Announcement wars as an equilibrium selection device

Nicola Acocella (), Giovanni Di Bartolomeo (), Andrew Hughes Hallett and Paolo Giovanni Piacquadio

No 2009077, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper attempts to give a rationale to public announcements, so often observed in the real world, and to formalize the idea that they can be used as a form of equilibrium selection device when multiple equilibria arise. It also shows how announcements solve the problems of coordination failures as predicted by the empirical literature based on experimental studies

Keywords: multiple Nash equilibria; coordination failure; cheap talk; policy games; announcement equilibrium (search for similar items in EconPapers)
JEL-codes: C72 C78 D61 (search for similar items in EconPapers)
Date: 2009-12-01
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2009077

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