01834cas a2200241 a 4500 AALejournalIMF001885 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451846980 1018-5941 BD-DhAAL BD-DhAAL Erbas, S. Primeron Reforms in a Second-Best Ambiguous Environment : A Case for Gradualism / S. Erbas. Washington, D.C. : International Monetary Fund, 2002. 1 online resource (56 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Ambiguity, as opposed to uncertainty, reflects lack of sufficient information about distribution and payoffs of infrequent events. Reforms are infrequent events, undertaken in ambiguous second-best environments where bad reform outcomes are feasible. A general case for the gradualist reform strategy is that it may pay to defer some reforms until relevant information about possible reform outcomes and associated probabilities is revealed, and ambiguity is reduced over time. Gradualism may dominate the big bang strategy, if some of the reforms in a reform sequence are not sure bets and waiting costs do not dominate reversal costs under some information sets forthcoming over time. The relation to Ellsberg's Paradox is discussed. Some cases for and against gradualism are reviewed. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2002/050 Full text available on IMF http://elibrary.imf.org/view/journals/001/2002/050/001.2002.issue-050-en.xml IMF e-Library