Mackowiak, Bartosz Adam; Wiederholt, Mirko - C.E.P.R. Discussion Papers - 2011
accident? To address this question, we study a model in which agents make state-contingent plans - think about actions in … uncorrelated with the optimal action in normal times, and actions are strategic complements. We then compare the equilibrium … would be better off if agents thought more carefully about optimal actions in rare events. …