Dynamic interventions and informational linkages
| Autor: | Steven R. Grenadier, Lin William Cong, Yunzhi Hu |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
040101 forestry
Economics and Econometrics Government 050208 finance Strategy and Management 05 social sciences Psychological intervention 04 agricultural and veterinary sciences Affect (psychology) Microeconomics Intervention (law) Accounting Complementarity (molecular biology) Economic interventionism 0502 economics and business Economics 0401 agriculture forestry and fisheries Finance Externality Global game |
| Zdroj: | Journal of Financial Economics. 135:1-15 |
| ISSN: | 0304-405X |
| DOI: | 10.1016/j.jfineco.2019.05.011 |
| Popis: | We model a dynamic economy with strategic complementarity among investors and study how endogenous government interventions mitigate coordination failures. We establish equilibrium existence and uniqueness, and we show that one intervention can affect another through altering the public information structure. A stronger initial intervention helps subsequent interventions through increasing the likelihood of positive news, but also leads to negative conditional updates. Our results suggest optimal policy should emphasize initial interventions when coordination outcomes tend to correlate. Neglecting informational externalities of initial interventions results in over- or under-interventions. Moreover, saving smaller funds disproportionally more can generate greater informational benefits at smaller costs. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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