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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.
Item Type: | Journal article |
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Form of publication: | Publisher's Version |
Keywords: | decision making; development theory; economic theory; game theory; industrial investment; industrialization; modeling |
Faculties: | Economics Economics > Chairs > Seminar for Organizational Economics Economics > Chairs > Chair of Dynamic Economic Theory (closed) |
Subjects: | 300 Social sciences > 330 Economics |
ISSN: | 1610-241X |
Language: | English |
Item ID: | 22031 |
Date Deposited: | 01. Dec 2014, 15:13 |
Last Modified: | 04. Nov 2020, 13:02 |
Available Versions of this Item
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Information, Coordination, and the Industrialization of Countries. (deposited 10. Jul 2012, 13:10)
- Information, coordination and the industrialization of countries. (deposited 01. Dec 2014, 15:13) [Currently Displayed]