Global vs. Local Information in (Anti-)Coordination Problems with Imitators

Leonardo Boncinelli
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Leonardo Boncinelli: University of Florence

The B.E. Journal of Theoretical Economics, 2008, vol. 8, issue 1

Abstract: In this paper I apply stochastic stability to compare the effect on welfare of local information and global information when agents adopt imitative behavioral rules. Under global information, agents can potentially imitate anyone, while under local information, the sets of observable agents are choice-dependent. The evaluation of information in terms of welfare enhancement is ambiguous over finite time horizons, while in the long run global information is worse (better) in the presence of pure negative (positive) spillovers. However, when preferences also depend on the choice itself, further ambiguity emerges, generally making the comparison uncertain.

Keywords: imitation; local information; global information; stochastic stability (search for similar items in EconPapers)
JEL-codes: D01 D80 D81 D85 Z13 (search for similar items in EconPapers)
Date: 2008

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Persistent link: http://EconPapers.repec.org/RePEc:bpj:bejtec:v:8:y:2008:i:1:n:17

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