Existence of a monetary steady state in a matching model: divisible money

Existence of a monetary steady state is established in a random matching model with divisible goods, divisible money, an arbitrary bound on individual money holdings, and take-it-or-leave-it offers by consumers. The monetary steady state shown to exist has nice properties: the value function, defined on money holdings, is strictly increasing and strictly concave, and the distribution over money holdings has full support. The approach is to show that the “limit” of the nice steady states for indivisible money, existence of which was established in an earlier paper, as the unit of money goes to zero is a monetary steady state for divisible money. For indivisible money, the marginal utility of consumption at zero was assumed to be large; for divisible money it is assumed to be large and finite.     

Existence and Welfare Properties of Equilibrium in an Exchange Economy with Multiple Divisible and Indivisible Commodities and Linear Production Technologies

In this paper we consider a class of economies with a finite number of divisible commodities, linear production technologies, and indivisible goods and a finite number of agents. This class contains several well-known economies with indivisible goods and money as special cases. It is shown that if the utility functions are continuous on the divisible commodities and are weakly monotonic both on one of the divisible commodities and on all the indivisible commodities, if each agent initially owns a sufficient amount of one of the divisible commodities, and if a “no production without input”-like assumption on the production sector holds, then there exists a competitive equilibrium for any economy in this class. The usual convexity assumption is not needed here. Furthermore, by imposing strong monotonicity on one of the divisible commodities we show that any competitive equilibrium is in the core of the economy and therefore the first theorem of welfare also holds. We further obtain a second welfare theorem stating that under some conditions a Pareto efficient allocation can be sustained by a competitive equilibrium allocation for some well-chosen redistribution of the total initial endowments. Journal of Economic Literature Classification Numbers: D4, D46, D5, D51, D6, D61.     

Coalitional strategy-proofness and fairness

This paper considers the problem of assigning a finite number of indivisible objects, like jobs, houses, positions, etc., to the same number of individuals. There is also a divisible good (money) and the individuals consume money and one object each. The class of fair allocation rules that are strategy-proof in the strong sense that no coalition of individuals can improve the allocation for all of its members, by misrepresenting their preferences, is characterized. It turns out that given a regularity condition, the outcome of a fair and coalitionally strategy-proof allocation rule must maximize the use of money subject to upper quantity bounds determined by the allocation rule. If available money is nonnegative, objects may be jobs and the distribution of money a wage structure. If available money is negative, the formal model may reflect a multi-object auction. In both cases fairness means equilibrium, i.e., that each individual receives a most demanded object. I would like to thank Tommy Andersson, Bo Larsson, Zaifu Yang and the participants of the seminars in Copenhagen and Lund for helpful comments on this paper. I will also thank an anonymous referee for very valuable comments. Financial support from The Jan Wallander and Tom Hedelius Foundation is gratefully acknowledged.     

Behavior and Learning in the “Dirty Faces” Game

This paper examines the Dirty Faces problem as a Bayesian game. The equilibrium in the general form of the game requires the extreme assumption of common knowledge of rationality. However, for any finite number of players, the exact number of steps of iterated rationality necessary for the equilibrium to arise depends on the number of players of a particular type, allowing the game to be used to bound the number of steps satisfied by actual players. The game differs from other games used to study iterated rationality in that all players are better off when common knowledge of rationality is satisfied. While behavior in experiments is inconsistent with the game-theoretic prediction at the group level, individual level behavior shows a greater degree of consistency with theory and with previous results on iterated rationality. Finally, there is some evidence of learning in repeated play.     

Public-Good Provision with Many Participants

For a nonexcludable public good with benefit and cost functions independent of the number of participants, this paper studies second-best allocations under Bayesian interim incentive compatibility and interim individual rationality. As the number of participants becomes large, second-best provision levels converge in distribution to first-best levels if the latter are bounded. Second-best provision levels become large in absolute terms but small relative to first-best levels if benefit and cost functions are isoelastic. In contrast, for an excludable public good, the ratio of second-best to first-best levels is bounded away from zero.     

Effects of fiscal policies on US agriculture

According to the macro rational expectation (MRE) hypothesis, only unanticipated macroeconomic policy has impacts on real economic variables, and anticipated policy changes have no real impacts. This study analysis the effects of the anticipated and unanticipated components of fiscal policy on the US farm real GNP by testing the neutrality and rationality propositions of the MRE hypothesis. The test results show that both the rationality and neutrality propositions are rejected. The empirical findings indicate that the anticipated fiscal policy does have significant effects on farm output. Examination of a specific sector sheds light on the nature of the market and helps ascertain the resons for the non-neutrality.     

