Research seminar: “Disagreement, Information, and Welfare”
The Research Centre of the Faculty of Economics cordially invites you to a research seminar on Wednesday, 19th November 2014 at 12 p.m. in room P-109 at the Faculty of Economics, University of Ljubljana.
Jernej Čopič, UCLA in Caltech will present the article:
“Disagreement, Information, and Welfare”
“In a strategic situation with incomplete information, two individuals form consistent (self-confirming) assessments as classical statisticians from privately accumulated data that each has observed (own types, payoffs, and actions of the other individual). In appropriately defined equilibrium, where individuals are rational and sophisticated, there are two outcomes: (i) “disagreement” bears no idiosyncratic risks, minimizes aggregate welfare, individuals cannot recover the truth, and may hold different assessments; (ii) “agreement” maximizes welfare, assessments coincide with the truth, and the outcome is robust to the individuals’ assessments. Welfare is defined via a subjective Pareto criterion, which compares outcomes based on assessments that players may hold. Agreement is efficient in the classical sense and is also subjectively Pareto efficient. However, disagreement subjectively Pareto-dominates agreement. Under equilibrium assessments, individuals disagree on the redistributive aspects of switching from disagreement to agreement. The model relates to “agreeing to disagree” (Aumann 1976). It also relates to trade and information (Milgrom and Stokey 1982), where it is shown that richer information cannot result in more disparate assessments and more trade. The model also represents a stylized economy with two sectors, where there are two equilibria, inefficient autarky (corresponding to disagreement) and efficient exchange (corresponding to exchange). A social planner can induce the switch from autarky to exchange and balance the budget.”
You can register for the free seminar by phone (01) 58-92-490, or via e-mail: research.seminars@ef.uni-lj.si by Tuesday, 18th November 2014.
We look forward to seeing you!
Publish your comment:
Upcoming events
