The power of sunspots

• Verfasst von: Fehr, Dietmar [VerfasserIn]
• Verfasst von: Heinemann, Frank [VerfasserIn]
• Verfasst von: Llorente-Saguer, Aniol [VerfasserIn]
• Titel: The power of sunspots
• Titelzusatz: an experimental analysis
• Verf.angabe: Dietmar Fehr, Frank Heinemann, Aniol Llorente-Saguer
• Jahr: 2019
• Jahr des Originals: 2018
• Umfang: 14 S.
• Fussnoten: Available online 23 August 2018 ; Gesehen am 15.10.2019
• Titel Quelle: Enthalten in: Journal of monetary economics
• Ort Quelle: Amsterdam [u.a.] : Elsevier, 1975
• Jahr Quelle: 2019
• Band/Heft Quelle: 103(2019), Seite 123-136
• DOI: doi:10.1016/j.jmoneco.2018.08.006
• Datenträger: Online-Ressource
• Sprache: eng
• Bibliogr. Hinweis: Erscheint auch als : Druck-Ausgabe: Fehr, Dietmar: The power of sunspots. - 2019
• Sach-SW: Coordination games
• Sach-SW: Expectations
• Sach-SW: Forward guidance
• Sach-SW: Strategic uncertainty
• Sach-SW: Sunspot equilibria
• K10plus-PPN: 1678919209

Abstract

In an experiment using a coordination game with extrinsic random signals (“sunspots”), we systematically vary the stochastic process generating these signals and measure how signals affect behavior. We find that sunspot equilibria emerge naturally with salient public signals. However, highly correlated private signals can also lead to sunspot-driven behavior, even when this is not an equilibrium. Private signals reduce the power of public signals as sunspot variables. The higher the correlation of extrinsic signals and the more easily they can be aggregated, the more powerful these signals are in distracting actions from the action that minimizes strategic uncertainty.