The aim of this article is to demonstrate that advertising can have an important function in markets with consumption externalities apart from its persuasive and informative roles. We show that advertising may function as a device to coordinate consumer expectations of the purchasing decisions...

The aim of this Paper is to demonstrate that advertising can have an important function in markets with consumption externalities, apart from its persuasive and informative roles. We show that advertising may function as a device to coordinate consumer expectations of the purchasing decisions of...

In an observational learning environment, rational agents with incomplete information may mimic the actions of their predecessors even when their own signal suggests the opposite. This herding behaviour may lead the society to an inefficient outcome if the signals of the early movers happen to...

The effect of a contribution cap is analyzed in a political lobbying game where the politician has a preference for the policy position of one of the lobbyists. In contrast to the previous literature where the politician has no preference over policy alternatives, we find that a more restrictive...

This paper is an adaptation of the Chamley-Gale endogenous-timing information-revelation model of investment (Econometrica 1994). It models a game with pure informational externality where agents can learn by observing others' actions. The social learning can result in herding and possibly in an...