Conference: 'Coordination, Incomplete Information, and Interated Dominance: Theory and Experiments. August 17 thru 19, 2002'

Yale University, New Haven CT

Investigators

Abstract

Many economic problems are naturally modeled as coordination problems. Speculators in financial markets may have an incentive to attack a currency only if they believe that others will do so. Depositors in a bank may have an incentive to withdraw their money only if they think that others will do so. In such settings, informal commentary points to "confidence" and "self-fulfilling expectations" as determinants of the outcome, but there is still no consensus on the corresponding theory to flesh out these explanations. The purpose of this project is to fund the participation of U.S. researchers in an international conference that brings together theorists and experimental economists who have been studying these issues. The conference will be held in Barcelona, Spain on August 17-19, 2002 in the campus of Pompeu Fabra University. The time is ripe is for such a conference. There has been rapid theoretical progress in the modeling of coordination with incomplete information. However, there is no consensus on whether the predictions of the new theories are of practical relevance. There is a well-developed experimental literature on coordination games. These literatures have developed independently and the two groups of researchers have much to learn from each other.