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Information, Coordination, and the Industrialization of Countries

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  • Englmaier, Florian
  • Reisinger, Markus

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.

Suggested Citation

  • Englmaier, Florian & Reisinger, Markus, 2006. "Information, Coordination, and the Industrialization of Countries," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 87, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    • Handle: RePEc:trf:wpaper:87
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    Cited by:

    1. 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.
    2. 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.

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    More about this item

    Keywords

    Information; Coordination; Industrialization; Development; Global Games; Equilibrium Refinements; Big Push;
    All these keywords.

    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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