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Coordination of Mobile Labor

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Abstract
We study coordination failures in many simultaneously occurring coordination problems. Players encounter one of the problems but have the outside option of migrating to one of the remaining ones. Drawing on the global games approach, we show that such a mobile game has a unique equilibrium that allows us to examine comparative statics. The endogeneity of the outside option value and of the migration activity leads to non-monotonicity of welfare with respect to mobility friction; high mobility may hurt players. We apply these "general equilibrium" findings to the problem of the labor market during industrialization as described by Matsuyama.

Suggested Citation

  • Jakub Steiner, 2006. "Coordination of Mobile Labor," Edinburgh School of Economics Discussion Paper Series 152, Edinburgh School of Economics, University of Edinburgh.
    • Handle: RePEc:edn:esedps:152
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    References listed on IDEAS

    as
    1. Steiner, Jakub, 2008. "Coordination of mobile labor," Journal of Economic Theory, Elsevier, vol. 139(1), pages 25-46, March.
    2. Morris, Stephen & Shin, Hyun Song, 1998. "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks," American Economic Review, American Economic Association, vol. 88(3), pages 587-597, June.
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    6. Morris, Stephen & Shin, Hyun Song, 2004. "Coordination risk and the price of debt," European Economic Review, Elsevier, vol. 48(1), pages 133-153, February.
    7. Steiner, Jakub, 2008. "Coordination cycles," Games and Economic Behavior, Elsevier, vol. 63(1), pages 308-327, May.
    8. Itay Goldstein & Ady Pauzner, 2005. "Demand–Deposit Contracts and the Probability of Bank Runs," Journal of Finance, American Finance Association, vol. 60(3), pages 1293-1327, June.
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    11. Byeongju Jeong, 2003. "The Welfare Effects of Mobility Restrictions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(3), pages 685-696, July.
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    13. Burdett Kenneth & Imai Ryoichi & Wright Randall, 2004. "Unstable Relationships," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(1), pages 1-44, January.
    14. George-Marios Angeletos & Christian Hellwig & Alessandro Pavan, 2004. "Information Dynamics and Equilibrium Multiplicity in Global Games of Regime Change," NBER Working Papers 11017, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Flavio Toxvaerd & Chryssi Giannitsarou, 2004. "Recursive global games," Money Macro and Finance (MMF) Research Group Conference 2003 104, Money Macro and Finance Research Group.
    2. Antoine Loeper & Jakub Steiner & Colin Stewart, 2014. "Influential Opinion Leaders," Economic Journal, Royal Economic Society, vol. 124(581), pages 1147-1167, December.
    3. Junichi Fujimoto, 2014. "Speculative attacks with multiple targets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 57(1), pages 89-132, September.
    4. Laurent Mathevet & Jakub Steiner, 2012. "Sand in the Wheels: A Dynamic Global-Game Approach," CERGE-EI Working Papers wp459, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    5. Peter R. Mueser & David Mandy & Eric Parsons, 2011. "Population Movements in the Presence of Agglomeration and Congestion Effects: Local Policy and the Social Optimum," Working Papers 1123, Department of Economics, University of Missouri.
    6. Steiner, Jakub, 2008. "Coordination of mobile labor," Journal of Economic Theory, Elsevier, vol. 139(1), pages 25-46, March.
    7. Araujo, Luis & Guimaraes, Bernardo, 2015. "Intertemporal coordination with delay options," Journal of Economic Theory, Elsevier, vol. 157(C), pages 793-810.
    8. Sylvain Chassang & Gerard Padró I Miquel, 2010. "Conflict and Deterrence Under Strategic Risk," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(4), pages 1821-1858.
    9. Dasgupta, Amil, 2007. "Coordination and delay in global games," Journal of Economic Theory, Elsevier, vol. 134(1), pages 195-225, May.

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    More about this item

    Keywords

    coordination; general equilibrium; global games; globalization; industrialization; mobility;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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