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Please use this identifier to cite or link to this item: http://hdl.handle.net/2108/52

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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