Changing the Game: Status-Quo Inertia, Institutional Design, and Equilibrium Transition (opens in new tab)

Many economic interventions are designed as marginal changes in incentives. Yet in environments shaped by coordination, institutional persistence, and path dependence, such reforms often leave behavior largely unchanged. This paper studies interventions in games when equilibrium selection displays status-quo inertia: if the pre-intervention equilibrium remains a Nash equilibrium after policy, it continues to be selected. In that environment, pri...