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Dynamic coordination with timing frictions: theory and applications

Guimaraes, Bernardo, Machado, Caio and Pereira, Ana Elisa (2017) Dynamic coordination with timing frictions: theory and applications. CFM discussion paper series (CFM-DP2017-26). Centre For Macroeconomics, London, UK.

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Abstract

We start by presenting the general model of dynamic coordination with timing frictions and some key theoretical results. We prove the model features a unique rationalizable equilibrium, present a method to solve the social planner problem and derive expressions for the equilibrium threshold in limiting cases. With this toolkit in hand, we get analytical results for a case with linear preferences and present several applications, ranging from network externalities to statistical discrimination and to macroeconomics. Besides generating insights for specific questions, the applications illustrate the potential of the model to accommodate a large set of economic problems. Last, we show extensions of the framework that allow for endogenous hazard rates, preemption motives and ex-ante heterogeneous agents.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.centreformacroeconomics.ac.uk/Home.aspx
Additional Information: © 2017 The Authors
Divisions: Centre for Macroeconomics
Subjects: H Social Sciences > HB Economic Theory
Sets: Research centres and groups > Centre for Macroeconomics
Date Deposited: 11 Dec 2017 12:01
Last Modified: 05 Aug 2020 23:09
URI: http://eprints.lse.ac.uk/id/eprint/86149

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