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Book/Printed Material Transparency of information and coordination in economies with investment complementarities

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Title

  • Transparency of information and coordination in economies with investment complementarities

Summary

  • "How do public and private information affect equilibrium allocations and social welfare in economies with investment complementarities? And what is the optimal transparency in the information conveyed, for example, by economic statistics, policy announcements, or news in the media? We first consider an environment where the complementarities are weak so that the equilibrium is unique no matter the structure of information. An increase in the precision of public information may have the perverse effect of increasing aggregate volatility. Nevertheless, as long as there is no value to lotteries, welfare unambiguously increases with an increase in either the relative or the absolute precision of public information. Hence, full transparency is optimal. This is because more transparency facilitates more effective coordination, which is valuable from a social perspective. On the other hand, when complementarities are strong enough that multiple equilibria are possible, more transparency permits the market to coordinate more effectively on either the bad or the good equilibrium. In this case, constructive ambiguity becomes optimal if there is a high risk that more transparency will lead to coordination failures"--National Bureau of Economic Research web site.

Names

  • Angeletos, Marios
  • Pavan, Alessandro
  • National Bureau of Economic Research

Created / Published

  • Cambridge, MA : National Bureau of Economic Research, c2004.

Notes

  • -  Title from PDF file as viewed on 1/14/2005.
  • -  Includes bibliographical references.
  • -  Also available in print.
  • -  Mode of access: World Wide Web.
  • -  System requirements: Adobe Acrobat Reader.

Call Number/Physical Location

  • HB1

Digital Id

Library of Congress Control Number

  • 2005615723

Access Advisory

  • Unrestricted online access

Online Format

  • image
  • pdf

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Cite This Item

Citations are generated automatically from bibliographic data as a convenience, and may not be complete or accurate.

Chicago citation style:

Angeletos, Marios, Alessandro Pavan, and National Bureau Of Economic Research. Transparency of Information and Coordination in Economies With Investment Complementarities. Cambridge, MA: National Bureau of Economic Research, 2004. Pdf. https://aj.sunback.homes/item/2005615723/.

APA citation style:

Angeletos, M., Pavan, A. & National Bureau Of Economic Research. (2004) Transparency of Information and Coordination in Economies With Investment Complementarities. Cambridge, MA: National Bureau of Economic Research. [Pdf] Retrieved from the Library of Congress, https://aj.sunback.homes/item/2005615723/.

MLA citation style:

Angeletos, Marios, Alessandro Pavan, and National Bureau Of Economic Research. Transparency of Information and Coordination in Economies With Investment Complementarities. Cambridge, MA: National Bureau of Economic Research, 2004. Pdf. Retrieved from the Library of Congress, <aj.sunback.homes/item/2005615723/>.