Cognitive ability and human behavior in experimental ultimatum games

Recent researches have shed light on the effect of cognitive ability on economic decision-making. By measuring cognitive ability applying Raven's progressive matrix test, we obtain two significant results that this effect affects decision-making in two types of experimental ultimatum games. First, the higher the cognitive ability, the larger the amount a sender offers when the offer is smaller than or equal to the half split. Second, the higher the responders’ cognitive ability, the smaller the offer they accept, when they accept it or not with the strategy method. This study not only finds new factors that affect decision-making in experimental ultimatum games, but also provides more evidences that cognitive ability influences economic decision-making.     

Stability of stochastic optimal growth models: a new approach

The paper proposes an Euler equation technique for analyzing the stability of differentiable stochastic programs. The main innovation is to use marginal reward directly as a Foster-Lyapunov function. This allows us to extend known stability results for stochastic optimal growth models, both weakening hypotheses and strengthening conclusions.     

Public Monopoly,Mixed Oligopoly and Productive Efficiency

In general, the introduction of competition into the public sector seems to lead to higher cost‐efficiency in service production. However, there are examples of substantial cost increases in some areas. In this paper, using a mixed oligopoly model, we investigate the effects of deregulation on the cost‐reducing incentives of a public firm. Our results show that a firm that is a public monopoly has greater incentive to conduct cost‐reducing investment than a public firm within mixed oligopoly market.     

Trade and Indeterminacy in a Dynamic General Equilibrium Model

This paper introduces sector-specific externalities in the Heckscher-Ohlin two-country dynamic general equilibrium model to show that indeterminacy of the equilibrium path in the world market can occur. Under certain conditions in terms of factor intensities, there are multiple equilibrium paths from the same initial distribution of capital in the world market, and the distribution of capital in the limit differs among equilibrium paths. One equilibrium path converges to a long-run equilibrium in which the international ranking of factor endowment ratios differs from the initial ranking; another equilibrium path maintains the initial ranking and converges to another long-run equilibrium. Since the path realized is indeterminate, so is the long-run trade pattern. Therefore, the Long-Run Heckscher-Ohlin prediction is vulnerable to the introduction of externality. Journal of Economic Literature Classification Numbers: E13, E32, F11, F43.     

Long-Run Effects of Monetary Expansion in a Two-Sector Model of Endogenous Growth

This paper explores the long-run effects of monetary expansion by introducing a cash-in-advance constraint into one of the basic models of endogenous growth. In our model, the real side of the economy consists of two production sectors, one of which produces a final good that can be used either for consumption or for investment and the other produces new human capital. Both sectors use physical and human capital under constant returns to scale technologies. We first characterize the balanced-growth equilibrium and then examine how a rise in money growth affects the relevant variables, such as the long-term growth rate and the relative prices.     

Inefficient but Robust Public Leadership

We investigate endogenous timing in a mixed duopoly in a differentiated product market. We find that private leadership is better than public leadership from a social welfare perspective if the private firm is domestic, regardless of the degree of product differentiation. Nevertheless, the public leadership equilibrium is risk-dominant, and it is thus robust if the degree of product differentiation is high. We also find that regardless of the degree of product differentiation, the public leadership equilibrium is risk-dominant if the private firm is foreign. These results may explain the recent revival of public financial institutions in Japan.     

Experimental Multimarket Contact Inhibits Cooperation

We experimentally examine the effect of multimarket contact utilizing 2 × 2 Prisoner's Dilemma games and a strict discount factor control. We find that cooperation rates when participants play both games simultaneously are lower than or equal to when they play each game separately. This finding suggests that experimental multimarket contact may inhibit cooperation.     

A dynamic two country Heckscher–Ohlin model with non-homothetic preferences

We examine the properties of a two-country dynamic Heckscher–Ohlin model that allows for preferences to be non-homothetic. We show that the model has a continuum of steady state equilibria under free trade, with the initial conditions determining which equilibrium will be attained. We establish conditions under which a static Heckscher–Ohlin theorem will hold in the steady state, and also conditions for a dynamic Heckscher–Ohlin theorem to hold. If both goods are normal, each country will have a unique autarkic steady state, and all steady state equilibria are saddle points. We also consider the case in which one good is inferior, and show that this can lead to multiple autarkic steady states, violations of the static Heckscher–Ohlin theorem in the steady state. Furthermore, there may exist steady state equilibria that Pareto dominate other steady states. These steady states will be unstable if discount factors are the same in each country, although they may exhibit dynamic indeterminacy if discount factors differ.