Strategic Delay and Coordination Efficiency in Global Games
Authors: Shinkyu Park, Behrouz Touri, Marcos M. Vasconcelos
Organizations: Electrical and Computer Engineering, King Abdullah University of Science and Technology, Thuwal, 23955, Saudi Arabia · Department of Industrial and Systems Engineering, University of Illinois Urbana Champaign, Champaign, IL 61820 · Department of Electrical and Computer Engineering, FAMU-FSU College of Engineering, Florida State University, Tallahassee, FL 32306, USA
We investigate a coordination model for a two-stage collective decision-making problem within the framework of global games. The agents observe noisy signals of a shared random variable, referred to as the fundamental, which determines the underlying payoff. Based on these signals, the agents decide whether to participate in a collective action now or to delay. An agent who delays acquires additional information by observing the identities of agents who have chosen to participate in the first stage. This informational advantage, however, comes at the cost of a discounted payoff if coordination ultimately succeeds. Within this decision-making framework, we analyze how the option to delay can enhance collective outcomes. We show that this intertemporal trade-off between information acquisition and payoff reduction can improve coordination and increase the efficiency of collective decision-making.
Figures & tables
Fig. 1: Two-stage global game with public (noiseless) feedback signal. In the first stage, the blue nodes decided to take the risky action, and the white nodes delayed their decision to the second stage. In the second stage the purple nodes decided to take the risky action. The payoff is collected at the end of the game.
Fig. 2: Per agent welfare for a two-stage global game with γ=0.8 .
Fig. 3: Illustration of the function V(σ,γ) defined in ( 35 ). The red region indicates the parameter regime (σ,γ) in which the option to delay is beneficial, whereas the blue region corresponds to regimes in which it is detrimental.
Department of Electrical Engineering, Eindhoven University of Technology, Eindhoven, The Netherlands · College of Engineering, Peking University, Beijing, China