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Stabilizing the economy: Market design and general equilibrium

Goeree, Jacob K.; Lindsay, Luke - 2012

Review, 1960). Tatonnement theory predicts that prices are globally unstable for this economy, i.e. unless prices start at … the competitive equilibrium they oscillate without converging. Anderson et al. (Journal of Economic Theory, 2004) report … convergence. We replicate their experiments and confirm that tatonnement theory predicts the direction of price changes remarkably …

Persistent link: https://www.econbiz.de/10010316891

Cheap Talk, Gullibility, and Welfare in an Environmental Taxation Game

Deissenberg, Christophe; Dawid, Herbert; Sevcik, Pavel - 2004

We consider a simple dynamic model of environmental taxation that exhibits time inconsistency. There are two categories of firms, Believers, who take the tax announcements made by the Regulator to face value, and Non-Believers, who perfectly anticipate the Regulator's decisions, albeit at a...

Persistent link: https://www.econbiz.de/10011325007

Social Conformity and Bounded Rationality in Arbitrary Games with Incomplete Information: Some First Results

Cartwright, Edward; Wooders, Myrna - 2003

In has been frequently observed, in both economics and psychology, that individuals tend to conform to the choices of other individuals with whom thy identify. Can such conformity be consistent with self-interested behaviour? To address this question we use the framework of games with incomplete...

Persistent link: https://www.econbiz.de/10011325147

Near-rational exuberance

Bullard, James; Evans, George W.; Honkapohja, Seppo - 2005

We study how the use of judgement or “add-factors” in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which we call exuberance equilibria, can exist in standard macroeconomic...

Persistent link: https://www.econbiz.de/10011604601

Existence of an exact Walrasian equilibrium in nonconvex economies

D'Agata, Antonio - In: Economics: The Open-Access, Open-Assessment E-Journal 6 (2012) 2012-12, pp. 1-16

The existence of an exact Walrasian equilibrium in nonconvex economies is still a largely unexplored issue. This paper shows that such an equilibrium exists in nonconvex economies by following the nearby economyapproach introduced by Postlewaite and Schmeidler (Approximate Walrasian Equilibrium...

Persistent link: https://www.econbiz.de/10010308740

Three Lectures on the Walrasian Hypotheses for Exchange Economies

Brown, Donald J. - 1997

This paper discusses the testable implications of the Walrasian hypotheses: H1 Observed market demand is the sum of consumer's demands derived from utility maximization subject to budget constraints. H2 There exists an observable (locally) unique equilibrium price system such that the observable...

Persistent link: https://www.econbiz.de/10010369219

A Ricardian model of the tragedy of the commons

lasserre, Pierre; Soubeyran, Antoine - 2001

This paper revisits the tragedy of the commons when agents have different capabilities in both production and encroachment activities, and can allocate their time between them. Under fairly general assumptions on production and encroachment technologies, an individual's expected income is convex...

Persistent link: https://www.econbiz.de/10011608842

Constrained inefficiency in GEI: A geometric argument

Tirelli, Mario - 2005

In this paper we use global analysis to study the welfare properties of general equilibrium economies with incomplete markets (GEI). Our main result is to show that constrained Pareto optimal equilibria are contained in a linear submanifold of the equilibrium set. This result is explicitly...

Persistent link: https://www.econbiz.de/10010318896

Existence of arrow-debreu equilibrium with generalized stochastic differential utility

Beißner, Patrick - 2011

This paper establishes, in the setting of Brownian information, a general equilibrium existence result under a stochastic differential formulation of intertemporal recursive utility. The present class of utility functionals is generated by a backward stochastic differential equation and...

Persistent link: https://www.econbiz.de/10010319971

Trade and the Internationalization of Production

Kleinert, Jörn - 2002

Whereas many empirical studies show that the internationalization of production is driven by falling distance costs, theoretical models of the endogenous emergence of multinational enterprises predict the opposite. This paper argues that this dichotomy can be resolved if the production process...

Persistent link: https://www.econbiz.de/10010260492