Asynchronized multiperiod commitments and cycles

We consider a game where agents can synchronize or stagger their decisions. We compare the outcomes of both timing patterns, and show that spillovers and strategic interactions are crucial for such a comparison. A typology us ed in industrial organization, distinguishing four cases ('Fat-Cat', 'Top D og', Lean and Hungry, 'Puppy Dog'), allows us to compare the actions taken in the staggered variant and in the synchronized one. The staggered variant exhibits cycles and players are both better-off, when there are strategic complementarities between them. A timing game is then set-up so as to endog enize the choice between the two variants we study. Two examples are developed: (i) Bertrand competition and (ii) a wage settin g game when there are two monopoly unions in two interrelated firms. We sho w that the staggering of price decisions generates counter-cyclical mark-up s in the first example, and the staggering of wage decisions generates cycl ing output in the industry in the second example. (C) 1999 Elsevier Science B.V. All rights reserved.