A Comment on “The Welfare Effects of Public Information" by Stephen Morris and Hyun

نویسندگان

  • Song Shin
  • Donald J. Dale
  • John Morgan
چکیده

We re-examine the Morris and Shin (2002) model, but assume that players hold proper priors. This sharply alters equilibrium behavior, and welfare, particularly when coordination dominates individual payoffs. Whereas under improper priors the social value of public information is smallest, and possibly negative, in these situations, this is never true under proper priors. When coordination matters suffi ciently, public information always has positive social value. With proper priors, the social value of public information always varies non-monotonically with coordination motives. The social value of public information can still be negative, but only when coordination motives are moderate. Despite these differences, the two models converge in the limit, though the rate of convergence varies markedly with the weight on coordination.

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تاریخ انتشار 2015