Overcoming the coordination problem: Dynamic formation of networks

A-Tier
Journal: Journal of Economic Theory
Year: 2010
Volume: 145
Issue: 2
Pages: 689-720

Authors (2)

Ochs, Jack (not in RePEc) Park, In-Uck (University of Bristol)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We analyze a multi-period entry game among privately informed agents who differ with respect to the number of agents who must enter in order for their own entry to be profitable. In each period agents who have not yet joined decide whether to subscribe to a network. There exists a unique equilibrium that approximates any symmetric equilibrium arbitrarily closely as the discount factor approaches one. This resolves the coordination problem. Ex-post efficiency is necessarily achieved asymptotically as the population size grows large. These results do not hold if subscribers can reverse their decisions without cost.

Technical Details

RePEc Handle
repec:eee:jetheo:v:145:y:2010:i:2:p:689-720
Journal Field
Theory
Author Count
2
Added to Database
2026-01-28