Kantian Equilibrium

Consider a game whose strategies are "contributions". A strategy profile is a Kantian equilibrium if  no  player would like  all  players to alter their contributions by the  same multiplicative factor.  Kantian equilibria are Pareto efficient. We characterize the allocation rules on several domains of environments that can be implemented as Kantian equilibria. The concept unifies the  proportional solution  on production economies and the  linear cost-share equilibrium  on public-good economies. We study Kantian equilibrium in the prisoner's dilemma, in a voting problem, and in a political economy where redistribution is the issue. The Kantian dictum engenders considerable but not unqualified cooperation.     

Equilibrium vengeance

The efficiency-enhancing role of the vengeance motive is illustrated in a simple social dilemma game in extensive form. Incorporating behavioral noise and observational noise in random interactions in large groups leads to seven continuous families of (short run) Perfect Bayesian equilibria (PBE) that involve both vengeful and non-vengeful types. A new long run evolutionary equilibrium concept, Evolutionary Perfect Bayesian Equilibrium (EPBE), shrinks the equilibrium set to two points. In one EPBE, only the non-vengeful type survives and there are no mutual gains. In the other EPBE, both types survive and reap mutual gains.     

Equilibrium Unemployment Dynamics

The global dynamics of Pissarides' (1990) equilibrium model of aggregate unemployment are studied in the case of increasing returns to scale in production and constant returns to scale in the matching process. An equilibrium is a dynamic path for the aggregate number of matches generated by best-response search and recruiting investment decisions under rational expectations. Necessary and sufficient conditions for multiple equilibria, including limit cycles, are derived, and illustrative examples are computed. The application of saddle-loop bifurcation theory is a novel feature of the analysis. Since one equilibrium Pareto dominates all the others, a macroeconomic coordination problem exists.     

Out of Equilibrium

This review article takes the volume by Mario Amendola and Jean-Luc Gaffard Out of Equilibrium as the starting point of a general assessment of the scope and perspectives of out-of-equilibrium economics. After describing the particular subject-matter covered by Amendola and Gaffard, the author calls attention upon he fundamental role in their treatment of time, coordination, and the magnitude of responses. The general foundations of the ‘out-of-equilibrium’ approach are then considered. In this connection, the author argues that making use of illustrations (rather than formal proofs) can still show in a conclusive way that widely held beliefs are not valid as general propositions. It is also maintained that, apart from these ‘anti-general’ results, the out-of-equilibrium approach can lead to positive generalizations of considerable power and significance. In conclusion, this essay maintains that coexistence of equilibrium and out-of-equilibrium analysis is possible, and mentions research and policy areas (such as coordination failures and rational regulatory policy) in which equilibrium theory can provide invaluable insights for an out-of-equilibrium investigation     

Equilibrium youth unemployment

In a model with continuous entry and exit to the labor market, it is shown that workers exploit their monopoly power by adopting a seniority system implying youth unemployment or an age determined insider-outsider distinction. The incentives of young outsiders to unberbid are curtailed by their expectation of becoming insiders in the future.     

论通货膨胀的均衡

本文在论证我国经济运行的基本态势与凯恩斯理论中的＂非充分就业均衡＂存有偏差的基础上，指出我国宏观总量的均衡是以通货膨胀为代价的，通货膨胀的治理必须采取结构性增长的政策，以降低宏观调控的成本。     

Financial and Thermodynamic Equilibrium

This paper explores general equilibrium asset pricing implications in a two-period model in which the production side explicitly describes the thermodynamic process unavoidably connected with production. We show that steady state of the production process, i.e. thermodynamic equilibrium, has a one-to-one correspondence with the absence of arbitrage possibilities. This provides an alternative definition of the absence of arbitrage.
(J.E.L.: D5, G1, R3)     

Comparing Sunspot Equilibrium And Lottery Equilibrium Allocations: The Finite Case*

Sunspot equilibrium and lottery equilibrium are two stochastic solution concepts for nonstochastic economies. We compare these concepts in a class of completely finite, (possibly) nonconvex exchange economies with perfect markets, which requires extending the lottery model to the finite case. Every equilibrium allocation of our lottery model is also a sunspot equilibrium allocation. The converse is almost always true. There are exceptions, however: For some economies, there exist sunspot equilibrium allocations with no lottery equilibrium counterpart.     

Equilibrium Selection and Consistency

In this paper we show that, for two important classes of strategic games, namely the class of mixed extensions of finite games and the class of games with compact and convex strategy spaces and continuous-concave payoff functions, equilibrium selection is incompatible with One Person Rationality, Consistency and (restricted) Non-Emptiness.     

