We study two aspects of globalization. It allows a decision-maker to go beyond his own local experience and to learn from other decision-makers in addressing common problems. This improves the identification and diffusion of best practices. It also provides extra information to `markets' that evaluate decision-makers: comparisons become possible. We identify conditions under which the globalization of markets helps or hurts (i) the communication among decision-makers about their own experience and (ii) the quality of the decision that is taken next. An important mediating factor is whether decision-making is centralized or decentralized.

Additional Metadata
Keywords centralization, cheap talk, decentralization, globalization, learning, policy diffusion, reputational concerns
Publisher Tinbergen Institute
Persistent URL hdl.handle.net/1765/18544
Citation
Swank, O.H., & Visser, B.. (2010). Decision Making and Learning in a Globalizing World (No. TI 2010-034/1). Discussion paper / Tinbergen Institute. Tinbergen Institute. Retrieved from http://hdl.handle.net/1765/18544