Renegotiation and Coordination with Private Values

35 Pages Posted: 12 Sep 2019 Last revised: 7 Oct 2019

See all articles by Yuval Heller

Yuval Heller

Bar Ilan University

Christoph Kuzmics

University of Graz - Department of Economics

Date Written: October 7, 2019

Abstract

We define and characterize the set of renegotiation-proof equilibrium strategies of coordination games with pre-play communication in which players have private preferences over the feasible coordinated outcomes. These strategies are such that players never miscoordinate, play their jointly preferred outcome whenever there is one, and communicate only the ordinal part of their preferences. Moreover, they do not depend on the distribution of private preferences, and are thus robust to changes in players' beliefs. Finally, they are interim Pareto efficient and evolutionarily stable.

Keywords: coordination games, renegotiation-proof, equilibrium entrants, secret handshake, incomplete information, evolutionary robustness

JEL Classification: C72, C73, D82

Suggested Citation

Heller, Yuval and Kuzmics, Christoph, Renegotiation and Coordination with Private Values (October 7, 2019). Available at SSRN: https://ssrn.com/abstract=3448035 or http://dx.doi.org/10.2139/ssrn.3448035

Yuval Heller

Bar Ilan University ( email )

Dept. of Economics, Building 504
Bar Ilan University
Ramat Gan, 5290002
Israel
+972 5252 82182 (Phone)

HOME PAGE: http://https://sites.google.com/site/yuval26/

Christoph Kuzmics (Contact Author)

University of Graz - Department of Economics ( email )

Universitaetsstrasse 15
RESOWI - F4
Graz, 8010
Austria

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