Regular Quantal Response Equilibrium

The structural Quantal Response Equilibrium (QRE) generalizes the Nash equilibrium by augmenting payoffs with random elements that are not removed in some limit. This approach has been widely used both as a theoretical framework to study comparative statics of games and as an econometric framework to analyze experimental and field data. The framework of structural QRE is flexible: it can be applied to arbitrary finite games and incorporate very general error structures. Restrictions on the error structure are needed, however, to place testable restrictions on the data (Haile et al., 2004). This paper proposes a reduced-form approach, based on quantal response functions that replace the best-response functions underlying the Nash equilibrium. We define a regular QRE as a fixed point of quantal response functions that satisfies four axioms: continuity, interiority, responsiveness, and monotonicity. We show that these conditions are not vacuous and demonstrate with an example that they imply economically sensible restrictions on data consistent with laboratory observations. The reduced-form approach allows for a richer set of regular quantal response functions, which has proven useful for estimation purposes. JEL Classification: D62, C73     

Equilibrium with nonconvex technologies

Summary We provide an elementary proof of the existence of equilibrium in a general equilibrium model allowing for non-convex production sets. It is shown that when firms follow upper hemicontinuous and convex-valued pricing rules with bounded losses, a price vector and an allocation exist, such that all agents are in equilibrium and all markets clear.The existence result presented in this paper is a particular case of that one in Bonnisseau & Cornet (1988, Th. 2.1). In this respect our contribution consists of presenting an alternative proof which turns-out to be simpler and more intuitive.Thanks are due to Carmen Herrero and two anonymous referees for very helpful comments. Financial support from theDirection General de Investigación Cientiflca y Ténica, under project PS89–0066, is gratefully acknowledged.     

中国建置经济制度的历史传承与当代竞争

在人类经济史上 ,中国与西欧组织经济的方式有显著的区别 ,其特征与西欧庄园经济的分封方式不同 ,具有独特的“建郡置县”规范。通过数学模型 ,本文说明中国建置经济制度有过辉煌 ,其历史遗产在今天仍然具有生命力。在人类经济发展的今天 ,经济制度之间不是非此即彼的排斥关系 ,它们将相互影响且继续传承下去     

Benefit-Transfer and Spatial Equilibrium

Compelling empirical evidence suggests that people move in response changes in pollution and that firms move in response to regulation. We investigate the problem of benefit estimation and transfer in the context of a simple model where firms and people can move in response to regulation and pollution. Including these margins of adjustment changes the problem of benefit-transfer. It requires the evaluation of policies that affect more than one region at a time. This suggests an important role for evaluation strategies based on easily observable indicators of local welfare like total population, real income net of real estate, or the use of elementary standardized models of spatial equilibrium.     

Equilibrium unemployment and retirement

We first propose some new empirical evidence on the fact that the labor market conditions matter for the retirement decision at the individual level: we investigate whether unemployed workers retire before employed workers, other things being equal. Our main objective in this paper is then to propose an equilibrium unemployment approach to retirement decisions that allows us to derive the positive and normative features of retirement decisions when search and matching frictions are considered. Two main conclusions emerge: the retirement decision of unemployed workers depends on the labor-market frictions whereas that of employed workers does not; the existence of search externalities makes the retirement age of unemployed workers intrinsically suboptimal. Considering Social Security policy issues, we show that the complete elimination of the implicit tax on continued activity is not necessarily welfare-optimizing in a second best world where the labor market equilibrium suffers from distortions.     

Stackelberg versus Cournot Equilibrium

We reconsider Stackelberg's classical critique of the Cournot duopoly, in the framework of endogenous timing for two-player games. For quantity duopoly we provide different sets of minimal conditions, directly on the demand and cost functions, yielding respectively the simultaneous and the two sequential modes of play. While our findings essentially confirm the predominance of the former, they also indicate that the latter is natural under some robust but restrictive conditions. No extraneous assumptions (such as concavity, existence, or uniqueness of equilibria…) are needed, and the analysis makes crucial use of the basic results from the theory of supermodular games.Journal of Economic LiteratureClassification Numbers: B21, C72, D43, L13.     

Calibration of Computable General Equilibrium Models from Synthetic Benchmark Equilibrium Data Sets*

The most common procedure for estimating the share parameters of a CGE model is to calibrate the model using a particular year-of-record benchmark equilibrium data set. In this paper we argue the case for calibration from synthetic benchmark equilibrium data sets which portray the economy in a notional typical year. The development of a synthetic agricultural sector in the benchmark equilibrium data set of the ORANI model of the Australian economy is described Finally a comparison is made of the results from ORANI of an across-the-board tariff cut simulation computed with both the synthetic benchmark equilibrium data set and a particular year-of-record data set.     

The Determination of the Equilibrium Exchange Rate in a Simple General Equilibrium Model

In this article, we develop an analytical general equilibrium model of the equilibrium exchange rate for emerging countries. This theoretical framework allows us to identify a relevant set of variables which determinate the equilibrium exchange rate and to explore how these variables influence the trajectory of the equilibrium exchange rate.     

Equilibrium with limited-recourse collateralized loans

We address a general equilibrium model with limited-recourse collateralized loans and securitization of debts. Each borrower is required to pledge physical collateral, and bankruptcy is filed against him if claims are not fully honored. Moreover, agents have a positive amount of wealth exempt from garnishment and, for at least a fraction of them, commodities used as collateral are desirable. In this context, equilibrium exists for any continuous garnishment rule and multiple types of reimbursement mechanisms.