Coordination, timing and common knowledge

Stephen Morris

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

There is tight link between coordination and common knowledge. The role of higher order beliefs in static incomplete information games has been widely studied. In particular, information frictions break down common knowledge. A large body of literature in economics examine dynamic coordination problems when there are timing frictions, in the sense that players do not all move at once. Timing frictions in dynamic coordination games play a role that is closely analogous to information frictions in static coordination games.This paper makes explicit the role of higher order beliefs about timing in dynamic coordination games with timing frictions. An event is said to be effectively known if a player knew the event when he last had an option to change his behavior. The lack of effective common knowledge of the time drives results of dynamic coordination games.

Original languageEnglish (US)
Pages (from-to)306-314
Number of pages9
JournalResearch in Economics
Volume68
Issue number4
DOIs
StatePublished - Jan 1 2014

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Keywords

  • Calvo frictions
  • Common knowledge
  • Coordination
  • Global game
  • Timing frictions

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