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Asymmetric‐information allocation to avoid coordination failure
Author(s) -
Moriya Fumitoshi,
Yamashita Takuro
Publication year - 2019
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/jems.12329
Subject(s) - intuition , coordination failure , computer science , optimal allocation , ex ante , context (archaeology) , coordination game , complete information , mathematical economics , information asymmetry , mathematical optimization , microeconomics , economics , operations research , mathematics , paleontology , philosophy , epistemology , biology , macroeconomics
In the context of team production, this paper studies the optimal (deterministic and stochastic) information allocation that implements desired effort levels as the unique Bayesian equilibrium. We show that under certain conditions, it is optimal to asymmetrically inform agents even though they may be ex ante symmetric. The main intuition is that informing the agents asymmetrically can be effective in avoiding “bad” equilibria, that is, equilibria with coordination failure.