Rational economic agents always engage in maximizing their payoffs. The endeavor in this paper is to show that when the parties involved in the bargaining process (game) have similar discount factors and when the number of periods of the game tends to infinity or very large, then the surplus is...

This paper examines the ability of a policy maker to control equilibrium outcomes in a global coordination game; applications include currency attacks, bank runs, and debt crises. A unique equilibrium is known to survive when the policy is exogenously fixed. We show that, by conveying...

Global games of regime change – coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attacks it – have been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change. We extend...

In economics, the standard approach to language is that talk is cheap. Here, instead, language is a social convention that affects utility. Unless language is used in its ordinary sense, it cannot help to coordinate actions because there is no way of decoding it. This points to a unique...

A theoretical model is adopted in order to explain incentives and actual safety behaviour for drivers, pedestrians and other road users which do not utilise motorised vehicles. A road user's outcome is supposed to be dependent on her individual actions and cares decided upon by other individuals...

Many facts are learned through the intermediation of individuals with special access to information, such as law enforcement officers, officials with a security clearance, or experts with specific knowledge. This paper considers whether societies can learn about such facts when information is...