Paths to the Frontier

Avidit Acharya and Juan Ortner

American Economic Journal: Microeconomics, 2022, vol. 14, issue 1, 39-69

Abstract: We construct a model of collective search in which players gradually approach the Pareto frontier. The players have imperfect control over which improvements to the status quo will be considered. Inefficiency takes place due to the difficulty in finding improvements acceptable to both parties. The process is path dependent, with early agreements determining long-run outcomes. It may also be cyclical, as players alternate between being more and less accommodating.

JEL-codes: C73 C78 D83 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1257/mic.20190125

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