Measuring Strategic Uncertainty in Coordination Games

Lecture on the first SFB/TR 15 meeting, Gummersbach, July, 18 - 20, 2004This paper explores predictability of behavior in coordination games with multiple equilibria. In a laboratory experiment we measure subjects' certainty equivalents for three coordination games and one lottery. Attitudes towards strategic uncertainty in coordination games are related to risk aversion, experience seeking, gender and age. From the distribution of certainty equivalents among participating students we estimate probabilities for successful coordination in a wide range of coordination games. For many games success of coordination is predictable with a reasonable error rate. The best response of a risk neutral player is close to the global-game solution. Comparing choices in coordination games with revealed risk aversion, we estimate subjective probabilities for successful coordination. In games with a low coordination requirement, most subjects underestimate the probability of success. In games with a high coordination requirement, most subjects overestimate this probability. Data indicate that subjects have probabilistic beliefs about success or failure of coordination rather than beliefs about individual behavior of other players

Coordination cycles

Players repeatedly face a coordination problem in a dynamic global game. By choosing a risky action (invest) instead of waiting, players risk instantaneous losses as well as a loss of payoffs from future stages, in which they cannot participate if they go bankrupt. Thus, the total strategic risk associated with investment in a particular stage depends on the expected continuation payoff. High continuation payoff makes investment today more risky and therefore harder to coordinate on, which decreases today’s payoff. Thus, expectation of successful coordination tomorrow undermines successful coordination today, which leads to fluctuations of equilibrium behavior even if the underlying economic fundamentals happen to be the same across the rounds. The dynamic game inherits the equilibrium uniqueness of the underlying static global game

Images of coordination : how implementing organizations perceive coordination arrangements

A crucial challenge for the coordination of horizontal policy programs those designed to tackle crosscutting issues is how to motivate government organizations to contribute to such programs. Hence, it is crucial to study how practitioners in implementing organizations view and appreciate the coordination of such programs. Assisted by Q-methodology, this inductive study reveals three significantly different "images" centralframe setting, networking via boundary spanners, and coordination beyond window dressing Most surprisingly, different images show up among respondents within the same organizations and horizontal programs. The authors find that the images reflect elements of the literature: the resistance to hierarchical central control, the need for local differentiation and increased incentives, and a collaboration-oriented culture. Most importantly, practitioners of implementing organizations perceive top-dawn mechanisms as ineffective to achieve coordination and ask for adaptive arrangements, involvement, and deliberative processes when designing coordination arrangements and during the collaboration

Strong Coordination over Noisy Channels: Is Separation Sufficient?

We study the problem of strong coordination of actions of two agents $X$ and $Y$ that communicate over a noisy communication channel such that the actions follow a given joint probability distribution. We propose two novel schemes for this noisy strong coordination problem, and derive inner bounds for the underlying strong coordination capacity region. The first scheme is a joint coordination-channel coding scheme that utilizes the randomness provided by the communication channel to reduce the local randomness required in generating the action sequence at agent $Y$. The second scheme exploits separate coordination and channel coding where local randomness is extracted from the channel after decoding. Finally, we present an example in which the joint scheme is able to outperform the separate scheme in terms of coordination rate.Comment: 9 pages, 4 figures. An extended version of a paper accepted for the IEEE International Symposium on Information Theory (ISIT), 201