Technology Adoption Under Strategic Complementarity: Less Information Can Do Better

Stefano Manzocchi and Domenico Marinucci
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Domenico Marinucci: [n.a.]

No 37, Working Papers from Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali

Abstract: Strategic complementarities can lead to multiple Nash equilibria in macro-economic models. When this is the case of a decentralized economy, agents have to choose their strategy on the basis of the expected behaviour of other agents, but the concept of rational expectations is not a guide to selecting among multiple Nash equilibria. Our point is that perfect observation without coordination can lead to less efficient outcomes in a specific example of "coordination game", where the Nash equilibria can be Pareto-ranked and expectations are "backward-looking".

Pages: 20
Date: 1993-06
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http://docs.dises.univpm.it/web/quaderni/pdf/037.pdf First version, 1993 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:anc:wpaper:37

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