Correlated equilibria in continuous games: Characterization and computation

We present several new characterizations of correlated equilibria in games with continuous utility functions. These have the advantage of being more computationally and analytically tractable than the standard definition in terms of departure functions. We use these characterizations to construct effective algorithms for approximating a single correlated equilibrium or the entire set of correlated equilibria of a game with polynomial utility functions.     

Dealing with urban terror: heritages of control,varieties of intervention,strategies of research

The events of September 11th bring urgency to problems of urban security, both in terms of finding ways to protect cities from attacks by terrorists and also protecting urban life from repressive measures that form in reaction to those attacks. We outline a rationale for urbanists to participate in analysis and policy‐formulation on security issues and examine the utility of past urban research strategies, including criminology, in terms of their relevance to the current challenge. We suggest principles to guide future urban policy in light of past experiences. Les événements du 11 septembre rendent urgents les problèmes de sécurité urbaine, à la fois pour trouver des façons de protéger les villes contre des attaques terroristes et pour préserver la vie urbaine de mesures répressives en réponse à ces attaques. L'article argumente en faveur de la participation d'urbanistes à l'analyse et à la formulation d'une politique publique sur les questions de sécurité. Il examine le parti à tirer des stratégies de recherches urbaines antérieures (y compris en criminologie) en fonction de leur pertinence par rapport au défi actuel. De plus, il suggère des principes permettant d'orienter la politique urbaine future à la lumière des expériences passées.     

Small noise asymptotics for a stochastic growth model

We develop analytic asymptotic methods to characterize time-series properties of nonlinear dynamic stochastic models. We focus on a stochastic growth model which is representative of the models underlying much of modern macroeconomics. Taking limits as the stochastic shocks become small, we derive a functional central limit theorem, a large deviation principle, and a moderate deviation principle. These allow us to calculate analytically the asymptotic distribution of the capital stock, and to obtain bounds on the probability that the log of the capital stock will differ from its deterministic steady-state level by a given amount. This latter result can be applied to characterize the probability and frequency of large business cycles. We then illustrate our theoretical results through some simulations. We find that our results do a good job of characterizing the model economy, both in terms of its average behavior and its occasional large cyclical fluctuations.     

How Ecotourism can go Wrong: The Cases of SeaCanoe and Siam Safari,Thailand

In 1989, two ecotourism operators started business in South Thailand – SeaCanoe, running kayaking trips in Phang Nga Bay, and Siam Safari, running nature tours in Phuket and South Thailand. Both companies have received international awards and recognition for their work in promoting environmentally sensitive tours yet their efforts seem to have been thwarted by the growth in mass tourism within South Thailand. Throughout the 1990s, Phuket received a three-fold increase in arrivals, and with it the establishment of many imitators of the original pioneers. This paper looks at the relationship between mass tourism and ecotourism and questions whether the two are compatible or mutually exclusive.     

Robustness and Pricing with Uncertain Growth

We study how decision-makers' concerns about robustness affectprices and quantities in a stochastic growth model. In the modeleconomy, growth rates in technology are altered by infrequentlarge shocks and continuous small shocks. An investor observesmovements in the technology level but cannot perfectly distinguishtheir sources. Instead the investor solves a signal extractionproblem. We depart from most of the macroeconomics and financeliterature by presuming that the investor treats the specificationof technology evolution as an approximation. To promote a decisionrule that is robust to model misspecification, an investor actsas if a malevolent player threatens to perturb the actual data-generatingprocess relative to his approximating model. We study how aconcern about robustness alters asset prices. We show that thedynamic evolution of the risk-return trade-off is dominatedby movements in the growth-state probabilities and that theevolution of the dividend-price ratio is driven primarily bythe capital-technology ratio.     

Financial Sector Reforms,Bank Performance and Economic Growth: Evidence from Zambia

Abstract: This paper investigates the effects of market‐based financial sector reforms on the competitiveness and efficiency of commercial banks, and economic growth, in Zambia. The results show that reforms adopted in Phase II (strengthening of regulatory and supervisory, payments and settlements, and financial operations frameworks) and Phase III (implementation of a comprehensive financial sector development plan) had significant positive effects on bank cost efficiency. Macroeconomic variables such as per capita GDP and inflation were insignificant. Further, using an endogenous growth model in which industrial production is a proxy for GDP growth, it was found that bank cost efficiency, financial depth, Phase II and III financial sector reforms, the degree of economic openness, and rate of inflation were significant determinants of economic growth. Phase II policies and the inflation rate have negative effects while the rest of the variables have positive effects on economic growth. Some plausible policy lessons are offered.