We analyze the behavior of foreign banks who sequentially provide credit to finance projects in an emerging market. The foreign banks are exposed to both micro-economic risks and the macro-economic risk of a currency crisis, and there are no bailout guarantees. Nevertheless, we show that it is...

Win Stay, Lose Shift as well as imitation strategies for iterated games rely on an aspiration level. With both learning rules a move is repeated unless the pay-off fell short of the aspiration level. I investigate social adaptation mechanisms for the aspiration level and their impact on the...

This paper analyzes whether in institutional structures on capital markets contribute to explaining why some OECD-countries, in particular the Anglo-Saxon countries, have been much more successful over the last two decades in producing employemt growth and in reducing unemployment than most...

Addressing a question raised by Tourky and Yannelis (1998), we show that given any non-separable Banach space as commodity space and giben any atomless measure space of agents, there is an economy fulfilling the usual standard assumptions but having a core allocation not supportable as a...

We consider economies with incomplete markets, production, and a given distribution of initial endowments. The main purpose of the paper to present a robust example of an econmy with only one firm and one good per state in which no production dicision entails a constrained efficient outcome. In...

This paper explores the impact of memory in Cournot oligopolies where firms learn through imitation of success (as suggested in Alchian (1950) and modeled in Vega-Redondo (1997)). As long as memory includes at least one period, the long-run outcomes correspond to all the quantities in the...

We consider four models of evolution and learning in games which rely on perturbations of payoffs, including stochastic fictitious play. In all cases, we establish global stability results for zerosum games, games with an interior ESS, potential games, and supermodular games.

Labor market performance has differed considerably between OECD countries over the last two decades. The focus of the literature so far has been to ask whether these differences can be explained by varying degrees of labor market rigidities and generosity of welfare states. This paper takes a...

We consider a monopolist who sells indetical objects of common but unknown value in a herding-prone environment. Buyers make their purchasing decisions sequentially, and rely on a private signal as well as previous buyers´actions to infer the common value of the object. The model applies to a...

We incorporate a wage bargaining structure in a dynamic general equilibrium model and show how this feature changes short and long-run properties of equilibria compared with a perfectly competitive setting. We discuss how employment, capital, and income shares respond to wage setting shocks and...