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(Reference retrieved automatically from Web of Science through information on FAPESP grant and its corresponding number as mentioned in the publication by the authors.)

Dynamic coordination among heterogeneous agents

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Author(s):
Guimaraes, Bernardo [1] ; Elisa Pereira, Ana [2]
Total Authors: 2
Affiliation:
[1] Sao Paulo Sch Econ FGV, Rua Itapeva 474, BR-01332000 Sao Paulo, SP - Brazil
[2] Univ Los Andes, Sch Business & Econ, Santiago - Chile
Total Affiliations: 2
Document type: Journal article
Source: JOURNAL OF MATHEMATICAL ECONOMICS; v. 73, p. 13-33, DEC 2017.
Web of Science Citations: 3
Abstract

We study a dynamic model of coordination with timing frictions and payoff heterogeneity. There is a unique equilibrium, characterized by thresholds that determine the choices of each type of agent. We characterize equilibrium for the limiting cases of vanishing timing frictions and vanishing shocks to fundamentals. A lot of conformity emerges: despite payoff heterogeneity, agents' equilibrium thresholds partially coincide as long as a set of beliefs that would make this coincidence possible exists. However, the equilibrium thresholds never fully coincide. In case of vanishing frictions, the economy behaves almost as if all agents were equal to an average type. Conformity is not inefficient. In the efficient solution, agents follow others even more often. (C) 2017 Elsevier B.V. All rights reserved. (AU)

FAPESP's process: 14/06069-5 - Equilibrium selection in dynamic environments with heterogeneity
Grantee:Ana Elisa Gonçalves Pereira
Support Opportunities: Scholarships abroad - Research Internship - Doctorate
FAPESP's process: 13/24368-7 - iPhone or Android? Equilibrium selection in dynamic models with network externalities
Grantee:Ana Elisa Gonçalves Pereira
Support Opportunities: Scholarships in Brazil - Doctorate