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Independence and Heterogeneity in Games of Incomplete Information

Mason, Robin; Valentinyi, Akos - C.E.P.R. Discussion Papers - 2004

This Paper provides a sufficient condition for the existence and uniqueness of equilibrium in monotone pure strategies …. Secondly, we show that if, in addition, there is sufficient heterogeneity of the conditional density of types, then the best … response correspondence is a contraction mapping. This ensures equilibrium existence and uniqueness. Our approach allows us to …

Persistent link: https://www.econbiz.de/10005114177

Incomplete-Market Equilibria Solved Recursively on an Event Tree

Dumas, Bernard J; Lyasoff, Andrew - C.E.P.R. Discussion Papers - 2009

We develop a method that allows one to compute incomplete-market equilibria routinely for Markovian equilibria (when they exist). The main difficulty to be overcome arises from the set of state variables. There are, of course, exogenous state variables driving the economy but, in an incomplete...

Persistent link: https://www.econbiz.de/10005124234

Was There a British House Price Bubble? Evidence from a Regional Panel

Cameron, Gavin; Muellbauer, John; Murphy, Anthony - C.E.P.R. Discussion Papers - 2006

lags and relevant spatial parameter heterogeneity. The results are data consistent, with plausible long-run solutions and …

Persistent link: https://www.econbiz.de/10005124041

Distribution of Export Price Risk in a Developing Country

Bourguignon, François; Lambert, Sylvie; Suwa … - C.E.P.R. Discussion Papers - 1996

We address the issue of social distribution of an aggregate risk (on agricultural export price), from a macroeconomic perspective. Individual incomes in representative social groups are computed as a function of export prices, which are assumed to be stochastic, using an applied general...

Persistent link: https://www.econbiz.de/10005497736

Competition between Intermediated and Direct Trade and the Timing of Disintermediation

Fingleton, John - C.E.P.R. Discussion Papers - 1996

This paper analyses competition between direct and intermediated trade. We show that middlemen’s supply and demand depend on both their bid and ask prices if sellers and buyers have the alternative of trading directly. Multiplicity also prevails. Direct trade does not constrain the market...

Persistent link: https://www.econbiz.de/10005661852

Explaining the Favorite-Longshot Bias: Is it Risk-Love or Misperceptions?

Snowberg, Erik; Wolfers, Justin - C.E.P.R. Discussion Papers - 2010

The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates of the probability of a horse winning—longshots are overbet, while favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet...

Persistent link: https://www.econbiz.de/10008468517

Government Gains from Self-Restraint: A Bargaining Theory of Inefficient Redistribution Policies

Drazen, Allan; Limão, Nuno - C.E.P.R. Discussion Papers - 2003

We consider a bargaining model of the interaction between a government and interest groups in which, unlike existing models, neither side is assumed to have all the bargaining power. The government will then find it optimal to constrain itself in the use of transfer policies to improve its...

Persistent link: https://www.econbiz.de/10005504570

Local and Consistent Centrality Measures in Networks

Dequiedt, Vianney; Zenou, Yves - C.E.P.R. Discussion Papers - 2014

The centrality of an agent in a network has been shown to be crucial in explaining different behaviors and outcomes. In this paper, we propose an axiomatic approach to characterize a class of centrality measures for which the centrality of an agent is recursively related to the centralities of...

Persistent link: https://www.econbiz.de/10011083213

Decision-making Procedures: A General Theory and Its Field Experimental Test

Aldashev, Gani; Kirchsteiger, Georg; Sebald, Alexander - C.E.P.R. Discussion Papers - 2009

It is a persistent finding in psychology and experimental economics that people's behavior is not only shaped by outcomes but also by decision-making procedures. In this paper we develop a general framework capable of modelling these procedural concerns. Within the context of psychological games...

Persistent link: https://www.econbiz.de/10005039581

Trust and Trustworthiness Among Europeans: South-North Comparison

Bornhorst, Fabian; Ichino, Andrea; Schlag, Karl; … - C.E.P.R. Discussion Papers - 2004

This Paper discovers significant differences between southern and northern Europeans in a dynamic version of the ‘trust game’ played by Ph.D. students from different nationalities at the European University Institute. Our version of the trust game allows subjects to choose the receivers to...

Persistent link: https://www.econbiz.de/10005067472