Who Matters in Coordination Problems?
- (pp. 3439-61)
AbstractAgents face a coordination problem akin to the adoption of a network technology. A principal announces investment subsidies that, at minimal cost, attain a given likelihood of successful coordination. Optimal subsidies target agents who impose high externalities on others and on whom others impose low externalities. Based on the analysis of the role of strategic uncertainty in coordination processes, we provide a methodology that can be used to find the optimal targets for a variety of interventions in a large class of coordination problems with heterogeneous agents. (JEL D81, D82, D83, O33)
Citation2012. "Who Matters in Coordination Problems?" American Economic Review, 102(7): 3439-61. DOI: 10.1257/aer.102.7.3439
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- O33 Technological Change: Choices and Consequences; Diffusion Processes