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Rotemberg and Imperfect Common Knowledge : A Solution Algorithm
Šauer, Radek - 2020
This paper develops an algorithm that enables to solve macroeconomic models with Rotemberg pricing and imperfect common … knowledge. Under the concept of imperfect common knowledge, Rotemberg pricing requires the solution algorithm to take prices … algorithm has to search for the policy function of the aggregate price and for the policy function of the firm-specific price …
Persistent link: https://www.econbiz.de/10012841148
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Collusion by Algorithm : The Role of Unobserved Actions
Martin, Simon; Rasch, Alexander - 2022
We analyze the effects of better algorithmic demand forecasting on collusive profits. We show that the comparative statics crucially depend on the whether actions are observable. Thus, the optimal antitrust policy needs to take into account the institutional settings of the industry in question....
Persistent link: https://www.econbiz.de/10013296270
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Collusive Compensation Schemes Aided by Algorithms
Martin, Simon; Schmal, Wolfgang Benedikt - 2021
Sophisticated collusive compensation schemes such as assigning future market shares or direct transfers are frequently observed in detected cartels. We show formally why these schemes are useful for dampening deviation incentives when colluding firms are temporary asymmetric. The relative...
Persistent link: https://www.econbiz.de/10013310765
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Aversion to Hiring Algorithms : Transparency, Gender Profiling, and Self-Confidence
Dargnies, Marie-Pierre; Hakimov, Rustamdjan; Kübler, … - 2022
We run an online experiment to study the origins of algorithm aversion. Participants are either in the role of workers … in the role of a manager or by an algorithm. In a second set of experiments, managers choose whether they want to … delegate their hiring decisions to the algorithm. In the baseline treatments, we observe that workers choose the manager more …
Persistent link: https://www.econbiz.de/10014244326
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Dynamic Ic and Dynamic Programming
Kwon, Suehyun - 2019
This paper develops a dynamic programming method when the one-stage deviation principle in the sense of mechanism design literature doesn’t hold. The commonly used dynamic programming method is valid only if the one-stage deviation principle in the sense of mechanism design literature is...
Persistent link: https://www.econbiz.de/10012889686
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Exploiting Symmetry in High-Dimensional Dynamic Programming
Kahou, Mahdi Ebrahimi; Fernández-Villaverde, Jesús; … - 2021
We propose a new method for solving high-dimensional dynamic programming problems and recursive competitive equilibria with a large (but finite) number of heterogeneous agents using deep learning. The „curse of dimensionality“ is avoided due to four complementary techniques: (1) exploiting...
Persistent link: https://www.econbiz.de/10013221172
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Optimal Epidemic Suppression Under an ICU Constraint
Miclo, Laurent - 2020
How much and when should we limit economic and social activity to ensure that the health-care system is not overwhelmed during an epidemic? We study a setting where ICU resources are constrained while suppression is costly (e.g., limiting economic interaction). Providing a fully analytical...
Persistent link: https://www.econbiz.de/10012833733
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Optimization Over Graphs
Kwon, Suehyun - 2019
This paper defines isomorphism for network formation that is not mathematically isomorphic. Once the pattern of network formation is characterized, one can test for (i) location fixed effects, (ii) heterogeneity, (iii) private information allowing for long-term contracts. The paper provides...
Persistent link: https://www.econbiz.de/10012892085
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Dynamic Programming on a Quantum Annealer : Solving the RBC Model
Fernández-Villaverde, Jesús; Hull, Isaiah - 2023
We introduce a novel approach to solving dynamic programming problems, such as those in many economic models, on a quantum annealer, a specialized device that performs combinatorial optimization. Quantum annealers attempt to solve an NP-hard problem by starting in a quantum superposition of all...
Persistent link: https://www.econbiz.de/10014347831
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Numerical solution of dynamic equilibrium models under Poisson uncertainty
Posch, Olaf; Trimborn, Timo - 2011
We propose a simple and powerful numerical algorithm to compute the transition process in continuous-time dynamic … system of functional differential equations of the retarded type. We apply the Waveform Relaxation algorithm, i.e., we …
Persistent link: https://www.econbiz.de/10010274762