Dynamic commitment games, efficiency and coordination

Rohan Dutta and Ryosuke Ishii

Journal of Economic Theory, 2016, vol. 163, issue C, 699-727

Abstract: An important form of commitment is the ability to restrict the set of future actions from which choices can be made. We study a simple two player dynamic game of complete information which incorporates this type of commitment. For a given initial game, the players engage in an endogenously determined number of commitment periods before choosing from the remaining actions. We show the existence of equilibria with pure strategies in the commitment periods. Partial characterization results for general games capture the tradeoff between commitment and deterrence. The equilibrium outcome is unique and efficient for two classes of games, including pure coordination and stag-hunt games.

Keywords: Dynamic commitment; Endogenous timing; Deterrence; Coordination games; Payoff dominance; Stag hunt (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:163:y:2016:i:c:p:699-727

DOI: 10.1016/j.jet.2016.03.004

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