Local public goods with mobility: Existence and optimality of a general equilibrium

The existence and optimality of a general equilibrium in a model with a finite number of locations among which the continuum of individuals (each individual belonging to one of a finite number of types) have to choose is investigated. Each community finances its own production of public goods by taxes. The way in which the tax burden in shared among the different types in the different regions is left arbitrary. The model allows for: restrictions on the mobility of either residents and/or workers, congestion and externalities in both production and consumption, commuting costs, preferences of an individual may also depend on his location as well as on the distribution of all individuals across locations.     

Some implications of anarchy for the distribution of property

A model of an anarchistic society is introduced and its implications for the distribution of income are considered. The economy is assumed to allocate one unit of an all-purpose completely divisible good to each individual in society. This initial distribution of income is changed through theft into a final distribution. The notion of equilibrium is introduced and the equilibrium distribution for a two-person example is displayed. Finally, the notion of orderly anarchy is discussed. An orderly anarchistic allocation of income is defined to be a distribution of income in which no effort is spent in stealing property from others. It is shown that every allocation in the core is an orderly anarchistic allocation and that the core is nonempty.     

Securely implementable social choice functions in divisible and nonexcludable public good economies with quasi‐linear utility functions

This paper studies the possibility of secure implementation (Saijo et al., 2007) in divisible and nonexcludable public good economies with quasi‐linear utility functions. In these economies, although Saijo et al. (2007) showed that the Groves mechanisms (Groves, 1973) are securely implementable when the valuation functions of the public good are (i) differentiable, concave, and (ii) identified with a real number, respectively, this paper shows the following negative result: securely implementable social choice functions are dictatorial or constant when the valuation functions of the public good are strictly increasing and strictly concave.     

Bargaining, coalitions and competition

We study a Gale-like matching model in a large exchange economy, in which trade takes place through non-cooperative bargaining in coalitions of finite size. Under essentially the same conditions of core equivalence, we show that the strategic equilibrium outcomes of our model coincide with the Walrasian allocations of the economy. Our method of proof makes use of the theory of the core. With respect to previous work, our positive implementation result applies to a substantially larger class of economies: the model relaxes differentiability and convexity of preferences, and also admits an arbitrary number of divisible and indivisible goods.     

Weighted approval voting

To allow society to treat unequal alternatives distinctly we propose a natural extension of Approval Voting by relaxing the assumption of neutrality. According to this extension, every alternative receives ex-ante a strictly positive and finite weight. These weights may differ across alternatives. Given the voting decisions of every individual (individuals are allowed to vote for, or approve of, as many alternatives as they wish to), society elects the alternative for which the product of total number of votes times exogenous weight is maximal. If the product is maximal for more than one alternative, a pre-specified tie-breaking rule is applied. Our main result is an axiomatic characterization of this family of voting procedures.      

Testable Implications of Pareto Efficiency and Individualrationality

This paper investigates the testable implications of Pareto efficiency and individual rationality on finite data sets in exchange economies with finitely many commodities and agents. Efficiency alone provides no restrictions other than a trivial “no waste”-condition. Efficiency together with individual rationality implies robust restrictionsI appreciate the comments of Don Brown, Truman Bewley and Charles Steinhorn. I also thank seminar participants at Yale, Zuerich and Mainz, as well as conference participants at the 12th European General Equilibrium Workshop in Bielefeld. The generous support of the Cowles Foundation is gratefully acknowledged. The paper also benefited greatly from the comments of an anonymous referee     

渐进式抑或突破式：个体创新幅度对众包绩效的影响——基于计算仿真的分析

结合TCPE框架和NK模型，构建一个模拟众包问题解决过程的仿真模型，引入个体创新幅度表征个体创新搜索行为，引入个体有限理性水平和有限理性偏差表征个体认知能力，探讨个体创新幅度对众包绩效的影响机制,以及个体有限理性和任务复杂性的调节作用。结果发现：个体创新幅度与众包绩效存在两种影响模式：当任务非常简单时，个体创新幅度与众包绩效呈负相关关系；当任务复杂性较高时，个体创新幅度与众包绩效呈倒U型关系；两种影响模式不会受到个体有限理性水平和有限理性偏差的调节。在相对复杂的任务中，任务复杂性与个体有限理性偏差会调节实现最优众包绩效对应的个体创新幅度，任务复杂性越高、个体有限理性偏差越大，对应的个体创新幅度随之增加。个体创新幅度会削弱个体认知能力对众包绩效的影响，当个体认知能力较强时，需要采用渐进式创新；当个体认知能力较弱时，需要采用突破式创新。该结论可为企业在众包过程中营造平台创新氛围提供理论依据。     

