Information, coordination and the industrialization of countries

Florian Englmaier and Markus Reisinger

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: The industrialization process of a country is often plagued by a failure to coordinate investment decisions. Using the Global Games approach we can solve this coordination problem and eliminate the problem of multiple equilibria. We show how appropriate information provision enhances efficiency. We discuss extensions of the model and argue that subsidies may be a property of a signalling equilibrium to overcome credibility problems in information provision. In addition, we point out possible problems with overreaction to public information. Furthermore, we suggest a new focus for development policy. © The Author 2008. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved.

Keywords: decision making; development theory; economic theory; game theory; industrial investment; industrialization; modeling (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (2)

Published in CESifo Economic Studies 3 54(2008): pp. 534-550

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Related works:
Journal Article: Information, Coordination and the Industrialization of Countries (2008)
Working Paper: Information, Coordination, and the Industrialization of Countries (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:22031

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