Equity and Efficiency: Policy Design in Coordination Problems Under Uncertainty

A planner subsidizes agents who take a specified action. Payoffs to choosing this action are uncertain but increasing in the number of agents who take it. We classify the set of implementable equilibria and, for any equilibrium in this set, characterize the unique subsidy scheme that implements it. In stark contrast to games of complete information, discrimination is not imperative for efficiency: we construct an effective symmetric subsidy scheme the cost of which converges to that of the optimal discriminatory policy as the uncertainty about payoffs vanishes. Applications include regime change, incentives in teams, network effects, and technology adoption.