SHAPING LONG-RUN EXPECTATIONS IN PROBLEMS OF COORDINATION

Fernando Vega Redondo
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Fernando Vega Redondo: Instituto Valenciano de Investigaciones Económicas
Authors registered in the RePEc Author Service: Fernando Vega-Redondo

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: When far-sighted agents may adjust their behavior only gradually , the issue of equilibrium selection in games becomes one of tension between "history" and "expectations". This paper analyzes whether, in this context, a planner may intervene successfully through short-run policies which redirect expectations away from the inertia of undesired history. The possibilities and limitations of such approach to "expectation management" are studied in a game-theoretic framework where both the planner and the population are involved in a struggle to impose their (credible) commitment possibilities.

Pages: 42 pages
Date: 1993-07
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Published by Ivie

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http://www.ivie.es/downloads/docs/wpasad/wpasad-1993-05.pdf Fisrt version / Primera version, 1993 (application/pdf)

Related works:
Journal Article: Shaping long-run expectations in problems of coordination (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:1993-05

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