eprintid: 10135991
rev_number: 17
eprint_status: archive
userid: 608
dir: disk0/10/13/59/91
datestamp: 2021-10-08 09:24:52
lastmod: 2023-11-28 11:53:37
status_changed: 2021-10-08 09:24:52
type: article
metadata_visibility: show
creators_name: Morris, S
creators_name: Yang, M
title: Coordination and Continuous Stochastic Choice
ispublished: pub
divisions: UCL
divisions: B04
divisions: C05
divisions: F49
note: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
abstract: Players receive a return to investment that is increasing in the proportion of others who invest and the state and incur a small cost for acquiring information about the state. Their information is reflected in a stochastic choice rule, specifying the probability of a signal leading to investment. If discontinuous stochastic choice rules are infinitely costly, there is a unique equilibrium as costs become small, in which actions are a best response to a uniform (Laplacian) belief over the proportion of others investing. Infeasibility of discontinuous stochastic choice rules captures the idea that it is impossible to perfectly distinguish states that are arbitrarily close together and is both empirically documented and satisfied by many natural micro-founded cost functionals on information. Our results generalize global game selection results and establish that they do not depend on the specific additive noise information structure.
date: 2022-10
date_type: published
official_url: https://doi.org/10.1093/restud/rdab082
oa_status: green
full_text_type: other
language: eng
primo: open
primo_central: open_green
verified: verified_manual
elements_id: 1892173
doi: 10.1093/restud/rdab082
lyricists_name: Yang, Ming
lyricists_id: MYANB79
actors_name: Yang, Ming
actors_id: MYANB79
actors_role: owner
full_text_status: public
publication: The Review of Economic Studies
volume: 89
number: 5
pagerange: 2687-2722
citation:        Morris, S;    Yang, M;      (2022)    Coordination and Continuous Stochastic Choice.                   The Review of Economic Studies , 89  (5)   pp. 2687-2722.    10.1093/restud/rdab082 <https://doi.org/10.1093/restud%2Frdab082>.       Green open access   
 
document_url: https://discovery.ucl.ac.uk/id/eprint/10135991/1/MS23417manuscript_with%20online%20appendix.pdf