Title

Coordination, Timing and Common Knowledge

Author(s)

Stephen Morris Stephen Morris (Princeton University)

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.

Creation Date

2013-09

Section URL ID

Paper Number

061-2014

URL

http://detc.princeton.edu/wp-content/uploads/2016/11/wp061_2014_Morris_Coordination-Timing-and-Common-Knowledge.pdf

File Function

Jel

C71. D82, D83

Keyword(s)

Suppress

false

Series

10