Publicação
Coordination and development
| Resumo: | This paper addresses the issue of industrial development using a coordination game. Complementarities between transport infrastructure provision by the Government and consumer goods manufacturing firms, and among consumer goods firms themselves dictate the outcome: either the transport infrastructure (i.e., a highway) is not built and firms keep doing “home” production, thus supplying mainly nearby consumers and dispensing with a highway; or they switch to “factory” production, a more spatially centralized regime, where output must be sold over long distances, thus implying the construction of a highway. In relation to the existent literature, this paper presents two main innovations. Firstly, the two sources of linkage, namely cost linkage, through the provision of an indivisible input (the highway), and demand linkage, through the wage rise brought about by industrialization, are not treated separately, but they are integrated in the same model. Consequently, the game has now two levels of equilibrium selection. Secondly, the paper does not limit itself to checking that there can arise multiple Nash equilibria under certain circumstances, but it discusses methods for the selection of a unique outcome. Consequently, in addition to the classical Nash equilibria mentioned above, there is a third possible solution where the Government builds the highway but the consumer goods firms refrain from using it and stick to “home” production. Hence, the transport infrastructure becomes a “white elephant”. |
|---|---|
| Autores principais: | Pontes, José Pedro |
| Outros Autores: | Pais, Joana |
| Assunto: | Big Push Coordination games Economic development Equilibrium selection Industrialization |
| Ano: | 2013 |
| País: | Portugal |
| Tipo de documento: | working paper |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório da Universidade de Lisboa |
| _version_ | 1866810732130074624 |
|---|---|
| author | Pontes, José Pedro |
| author2 | Pais, Joana |
| author2_role | author |
| author_facet | Pontes, José Pedro Pais, Joana |
| author_role | author |
| contributor_name_str_mv | Repositório Científico de Acesso Aberto da ULisboa |
| country_str | PT |
| creators_json_txt | [{\"Person.name\":\"Pontes, José Pedro\"},{\"Person.name\":\"Pais, Joana\"}] |
| datacite.contributors.contributor.contributorName.fl_str_mv | Repositório Científico de Acesso Aberto da ULisboa |
| datacite.creators.creator.creatorName.fl_str_mv | Pontes, José Pedro Pais, Joana |
| datacite.date.Accepted.fl_str_mv | 2013-01-01T00:00:00Z |
| datacite.date.available.fl_str_mv | 2014-01-09T16:46:28Z |
| datacite.date.embargoed.fl_str_mv | 2014-01-09T16:46:28Z |
| datacite.rights.fl_str_mv | http://purl.org/coar/access_right/c_abf2 |
| datacite.subjects.subject.fl_str_mv | Big Push Coordination games Economic development Equilibrium selection Industrialization |
| datacite.titles.title.fl_str_mv | Coordination and development |
| dc.contributor.none.fl_str_mv | Repositório Científico de Acesso Aberto da ULisboa |
| dc.creator.none.fl_str_mv | Pontes, José Pedro Pais, Joana |
| dc.date.Accepted.fl_str_mv | 2013-01-01T00:00:00Z |
| dc.date.available.fl_str_mv | 2014-01-09T16:46:28Z |
| dc.date.embargoed.fl_str_mv | 2014-01-09T16:46:28Z |
| dc.format.none.fl_str_mv | application/pdf |
| dc.identifier.none.fl_str_mv | http://hdl.handle.net/10400.5/6318 |
| dc.language.none.fl_str_mv | eng |
| dc.publisher.none.fl_str_mv | ISEG. Departamento de Economia |
| dc.rights.none.fl_str_mv | http://purl.org/coar/access_right/c_abf2 |
| dc.subject.none.fl_str_mv | Big Push Coordination games Economic development Equilibrium selection Industrialization |
| dc.title.fl_str_mv | Coordination and development |
| dc.type.none.fl_str_mv | http://purl.org/coar/resource_type/c_8042 |
| description | This paper addresses the issue of industrial development using a coordination game. Complementarities between transport infrastructure provision by the Government and consumer goods manufacturing firms, and among consumer goods firms themselves dictate the outcome: either the transport infrastructure (i.e., a highway) is not built and firms keep doing “home” production, thus supplying mainly nearby consumers and dispensing with a highway; or they switch to “factory” production, a more spatially centralized regime, where output must be sold over long distances, thus implying the construction of a highway. In relation to the existent literature, this paper presents two main innovations. Firstly, the two sources of linkage, namely cost linkage, through the provision of an indivisible input (the highway), and demand linkage, through the wage rise brought about by industrialization, are not treated separately, but they are integrated in the same model. Consequently, the game has now two levels of equilibrium selection. Secondly, the paper does not limit itself to checking that there can arise multiple Nash equilibria under certain circumstances, but it discusses methods for the selection of a unique outcome. Consequently, in addition to the classical Nash equilibria mentioned above, there is a third possible solution where the Government builds the highway but the consumer goods firms refrain from using it and stick to “home” production. Hence, the transport infrastructure becomes a “white elephant”. |
