No-envy in queueing problems

We explore the implications of no-envy(Foley 1967) in the context of queueing problems. We identify an easy way of checking whether a rule satisfies efficiencyand no-envy. The existence of such a rule can easily be established. Next, we ask whether there is a rule satisfying efficiency and no-envytogether with an additional solidarity requirement how agents should be affected as a consequence of changes in the waiting costs. However, there is no rule satisfying efficiency, noenvy, and either one of two cost monotonicity axioms. To remedy the situation, we propose modifications of no-envy, adjusted no-envyand backward/forward no-envy. Finally, we discuss whether three fairness requirements, no-envy, the identical preferences lower bound, and egalitarian equivalence, are compatible in this context.     

A characterization of virtual Bayesian implementation

We provide a characterization of virtual Bayesian implementation in pure strategies for environments satisfying no-total-indifference. A social choice function in such environments is virtually Bayesian implementable if and only if it satisfies incentive compatibility and a condition we term virtual monotonicity. The latter is weaker than Bayesian monotonicity—known to be necessary for Bayesian implementation. Virtual monotonicity is weak in the sense that it is generically satisfied in environments with at least three alternatives. This implies that in most environments virtual Bayesian implementation is as successful as it can be (incentive compatibility is the only condition needed).     

From revealed preference to preference revelation

Utility functions are regarded as elements of a linear space that is paired with a dual representation of choices to demonstrate the similarity between preference revelation and the duality of prices and quantities in revealed preference. With respect to preference revelation, quasilinear versus ordinal utility and choices in an abstract set versus choices in a linear space are distinguished and their separate and common features are explored. The central thread uniting the various strands is the subdifferentiability of convex functions.     

Market depth,domestic investors and price monotonicity violations

We re-examine the monotonicity violations of option price dynamics considering the roles of market depth and domestic investors. Violations caused by option price movements in conflict with underlying price movements tend to occur less frequently as the market depth increases, especially in the case of out-of-the-money options. In contrast, violations caused by option prices that remain sticky despite underlying price changes occur more frequently as the market depth increases. Both of these relationships are amplified by domestic investors.     

Thresholds in finance–growth nexus: Evidence from G‐7 economies

This study explores the finance and economic growth nexus in G‐7 economies as these countries experience significantly higher levels of financial development. Using a balanced panel of 31 years from 1983 to 2013, we provide new evidence on the finance–growth relationship. We show the presence of nonlinearity as there is an inverted U‐shaped relationship between finance and growth in the long run. Estimating the thresholds in the finance–growth nexus, we notice that there exists a threshold effect of finance at 109% of Gross Domestic Product (GDP). We observe that exceeding the threshold would hinder the countries instead of furthering economic growth as too much finance is harmful. Based on the panel Granger causality test results, we claim that financial development should be associated with optimal growth performance. Our findings for the G‐7 economies offer some useful policy inferences to the emerging and developing economies in designing their financial development strategies.     

Bayesian beliefs with stochastic monotonicity: An extension of Machina and Schmeidler

Machina and Schmeidler show that the probabilistic sophistication can be obtained in an Anscombe–Aumann setting without imposing expected utility by maintaining stochastic monotonicity and adding a new axiom loosely analogous to Savage's P4. This analogous axiom, however, is very strong. In this note, we obtain probabilistic sophistication using a weaker (and more natural) analog of Savage's P4. Stochastic monotonicity is sufficient to bridge the gap, where Anscombe and Aumman use independence twice, we use stochastic monotonicity twice.     

Local monotonicity of power: Axiom or just a property?

This paper discusses whether Local Monotonicity (LM) should be regarded as a property of the power distribution of a specific voting game under consideration, indicated by a power measure, or as a characteristic of power per se. The latter would require reasonable power measures to satisfy a corresponding LM axiom. The former suggests that measures which do not allow for a violation of LM fail to account for dimensions of power which can cause nonmonotonicity in voting weight. Only if a measure is able to indicate nonmonotonicity, it can help design voting games for which power turns out to be monotonic. The argument is discussed in the light of recent extensions of traditional power indices.     

Feasible elimination procedures in social choice: An axiomatic characterization

Feasible elimination procedures (Peleg, 1978) play a central role in constructing social choice functions which have the following property: in the associated game form, for any preference profile there exists a strong Nash equilibrium resulting in the sincere outcome. In this paper we provide an axiomatic characterization of the social choice correspondences resulting from applying feasible elimination procedures. The axioms are anonymity, Maskin monotonicity, and independent blocking. We also show that these axioms are logically independent.     

CHARACTERIZATION OF OPTIMAL STOPPING REGIONS OF AMERICAN ASIAN AND LOOKBACK OPTIONS

A general framework is developed to analyze the optimal stopping (exercise) regions of American path-dependent options with either the Asian feature or lookback feature. We examine the monotonicity properties of the option values and stopping regions with respect to the interest rate, dividend yield, and time. From the ordering properties of the values of American lookback options and American Asian options, we deduce the corresponding nesting relations between the exercise regions of these American options. We illustrate how some properties of the exercise regions of the American Asian options can be inferred from those of the American lookback options.