Informational Externalities with Lump-Sum Sampling
AbstractWe consider a game of strategic experimentation where agents are restricted to an all-or-nothing sampling strategy. The strategic interaction between agents due to informational externalities is affected by the sizes of the experimentation samples and the sensitivity of information to changes in sample sizes. There is experimentation only if the overall sample is large enough. Equilibrium may involve optimal, insufficient or excessive experimentation relative to a second-best welfare benchmark. This unusual over-experimentation result is associated not necessarily with large samples but with a low elasticity of the value of information with respect to the sample size.
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Bibliographic InfoPaper provided by University of Toulouse 1 Capitole in its series Open Access publications from University of Toulouse 1 Capitole with number http://neeo.univ-tlse1.fr/2180/.
Date of creation: Aug 2006
Date of revision:
Publication status: Published in Canadian Journal of Economics (2006-08) v.39, p.1005-1022
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Web page: http://www.univ-tlse1.fr/
Other versions of this item:
- Carole Haritchabalet & Régis Renault, 2006. "Informational externalities with lump-sum sampling," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 1005-1022, August.
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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