When a compromise gets compromised by another compromise

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F22%3A10251764" target="_blank" >RIV/61989100:27510/22:10251764 - isvavai.cz</a>

Result on the web

<a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8454.12274" target="_blank" >https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8454.12274</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1111/1467-8454.12274" target="_blank" >10.1111/1467-8454.12274</a>

Result language

angličtina

Original language name

When a compromise gets compromised by another compromise

Original language description

In many situations it is difficult to avoid a conflict and cooperate with others, even when all parties would like to do so. We show that while having one coordination device tends to be beneficial, having more of them may actually make things worse. Our game theoretic analysis examines the relationship between two widely used coordination devices, namely the focal point and leadership. However, instead of conventional Stackelberg leadership we use a more general Stochastic leadership framework that allows for probabilistic revisions of the players&apos; decisions. Upon observing the initial simultaneous actions, each player (Formula presented.) can (simultaneously) change her action with some probability (Formula presented.), known to all players in advance. In this framework, the more rigid player with lower (Formula presented.) assumes the role of a Stochastic leader, and the more flexible player becomes the Stochastic follower. We demonstrate how focal point and leadership may clash in coordination and anti-coordination games such as the Battle of the sexes, Hawk and dove and Stag hunt. Because the focal point is based on symmetry whereas leadership on asymmetry, having these two coordination devices jointly makes Pareto-inferior outcomes more likely. Two distinct effects are behind this phenomenon, we call them multiplicity-broadening and multiplicity-deepening. Our theoretic findings are then linked to many instances from business, sport as well as politics. We also discuss the implications for the design of welfare-improving managerial processes and public policies that might help to avoid costly mis-coordination. (C) 2022 John Wiley &amp; Sons Australia, Ltd.

Czech name

—

Czech description

—

Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

—

OECD FORD branch

50202 - Applied Economics, Econometrics

Project

<a href="/en/project/GA16-22540S" target="_blank" >GA16-22540S: "Eye for eye?" Restoring Fiscal and Financial Stability without Jeopardizing Monetary Stability</a><br>

Continuities

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year

2022

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Australian Economic Papers

ISSN

0004-900X

e-ISSN

—

Volume of the periodical

61

Issue of the periodical within the volume

4

Country of publishing house

US - UNITED STATES

Number of pages

39

Pages from-to

678-716

UT code for WoS article

000851468200001

EID of the result in the Scopus database

2-s2.0-85135615298