Publications

Theoretical Economics Papers

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Theoretical Economics Paper

Time Preferences and Bargaining

Sebastian Schweighofer-Kodritsch

This paper presents an analysis of general time preferences in the canonical Rubinstein (1982) model of bilateral alternating-offers bargaining. I derive a simple sufficient structure for optimal punishments and ther...Read more...

15 October 2015

Theoretical Economics Paper

Inventories as an Information-Gathering Device

Steve Alpern and Dennis J. Snower

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Theoretical Economics Paper

Decentralized Bargaining: Efficiency and the Core

Matt Elliott and Francesco Nava

This paper studies market clearing in matching markets. Bargaining in such markets occurs in the context of alternative possible matches that provide endogenous outside options. We ask when will such markets clear effici...Read more...

10 July 2015

Theoretical Economics Paper

Projection Equilibrium: Definition and Applications to Social Investment and Persuasion

Kristof Madarasz

People exaggerate the extent to which their private information is shared with others. This paper introduces this phenomenon portably into Bayesian games where people wrongly think that if they can condition their strate...Read more...

16 February 2015

Theoretical Economics Paper

Reason-Based Rationalization

Franz Dietrich and Christian List

?Reason-based rationalizations? explain an agent's choices by specifying which properties of the options or choice context he/she cares about (the ?motivationally salient properties?) and how he/she cares about these pro...Read more...

4 March 2014

Theoretical Economics Paper

Peer Effects in Endogenous Networks

Timo Hiller and Timo Hiller

This paper presents a simple model of strategic network formation with local complementarities in effort levels and positive local externalities for a general class of payoff functions. Results are obtained for one-sided...Read more...

30 September 2013

Theoretical Economics Paper

Conscience Accounting: Emotional Dynamics and Social Behavior

Uri Gneezy, Alex Imas and Kristof Madarasz

We develop a dynamic model where people decide in the presence of moral constraints and test the predictions of the model through two experiments. Norm violations induce a temporal feeling of guilt that depreciates with ...Read more...

1 February 2012

Theoretical Economics Paper

An Approach To Asset-Pricing Under Incomplete and Diverse Perceptions

Erik Eyster and Michele Piccione

We model a competitive market where risk-neutral traders trade one risk-free and one risky asset with limited short-selling of the risky asset. Traders use incomplete theories that give statistically correct beliefs abou...Read more...

1 December 2011

Theoretical Economics Paper

Does Competition Solve the Hold-up Problem?

Leonardo Felli and Kevin Roberts

In an environment in which heterogenous buyers and sellers undertake ex-ante investments, the presence of market competition for matches provides incentives for investment but may leave inefficiencies that take the form ...Read more...

1 September 2011

Theoretical Economics Paper

Efficiency in Repeated Two-Action Games with Local Monitoring

Francesco Nava and Michele Piccione

The paper discusses community enforcement in infinitely repeated two-action games with local monitoring. Each player interacts with and observes only a fixed set of partners, of whom he is privately informed. The main re...Read more...

1 September 2011

Theoretical Economics Paper

Sales and Collusion in a Market with Storage

Francesco Nava and Pasquale Schiraldi

Sales are a widespread and well-known phenomenon that has been documented in several product markets. Regularities in such periodic price reductions appear to suggest that the phenomenon cannot be entirely attributed to ...Read more...

1 July 2011

Theoretical Economics Paper

Screening with an Approximate Type Space

Kristof Madarasz and Andrea Prat

We re-visit the single-agent mechanism design problem with quasi-linear preferences, but we assume that the principal knowingly operates on the basis of only an approximate type space rather than the (potentially complex...Read more...

June 2010

Theoretical Economics Paper

Spatial Asset Pricing: A First Step

Francois Ortalo-Magne and Andrea Prat

People choose where to live and how much to invest in housing. Traditionally, the first decision has been the domain of spatial economics, while the second has been analyzed in finance. Spatial asset pricing is an attemp...Read more...

April 2010

Theoretical Economics Paper

Religious Organizations

Gilat Levy and Ronnie Razin

We propose a model of religious organizations which relies on the ability of such organizations to affect individual beliefs about the causality between actions in the social context and personal utility shocks. We show ...Read more...

November 2009

Theoretical Economics Paper

Gradualism in Dynamic Agenda Formation

Gilat Levy and Ronnie Razin

We analyze a dynamic model of agenda formation in which players compete in each period to put their ideal policies on the agenda. In each period, with some probability, a decision maker is called upon to take an action f...Read more...

September 2009

Theoretical Economics Paper

Quantity Competition in Networked Markets Outflow and Inflow Competition

Francesco Nava

This paper investigates how quantity competition operates in economies in which a network describes the set of feasible trades. A general equilibrium model is presented in which prices and .ows of goods are endogenously ...Read more...

September 2009

Theoretical Economics Paper

Statute Law or Case Law?

Luca Anderlini, Leonardo Felli and Alessandro Riboni

In a Case Law regime Courts have more flexibility than in a Statute Law regime. Since Statutes are inevitably incomplete, this confers an advantage to the Statute Law regime over the Case Law one. However, all Courts rul...Read more...

August 2008

Theoretical Economics Paper

The Political Economy of Housing Supply: Homeowners, Workers, and Voters

Francois Ortalo-Magne and Andrea Prat

Equilibrium of the housing market depends on a complex set of interactions between: (1) individual location decisions; (2) individual housing investment; (3) collective decisions on urban growth. We embed these three ele...Read more...

January 2007

Theoretical Economics Paper

Active Courts and Menu Contracts

Luca Anderlini, Leonardo Felli and Andrew Postlewaite

We describe and analyze a contractual environment that allows a role for an active court. The model we analyze is the same as in Anderlini, Felli, and Postlewaite (2006). An active court can improve on the outcome that t...Read more...

October 2006

Theoretical Economics Paper

SHOULD COURTS ALWAYS ENFORCE WHAT CONTRACTING PARTIES WRITE? This paper replaces TE/2003/464

Luca Anderlini, Leonardo Felli and Andrew Postlewaite

We find an economic rationale for the common sense answer to the question in our title ? courts should not always enforce what the contracting parties write. We describe and analyze a contractual environment that allows ...Read more...

October 2006

Theoretical Economics Paper

Characterizations of long-run producer optima and the short-run approach to long-run market equilibrium: a general theory with applications to peak-load pricing

Anthony Horsley and Andrew J Wrobel

This is a new formal framework for the theory of competitive equilibrium and its applications. Our ?short-run approach? means the calculation of long-run producer optima and general equilibria from the short-run solution...Read more...

May 2005

Theoretical Economics Paper

The Wong-Viner Envelope Theorem for subdifferentiable functions

Anthony Horsley and Andrew J Wrobel

The Wong-Viner Envelope Theorem on the equality of long-run and short-run marginal costs (LRMC and SRMC) is reformulated for convex but generally nondifferentiable cost functions. The marginal cost can be formalized as t...Read more...

