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dc.contributor.authorHohnisch, Martinen_US
dc.date.accessioned2009-01-29T15:11:11Z-
dc.date.available2009-01-29T15:11:11Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/22936-
dc.description.abstractIn the context of standard two-period pure-exchange economies with sequential trade, this paper proposes a decentralized coordination mechanism for equilibriumexpectations, facilitated by local interactions between agents. Interactions are modelled stochastically by specifying a family of individual Markov processes on a two-dimensional integer lattice Z2 in continuous time. These processes are interdependent, in that the transition rate of each agent?s expectation also depends on expectations of neighboring agents. The particular specification of transition rates chosen in the present paper is known as the (two-dimensional) Voter Model. The composite process has two extremal invariant measures and a continuum of non-extremal invariant measures. The economic content of the stochastic expectations process is twofold. First, the convergence of the expectations process itself constitutes a ?sunspot-device?. While convergence to either one of the extremal invariant measures corresponds to a sunspot-free coordination state, convergence to a convex mixture of invariant measures engenders a sunspot equilibrium. Thus, nonergodicity of the expectations process is related to the occurrence of sunspot equilibria. Second, it explains how coordination of expectations is actually achieved through direct interactions between agents. Any particular coordination state (defined as a limiting measure of the process) can be traced back to a set of initial configurations or more general initial distributions of expectations.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesBonn econ discussion papers 2005,30en_US
dc.subject.jelD52en_US
dc.subject.jelD51en_US
dc.subject.jelD50en_US
dc.subject.jelD80en_US
dc.subject.jelD84en_US
dc.subject.ddc330en_US
dc.subject.keywordSunspot Equilibriaen_US
dc.subject.keywordVoter modelen_US
dc.subject.keywordlocal interactionsen_US
dc.subject.keywordcoordinationen_US
dc.titleLocal Interactions as a Decentralized Mechanism Coordinating Equilibrium Expectationsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn503119369en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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