In binary choice games with strategic complementarities and multiple equilibria, we characterize the minimal cost subsidy program to guarantee agents play the Pareto optimal equilibrium. These subsidies are generally asymmetric, whether or not agents are identical and even if private values are anonymous.

Keywords: Coordination; failure; Strategic; complementarities; Tipping (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:110:y:2011:i:1:p:32-35

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