April 2005

Theoretical Economics Paper

A Practical Short-run Approach to Market Equilibrium

Anthony Horsley and Andrew J Wrobel

The ?short-run approach? calculates long-run producer optima and general equilibria by building on short-run solutions to the producer?s profit maximization problem and on profit-based valuation of the fixed inputs. We o...Read more...

April 2005

Theoretical Economics Paper

Knowledge Disclosure, Patents and Optimal Organization of Research and Development

Sudipto Bhattacharya and Sergei Guriev

We develop a model of two-stage cumulative research and development (R&D), in which one Research Unit (RU) with an innovative idea bargains to license her nonverifiable interim knowledge exclusively to one of two competi...Read more...

September 2004

Theoretical Economics Paper

Firm-Specific Training

Leonardo Felli and Christopher Harris

This paper introduces two complementary models of firm-specific training: an informational model and a productivity-enhancement model. In both models, market provision of firm-specific training is inefficient. However, t...Read more...

April 2004

Theoretical Economics Paper

AGREEING NOW TO AGREE LATER: Contracts that Rule Out but do not Rule In

Oliver Hart and John Moore

We view a contract as a list of outcomes. Ex ante, the parties commit not to consider outcomes not on the list, i.e., these are 'ruled out'. Ex post, they freely bargain over outcomes on the list, i.e., the contract spec...Read more...

March 2004

Theoretical Economics Paper

Public Education for the Minority, Private Education for the Majority

Gilat Levy

Public provision of private goods such as education is usually viewed as a form of redistribution in kind. However, does it arise when income redistribution is feasible as well? In this paper I analyse a two-dimensional ...Read more...

March 2004

Theoretical Economics Paper

Financial Institutions and The Wealth of Nations: Tales of Development

Jian Tong and Chenggang Xu

Interactions between economic development and financial development are studied by looking at the roles of financial institutions in selecting R&D projects (including for both imitation and innovation). Financial develop...Read more...

March 2004

Theoretical Economics Paper

Competition and Incentives with Motivated Agents

Timothy Besley and Maitreesh Ghatak

A unifying theme in the literature on organizations such as public bureaucracies and private non-profits is the importance of missions, as opposed to profit, as an organizational goal. Such mission-oriented organizations...Read more...

November 2003

Theoretical Economics Paper

Should Courts Always Enforce What Contracting Parties Write? This paper is replaced by TE/2006/510

Luca Anderlini, Leonardo Felli and Andrew Postlewaite

We find an economic rationale for the common-sense answer to the question in our title ? courts should not always enforce what the contracting parties write. We describe and analyse a contractual environment that allows ...Read more...

November 2003

Theoretical Economics Paper

Dynamic Yardstick Regulation

Antoine Faure-Grimaud and Soenje Reiche

This paper shows that the inability of regulators to commit to long-term contracts is irrelevant when there is some competition between regulated firms and when firms' private information is correlated. This sharply cont...Read more...

September 2003

Theoretical Economics Paper

Coordinating Tasks in M-Form and U-Form Organisations

Yingyi Qian, Gerard Roland and Chenggang Xu

We model the coordination of specialised tasks inside an organisation as 'attribute matching'. Using this method, we compare the performance of organisational forms (M-form and U-form) in implementing changes such as inn...Read more...

June 2003

Theoretical Economics Paper

Careerist Judges

Gilat Levy

In this paper I analyse how careerist judges formulate their decisions using information they uncover during deliberations as well as relevant information from previous decisions. I assume that judges have reputation con...Read more...

May 2003

Theoretical Economics Paper

Endogenous Lobbying

Leonardo Felli and Antonio Merlo

In this paper we present a citizen-candidate model of representative democracy with endogenous lobbying. We find that lobbying induces policy compromise and always affects equilibrium policy outcomes. In particular, even...Read more...

February 2003

Theoretical Economics Paper

Courts of Law and Unforeseen Contingencies

Luca Anderlini, Leonardo Felli and Andrew Postlewaite

We study a contracting model with unforeseen contingencies in which the court is an active player. Ex-ante, the contracting parties cannot include the risky unforeseen contingencies in the contract they draw up. Ex-post ...Read more...

February 2003

Theoretical Economics Paper

Efficiency and Equilibrium when Preferences are Time-Inconsistent

Erzo G J Luttmer and Thomas Mariotti

We consider an exchange economy with time-inconsistent consumers whose preferences are additively separable. When these consumers trade in a sequence of markets, their time-inconsistency may introduce a non-convexity tha...Read more...

January 2003

Theoretical Economics Paper

Strategic Liquidity Supply and Security Design

Bruno Biais and Thomas Mariotti

We study how securities and trading mechanisms can be designed to optimally mitigate the adverse impact of market imperfections on liquidity. Asset owners seek to obtain liquidity by selling their claims on future cash-f...Read more...

January 2003

Theoretical Economics Paper

Investment Timing under Incomplete Information

Jean-Paul Decamps, Thomas Mariotti and Stephane Villeneuve

We study the decision of when to invest in an indivisible project whose value is perfectly observable but driven by a parameter that is unknown to the decision maker ex ante. This problem is equivalent to an optimal stop...Read more...

January 2003

Theoretical Economics Paper

Law Enforcement under Incomplete Law: Theory and Evidence from Financial Market Regulation

Katharina Pistor and Chenggang Xu

This paper studies the design of law-making and law enforcement institutions based on the premise that law is inherently incomplete. Under incomplete law, law enforcement by courts may suffer from deterrence failure, def...Read more...

December 2002

Theoretical Economics Paper

Credit Rationing, Wealth Inequality, and Allocation of Talent

Maitreesh Ghatak, Massimo Morelli and Tomas Sjostrom

We study an economy where agents are heterogeneous in terms of observable wealth and unobservable talent. Adverse selection forces creditors to ask for collateral. We study the two-way interaction between rationing in th...Read more...

October 2002

Theoretical Economics Paper

Modelling the Economic Interaction of Agents with Diverse Abilities to Recognise Equilibrium Patterns

Michele Piccione and Ariel Rubinstein

We model differences among agents in their ability to recognise temporal patterns of prices. Using the concept of DeBruijin sequences in two dynamic models of markets, we demonstrate the existence of equilibria in which ...Read more...

October 2002

Theoretical Economics Paper

The Wrong Kind of Transparency

Andrea Prat

In a model of career concerns for experts, when is the principal hurt from observing more information about her agent? This paper introduces a distinction between information on the consequence of the agent's action and ...Read more...

October 2002

Theoretical Economics Paper

Unforeseen Contingencies

Nabil J Al-Najjar, Luca Anderlini and Leonardo Felli

We develop a model of unforeseen contingencies. These are contingencies that are understood by economic agents ' their consequences and probabilities are known' but are such that every description of such events necessar...Read more...

