Title:When do Organizations Arise from Coordination?
Speaker:Liang Dai, Shanghai Jiao Tong University - Antai College of Economics and Management
Abstract:Situations where diverse individuals with incomplete information must coordinate their actions are ubiquitous. Individuals face uncertainty about economic fundamentals (fundamental uncertainty), and uncertainty about actions others will take (strategic uncertainty). Strategic uncertainty is originated from fundamental uncertainty, and results in mis-coordination. An organization obligates its members to take collective actions and thus mitigates strategic uncertainty and facilitates coordination. But it may also compel an individual to take the collective action not in his favor and thus is not sustainable ex ante. In light of this tradeoff, we identify strategic complementarity and preference heterogeneity as the key factors that determine whether or not organizations are desirable and/or sustainable. Organizations are desirable if and only if strategic complementarity dominates preference heterogeneity. No organization is asymptotically sustainable when strategic complementarity is dominated by preference heterogeneity. We characterize an upper bound on the size of asymptotically sustainable organizations when strategic complementarity dominates preference heterogeneity. Finally, in any equilibrium with organizations, all individuals take asymptotically the same action whether or not they are members of any organization.
时间：2017年11月27日 14:00-15:30
地点：复旦大学经济学院614会议室
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