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ICT Revolution, Globalization and Informational Lock-in

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  • Sanditov, Bulat

    (MERIT)

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

  • Sanditov, Bulat, 2004. "ICT Revolution, Globalization and Informational Lock-in," Research Memorandum 013, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:umamer:2004013
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    References listed on IDEAS

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    1. Venkatesh Bala & Sanjeev Goyal, 1998. "Learning from Neighbours," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(3), pages 595-621.
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    7. Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 1998. "Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 151-170, Summer.
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