Showing 1 - 10 of 352
We study the perfect Bayesian equilibrium of a model of learning over a general social network. Each individual receives a signal about the underlying state of the world, observes the past actions of a stochastically-generated neighborhood of individuals, and chooses one of two possible actions....
Persistent link: https://www.econbiz.de/10005774491
Most economic analyses presume that there are limited differences in the prior beliefs of individuals, as assumption most often justified by the argument that sufficient common experiences and observations will eliminate disagreements. We investigate this claim using a simple model of Bayesian...
Persistent link: https://www.econbiz.de/10005777666
complete or incomplete information. ( Complete information means there is no private information.) The corresponding solution … concepts are: Nash equilibrium in static games of complete information; backwards induction (or subgame-perfect Nash … equilibrium) in dynamic games of complete information; Bayesian Nash equilibrium in static games with incomplete information; and …
Persistent link: https://www.econbiz.de/10005779015
In recent years there has been a growing interest in macro models with heterogeneity in information and complementarity … there is room for policies that correct the way agents use information in equilibrium, and what are the welfare effects of … the information disseminated by the media or policy makers. We argue that a key to answering all these questions is the …
Persistent link: https://www.econbiz.de/10005049877
This paper studies policy in a class of economies in which information about commonly-relevant fundamentals -- such as …, the decentralized use of information can fail to be efficient either because of discrepancies between private and social … second case, inefficiency manifests itself in suboptimal social learning (low quality of information contained in …
Persistent link: https://www.econbiz.de/10005580205
complementarity or substitutability, and incomplete information. In equilibrium, complementarity amplifies aggregate volatility by … increasing the sensitivity of actions to public information; substitutability raises cross-sectional dispersion by increasing the … sensitivity to private information. To address whether these effects are undesirable from a welfare perspective, we characterize …
Persistent link: https://www.econbiz.de/10005580464
participants play a coordination game with information heterogeneity. We consider defense policies against speculative currency … costly policy action only for moderate fundamentals. Market participants can use this information to coordinate on di … measure only for a small region of moderate fundamentals, and this region shrinks as the information in the market becomes …
Persistent link: https://www.econbiz.de/10005580557
In this paper we analyze the problem of whether and/or when to replace a leader (agent) when no monetary rewards are available, and it is the leader's competence rather than effort that is being evaluated. The only decisions that the leader takes over time are whether to undertake risky but...
Persistent link: https://www.econbiz.de/10010796728
, asymmetric information, imperfect competition, funding constraints, and search---and for each imperfection we address the three …
Persistent link: https://www.econbiz.de/10010951230
This paper proposes a theory of liquidity dynamics. Illiquidity results from asymmetric information. Observing the … historical track record teaches agents how to interpret public information and helps overcome information asymmetry. There can be … an illiquidity trap: too much asymmetric information leads to the breakdown of trade, which interrupts learning and …
Persistent link: https://www.econbiz.de/10011266636