February 2002

Theoretical Economics Paper

Self-Confidence and Survival

Heski Bar-Isaac

We consider the impact of history on the survival of a monopolist selling single units in discrete time periods, whose quality is learned slowly. If the seller learns her own quality at the same rate as customers, a suff...Read more...

October 2001

Theoretical Economics Paper

Continuity of the Equilibrium Price Density and its Uses in Peak-Load Pricing

Anthony Horsley and Andrew J Wrobel

With L8 as the commodity space, the equilibrium price density is shown to be a continuous function of the commodity characteristics. The result is based on symmetry ideas from the Hardy-Littlewood-Polya theory of rearran...Read more...

May 2001

Theoretical Economics Paper

Does Competition Solve the Hold-up Problem?

Leonardo Felli and Kevin Roberts

In an environment in which both buyers and sellers can undertake match specific investments, the presence of market competition for matches may solve hold-up and coordination problems generated by the absence of complete...Read more...

May 2001

Theoretical Economics Paper

Ownership and Managerial Competition: Employee, Customer, or Outside Ownership

Patrick Bolton and Chenggang Xu

This paper centres around the question of ownership of firms and managerial competition and how these affect manager and employees' incentives to invest in human capital. We argue that employee's incentives in human capi...Read more...

March 2001

Theoretical Economics Paper

Ownership, Incentives and Monitoring

Chong-En Bai and Chenggang Xu

This paper studies the effect of ownership structure on workers' incentives for investing in firm-specific human capital. Particularly, we analyse such incentivers and monitoring under employee ownership and capitalist o...Read more...

March 2001

Theoretical Economics Paper

Transaction Costs and the Robustness of the Coase Theorem

Luca Anderlini and Leonardo Felli

This paper explores the extent to which the presence of ex-ante transaction costs may lead to failures of the Coase Theorem. In particular we identify and investigate the basic 'hold-up problem' which arises whenever the...Read more...

February 2001

Theoretical Economics Paper

Bounded Rationality and Incomplete Contracts

Luca Anderlini and Leonardo Felli

This paper explores the link between boundedly rational behaviour and incomplete contracts. The bounded rationality of the agents in our world is embodied in a constraint that the contracts they write must be algorithmic...Read more...

December 2000

Theoretical Economics Paper

Strategic Consultation in the Presence of Career Concerns

Gilat Levy

In this paper I analyse the strategic interaction of decision makers and their advisers in a consultation process. I find that when agents are concerned about their reputation, consultation results in sub-optimal sharing...Read more...

November 2000

Theoretical Economics Paper

Efficiency Rents of Pumped-Storage Plants and their Uses for Operation and Investment Decisions

Anthony Horsley and Andrew J Wrobel

We apply duality methods of linear and convex programming to the problems of operation and rental valuation of facilities for conversion and storage of cyclically priced goods, e.g. , energy. Both problems are approached...Read more...

November 2000

Theoretical Economics Paper

Collective Bargaining under Complete Information

Carlos Diaz-Moreno and Jose E. Galdon-Sanchez

In this paper, we build and structurally estimate a complete information bargaining model of collective negotiation for Spain. For large firms, the assumption of complete information seems a sensible one, and it matches ...Read more...

July 2000

Theoretical Economics Paper

The Short-Run Approach to LRMC Pricing for Multiple Outputs with Nondifferentiable Costs

Anthony Horsley and Andrew J Wrobel

Using convex calculus, we extend the Wong-Viner Theorem to nondifferentiable costs by equating the capital inputs' rental prices to their profit-imputed marginal values. Thus extended, the short-run approach to LRMC pric...Read more...

June 2000

Theoretical Economics Paper

Efficiency Rents of Storage Plants in Peak-Load Pricing, II: Hydroelectricity

Anthony Horsley and Andrew J Wrobel

Duality methods of linear and convex programming are applied to impute definite marginal values to the fixed inputs of a hydroelectric plant from the operating profit. Our earlier analysis of pumped storage (of energy an...Read more...

October 1999

Theoretical Economics Paper

The Density Form of Equilibrium Prices in Continuous Time and Boiteux's Solution to the Shifting-Peak Problem - (Now published as 'Boiteux's solution to the shifting-peak problem and the equilibrium price density in continuous time', in Economic Theory, vol. 20 (2002), pp.503-537.)

Anthony Horsley and Andrew J Wrobel

Bewley's condition on production sets, imposed to ensure the existence of an equilibrium price density when L? is the commodity space, is weakened to allow applications to continuous-time problems, and especially to peak...Read more...

October 1999

Theoretical Economics Paper

On the Design of Hierarchies: Coordination Versus Specialization

Oliver Hart and John Moore

We develop a model of hierarchies based on the allocation of authority. A firm's owners have ultimate authority over a firm's decisions, but they have limited time or capacity to exercise this authority. Hence owners mus...Read more...

October 1999

Theoretical Economics Paper

Market Experimentation in a Dynamic Differentiated-Goods Duopoly

Godfrey Keller and Sven Rady

We study the evolution of prices in a symmetric duopoly where firms are uncertain about the degree of product differentiation. Customers sometimes perceive the products as close substitutes, sometimes as highly different...Read more...

July 1999

Theoretical Economics Paper

Dynamic Voting in Clubs

Kevin Roberts

This paper examines the process and outcomes of democratic decision-making in clubs where a club is defined by their sets of members whose preferences and decisions relate to the set of members in the club: the electorat...Read more...

January 1999

Theoretical Economics Paper

The Property-Rights Theory of the Firm with Endogenous Timing of Asset Purchase

Ben Lockwood and David de Meza

The standard property-rights theory of the firm assumes that prior to investing in human capital, team members meet and negotiate asset ownership. This paper endogenizes the event sequence in a matching model of market e...Read more...

December 1998

Theoretical Economics Paper

Implementation and Renegotiation

Eric Maskin and John Moore

The paper characterises the choice rules that can be implemented when agents are unable to commit themselves not to renegotiate the mechanism....Read more...

December 1998

Theoretical Economics Paper

Costly Bargaining and Renegotiation

Luca Anderlini and Leonardo Felli

We identify the inefficiencies that arise when negotiation between two parties takes place in the presence of transaction costs. First, for some values of these costs it is efficient to reach an agreement but the unique ...Read more...

October 1998

Theoretical Economics Paper

Costly Coasian Contracts

Luca Anderlini and Leonardo Felli

We identify and investigate the basic 'hold-up problem' which arises whenever each party to a contract has to pay some ex-ante cost for the contract to become feasible. We then proceed to show that, under plausible circu...Read more...

October 1998

Theoretical Economics Paper

Foundations of Incomplete Contracts

Oliver Hart and John Moore

In the last few years, a new area has emerged in economic theory, which goes under the heading of 'incomplete contracting'. However, almost since its inception, the theory has been under attack for its lack of rigorous f...Read more...

