Specialization, Information, and Growth: A Sequential Equilibrium Analysis

Yew-Kwang Ng () and Xiaokai Yang

Working Papers from Chicago - Graduate School of Business

Abstract: Pricing costs and information problems are introduced into a framework with consumer-producers, economies of specialization, and transaction costs to predict the endogenous and concurrent evolution in division of labor and in the information of organization acquired by society. The concurrent evolution generates endogenous growth based on the tradeoff between gains from information about the efficient pattern of division of labor, which can be acquired via experiments with various patterns of division of labor, and experimentation costs, which relate to the costs in discovering prices. The concept of Walras sequential equilibrium is developed to analyze the social learning process which is featured with uncertainties of the direction of the evolution as well as a certain trend of the evolution.

Keywords: INFORMATION; ECONOMIC DEVELOPMENT; PRICES (search for similar items in EconPapers)
JEL-codes: D23 D50 D90 O12 (search for similar items in EconPapers)
Date: Written

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Related works:
Working Paper: Specialization, Information, and Growth: A Sequential Equilibrium Analysis (1999)
Journal Article: Specialization, Information, and Growth: A Sequential Equilibrium Analysis (1997)
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