Global vs. Local Information in (Anti-)Coordination Problems with Imitators
AbstractIn this paper I apply stochastic stability to compare the effect on welfare of local information and global information when agents adopt imitative behavioral rules. Under global information, agents can potentially imitate anyone, while under local information, the sets of observable agents are choice-dependent. The evaluation of information in terms of welfare enhancement is ambiguous over finite time horizons, while in the long run global information is worse (better) in the presence of pure negative (positive) spillovers. However, when preferences also depend on the choice itself, further ambiguity emerges, generally making the comparison uncertain.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Theoretical Economics.
Volume (Year): 8 (2008)
Issue (Month): 1 (June)
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Web page: http://www.degruyter.com
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- Katharine Rockett, 2009. "Property Rights and Invention," Economics Discussion Papers 663, University of Essex, Department of Economics.
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