Shaping long-run expectations in problems of coordination

• Autores: Fernando Vega-Redondo
• Localización: Working papers = Documentos de trabajo: Serie AD, Nº. 5, 1993, págs. 1-42
• Idioma: inglés
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• Resumen

  • When far-sighted agents may adjust their behavior only gradually , the issue of equilibrium selection in games becomes one of tension between "history" and "expectations". This paper analyzes whether, in this context, a planner may intervene successfully through short-run policies which redirect expectations away from the inertia of undesired history. The possibilities and limitations of such approach to "expectation management" are studied in a game-theoretic framework where both the planner and the population are involved in a struggle to impose their (credible) commitment possibilities.