Shapley and Scarf housing markets with consumption externalities

We introduce externalities into the classical model by Shapley and Scarf; that is, agents care about others and their preferences are defined over allocations rather than over single indivisible goods. After collecting some results about the nonexistence of several cooperative solutions, we focus on stable allocations and propose domains of preferences that can guarantee that they both exist and form a stable set à la von Neumann and Morgenstern.     

The process of conflict in buyer‐seller relationships at domestic and international levels: A comparative analysis

Despite the fact that conflict is an essential behavioural dimension underlying the buyer‐seller relationship, no empirical work has as yet been conducted on the comparison of conflictual processes between different types of marketing channels. This paper attempts to compare exporter‐importer and exporter‐domestic customer business partnerships, regarding the dimension of conflict throughout its various stages of growth and development. The study was carried out on a sample of 53 indigenous Greek manufacturing firms. Contrary to prior expectations, it was found that the exporter‐importer (E‐I) kind of relationship was not characterized by higher levels of conflictual processes than those in the domestic type of business association. Surprisingly, the study results also showed that in a substantial number of conflict areas, the domestic relationship category was governed by significantly higher levels of conflictual processes compared with those in the E‐I kind of business partnership. The managerial implications of the research findings are discussed and avenues for future research directions are outlined.     

The rise in student loan defaults

We examine the rise in student loan defaults in the Great Recession by linking administrative student loan data at the individual borrower level to student loan borrowers’ individual tax records. A Blinder-Oaxaca style decomposition shows that shifts in the composition of student loan borrowers and the massive collapse in home prices during the Great Recession can each account for approximately 30% of the rise in student loan defaults. Falling home prices affect student loan defaults by impairing individuals’ labor earnings, especially for low income jobs. By contrast, when comparing the default sensitivities of homeowners and renters, we find no evidence that falling home prices affect student loan defaults through a home equity-based liquidity channel. The Income Based Repayment (IBR) program introduced by the federal government in the wake of the Great Recession reduced both student loan defaults and their sensitivity to home price fluctuations, thus providing student loan borrowers with valuable insurance against negative shocks.     

Continuity properties of the private core

Let be a sequence of differential information economies, converging to a limit differential information economy (written as ). Denote by the set of all ε-private core allocations, ε ≥ 0 (for ε=0 we get the private core of Yannelis (1991), denoted by ). Under appropriate conditions, we prove the following stability results

Convergence and approximation results for non-cooperative Bayesian games: Learning theorems

Summary LetT denote a continuous time horizon and {G ^t :tT} be a net (generalized sequence) of Bayesian games. We show that: (i) if {x ^t : tT} is a net of Bayesian Nash Equilibrium (BNE) strategies for G^t we can extract a subsequence which converges to a limit full information BNE strategy for a one shot limit full information Bayesian game, (ii) If {x ^t : tT} is a net of approximate or _t-BNE strategies for the game G^t we can still extract a subsequence which converges to the one shot limit full information equilibrium BNE strategy, (iii) Given a limit full information BNE strategy of a one shot limit full information Bayesian game, we can find a net of _t-BNE strategies {x ^t : tT} in {G ^t :tT} which converges to the limit full information BNE strategy of the one shot game.We wish to thank Larry Blume, Mark Feldman, Jim Jordan, Charlie Kahn, Stefan Krasa, Gregory Michalopoulos, Wayne Shafer, Bart Taub, and Anne Villamil for several useful discussions. The financial support of the University of Illinois at Urbana-Champaign Campus Research Board is gratefully acknowledged.