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Coordination and uncertainty
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Jens, Dean. Coordination and uncertainty. Retrieved from https://doi.org/doi:10.7282/t3-fpca-4b52

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TitleCoordination and uncertainty
NameJens, Dean (author); SOPHER, BARRY (chair); McLean, Richard P (internal member); Carbonell-Nicolau, Oriol (internal member); Smith, John (outside member); Rutgers University; School of Graduate Studies
Date Created2018
Other Date2018-10 (degree)
SubjectEconomics, Game theory, Cooperative games (Mathematics)
Extent1 online resource (89 pages) : illustrations
DescriptionEven when economic agents have common interests, it can be difficult for them to coordinate on a commonly-accepted outcome.
I use both human subject experimentation and theory to shed light on how coordination takes place and where and why it might be prone to fail.
In a human subject experiment, I find that the coordination problem leads to inertia in groups --- once coordination has taken place, agents avoid trying to change the outcome --- and that, with exogenous uncertainty and differing risk preferences, the less risk-averse agent tends to defer to the more risk-averse agent, though in a state of potential loss, conflicting notions of risk-aversion can make coordination even more difficult.
In the second chapter, I construct a theoretical model of storable consumption goods, in which markets for goods with high income-elasticity are shown to be prone to ``runs'' in which consumers, in the face of otherwise adequate supply, store up for a shortage, thereby creating the very shortage they feared; it would be in everybody's interest to avoid this outcome, and yet avoiding it requires a great deal of mutual trust and coordination.
In the final chapter, an information-theoretic elaboration of this idea is presented, in which agents form robust but diffuse beliefs about what other agents believe other agents believe, and I note that cutting off the chain of reasoning at the second level favors ``risk-dominant'' equilibria over ``risk-dominated'' equilibria, but can also favor non-equilibrium outcomes in situations in which equilibrium strategies are only best-responses to fairly precise actions by other agents.
NotePh.D.
NoteIncludes bibliographical references
Noteby Dean Jens
Genretheses, ETD doctoral
Persistent URLhttps://doi.org/doi:10.7282/t3-fpca-4b52
Languageeng
CollectionSchool of Graduate Studies Electronic Theses and Dissertations
Organization NameRutgers, The State University of New Jersey
RightsThe author owns the copyright to this work.
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