Rent Royalties*

On neutrality grounds, royalties designed to tax only the economic rent of mining or petroleum operations are preferable to royalty schemes currently used in Australia. The Resource Rent type of royalty generally has a predictable but asymmetrical effect on the probability distribution of the net present value of projects being considered for investment. This effect is independent of the characteristics of individual projects, and so with appropriate selection of the operating parameters, this royalty scheme would not greatly affect the screening of projects for investment purposes.     

Eliciting Preferences to Assign Positions and Compensation

We describe strategy-proof rules for economies where an agent is assigned a position (e.g., a job) plus some of a divisible good. For the 2-agent–2-position case we derive a robust characterization. For the multi-agent–position case, many “arbitrary” such rules exist, so we consider additional requirements. By also requiring coalitional strategy-proofness or nonbossiness, the range of a solution is restricted to the point that such rules are not more complex than those for the Shapley–Scarf housing model (no divisible good). Third, we show that essentially only constant solutions are immune to manipulations involving “bribes.” Finally, we demonstrate a conflict between efficiency and strategy-proofness. The results extend to models (without externalities) in which agents share positions. Journal of Economic Literature Classification Numbers: C72, D70.     

On efficient partnership dissolution under ex post individual rationality

This paper studies ex post individually rational, efficient partnership dissolution in a setting with interdependent valuations. We derive a sufficient condition that ensures the existence of an efficient dissolution mechanism that satisfies Bayesian incentive compatibility, ex post budget balancedness, and ex post individual rationality. For equal-share partnerships, we show that our sufficient condition is satisfied for any symmetric type distribution whenever the interdependence in valuations is non-positive. This result improves former existence results, demonstrating that the stronger requirement of ex post individual rationality does not always rule out efficiency. We also show that if we allow for two-stage revelation mechanisms, in which agents report their realized payoffs from the allocation, as well as imposing penalties off the equilibrium path, efficient dissolution is always possible even when the interdependence is positive. We further discuss the possibility of efficient dissolution with ex post quitting rights.     

Demand Uncertainty, Incomplete Markets, and the Optimality of Rationing

When the arrival of traders at the market is stochastic, and it is impossible for traders who might arrive to meet ex ante, then Walrasian spot-market clearing presents consumers with price-risk and is typically not Pareto optimal. Instead, with an indivisible good and a divisible numeraire, the first-best can be achieved by an “Exchange” selling raffle tickets at a fixed price. When only spot market trading is feasible and consumers cannot commit to pay unless they purchase the indivisible good, efficiency implies price-fixing with rationing. Potential disadvantages of black markets and scalping are discussed.Journal of Economic LiteratureClassification Numbers: D45, D52, D8.     

VOLUNTARY CONTRIBUTIONS TO A PUBLIC GOOD: NON-NEUTRALITY RESULTS

Abstract.  We show that the well-known neutrality theorem (that a small redistribution of wealth does not affect the aggregate private provision of a public good) no longer holds if agents take into account the effect of their individual supply of the public good on the relative price of private goods.     

Public Goods Provision: On Generalizing the Jackson–Moulin Mechanism

Jackson and Moulin (1992) proposed a simple mechanism to implement a wide class of cost‐sharing rules for the provision of a binary public good. Bag (1997) generalized this mechanism to divisible public goods under the assumption of “constant marginal benefit.” This paper generalizes the Jackson–Moulin mechanism to a broader setting, including the cases of both decreasing and constant marginal benefit. Moreover, this paper shows the impossibility of generalizing the mechanism further.     

Mechanism design with side payments: Individual rationality and iterative dominance

We investigate the collective decision with incomplete information and side payments. We show that a direct mechanism associated with the social choice function that satisfies budget balancing, incentive compatibility, and interim individual rationality exists for generic prior distributions. We consider the possibility that a risk-averse principal extracts full surplus in agency problems with adverse selection. With regard to generic prior distributions, we show that there exists a modified direct mechanism associated with the virtual social choice function, which satisfies budget balancing and interim individual rationality, such that truth telling is the unique three times iteratively undominated message rule profile.