Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 22/2007: Coordinating under incomplete information

Geir B. Asheim () and Seung Han Yoo ()
Additional contact information
Geir B. Asheim: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Seung Han Yoo: Department of Economics, Postal: Cornell University , Ithaca , NY 14853, USA,

Abstract: We show that, in a minimum effort game with incomplete information where player types are independently drawn, there is a largest and smallest Bayesian equilibrium, leading to the set of equilibrium payoffs (as evaluated at the interim stage) having a lattice structure. Furthermore, the range of equilibrium payoffs converges to those of the deterministic complete information version of the game, in the limit as the incomplete information vanishes. This entails that such incomplete information alone cannot explain the equilibrium selection suggested by experimental evidence.

Keywords: Minimum effort games; Coordination games; Incomplete information

JEL-codes: C72

25 pages, September 29, 2007

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