Tacit Coordination via Asynchronous Play

Speaker
Yevgeny Tsodikovich
Date
07/05/2019 - 13:00 - 11:30Add To Calendar 2019-05-07 11:30:00 2019-05-07 13:00:00 Tacit Coordination via Asynchronous Play We study infinitely repeated games in which players are limited to subsets of their action space in each stage - a generalization of asynchronous games (where these subsets are singletons). We show that such rigidity in the actions facilitates the creation and sustainment of coordination and identify the stage games that are prone to asynchronous behavior. Consequently, publicly announcing prices, which is considered legal and even encouraged in many countries, can lead to tacit collusion and non-competitive results. Moreover, we indicate which of the players should be the asynchronous ones and identify a wide family of games in which tacit collusion via asynchronous play will arise. We use the worst case rational payoff, the effective minimax, to evaluate the collusive result and compare the outcome of different durations of inactivity. Economics building (504), faculty lounge on the first floor אוניברסיטת בר-אילן - Department of Economics Economics.Dept@mail.biu.ac.il Asia/Jerusalem public
Place
Economics building (504), faculty lounge on the first floor
Affiliation
Tel Aviv University
Abstract
We study infinitely repeated games in which players are limited to subsets of their action space in each stage - a generalization of asynchronous games (where these subsets are singletons). We show that such rigidity in the actions facilitates the creation and sustainment of coordination and identify the stage games that are prone to asynchronous behavior. Consequently, publicly announcing prices, which is considered legal and even encouraged in many countries, can lead to tacit collusion and non-competitive results. Moreover, we indicate which of the players should be the asynchronous ones and identify a wide family of games in which tacit collusion via asynchronous play will arise. We use the worst case rational payoff, the effective minimax, to evaluate the collusive result and compare the outcome of different durations of inactivity.

Last Updated Date : 04/12/2022