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Public information and the concern for coordination

Kene Boun My (), Camille Cornand and Rodolphe Dos Santos Ferreira ()

Working Papers from HAL

Abstract: In Keynes' beauty contest, agents make evaluations reflecting both an expected fundamental value and the conventional value expected to be set by the market. They thus respond to fundamental and coordination motives, respectively, the prevalence of either being set exogenously. Our contribution is twofold. First, we propose a valuation game in which agents strategically choose how to weight each motive. This game emphasises public information leads agents to favour the coordination motive. Second, we test the game through a laboratory experiment. Subjects tend to conform to theoretical predictions, except when fundamental uncertainty is low relative to strategic uncertainty. Abstract In Keynes' beauty contest, agents make evaluations reflecting both an expected fun

Keywords: beauty contest; experiment; coordination; dispersed information; public information (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-exp, nep-gth, nep-hpe and nep-pke
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01485677v5
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