This paper studies equilibrium selection via stochastic dynamics in the style of Young (Econometrica 61, 1993, 57-84), when the mistake probabilities are allowed to depend on their expected payoffs. Although any strict equilibrium can be selected with properly constructed state-dependent...

This paper proposes an extension of p-dominance called q-resistant equilibrium, which has the largest resistance to payoff-dependent mistakes. The selection could differ from the risk-dominant equilibrium, and a sufficient condition for a q-resistant equilibrium to follow risk-dominance is provided.

It is shown that the limiting distribution of the augmented Dickey-Fuller (ADF) test under the null hypothesis of a unit root is valid under a very general set of assumptions that goes far beyond the linear AR (∞) process assumption typically imposed. In essence, all that is required is...

Almost all fisher models assume time-invariant parameter values of the underlying biological growth function except for an i.i.d. error term. We examine the economic implications of cyclical growth parameters in both single and multi-species models, which are frequently observed in many...

Consideration sets have become a central concept in the study of consumer behavior. Frequently, consumers are asked to split choice alternatives into those that that they would consider and those that they would not. Information on alternatives not in the consideration set is then typically not...

Linear correlation is only an adequate means of describing the dependence between two random variables when they are jointly elliptically distributed. When the joint distribution of two or more variables is not elliptical the linear correlation coefficient becomes just one of many possible ways...

We consider writing a derivative contract on some underlying asset in such a way that the derivative contract and underlying asset yield the same payo� distribution after one time period. Using the Hardy-Littlewood rearrangement inequality, we obtain an explicit solution for the cheapest...