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Information, Coordination and the Industrialization of Countries

Author

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  • Florian Englmaier
  • Markus Reisinger

Abstract

The industrialization process of a country is often plagued by a failure to coordinate investment decisions. Using the Global Games approach we can solve this coordination problem and eliminate the problem of multiple equilibria. We show how appropriate information provision enhances efficiency. We discuss extensions of the model and argue that subsidies may be a property of a signalling equilibrium to overcome credibility problems in information provision. In addition, we point out possible problems with overreaction to public information. Furthermore, we suggest a new focus for development policy. (JEL codes: C72, C79, D82, F21, O12, O14) Copyright , Oxford University Press.

Suggested Citation

  • Florian Englmaier & Markus Reisinger, 2008. "Information, Coordination and the Industrialization of Countries," CESifo Economic Studies, CESifo Group, vol. 54(3), pages 534-550, September.
    • Handle: RePEc:oup:cesifo:v:54:y:2008:i:3:p:534-550
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    Cited by:

    1. Weiliang Chen & Xinjian Huang & Yanhong Liu & Yan Song, 2019. "Does Industry Integration Improve the Competitiveness of China’s Electronic Information Industry?—Evidence from the Integration of the Electronic Information Industry and Financial Industry," Sustainability, MDPI, vol. 11(9), pages 1-18, May.
    2. Hongpeng Guo & Xin Yi & Chulin Pan & Baiming Yang & Yin Li, 2021. "Analysis on the Temporal and Spatial Features of the Coupling and Coordination of Industrialization and Agricultural Green Development in China during 1990–2019," IJERPH, MDPI, vol. 18(16), pages 1-27, August.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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