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SSRN Electronic Journal
Article . 2010 . Peer-reviewed
Data sources: Crossref
EconStor
Research . 2010
Data sources: EconStor
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Preopening and Equilibrium Selection

Authors: Riccardo Calcagno; Stefano Lovo;

Preopening and Equilibrium Selection

Abstract

We introduce a form of pre-play communication that we call "preopening" for standard normal form, two player games. During the preopening players announce their strategy using a communication system which is subject to stochastic failures. Players payoffs depend on the action profile posted on the system at the end of the preopening. We show that the preopening allows players to coordinate on one pure strategy equilibrium of the game when the system failures hit the two players idiosyncratically. In such a case the preopening always leads the players to select the Pareto superior Nash equilibrium when this exhibits the maximum attainable payoff for each player. Moreover, in the class of two action games of conflicting interests the preopening leads to select the equilibrium preferred by the player with (i) the strongest preference over different equilibria, (ii) the lower cost of miscoordination or (iii) the less efficient posting system.

Country
Netherlands
Keywords

equilibrium selection, [SHS.GESTION.FIN] Humanities and Social Sciences/Business administration/domain_shs.gestion.fin, ddc:330, bargaining, Preopening, Nash-Gleichgewicht, Preopening; equilibrium selection; bargaining; cheap talk, C72, C73, Nichtkooperatives Spiel, G1, preopening, cheap talk, Verhandlungstheorie, Preopening, equilibrium selection, bargaining, cheap talk, C78, jel: jel:C72, jel: jel:C73, jel: jel:C78, jel: jel:G10, jel: jel:G1

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    popularity
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    influence
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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
6
Average
Average
Average
bronze