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Bagwell's paradox, forward induction and outside option games

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URI: https://hdl.handle.net/10016/9793
ISSN: 2340-5031
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we1035.pdf (93.85 KB)
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2010-12
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Abstract
In Stackelberg-like games there is an advantage of moving first. However, Bagwell (1995) shows that this result may not hold if the second player can make only imperfect observations. We explore whether this paradox also holds when the advantage comes from forward induction arguments in the class of outside option games.
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Bagwell's paradox, Commitment, Observability, Noise, Outside option games, Forward induction
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DE - Working Papers. Economics. WE
Economists Online