Topic
Coordination failure
About: Coordination failure is a research topic. Over the lifetime, 607 publications have been published within this topic receiving 18207 citations.
Papers published on a yearly basis
Papers
TL;DR: In this paper, the importance of strategic complementarities in agents' payoff functions as a basis for macroeconomic coordination failures is discussed, where the optimal strategy of an agent depends positively upon the strategies of the other agents.
Abstract: This paper focuses on the importance of strategic complementarities in agents’ payoff functions as a basis for macroeconomic coordination failures. Strategic complementarities arise when the optimal strategy of an agent depends positively upon the strategies of the other agents. We first analyze an abstract game and find that multiple equilibria and a multiplier process may arise when strategic complementarities are present. Often these equilibria can be Pareto ranked. We then place additional economic content on the analysis of this game by considering strategic complementarities arising from production functions, matching technologies, and commodity demand functions in a multisector, imperfectly competitive economy. C 1988 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology. © 1988 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
1,900 citations
Posted Content•
1,290 citations
Posted Content•
1,191 citations
TL;DR: In this paper, the authors develop a general theory of monopoly pricing of networks and propose a more plausible, yet equally tractable, model of heterogeneity in which users differ in their income or scale.
Abstract: I develop a general theory of monopoly pricing of networks. Platforms use insulating tariffs to avoid coordination failure, implementing any desired allocation. Profit-maximization distorts in the spirit of Spence (1975) by internalizing only network externalities to marginal users. Thus the empirical and prescriptive content of the popular Rochet and Tirole (2006) model of two-sided markets turns on the nature of user heterogeneity. I propose a more plausible, yet equally tractable, model of heterogeneity in which users differ in their income or scale. My approach provides a general measure of market power and helps predict the effects of price regulation and mergers.
674 citations
TL;DR: In this paper, the authors investigated the pricing behavior of firms in the euro area on the basis of surveys conducted by nine Eurosystem national central banks, covering more than 11,000 firms and found that firms operate in monopolistically competitive markets, where prices are mostly set following markup rules and where price discrimination is common.
Abstract: This study investigates the pricing behaviour of firms in the euro area on the basis of surveys conducted by nine Eurosystem national central banks, covering more than 11,000 firms. The results, robust across countries, show that firms operate in monopolistically competitive markets, where prices are mostly set following markup rules and where price discrimination is common. Around one-third of firms follow mainly time-dependent pricing rules while two-thirds allow for elements of state-dependence. The majority of firms take into account past and expected economic developments in their pricing decisions. Price stickiness is mainly driven by customer relationships - explicit and implicit contracts - and coordination failure. Firms adjust prices asymmetrically in response to shocks: while cost shocks have a greater impact when prices have to be raised than when they have to be reduced, reductions in demand are more likely to induce a price change than increases in demand.
626 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2025 | 1 |
| 2024 | 1 |
| 2023 | 9 |
| 2022 | 6 |
| 2021 | 7 |
| 2020 | 23 |