
on Microeconomics 
By:  Vrany, Martin 
Abstract:  Procrastination is the notorious tendency to postpone work for tomorrow. This paper presents a formal model of procrastination based on expectations and prospect theory, which differs signficantly from the prevalent model of O’Donoghue and Rabin. Subject is assumed to work on a task for distant reward which depends on the number of periods actually spent working, where the subject faces varying op portunity costs of working each period before the deadline. In order to assess a hypothesis that procrastination is an evolved and stable habit, the model is rendered dynamic in that past decisions and circumstances affect the present. The model is first explored via qualitative analysis and simulations are performed to further reveal its functionality. 
Keywords:  procrastination; dynamic inconsistency; intertemporal choice; prospect theory; hyperbolic discounting; expectations 
JEL:  D0 D81 D84 D90 J22 
Date:  2010–10–14 
URL:  http://d.repec.org/n?u=RePEc:pra:mprapa:32618&r=mic 
By:  Schmitz, Patrick W.; Tröger, Thomas 
Abstract:  We consider collective choice from two alternatives. Ex ante, each agent is uncertain about which alternative she prefers, and may be uncertain about the intensity of her preferences. An environment is given by a probability distribution over utility vectors that is symmetric across agents and neutral across alternatives. In many environments, the majority voting rule maximizes agents' exante expected utilities among all anonymous and dominantstrategy implementable choice rules. But in some environments where the agents' utilities are stochastically correlated, other dominantstrategy choice rules are better for all agents. If utilities are stochastically independent across agents, majority voting is exante optimal among all anonymous and incentivecompatible rules. We also compare rules from an interim viewpoint. 
Keywords:  majority rule 
JEL:  D72 
Date:  2011–06 
URL:  http://d.repec.org/n?u=RePEc:pra:mprapa:32716&r=mic 
By:  Alain Chateauneuf; Luciano De Castro 
Abstract:  What is the effect of ambiguity aversion on trade? Although in a Bewley's model ambiguity aversion always lead to less trade, in other models this is not always true. However, we show that if the endowments are unambiguous then more ambiguity aversion implies less trade, for a very general class of preferences. The reduction in trade caused by ambiguity aversion can be as severe as to lead to notrade. In an economy with MEU decision makers, we show that if the aggregate endowment is unanimously unambiguous then every Pareto optima allocation is also unambiguous. We also characterize the situation in which every unanimously unambiguous allocation is Pareto optimal. Finally, we show how our results can be used to explain the homebias effect. As a useful result for our methods, we also obtain an additivity theorem for CEU and MEU decision makers that does not require comonotonicity JEL Code: D51, D6, D8 
Keywords:  notrade results, ambiguity aversion, Pareto optimality. 
Date:  2011–04–01 
URL:  http://d.repec.org/n?u=RePEc:nwu:cmsems:1535&r=mic 
By:  Luciano De Castro; Marialaura Pesce; Nicolas Yannelis 
Abstract:  This paper introduces new core and Walrasian equilibrium notions for an asymmetric information economy with nonexpected utility preferences. We prove existence and incentive compatibility results for the new notions we introduce. 
Date:  2011–03–07 
URL:  http://d.repec.org/n?u=RePEc:nwu:cmsems:1534&r=mic 
By:  Jianjun Miao 
Abstract:  This paper studies competitive equilibria of a production economy with aggregate productivity shocks. There is a continuum of consumers who face borrowing constraints and individual labor endowment shocks. The dynamic economy is described in terms of sequences of aggregate distributions. The existence of sequential competitive equilibria is proven and a recursive characterization is established. In particular, it is shown that for any sequential competitive equilibrium, there exists a payoff equivalent sequential competitive equilibrium that is generated by a suitably defined recursive equilibrium with state variables including continuation value. 
Keywords:  competitive equilibrium, recursive equilibrium, aggregate distribution, heterogeneity, incomplete markets 
JEL:  D50 D52 E20 
Date:  2011 
URL:  http://d.repec.org/n?u=RePEc:cuf:wpaper:460&r=mic 
By:  Regine Oexl (Università di Padova) 
Abstract:  We present a novel solution for the hold up problem, when more than two parties are involved. The case we consider is a company selling identical products to two buyers that have a common interest in inducing the seller to make a quality enhancing investment. We show that a trilateral contract may provide the correct incentives to restore optimal efficiency. The contract induces a coalition proof Nash equilibrium and holds under complete as well as incomplete information. The extension to more than two buyers is straightforward. 
Keywords:  Multilateral Contract, Trilateral Contract, Holdup Problem. 
JEL:  L14 D82 
Date:  2011–01 
URL:  http://d.repec.org/n?u=RePEc:pad:wpaper:0126&r=mic 
By:  Luciano De Castro 
Abstract:  Affiliation has been a prominent assumption in the study of economic models with statistical dependence. Despite its large number of applications, especially in auction theory, affiliation has limitations that are important to be aware of. This paper shows that affiliation is a restrictive condition and the intuition usually given for its adoption may be misleading. Also, other usual justifications for affiliation are not compelling. Moreover, some implications of affiliation — namely, equilibrium existence in firstprice auctions and the revenue dominance of secondprice auctions — do not generalize to other definitions of positive dependence. JEL Classification Numbers: C62, C72, D44, D82. 
Keywords:  affiliation, positive dependence, statistical dependence of types, conditional independence, de Finetti’s theorem, minimally informative random variable, auctions, pure strategy equilibrium, revenue ranking. 
Date:  2010–12–01 
URL:  http://d.repec.org/n?u=RePEc:nwu:cmsems:1530&r=mic 