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on Microeconomics |
| By: | J. Rupert J. Gatti |
| Abstract: | This paper generalises the approach taken by Dasgupta & Maskin (1986) and Simon (1989) and provides necessary and sufficient conditions for the existence of pure and mixed strategy Nash equilibrium in games with continuous strategy spaces and discontinuous payoff functions. The conditions can be applied widely, and examples for existence of pure strategy and monotonic equilibria in First-Price auctions are provided. The conditions are also appropriate for ensuring that computer generated equilibrium solutions can be extended to continuous strategy spaces. |
| Keywords: | Nash Equilibrium, Discontinuous Payoff Function, First-price Auctions |
| JEL: | C70 D44 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0510&r=mic |
| By: | Rodolfo Apreda |
| Abstract: | This paper seeks to expand on two topical strands in Government Finance and Political Science literature, rent-seeking and the soft-budget constraint, so as to bring forth a strong linkage with corporate governance environments. It will attempt to accomplish this task by setting up a distinctive framework of analysis that hinges on incremental cash flows. Firstly, it claims that both rent-seeking behavior and the soft-budget constraint are worthy of being applied to corporate governance learning and practice. Secondly, the paper contributes to focus on cash-flows reliability and managers’ accountability. Thirdly, it is shown how conflicts of interest underlie rent-seeking behavior, and how the latter relates to the soft-budget constraint. |
| Keywords: | Rent-Seeking, Soft-Budget Constraint, Corporate Governance, Incremental Cash Flow model, Conflicts of Interest. |
| JEL: | G30 G34 D72 D74 D82 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:283&r=mic |
| By: | Jorge Streb; Daniel Lema; Gustavo Torrens |
| Abstract: | In contrast to previous empirical work on electoral cycles, which implicitly assumes the executive has full discretion over fiscal policy, this paper contends that under separation of powers an unaligned legislature may have a moderating role. Focusing on the budget surplus, we find that stronger effective checks and balances explain why cycles are weaker in developed and established democracies. Once the discretional component of executive power is isolated, there are significant cycles in all democracies. Whether the political system is presidential or parliamentary, or the electoral rules are majoritarian or proportional, does not change the basic results. |
| Keywords: | political budget cycles, asymmetric information, discretion, separation of powers, checks and balances, veto players, rule of law |
| JEL: | D72 D78 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:286&r=mic |
| By: | Michele Boldrin; David K Levine |
| Date: | 2005–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:122247000000000886&r=mic |
| By: | Martin J. Osborne; Ariel Rubinstein |
| Date: | 2005–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:666156000000000515&r=mic |
| By: | Luis G. Gonzalez; Vittoria Levati; Graciela Gonzalez-Farias |
| Abstract: | A conditional cooperator in a public goods game wants to match his partners' expected contribution. We investigate theoretically and empirically, whether (and to what extent) conditional cooperation can explain how individual contributions evolve in a repeated two-person public goods experiment using a perfect strangers design. To identify a random utility model including non-pecuniary preferences we also elicit participants' beliefs. Our econometric results show that the distribution of preferences in the population can be captured by a latent-class mixed logit specification with three subpopulations, and that 55 % of participants can be regarded as conditional cooperators. Thus, the decline in average contribution levels may be attributed to the presence of conditional cooperators who have to revise their expectations about the others' behavior. |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2005-05&r=mic |
| By: | Gersbach, Hans (University of Heidelberg and IZA Bonn); Haller, Hans (Virginia Tech) |
| Abstract: | This paper analyzes the effects of sociological changes in the form of a shift of influence within two-member households participating in labor and product markets. The most striking effects occur when household members differ in individual preferences and enjoy positive leisure-dependent externalities. For instance, a global sociological change where the “workaholic" member becomes more influential in each working class household can render the working class worse off. A binding restriction on the number of hours an individual is allowed to work can benefit all workers. |
| Keywords: | household behavior, general equilibrium, externalities, labor supply |
| JEL: | D10 D50 J22 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1502&r=mic |
| By: | Peter Funk |
| Abstract: | This paper models the relationship between growth, technology-lifetime, entry, and competition in a vintage-knowledge model of endogenous growth and perfect competition. The model has a unique steady state REE equilibrium. Variations of R&D-efficiency lead to a negative relation between growth and vintage-lifetime and indicate a non-monotonic relation between growth and competition. A shift of population size and its growth rates have qualitatively different consequences here than in standard models. The extent of entry constitutes a buffer, neutralizing the effect of population size or population growth rates on per-capita income levels and growth rates. |
| Keywords: | Endogenous Growth, Vintage-Model, Perfect Competition |
| JEL: | D40 D90 O30 O40 |
| Date: | 2005–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:kls:series:0015&r=mic |
| By: | Carl Chiarella (School of Finance and Economics, University of Technology, Sydney); Xue-Zhong He (School of Finance and Economics, University of Technology, Sydney); Duo Wang |
| Abstract: | We develop a simple behavioural asset pricing model with fundamentalists and chartists to study price behaviour in financial markets. Within our model, the market impact of the weighting process of the conditional mean and variance of the chartists and investors' reactions are analysed. Price dynamics of the deterministic model under/over-reactions are analyzed. It shows different price dynamics and routes to complicated price behaviour when the chartists act as either trend followers or contrarians. It is found that (in a separate paper Chiarella et al (2004)) this analysis can be used to establish some connections between the statistical properties of the nonlinear stochastic system (such as distribution density and autocorrelation patterns of returns, in particular the stylised facts, such as fat tails, skewness, high kurtosis and long memory, observed in high frequency financial data) and the stability and bifurcation of the underlying deterministic system are established. |
| Keywords: | fundamentalists; chartists, stability; bifurcation; investors' under- and over-reactions; stylized facts |
| JEL: | D83 D84 E21 E32 C60 |
| Date: | 2004–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:uts:rpaper:141&r=mic |
| By: | Carl Chiarella (School of Finance and Economics, University of Technology, Sydney); Xue-Zhong He (School of Finance and Economics, University of Technology, Sydney); Duo Wang |
| Abstract: | Stability and bifurcation analysis of deterministic systems has been widely used in modeling financial markets. However, the impact of such dynamic phenomena on various statistical properties of the corresponding stochastic model, including skewness and excess kurtosis, various autocorrelation (AC) patterns of under and over reactions, and volatility clustering characterised by the long-range dependence of ACs, is not clear and has been very little studied. This paper aims to study this issue. Through a simple behavioural asset pricing model with fundamentalists and chartists, we examine the statistical properties of the model and their connection to the dynamics of the underlying deterministic model. In particular, our analysis leads to some insights into the type of mechanism that may be generating some of the stylised facts, such as fat tails, skewness, high kurtosis and long memory, observed in high frequency financial data. |
| Keywords: | fundamentalists; chartists, stability; bifurcation; investors' under- and over-reactions; stylized facts |
| JEL: | D83 D84 E21 E32 C60 |
| Date: | 2004–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:uts:rpaper:142&r=mic |