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ICT Revolution, Globalization and Informational Lock-in

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  • Bulat Sanditov

    (Merit, Maastricht University)

Abstract

We examine a model of social learning in networks following the lines of Bala and Goyal (1998, 2001). As a model of agents’ behaviour we have chosen the model of informational cascades of Bikhchandani et al (1992). Similarly to Bala and Goyal we find that the higher the ’degree of integration’ within the society is, the more likely it is that conformity of actions will arise. However, unlike their results our model suggests that in the presence of informational externalities globalisation of informational flows, expressed in the increasing density of communication channels in a network, may drive down the expected social welfare.

Suggested Citation

  • Bulat Sanditov, 2004. "ICT Revolution, Globalization and Informational Lock-in," Working Papers geewp39, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    • Handle: RePEc:wiw:wiwgee:geewp39
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    References listed on IDEAS

    as
    1. Mitchell A. Petersen & Raghuram G. Rajan, 2000. "Does Distance Still Matter? The Information Revolution in Small Business Lending," NBER Working Papers 7685, National Bureau of Economic Research, Inc.
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    6. Anderson, Lisa R & Holt, Charles A, 1997. "Information Cascades in the Laboratory," American Economic Review, American Economic Association, vol. 87(5), pages 847-862, December.
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    More about this item

    Keywords

    Social learning; Cascades; Globalization; Networks;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F02 - International Economics - - General - - - International Economic Order and Integration

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