Scaramozzino, Pasquale; Vulkan, Nir - Centro di Studi Internazionali Sull'Economia e la … - 2003
This paper presents a model of co-ordination failures based on market power and local oligopoly. The economy exhibits a multiplicity of Pareto-ranked equilibria. The introduction of uncertainty generates an endogenous equilibrium selection process, due to a strategic use of information by firms....