September 1998

Theoretical Economics Paper

A Theory of Supervision with Endogenous Transaction Costs

Antoine Faure-Grimaud, Jean-Jacques Laffont and David Martimort

We propose a theory of supervision with endogenous transaction costs. A principal delegates part of his authority to a supervisor who can acquire soft information about an agent's productivity. If the supervisor were ris...Read more...

July 1998

Theoretical Economics Paper

Read My Lips: The Political Economy of Information Transmission

Timothy Besley and Rohini Pande

The paper studies credible information transmission by governments. A group of heterogenous individuals have to make private investment and labour supply decisions while relying on the government for information about in...Read more...

July 1998

Theoretical Economics Paper

Berge's Maximum Theorem With Two Topologies On The Action Set

Anthony Horsley, Timothy Van Zandt and Andrew J Wrobel

We give variants on Berge's Maximum Theorem in which the lower and the upper semicontinuities of the preference relation are assumed for two different topologies on the action set, i.e., the set of actions availabe a pri...Read more...

March 1998

Theoretical Economics Paper

Cooperatives vs. Outside Ownership

Oliver Hart and John Moore

We are concerned with the design of a constitution for a firm - an ex ante contract which assigns residual rights of control (and possibly residual income rights) without reference to the issue to be decided. We focus at...Read more...

January 1998

Theoretical Economics Paper

Epistemic Conditions for Bayesian Nash Equilibrium, and Common Knowledge of Rationality

Ben Polak

We show that, in games of complete information, the Aumann-Brandenburger (1995) sufficient conditions for Nash equilibrium in beliefs also imply common knowledge of rationality. We then consider beliefs held in games of ...Read more...

November 1997

Theoretical Economics Paper

Weakening the Sure-Thing Principle: Decomposable Choice under Uncertainty

Simon Grant, Atsushi Kajii and Ben Polak

Savage motivated his Sure-Thing Principle b y arguing that, whenever an act would be preferred if an event obtains and preferred if an event did not obtain, then it should be preferred overall. The idea that it should be...Read more...

October 1997

Theoretical Economics Paper

A Model of a Predatory State

Boaz Moselle and Ben Polak

We provide a model of a primitive state whose rulers extort taxes for their own ends. This 'predatory' state can result in lower levels of both output and popular welfare than either organized banditry or anarchy. The pr...Read more...

September 1997

Theoretical Economics Paper

Analyzing the Case for Government Intervention in a Representative Democracy

Timothy Besley and Stephen Coate

The welfare economic method for analyzing the case for government intervention is often criticised for ignoring the political determination of policies. The standard method of accounting for this critique studies the cas...Read more...

September 1997

Theoretical Economics Paper

Lobbying and Welfare in a Representative Democracy - (Now published in 'Review of Economic Studies', 68 (2001), pp.67-82.)

Timothy Besley and Stephen Coate

This paper studies the impact of lobbying on political competition and policy outcomes in a framework which integrates the citizen-candidate model of representative democracy with the menu-auction model of lobbying. Posi...Read more...

September 1997

Theoretical Economics Paper

Optimal Experimentation in a Changing Environment

Godfrey Keller and Sven Rady

This paper studies optimal experimentation by a monopolist who faces an unknown demand curve subject to random changes, and who maximises profits over an infinite horizon in continuous time. We show that there are two qu...Read more...

July 1997

Theoretical Economics Paper

Incentives, Scale Economies, and Organizational Form - (Now published in 'Economics of Transition' (2201)).

Eric Maskin, Yingyi Qian and Chenggang Xu

We model organization as the command-and-communication network of managers erected on top of technology (which is modelled as a collection of plants). In our framework, the role of a manager is to deal with shocks that a...Read more...

June 1997

Theoretical Economics Paper

Default and Renegotiation: A Dynamic Model of Debt

Oliver Hart and John Moore

We analyse the role of debt in persuading an entrepreneur to pay out cash flows, rather than to divert them. In the first part of the paper we study the optimal debt contract - specifically, the trade-off between the siz...Read more...

January 1997

Theoretical Economics Paper

Bilateral Search and Vertical Heterogeneity

Jan Eeckhout

The Two-Sided Perfect Matching model is generalised to an Imperfect Matching model with search frictions. A search model is proposed which is characterised by bilateral search and vertical heterogeneity and allows for a ...Read more...

October 1996

Theoretical Economics Paper

Costly Contingent Contracts

Luca Anderlini and Leonardo Felli

We identify and investigate the basic ?hold-up? problem which arises whenever each party to a contingent contract has to pay some ex-ante cost for the contract to become feasible. We then proceed to show that, under plau...Read more...

October 1996

Theoretical Economics Paper

A New Bankruptcy Procedure that Uses Multiple Auctions - (Now published in 'European Economics Review', vol.41(3/5), 1997, pp.461-473.)

Oliver Hart, R La Porta Drago, F Lopez-de-Silanes and John Moore

We propose a new bankruptcy procedure that makes use of multiple auctions. The procedure is designed to work even when capital markets do not function well (for example, in developing economies, or in economies in transi...Read more...

October 1996

Theoretical Economics Paper

Friendships in Vertical Relations - (Now published under the title 'Renegotiation and Collusion in Organisations', in 'Journal of Economics and Management Strategy', 9(4)(Winter 2001), pp.453-483.)

Leonardo Felli and J M Villas-Boas

It has been argued that collusion among the members of an organization or a vertical structure creates efficiency losses, and hence should be prevented. This paper shows that whenever collusion takes the form of co-insur...Read more...

September 1996

Theoretical Economics Paper

The Optimal Consumption Function in a Brownian Model of Accumulation, Part B: Existence of Solutions of Boundary Value Problems

Lucien Foldes

In Part A of the present study, subtitled The Consumption Function as Solution of a Boundary Value Problem, Discussion Paper No. TE/96/297, STICERD, London School of Economics, we formulated a Brownian model of accumulat...Read more...

June 1996

Theoretical Economics Paper

The Optimal Consumption Function in a Brownian Model of Accumulation Part A: The Consumption Function as Solution of a Boundary Value Problem

Lucien Foldes

We consider a neo-classical model of optimal economic growth with c.r.r.a. utility in which the traditional deterministic trends representing population growth, technological progress, depreciation and impatience are rep...Read more...

March 1996

Theoretical Economics Paper

Competition, Investment and Vertical Integration

Gilles Chemla

This paper analyses the impact of competition among downstream firms on a supplier's investment and on her incentive to vertically integrate. We argue that tougher competition decreases the downstream industry profit, bu...Read more...

1996

Theoretical Economics Paper

Building Trust

Saikat Datta

In this paper we show slow trust building in social relationships in a model of complete information. This model is in contrast to the asymmetric information settings in 'reputation' models of slow trust building. We loo...Read more...

