EconPapers    
Economics at your fingertips  
 

Efficient Dynamic Coordination with Individual Learning

Amil Dasgupta (), Jakub Steiner () and Colin Stewart ()

FMG Discussion Papers from Financial Markets Group

Abstract: We study how the presence of multiple participation opportunities coupled with individual learning about payoffs affects the ability of agents to coordinate efficiently in global coordination games. Two players face the option to invest irreversibly in a project in one of many rounds. The project succeeds if some underlying state variable è is positive and both players invest, possibly asynchronously. In each round they receive informative private signals about è, and asymptotically learn the true value of è. Players choose in each period whether to invest or to wait for more precise information about è. We show that with sufficiently many rounds, both players invest with arbitrarily high probability whenever investment is socially efficient, and delays in investment disappear when signals are precise. This result stands in sharp contrast to the usual static global game outcome in which players coordinate on the risk-dominant action. We provide a foundation for these results in terms of higher order beliefs.

Date: 2007-11
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.lse.ac.uk/fmg/workingPapers/discussionPapers/fmgdps/dp600.pdf (application/pdf)

Related works:
Working Paper: Efficient Dynamic Coordination with Individual Learning (2007) Downloads
Working Paper: Efficient dynamic coordination with individual learning (2007) Downloads
Working Paper: Efficient Dynamic Coordination with Individual Learning (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fmg:fmgdps:dp600

Access Statistics for this paper

More papers in FMG Discussion Papers from Financial Markets Group
Bibliographic data for series maintained by The FMG Administration ().

 
Page updated 2020-03-29
Handle: RePEc:fmg:fmgdps:dp600