This paper examines the ability of a policy maker to control equilibrium outcomes in a global coordination game … into a position where both the optimal policy and the coordination outcome are dictated by self-fulfilling market …

In classical game theory, players have finitely many actions and evaluate outcomes of mixed strategies using a von … impossible in finite games. Firstly, in coordination games, all players have the same preferences: switching to a weakly dominant … action makes everyone at least as well off as before. Nevertheless, there are coordination games where the best outcome …

frictions in the relations among agents are endogenous. Frictions are modeled as dependent on the result of a coordination game …, played by every pair of directly linked agents and characterized by 2 equilibria: one efficient and the other risk dominant …