Strategic Delay and Coordination Efficiency in Global Games

TL;DR

This paper models a two-stage global game where agents decide to participate immediately or delay to gain more information, balancing informational benefits against payoff costs to improve collective coordination.

Contribution

It introduces a novel analysis of how strategic delay influences coordination efficiency in global games with noisy signals.

Findings

Delay options can improve collective coordination outcomes.

Information gained from delaying can outweigh payoff discounts under certain conditions.

Strategic timing enhances overall decision-making efficiency.

Abstract

We investigate a coordination model for a two-stage collective decision-making problem within the framework of global games. The agents observe noisy signals of a shared random variable, referred to as the fundamental, which determines the underlying payoff. Based on these signals, the agents decide whether to participate in a collective action now or to delay. An agent who delays acquires additional information by observing the identities of agents who have chosen to participate in the first stage. This informational advantage, however, comes at the cost of a discounted payoff if coordination ultimately succeeds. Within this decision-making framework, we analyze how the option to delay can enhance collective outcomes. We show that this intertemporal trade-off between information acquisition and payoff reduction can improve coordination and increase the efficiency of collective decision-making.