Coordination, Timing and Common Knowledge

There is tight link between coordination and common knowledge. The role of higher order beliefs in static incomplete information games has been widely studied. In particular, information frictions breaks down common of payoffs. A large literature in economics examines dynamic coordination problems when there are timing frictions, in the sense that players do not all move at once. Timing frictions in dynamic coordination games play a role that is closely analogous to information frictions in static coordination games. This paper makes explicit the role of higher order beliefs about timing in dynamic coordination games with timing frictions. An event is said to be effectively known if a player knew the event when he last had an option to change his behavior. Lack of effective common knowledge of the time drives results on dynamic coordination games