Please use this identifier to cite or link to this item: http://hdl.handle.net/10125/70555

Information Design in Coordination Games with Risk Dominant Equilibrium Selection

File Size Format  
HARC-2021 paper 175.pdf 273.54 kB Adobe PDF View/Open

Item Summary

Title:Information Design in Coordination Games with Risk Dominant Equilibrium Selection
Authors:Michael Ebert
Joseph Kadane
Dirk Simons
Jack Stecher
Keywords:Bayesian Persuasion
Information Design
Oordination
Neyman-Pearson Lemma
Risk Dominance
Date Issued:18 Aug 2020
Abstract:We study the design of public information structures that maximize the probability of selecting a Pareto dominant equilibrium in symmetric (2 x 2) coordination games. Because the need to coordinate exposes players to strategic risk, we treat the designer as able to implement an equilibrium only if the players believe it is also risk dominant. The designer's task is therefore to pool the set of states in which the desired equilibrium is risk dominant with the largest possible set in which it is not, while keeping the desired equilibrium risk dominant in expectation. We provide a simple characterization of the optimal signal structure which holds under general conditions. We extend the analysis to related problems, and show that our intuition is robust, suggesting that our approach provides a promising way forward for a large class of problems in constrained information design.
URI:http://hdl.handle.net/10125/70555
Appears in Collections: 17 Theory


Please email libraryada-l@lists.hawaii.edu if you need this content in ADA-compliant format.

Items in ScholarSpace are protected by copyright, with all rights reserved, unless otherwise indicated.