Fontini F. (2003)

A Firms-Government Coordination Game under Strategic Uncertainty. Studi Economici.

 

Abstract:

A 2×2 coordination game under uncertainty is analysed. It is shown that specific equilibria can emerge given the specific players’ uncertainty attitude, namely, optimism or pessimism. In particular, when uncertainty is taken into account it is possible to discriminate between the equilibria that arise in the uncertainty-free game, on the basis of an exogenous parameter expressing players’ uncertainty. Moreover, it is shown that several other outcomes can be sustained in equilibrium as results of rational but pessimistic or optimistic plays, some of which are not even Nash-equilibria of the standard uncertainty-free game.