Correlated choice

Christopher P. Chambers, Yusufcan Masatlioglu, Christopher Turansick

The commitment ability of governments is neither infinite nor zero but intermediate. In this paper, we determine the commitment ability that a government needs to implement a unique equilibrium outcome and rule out self-fulfilling expectations. We show that, in a large class of static macroeconomic games, the government can obtain a unique equilibrium with any low level of commitment ability. We finally derive implications for models of bailouts and capital taxation.

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Year of publication:	2024
Authors:	Chambers, Christopher P. ; Masatlioglu, Yusufcan ; Turansick, Christopher
Published in:	Theoretical economics : TE ; an open access journal in economic theory. - Toronto : [Verlag nicht ermittelbar], ISSN 1555-7561, ZDB-ID 2220447-7. - Vol. 19.2024, 3, p. 1119-1150
Subject:	Implementation \| limited commitment \| policy rules \| Theorie \| Theory \| Regelbindung versus Diskretion \| Rules versus discretion \| Geldpolitik \| Monetary policy

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Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Other identifiers:	10.3982/TE5184 [DOI]
Classification:	C73 - Stochastic and Dynamic Games ; E58 - Central Banks and Their Policies ; E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination ; G28 - Government Policy and Regulation
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10014635390