Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85270
Authors: 
Neher, Frank
Year of Publication: 
2011
Series/Report no.: 
Discussion Paper, School of Business & Economics: Economics 2011/1
Abstract: 
We analyse and compare individual beliefs about the effects of competition and their evolution over time in transition economies and experienced market economies. At the onset of transition, competition beliefs in transition countries are far more positive than in market economies. Over time, this difference has vanishes. Convergence can be attributed to changing believes in transition countries. We argue that overly optimistic competition beliefs in transition countries contributed to the possibility of implementing far reaching pro-market reforms and show that competition beliefs underlay support for economic reform. The empirical analysis is supplemented with a simple learning model rationalizing the findings on competition belief overshooting.
Subjects: 
convergence
beliefs
public support
reform
bias
signalling
JEL: 
D72
D83
P5
Document Type: 
Working Paper

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