January 1996

Theoretical Economics Paper

On Connections Between Renegotiation Proof Sets of Long Finitely and Infinitely Repeated Games with Low Discounting

Saikat Datta

This paper looks at connections between Renegotiation Proof Equilibrium sets for finitely and infinitely repeated games. We look at the Benoit and Krishna (1993) definition of renegotiation proof sets for discounted fini...Read more...

1996

Theoretical Economics Paper

Preventing Collusion Through Discretion

Leonardo Felli

Large public bureaucracies are usually less efficient than modern private corporations. This paper explains how the degree of discretionary power might account for this difference in efficiency. In fact, increasing the d...Read more...

1996

Theoretical Economics Paper

Comparative Statics for a Partial Equilibrium Model of Investment with Wicksell-Complementary Capital Inputs

Anthony Horsley and Andrew J Wrobel

A partial competitive equilibrium model is set up for the determination of profit-maximising investment in a production technique which has constant returns to scale itself, but at least one of its inputs has an increasi...Read more...

1996

Theoretical Economics Paper

Efficiency Rents of Storage Plants in Peak-Load Pricing, I: Pumped Storage

Anthony Horsley and Andrew J Wrobel

Programming methods are given for rental valuation of storage and conversion facilities in cyclical, continuous-time pricing problems, e.g. pumped storage of electricity. By identifying the points of differentiability of...Read more...

1996

Theoretical Economics Paper

Uninterruptible Consumption, Concentrated Charges, and Equilibrium in the Commodity Space of Continuous Functions

Anthony Horsley and Andrew J Wrobel

Many consumption/production processes cannot be interrupted without significant loss of utility/ouput. In continuous-time equilibrium analysis, the structure of the demand for flows that results can lead to prices contai...Read more...

1996

Theoretical Economics Paper

The Wong-Viner Envelope Theorem or Nonsmooth Joint Costs, Rental Valuation and the Short-Run Approach to Long-Run Equilibrium

Anthony Horsley and Andrew J Wrobel

The standard Wong-Viner envelope theorem is of little use in the context of production with multiple outputs because the differentiability assumptions its builds on are so severely restrictive that even the simplest of a...Read more...

1996

Theoretical Economics Paper

The Le Chatelier Principle can be 'Expected' to Hold Globally: Implications of Rationality in Constrained and Unconstrained Situations - (Now published in 'Journal of Economic Theory', 87 (1999), pp.416-428.)

Kevin Roberts

Although conditions that exhaust the implications of rationality (homogeneity, symmetry, definiteness) are well known, these apply under a single set of constraints. If a situation can be compared with another situation ...Read more...

1996

Theoretical Economics Paper

Bargaining and Sharing Knowledge

Sudipto Bhattacharya, L-A Gerard-Varet and Claude d'Aspremont

We consider the problem of bargaining over the disclosure of interim research knowledge, between two participants in a R & D race or contest, for an ultimate, patentable invention. Licensing fee schedules, as functions o...Read more...

1996

Theoretical Economics Paper

The Governance of Exchanges: Members' Co-operatives Versus Outside Ownership

Oliver Hart and John Moore

The paper compares co-operative governance structure to outside ownership. The distinction between the two lies in who has residual rights of control. It is found that a co-operative becomes relatively less efficient as ...Read more...

1996

Theoretical Economics Paper

Reputation and Allocation of Ownership

Maija Halonen

We show that allocation of ownership matters even in a long-term relationship where problems of opportunism are less severe unless agents are very patient. Ownership structure is chosen to give the agents best incentives...Read more...

May 1995

Theoretical Economics Paper

Roads to Equality: Wealth Distribution Dynamics with Public-Private Capital Complementarity

Francisco H.G. Ferreira

This paper proposes a model of wealth distribution dynamics with a capital market imperfection and a production function where public capital is complementary to private capital. A unique invariant steady-state distribut...Read more...

April 1995

Theoretical Economics Paper

Credit Cycles - (Now published in 'Journal of Political Economy', vol.105(2), April 1997, pp.211-248.)

Nobuhiro Kiyotaki and John Moore

This paper is a theoretical study into how credit constraints intereact with aggregate economic activity over the business cycle. We construct a model of a dynamic economy in which lenders cannot force borrowers to repay...Read more...

1995

Theoretical Economics Paper

Objective Interpersonal Comparisons of Utility - (Now published in 'Social Choice and Welfare',14 (1997), pp.79-96.)

Kevin Roberts

This paper examines the problem of distilling conflicting interpersonal comparisons into a single set of interpersonal comparisons. The mapping that achieves this has a richer co-domain than all social choice problems (a...Read more...

1995

Theoretical Economics Paper

A Matching Model with Wage Announcement

Espen R. Moen

I study a matching model where heterogeneous firms publicly announce wage offers. A Walrasian type of equilibrium is derived, and the concept of stability used to restrict the set of equilibria. It is shown that the equi...Read more...

1995

Theoretical Economics Paper

Exploring a Branching Structure: A Bandit Problem with Correlated Pay-offs

Alison Hole and Godfrey Keller

This paper presents a model of a search process for the best outcome of many multi-stage projects. The branching structure of the search environment is such that the pay-offs to various actions are correlated; neverthele...Read more...

1994

Theoretical Economics Paper

Job Matching, Learning and the Distribution of Surplus (Revised version published in Journal of Political Economy, vol.104 (1996), pp.838-868 (new title: Learning, Wage Dynamics, and Firm-Specific Human Capital.)

Leonardo Felli and Christopher Harris

We study wage determination in a job-matching model, under the assumption that wages may be continuously renegotiated, so as to reflect the employee's endogenous outside option. We characterize the unique equilibirum of ...Read more...

1994

Theoretical Economics Paper

Wage and Employment Determination through Non-Cooperative Bargaining

Kevin Roberts

Classical theories of exchange rates, such as Mint Par and Purchasing Power Parity (PPP), have the desirable property that they define a network of exchange rates in which no profit by 'compound arbitration' or 'cyclic a...Read more...

1994

Theoretical Economics Paper

Exchange Rates and the Matrix-Tree Theorem

Norman Biggs

Classical theories of exchange rates, such as Mint Par and Purchasing Power Parity (PPP), have the desirable property that they define a network of exchange rates in which no profit by 'compound arbitration' or 'cyclic a...Read more...

1994

Theoretical Economics Paper

The Algebra of Knowledge: Critique and Reformulation

Kaushik Basu

The standard algebra of experessing knowledge and common knowledge in game theory is critically examines. It is argued that this algebra is flawed because it assumes implicitly that information partitions of individuals ...Read more...

1994

Theoretical Economics Paper

A General Model of Information Sharing in Oligopoly

Michael A. Raith

Under which circumstances do oligopolists have an incentive to share private information about a stochastic demand or stochastic costs? We present a general model which includes virtually all models of the existing liter...Read more...

