# Observing Actions in Bayesian Games

## TL;DR

This paper investigates how private information quality affects equilibrium coordination in Bayesian games, revealing conditions for multiple versus unique equilibria and applying the model to real-world economic crises.

## Contribution

It introduces a flexible information structure model for Bayesian games, analyzing how private information precision influences equilibrium outcomes and applicability to economic phenomena.

## Key findings

- High-quality private information leads to multiple equilibria.
- Low-quality private information results in unique equilibrium.
- The model applies to phenomena like bank-runs and revolutions.

## Abstract

We study Bayesian coordination games where agents receive noisy private information over the game's payoff structure, and over each others' actions. If private information over actions is precise, we find that agents can coordinate on multiple equilibria. If private information over actions is of low quality, equilibrium uniqueness obtains like in a standard global games setting. The current model, with its flexible information structure, can thus be used to study phenomena such as bank-runs, currency crises, recessions, riots, and revolutions, where agents rely on information over each others' actions.