Global vs. Local Information

Leonardo Boncinelli

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: In this paper I apply stochastic stability to compare local information to global information in terms of welfare. Under global information agents potentially imitate anyone else, while under local information choices are grouped into information sets and agents can observe and hence imitate only those within their own information set. The welfare evaluation of information is ambiguous over finite time horizons, while in the long run less (more) information is better in the presence of pure negative (positive) spillovers. However, when a selection issue is considered a further ambiguity emerges making the comparison, in general, uncertain.

Keywords: imitation; local information; global information; stochastic stability (search for similar items in EconPapers)
JEL-codes: D01 D80 D81 D85 Z13 (search for similar items in EconPapers)
Date: 2007-10
New Economics Papers: this item is included in nep-dcm
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Persistent link: https://EconPapers.repec.org/RePEc:usi:wpaper:520

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