| dirty | 0 |
| eu_rights_str_mv | openAccess |
| format | workingPaper |
| fulltext.url.fl_str_mv | https://repositorio.ulisboa.pt/bitstreams/aca1ab91-67f0-4279-bdd7-bb9ebec87039/download |
| id | ul_eaf403ff032257dcd987058e2b239c8a |
| identifier.url.fl_str_mv | http://hdl.handle.net/10400.5/6318 |
| instacron_str | ul |
| institution | Universidade de Lisboa |
| instname_str | Universidade de Lisboa |
| language | eng |
| network_acronym_str | ul |
| network_name_str | Repositório da Universidade de Lisboa |
| oai_identifier_str | oai:repositorio.ulisboa.pt:10400.5/6318 |
| organization_str_mv | urn:organizationAcronym:ul |
| person_str_mv | Pontes, José Pedro Pais, Joana |
| publishDate | 2013 |
| publisher.none.fl_str_mv | ISEG. Departamento de Economia |
| reponame_str | Repositório da Universidade de Lisboa |
| repository_id_str | urn:repositoryAcronym:ul |
| service_str_mv | urn:repositoryAcronym:ul |
| spelling | engISEG. Departamento de EconomiaporThis paper addresses the issue of industrial development using a coordination game. Complementarities between transport infrastructure provision by the Government and consumer goods manufacturing firms, and among consumer goods firms themselves dictate the outcome: either the transport infrastructure (i.e., a highway) is not built and firms keep doing “home” production, thus supplying mainly nearby consumers and dispensing with a highway; or they switch to “factory” production, a more spatially centralized regime, where output must be sold over long distances, thus implying the construction of a highway. In relation to the existent literature, this paper presents two main innovations. Firstly, the two sources of linkage, namely cost linkage, through the provision of an indivisible input (the highway), and demand linkage, through the wage rise brought about by industrialization, are not treated separately, but they are integrated in the same model. Consequently, the game has now two levels of equilibrium selection. Secondly, the paper does not limit itself to checking that there can arise multiple Nash equilibria under certain circumstances, but it discusses methods for the selection of a unique outcome. Consequently, in addition to the classical Nash equilibria mentioned above, there is a third possible solution where the Government builds the highway but the consumer goods firms refrain from using it and stick to “home” production. Hence, the transport infrastructure becomes a “white elephant”.application/pdfporCoordination and developmentPontes, José PedroPais, JoanaHostingInstitutionOrganizationalRepositório Científico de Acesso Aberto da ULisboae-mailmailto:repositorio@reitoria.ulisboa.ptrepositorio@reitoria.ulisboa.ptISSNIsPartOf0874-45482014-01-09T16:46:28Z20132013-01-01T00:00:00ZHandlehttp://hdl.handle.net/10400.5/6318http://purl.org/coar/access_right/c_abf2open accessBig PushCoordination gamesEconomic developmentEquilibrium selectionIndustrialization562970 bytesother research producthttp://purl.org/coar/resource_type/c_8042working paperhttp://purl.org/coar/access_right/c_abf2application/pdffulltexthttps://repositorio.ulisboa.pt/bitstreams/aca1ab91-67f0-4279-bdd7-bb9ebec87039/download |
| spellingShingle | Coordination and development Pontes, José Pedro Big Push Coordination games Economic development Equilibrium selection Industrialization |
| status | SINGLETON |
| subject.fl_str_mv | Big Push Coordination games Economic development Equilibrium selection Industrialization |
| title | Coordination and development |
| title_full | Coordination and development |
| title_fullStr | Coordination and development |
| title_full_unstemmed | Coordination and development |
| title_short | Coordination and development |
| title_sort | Coordination and development |
| topic | Big Push Coordination games Economic development Equilibrium selection Industrialization |
| topic_facet | Big Push Coordination games Economic development Equilibrium selection Industrialization |
| url | http://hdl.handle.net/10400.5/6318 |
| visible | 1 |