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Abstract

This paper considers an infinite stage two person coordination game in which players are asymmetrically informed about the changes in the stage-game pay-offs. The main result is that, in all equilibria, if players start by conforming to a stage-game norm then, inspite of the existence of signalling possibilities, the informed player chooses not to signal an interval of strict pareto-improving changes in stage-game pay-offs, ,and this leads to the persistence of norms, which have become in-efficient.

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