IDEAS home Printed from https://ideas.repec.org/a/eee/dyncon/v58y2015icp19-33.html
   My bibliography  Save this article

Learning and coordination with dispersed information

Author

Listed:
  • Berardi, Michele

Abstract

We analyse adaptive learning in a model of incomplete and dispersed information, with externalities and strategic interactions. We build on the framework proposed by Angeletos and Pavan (2007a) and extend it to a dynamic multi-period setting where agents need to learn to coordinate. We derive conditions under which adaptive learning obtains in such setting and show that, when actions are strategic substitutes, the information structure affects the speed of convergence: while more precise private information is beneficial, better public information has negative effects. We also show that adaptive learning dynamics converge to the Bayesian Nash equilibrium, which means that agents can learn to act strategically by relying only on observable (exogenous) information.

Suggested Citation

  • Berardi, Michele, 2015. "Learning and coordination with dispersed information," Journal of Economic Dynamics and Control, Elsevier, vol. 58(C), pages 19-33.
    • Handle: RePEc:eee:dyncon:v:58:y:2015:i:c:p:19-33
    DOI: 10.1016/j.jedc.2015.05.019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165188915000998
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Seppo Honkapohja & Kaushik Mitra, 2006. "Learning Stability in Economies with Heterogeneous Agents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(2), pages 284-309, April.
    2. Beggs Alan, 2009. "Learning in Bayesian Games with Binary Actions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-30, September.
    3. Evans, George W. & Honkapohja, Seppo, 1996. "Least squares learning with heterogeneous expectations," Economics Letters, Elsevier, vol. 53(2), pages 197-201, November.
    4. Guse, Eran A. & Carton, Joel, 2014. "Replicator Dynamic Learning In Muth'S Model Of Price Movements," Macroeconomic Dynamics, Cambridge University Press, vol. 18(03), pages 573-592, April.
    5. Morris, Stephen & Shin, Hyun Song, 1998. "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks," American Economic Review, American Economic Association, vol. 88(3), pages 587-597, June.
    6. Crawford, Vincent P, 1995. "Adaptive Dynamics in Coordination Games," Econometrica, Econometric Society, vol. 63(1), pages 103-143, January.
    7. Marcet, Albert & Sargent, Thomas J, 1989. "Convergence of Least-Squares Learning in Environments with Hidden State Variables and Private Information," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1306-1322, December.
    8. Christev, Atanas & Slobodyan, Sergey, 2014. "Learnability Of E–Stable Equilibria," Macroeconomic Dynamics, Cambridge University Press, vol. 18(05), pages 959-984, July.
    9. Branch, William A. & Evans, George W., 2006. "Intrinsic heterogeneity in expectation formation," Journal of Economic Theory, Elsevier, vol. 127(1), pages 264-295, March.
    10. Stephen Morris & Hyun Song Shin, 2000. "Global Games: Theory and Applications," Cowles Foundation Discussion Papers 1275R, Cowles Foundation for Research in Economics, Yale University, revised Aug 2001.
    11. Sergey Slobodyan & Atanas Christev, 2006. "On learnability of E–stable equilibria," Computing in Economics and Finance 2006 451, Society for Computational Economics.
    12. George W. Evans & Seppo Honkapohja, 2009. "Learning and Macroeconomics," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 421-451, May.
    13. Stephen Morris & Hyun Song Shin, 2002. "Social Value of Public Information," American Economic Review, American Economic Association, vol. 92(5), pages 1521-1534, December.
    14. Townsend, Robert M, 1983. "Forecasting the Forecasts of Others," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 546-588, August.
    15. George-Marios Angeletos & Alessandro Pavan, 2007. "Efficient Use of Information and Social Value of Information," Econometrica, Econometric Society, vol. 75(4), pages 1103-1142, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michele Berardi, 2015. "Prices, fundamental values and learning," Centre for Growth and Business Cycle Research Discussion Paper Series 214, Economics, The Univeristy of Manchester.
    2. Michele Berardi, 2016. "Herding through learning in an asset pricing model," Centre for Growth and Business Cycle Research Discussion Paper Series 223, Economics, The Univeristy of Manchester.

    More about this item

    Keywords

    Learning; Heterogeneity; Dispersed information; Interaction; Coordination;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:dyncon:v:58:y:2015:i:c:p:19-33. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/jedc .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.