Coordination in complex environments
Theoretical Economics
2026-04-28 v1
Abstract
Coordination is an important aspect of innovative contexts, where: the more innovative a course of action, the more uncertain its outcome. To study the interplay of coordination and informational ``complexity'', I embed a beauty-contest game into a complex environment. I identify a new conformity phenomenon. This effect may push towards the exploration of unknown alternatives or constitute a status-quo bias, depending on the network structure of players' interactions. In an application, I show that an organization with decentralized authority can implement profit maximization in a sufficiently complex environment.
Cite
@article{arxiv.2604.24757,
title = {Coordination in complex environments},
author = {Pietro Dall'Ara},
journal= {arXiv preprint arXiv:2604.24757},
year = {2026}
}