In case of multiple creditors a coordination problem can arise when the borrowingfirm runs into financial distress. Even if the project's value at maturity is enoughto pay all creditors in full, some creditors may be tempted to foreclose on theirloans. We develop a model of creditor coordination...

In case of multiple source lending even solvent firms may be forced into bankruptcy due to uncoordinated credit withdrawals of their lenders. This paper analyzes whether a debtor firm can thwart such inefficient liquidations by offering creditors the option to delay their foreclosure decision...

We study information acquisition in a coordination game with incomplete information. To capture the idea that players can flexibly decide what information to acquire, we do not impose any physical restriction on feasible information structure. Facing an informational cost measured by reduction...

Players choose a stochastic choice rule, assigning a probability of “investing” as a function of a state. Players receive a return to investment that is increasing in the proportion of others who invest and the state. In addition, they incur a small cost associated with adapting the...

This paper uses a mechanism design without transfer approach to investigate the optimal communication mechanism in a two-division organization. The principal, with perfect commitment power on multiple decision rules, wants decisions to be both adapted to local conditions and coordinated with...

The traditional mechanism of finding Nash equilibria presumes that economic actors are capable of performing computations which even computers would take far too long to perform. A decentralized and parallel process of interactions between simple economic actors is presented as a more plausible...

This paper studies the interaction between coordination and social learning in a dynamic regime change game. Social learning provides public information, to which players overreact due to the coordination motive. Coordination affects the aggregation of private signals through players' optimal...