Decision Making and Learning in a Globalizing World
March 2010
Research Paper
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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.
Keywords
- globalization
- decentralization
- centralization
- learning
- reputational concerns
- cheap talk
- policy diffusion
Classifications using
Journal of Economic Literature (JEL) Classification System
- D70 : Analysis of Collective Decision-Making: General
- D02 : Institutions: Design, Formation, and Operations
- D83 : Search; Learning; Information and Knowledge
Automatically Extracted Terms
- agent
- technology
- value
- market
- information
- ^ 1
- strategy
- e zjsy
- decision
- communication
- equilibrium
- process
- center
- reputational
- proposition
- practice
- reputational concerns
- reputation
- dierent
- period
