Noisy Directional Learning and the Logit Equilibrium

We specify a dynamic model in which agents adjust their decisions toward higher payoffs, subject to normal error. This process generates a probability distribution of players’ decisions that evolves over time according to the Fokker–Planck equation. The dynamic process is stable for all potential games, a class of payoff structures that includes several widely studied games. In equilibrium, the distributions that determine expected payoffs correspond to the distributions that arise from the logit function applied to those expected payoffs. This “logit equilibrium” forms a stochastic generalization of the Nash equilibrium and provides a possible explanation of anomalous laboratory data.     

Parametric and Semiparametric Modeling of the Off-Farm Labor Supply of Agrarian Households in Transition Bulgaria

The reaction of labor markets to economic reforms is an important indicator of the progress of transition. Because of diminished government support and the breakup of state and collective enterprises, labor market adjustments in the transition economies have been particularly severe in the agricultural sector. This article evaluates the off-farm labor market for a sample of agrarian households in transition Bulgaria. We give particular attention to the distributional assumptions that underlie standard approaches to the evaluation of labor supply. A variety of specification tests are considered and support for standard maximum likelihood estimates which rely on normality as a maintained hypothesis is mixed. Alternative semiparametric (distribution-free) estimators are also considered. The empirical results indicate that, five years after the initiation of the transition, off-farm labor supply patterns for Bulgarian agricultural households are similar to what is commonly observed in developed market economies. Labor supply is positively affected by factors such as education and work experience which are hypothesized to increase off-farm wages. Social benefit programs providing monetary or in-kind support payments are shown to significantly decrease off-farm work.     

Robert E. Wright. The First Wall Street: Chestnut Street, Philadelphia, & The Birth of American Finance

The First Wall Street is Robert Wright's latest installmentin his campaign to highlight financial institutions as the drivingforce in the economic and political history of the Early Republic.Wright reminds us that prior to Wall Street's ascendance inthe 1830s, Chestnut Street in Philadelphia was the nation'sfinancial center and the birthplace of some of America's mostimportant financial innovations. Wright argues that despite its physical disadvantages as a port,Philadelphia thrived because its climate of     

A heuristic method for aggregate planning: Production decision framework

This paper presents an understandable and straight-forward method for making work force level and inventory planning decisions, i.e., dynamic aggregate planning decisions.The development phase utilizes a ratio, named RPCC, which represents the relative value of the cost of changing the production level to the cost of carrying inventory. This ratio is used to determine the length of an effective planning horizon. Two indicators are calculated to reflect the demand to current production rate over different time periods. Based on the joint values of these indicators, the planning problem is subdivided into one of nine mutually exclusive and exhaustive states. A set of action statements, representing logical responses to each of the sub-problems, is formulated.After completion of the development phase, the performance of the Production Decision Framework model is tested in several real case environments. Suggestions are made for further improvement.