March 1993

Theoretical Economics Paper

Incomplete Written Contracts: Endogenous Agency Problems (Revised version, 'Describability and Agency Problems', published in European Economic Review, vol.42 (1998), pp.35-59.)

Luca Anderlini and Leonardo Felli

This paper suggests a reason, other than asymmetric formation, why agency contracts are not explicitly contingent on the contracting parties' performances or actions. This reason is the formal nature of contracts: the fo...Read more...

1993

Theoretical Economics Paper

Recession Dynamics Following a Price Shock in a Transition Economy

Stanislaw Gomulka and John Lane

The paper develops and discusses a two-sector general equilibrium growth model of a 'transit economy' which is subjected to an external price shock. The assumed behavioural charactertistic of such an economy is the prese...Read more...

1993

Theoretical Economics Paper

Incomplete Written Contracts: Undescribable States of Nature (Now published in Quarterly Journal of Economics (1994), vol.109, pp.1085-1124.)

Luca Anderlini and Leonardo Felli

This paper extends the classic two-armed bandit problem to a many-agent setting in which N players each face the same experimentation problem. The difference with the single-agent problem is that agents can now learn fro...Read more...

1993

Theoretical Economics Paper

Strategic Experimentation - (Now published in 'Econometrica',(March 1999).

Patrick Bolton and Christopher Harris

This paper extends the classic two-armed bandit problem to a many-agent setting in which N players each face the same experimentation problem. The difference with the single-agent problem is that agents can now learn fro...Read more...

1993

Theoretical Economics Paper

Incomplete Information Bargaining and Business Cycles

Daron Acemoglu

This paper presents a one-sided incomplete (asymmetric) information bargaining game between a firm and a worker embedded in a general equilibrium framework. The model predicts business cycle fluctuations in the economy i...Read more...

1993

Theoretical Economics Paper

Imperfect Capital Markets and Persistence of Initial Wealth Inequalities

Thomas Piketty

We consider an infinite-horizon inter-generational economy with identical agents differing only in their inherited wealth and with a constant-returns-to-scale technology using capital and labour (called 'effort') and dis...Read more...

November 1992

Theoretical Economics Paper

Irreversible Investment with Uncertainty and Scale Economies

Avinash Dixit

This paper analyses optimal irreversible investment policy when profits are subject to a multiplicative geometric Brownian motion shock. The marginal product of capital is increasing initially and decreasing thereafter. ...Read more...

May 1992

Theoretical Economics Paper

Optimal Selling Procedures with Fixed Costs

Francesca Cornelli

This paper studies the optimal selling procedures for a monopolist, when consumers valuations are unknown and there are fixed costs. The fixed costs introduce a positive externality among customers: each customer benefit...Read more...

1992

Theoretical Economics Paper

The Firm as a Communication Network - (Now published in 'Quarterly Journal of Economics' CIX(4) (December 1994), pp.809-839. Reprinted in Mark Casson (ed.). 'The Theory of the Firm'(Edward Elgar Publishing, 1997).

Patrick Bolton and Mathias Dewatripont

In this paper the internal organisation of firms is reduced to the organisation of a communication network. In the presence of information communication and processing costs it is important to design rules guiding which ...Read more...

1992

Theoretical Economics Paper

Valued Opinions or Opinionated Values: The Double Aggregation Problem (Now published in K. Basu, P. Pattanaik and K. Suzumura (eds.), Choice, Welfare and Development: Essays in Honour of Amartya Sen (Oxford University Press, Oxford, 1994).)

Kevin Roberts

A new and powerful dictatorship result is presented. It is well known that in social choice problems, the negativism of the original Arrow result can be overcome by admitting information based on interpersonal comparison...Read more...

1992

Theoretical Economics Paper

The Art of Smooth Pasting (Now published in Fundamentals of Pure and Applied Economics 55 (Harwood Academic Publishers GbmH, Poststr. 22, 7000 Chur, Switzerland), 1993. ISBN: 3-7186-5384-2, ISSN: 0191-1708.)

Avinash Dixit

Many recent stochastic dynamic models in economics and finance are based on the theory of Brownian motion and its control or regulation. A heuristic exposition of this theory is presented with emphasis given to Ito's Lem...Read more...

1992

Theoretical Economics Paper

The Economics of Bankruptcy Reform (Now published in Journal of Law, Economics and Organization, vol.8, no.3, (1992), pp. 523-546.)

Philippe Aghion, Oliver Hart and John Moore

We propose a new bankruptcy procedure. Initially, a firm's debts are cancelled, and cash and non-cash bids are solicited for the 'new' (all-equity) firm. Former claimants are given shares, or options to buy shares, in th...Read more...

1992

Theoretical Economics Paper

On the Local Stability of Sunspot Equilibria Under Adaptive Learning Rules - (Now published in 'Journal of Economic Theory', vol.64 (1994), pp.142-161.)

George W. Evans and Seppo Honkapohja

We examine local stability under learning of stationary Markov sunspot equilibria (SSEs) in a simply dynamic nonlinear model. Necessary and sufficient conditions for local convergence of a recursive learning algorithm to...Read more...

1992

Theoretical Economics Paper

Adaptive Learning and Expectational Stability: An Introduction - (Now published as Ch.4 in 'Learning Rationality in Economics', A Kirman and M Salmon (eds), 1995, Basil Blackwell, Oxford), pp.102-126.)

George W. Evans and Seppo Honkapohja

Rational expectations as the standard solution concept for dynamic economic models leaves open two fundamental questions: (1) how can RE be attained if agents do not actually begin with RE?, and (2) which RE solution wil...Read more...

1992

Theoretical Economics Paper

Localization of Closedness and Continuity Properties, with Applications to Preferences and Production Sets - (Now published as 'Localisation of continuity to bounded sets for nonmetrisable vector topologies and its applications to economic equilibrium theory', in Indagationes Mathematicae (New Series), 11 (2000), pp.53-61.)

Anthony Horsley and Andrew J Wrobel

Localization techniques which facilitate verification of the topological properties of sets, functions and correspondences needed for equilibrium analysis in infinite-dimensional spaces are given. For example, it is show...Read more...

1992

Theoretical Economics Paper

Continuity of Demand and the Direct Approach to Equilibrium Existence in Dual Banach Commodity Spaces - (Now published as 'Berge's Maximum Theorem with two topologies on the action set', in Economics Letters, 61 (1998), pp.285-291.)

Anthony Horsley and Andrew J Wrobel

An extension of Berge's Maximum Theorem is given, with two different topologies on the choice set used for the two semicontinuity assumptions on preferences. It is used to establish the norm-to-weak* continuity of (trunc...Read more...

1992

Theoretical Economics Paper

Outside Options in a Bargaining Model with Decay in the Size of the Cake (Now published in Economics Letters 40 (1992), pp.417-421.)

