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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2108/52
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| Title: | Uncertainty and endogenous selection of economic equilibria |
| Authors: | Scaramozzino, Pasquale
Vulkan, Nir |
| Keywords: | microfoundations
co-ordination failure
equilibrium selection |
| Issue Date: | Mar-2003 |
| Publisher: | CEIS |
| Series/Report no.: | CEIS Tor Vergata Research Paper
5 |
| Abstract: | This paper presents a model of co-ordination failures based on market power and local oligopoly. The economy exhibits a multiplicity of Pareto-ranked equilibria. The introduction of uncertainty generates an endogenous equilibrium selection process, due to a strategic use of information by firms. The economy is more likely to settle on some equilibria than on others. We argue that a full understanding of these robustness criteria is needed before any policy which is intended to help co-ordinate the level of activity to a Pareto dominant outcome can be successfully implemented. |
| URI: | http://ssrn.com/abstract=386281
http://hdl.handle.net/2108/52 |
| Appears in Collections: | Research papers
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| SSRN-id386281.pdf | | 297Kb | Adobe PDF | View/Open |
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