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Equilibrium Conditions for Catch-22 Situations

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  • Joshua S. Gans

Abstract

This is a paper in the ``economists ruin everything'' field. It considers whether Catch-22 situations can persist as an equilibrium phenomenon. Rather than being an arbitrary rule or a set of self-serving beliefs, the focus is on the preferences of Gatekeepers who choose to create such situations in the first place. The base game-theoretic model is of a Catch-22 situation inspired by Heller's famous paradox. We consider a Requester who may be Sane or Insane and a Gatekeeper who must decide whether to grant the Requester's desired outcome or force them into a less desirable one. This is modelled as a game in which the Requester chooses whether to send a request signal before the Gatekeeper decides. We solve for the conditions under which a Catch-22 situation persists as an equilibrium and its efficiency properties. It is demonstrated that Catch-22 situations can arise, but they reflect an efficient response on the part of a Gatekeeper facing asymmetric information. An application to labour markets is also considered

Suggested Citation

  • Joshua S. Gans, 2024. "Equilibrium Conditions for Catch-22 Situations," NBER Working Papers 33304, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33304
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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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