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 …

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 … action. Secondly, the location of payoff-dominant equilibria behaves capriciously: two coordination games that look so much …

frictions in the relations among agents are endogenous. Frictions are modeled as dependent on the result of a coordination game …