Equilibrium Coordination With Discretionary Policy Making

Bibliographic Data

ID9705026
AuthorsRichard Dennis (0000-0003-3267-4205, University of Glasgow), Tatiana Kirsanova (0000-0002-1470-4311, University of Glasgow)
Year2018
Volume128
Issue609
Pages710-727
Publication date2018-03-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/ecoj.12407
OpenAlexW2428961835
LanguageEN
References cited21

Discretionary policy makers cannot manage private‐sector expectations and cannot coordinate the actions of future policy makers. As a consequence, coordination failures can occur and multiple equilibria can arise. In this article, we employ notions of self‐enforceability and learnability to motivate and identify equilibria of particular interest in discretionary policy problems exhibiting multiple equilibria. Central among these criteria are whether an equilibrium is robust to the formation of coalitions, and whether it is learnable by private agents and jointly learnable by private agents and the policy maker. Unless the Pareto‐preferred equilibrium is learnable by private agents, we find little reason to expect coordination on that equilibrium

Coordination failure · Coordination game · Economics · General equilibrium theory · Learnability · Mathematical economics · Microeconomics · Operations management · Pareto principle · Private information retrieval · Private sector · Computer Science · Economic theories and models · Economic Theory and Institutions · Monetary Policy and Economic Impact

Tools

Open DOISci-Hub