Alberto Dalmazzo

The paper analyses a simple Rubinstein-type bargaining model in which there is no discounting and the cake decays over time at a positive rate. As a consequence, outside options enter players' unique Perfect Equilibrium ...Read more...

1992

Theoretical Economics Paper

An Exploration of the Eductive Justifications of the Rational Expectations Hypothesis (Now published in American Economic Review, vol.82, no.5 (1992), pp.1254-1278.)

Roger Guesnerie

This paper examines justifications of the rational expectations hypothesis that rely on the analysis of the agents' mental forecasting ('educing') activity which involves 'forecasting the forecasts' of others etc. The co...Read more...

1992

Theoretical Economics Paper

Rationalizability, Strong Rationality and Expectational Stability (Now published in Games and Economic Behavior, Special Issue on Learning Dynamics, vol.5 (Oct. 1993), pp.632-646).)

George W. Evans and Roger Guesnerie

We examine the connection between two stability concepts of rational expectations equilibria: expectational stability, based on the convergence of iterations of expectations, and strong rationality, based on uniqueness o...Read more...

1992

Theoretical Economics Paper

Local Convergence of Recursive Learning to Steady States and Cycles in Stochastic Nonlinear Models - (Now published in 'Econometrica', vol.63 (1995), pp.195-206.)

George W. Evans and Seppo Honkapohja

We examine a recursive algorithm for learning steady states and cycles in stochastic nonlinear models. Necessary and sufficient conditions for local convergence are shown to be equivalent to easily computable expectation...Read more...

1992

Theoretical Economics Paper

Implementation in Environments with Complete Information (Now published as 'Implementation, Contracts and Renegotiation in Environments with Complete Information' in J-J Laffont (ed.), Advances in Economic Theory: Invited Papers to the World Congress of the Econometric Society, vol.I (1992), pp.182-282.)

John Moore

There are two parts to this paper. Part One introduces the subject of implementation, and provides applications (in particular, to the theory of contracts). This part is written so as to be accessible to the general read...Read more...

1991

Theoretical Economics Paper

The Firm as a Collection of Assets (Now published in European Economic Review, vol.36, Nos.2/3 (1992), pp.493-507.)

John Moore

The thesis of this paper is that human capital is inalienable: it cannot be bought or sold. Control of physical capital proved the means by which one agent influences another. That is, the pattern of property rights over...Read more...

1991

Theoretical Economics Paper

A Theory of Debt Based on the Inalienability of Human Capital

Oliver Hart and John Moore

Consider an entrepreneur whocneeds to raise funds from an investor, but cannot commit not to withdraw his human capital from the project. The possibility of a default or quit puts an upper bound on the total indebtedness...Read more...

1991

Theoretical Economics Paper

Price Singularities: Representation vs. Exclusion - (Now published as 'Boiteux's solution to the shifting-peak problem and the equilibrium price density in continuous time', in Economic Theory, vol. 20 (2002), pp.503-537.)

Anthony Horsley and Andrew J Wrobel

Bewley's programme of excluding price singularities in equilibrium solutions for commodity spaces of bounded functions is reconsidered. From two recent examples in which singularities are indispensable, viz., marginal co...Read more...

1991

Theoretical Economics Paper

Marginal Analysis and Bewley Equilibria: The Use of Subgradients

Anthony Horsley and Andrew J Wrobel

Using subdifferentials we develop a marginal-analytical approach to equilibrium and use it in the commodity space L? to derive new results on the representation of prices by a density. Apart from conferring advantages wh...Read more...

1991

Theoretical Economics Paper

Toward a Theory of International Currency (Now published in Review of Economic Studies 60 (1993), pp.283-307.)

Nobuhiro Kiyotaki, Akihiko Matsui and Kiminori Matsuyama

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1991

Theoretical Economics Paper

On the Preservation of Deterministic Cycles when some Agents Perceive them to be Random Fluctuations (Now published in Journal of Economic Dynamics and Control, vol.17 (1993), pp.705-721.)

George W. Evans, Seppo Honkapohja and Thomas J. Sargent

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1991

Theoretical Economics Paper

On the Stability of Rationing Scheme

Aditya Goenka

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1991

Theoretical Economics Paper

Search for a Theory of Money (Now published as 'A Search-Theoretic Approach to Monetary Economics' in The American Economic Review, vol.83, No.1, (March 1993), pp.63-77.)

Nobuhiro Kiyotaki and Randall Wright

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1990

Theoretical Economics Paper

A Theory of Corporate Financial Structure Based on the Seniority of Claims

Oliver Hart and John Moore

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1990

Theoretical Economics Paper

Renegotiation-Proof Implementation and Time Preferences

Ariel Rubinstein and Asher Wolinsky

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1990

Theoretical Economics Paper

Learning, Convergence, and Stability with Multiple Rational Expectations Equilibria - (Now published in 'European Economic Review', vol.38 (1994), pp.1071-1098.)

George W. Evans and Seppo Honkapohja

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1990

Theoretical Economics Paper

Price-Quantity Decisions as Learning Instruments

Steve Alpern and Dennis J. Snower

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1990

Theoretical Economics Paper

The Theory of Union Behaviour: Labour Hoarding and Endogenous Hysteresis.

Kevin Roberts

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1989

Theoretical Economics Paper

Culture and Optimality

Max Steuer

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1989

Theoretical Economics Paper

Implementing Alternative Voting in Kingmaker Trees (Now published in Games and Economic Behavior, 2 (1990), pp.325-336.)

J.V. Howard

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1989

Theoretical Economics Paper

Expectation Calculation and Macroeconomic Dynamics (Now published in American Economic Review, (March 1992).)

George W. Evans and Gary Ramey

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1989

Theoretical Economics Paper

Budget-Constrained Sequential Auctions With Incomplete Information

Carolyn Pitchik

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1989

Theoretical Economics Paper

Commitment Through Incomplete Information in a Simple Repeated Bargaining Model

Klaus M. Schmidt

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1989

Theoretical Economics Paper

The Envelope Theorem, Joint Costs, and Equilibrium

Anthony Horsley and Andrew J Wrobel

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1989

Theoretical Economics Paper

Renegotiation and Symmetry in Repeated Games

Dilip Abreu, David Pearce and Ennio Stacchetti

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1989

Theoretical Economics Paper

Aggregation and Social Choice: A Mean Voter Theorem (Now published in Econometrica, vol.59, No.1 (Jan.1991), pp.1-23.)

Andrew Caplin and Barry Nalebuff

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1989

Theoretical Economics Paper

Aggregation and Imperfect Competition: On the Existence of Equilibrium (Now published in Econometrica, vol.59, no.1 (Jan.1991), pp.25-29.)

Andrew Caplin and Barry Nalebuff

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1989

Theoretical Economics Paper

Cycles in Extensive Form Perfect Information Games (Now published in Journal of Mathematical Analysis, vol.159, no.1 (1991), pp.1-17.)

