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Diffusing Coordination Risk
2017
Social Science Research Network
This paper designs an optimal mechanism to correct coordination failure. A planner wants her agents to coordinate on a cooperative action. Agents gather noisy private information regarding the underlying fundamental and decide whether to cooperate or not. The global game literature uniquely identifies the chance of coordination failure when the coordination risk is concentrated at one point in time. We analyze the case when the planner diffuses the coordination risk over time. The planner
doi:10.2139/ssrn.2999636
fatcat:aisjarbka5arfo4zamewx6jrle