Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19134
Authors: 
Englmaier, Florian
Reisinger, Markus
Year of Publication: 
2006
Series/Report no.: 
CESifo Working Paper 1670
Abstract: 
The industrialization process of a country is often plagued by a failure to coordinate investment decisions. Using the Global Games approach we can solve this coordination problem and eliminate the problem of multiple equilibria. We show how appropriate information provision enhances efficiency. We discuss extensions of the model and argue that subsidies may be a property of a signalling equilibrium to overcome credibility problems in information provision. In addition we point out possible problems with overreaction to public information. Furthermore, we suggest a new focus for development policy.
Subjects: 
information
coordination
industrialization
development
global games
equilibrium refinements
big push
JEL: 
C72
F21
D82
O14
O12
C79
Document Type: 
Working Paper

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