Steve Alpern

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1989

Theoretical Economics Paper

Bargaining Without Commitment (Now published in Games and Economic Behavior, 2 (1990), pp.291-297.)

Abhinay Muthoo

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1989

Theoretical Economics Paper

Default and Renegotiation: A DynamicModel of Debt - (Now published in 'Quarterly Journal of Economics', vol.113(1), February 1998, pp.1-41.)

Oliver Hart and John Moore

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1989

Theoretical Economics Paper

Convergence to Equilibrium in a Sequence for Games with Learning

David Canning

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1989

Theoretical Economics Paper

On the Robustness of Bubbles in Linear RE Models (Now published in International Economic Review, vol.33, No.1 (1992), pp.1-14.)

George W. Evans and Seppo Honkapohja

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1989

Theoretical Economics Paper

Remarks on the Logic of 'Agreeing to Disagree' Type Results (Now published in Journal of Economic Theory, 51 (1990), pp.184-193.)

Ariel Rubinstein and Asher Wolinsky

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1989

Theoretical Economics Paper

The Existence of an Equilibrium Price for Marginal Cost Pricing - (Now published as 'Boiteux's solution to the shifting-peak problem and the quilibrium price density in continuous time', in Economic Theory, vol. 20 (2002), pp.503-537.)

Anthony Horsley and Andrew J Wrobel

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1989

Theoretical Economics Paper

Limit Points in a Bargaining Model of a Decentralised Market I (Revised version now published in Economic Theory 3 (1993), pp.353-363.)

Abhinay Muthoo

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1988

Theoretical Economics Paper

Rationality and Game Theory when Players are Turing Machines

David Canning

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1988

Theoretical Economics Paper

Comments on the interpretation of game theory (Now published in Econometrica, 59 (1991), pp.909-924.)

Ariel Rubinstein

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1988

Theoretical Economics Paper

The Innovative Rate and Kalecki's Theory of Trend, Unemployment and the Business Cycle (Now published in Economica, 57 (1990), pp.525-540.)

Roy O. Davies, Stanislaw Gomulka and Adam Ostaszewski

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1988

Theoretical Economics Paper

Nash Implementation: A Full Characterization (Now published in Econometrica, vol.58, No.5 (1990), pp.1083-1099.)

John Moore and Rafael Repullo

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1988

Theoretical Economics Paper

Property Rights and the Nature of the Firm (Now published in Journal of Political Economy, vol.98, No.6 (1990), pp.1119-1158.)

Oliver Hart and John Moore

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1988

Theoretical Economics Paper

Active Learning about the Demand Distribution (Now published in Methods of Operations Research, 63, U. Rieder, P. Gessner, A. Peyerimhoff and F.J. Rademacher (eds.), (Anton Hain, Ulm, 1989), pp.81-92.)

Diane J. Reyniers

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1988

Theoretical Economics Paper

A Social Choice Rule and its Implementation in Perfect Equilibrium (Now published in Journal of Economic Theory, 56 (1992), pp.142-159.)

J.V. Howard

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1988

Theoretical Economics Paper

Cooperations in the Prisoner's Dilemma (Now published in Theory and Decision, vol.24 (1988), pp.203-213.)

J.V. Howard

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1988

Theoretical Economics Paper

Game Theory and Social Contract Mark II

Ken Binmore

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1988

Theoretical Economics Paper

Local Compactness of Choice Sets, Continuity of Demand on Prices, and the Existence of a Competitive Equilibrium

Anthony Horsley and Andrew J Wrobel

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1988

Theoretical Economics Paper

Common Knowledge and Game Theory

Ken Binmore and Adam Brandenburger

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1988

Theoretical Economics Paper

A Game with 'Almost Common Knowledge': An Example (Now published in American Economic Review, 79 (1989), pp.385-391.)

Ariel Rubinstein

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1987

Theoretical Economics Paper

Interactive High-Low Search: The Case of Lost Sales (Now published in Journal of the Operational Research Society, vol.40,No.8 (1989), pp.769-780.)

Diane J. Reyniers

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1987

Theoretical Economics Paper

Decentralized Trading, Strategic Behavior and the Walrasian Outcome (Now published in Review of Economic Studies, 57 (1990), pp.63-78.)

Ariel Rubinstein and Asher Wolinsky

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1987

Theoretical Economics Paper

Similarity and Decision-Making Under Risk (Now published in Journal of Economic Theory, 46 (1988), pp.145-153.)

Ariel Rubinstein

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1987

Theoretical Economics Paper

Opting Out: Bazaars versus 'Hi Tech' Markets

Avner Shaked

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1987

Theoretical Economics Paper

A Mixed Strategy Minimax Theorem (Now published in SIAM J. Control and Optimization, vol.26, No.6 (1988), pp.1357-1361.)

Steve Alpern and Shmuel Gal

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1987

Theoretical Economics Paper

Multiproduct Firms and Market Structure (Now published in Quarterly Journal of Economics, (November 1989), pp.753-770.)

Avner Shaked and John Sutton

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1987

Theoretical Economics Paper

The Complexity of Strategies and the Resolution of Conflict: An Introduction (Now published in Global Macroeconomics: Policy Conflict and Cooperation, Bryant and Portes (eds.), (Macmillan Press, 1987), pp.17-32.)

Ariel Rubinstein

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1987

Theoretical Economics Paper

Remodeled Rational Players (Now published as 'Modeling Rational Players II', in Economics and Philosopy, 4 (1988), pp.9-55.)

Ken Binmore

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1987

Theoretical Economics Paper

Perfect Equilibrium Histories of Finite and Infinite Horizon Games (Now published in Journal of Economic Theory, vol.47, No.1, (1989), pp.218-227.)

Tilman Borgers

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1987

Theoretical Economics Paper

Competitive Equilibrium in a Market with Decentralized Trade and Strategic Behaviour: An Introduction (Now published in The Economics of Imperfect Competition and Employment: John Robinson and Beyond, edited by G. Feiwel, (1989), pp.243-25.)

Ariel Rubinstein

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1987

Theoretical Economics Paper

Unique Implementation of Incentive Contracts with Many Agents (Now published in Review of Economic Studies, LV (1988), pp.555-572.)

Ching-to Ma

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1987

Theoretical Economics Paper

The Structure of Nash Equilibrium in Repeated Games with Finite Automata (Now published in Econometrica, 56 (1988), pp.1259-1282.)

Dilip Abreu and Ariel Rubinstein

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1987

Theoretical Economics Paper

Price Destabilizing Speculation (Now published in Journal of Political Economy (october 1986).)

Oliver Hart and David Kreps

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October 1986

Theoretical Economics Paper

Stopping Agents 'Cheat' (Now published in Journal of Economic Theory, vol.46, No.2, (Dec.1988), pp.355-372.)

Ching-to Ma and John Moore

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1986

Theoretical Economics Paper

Subgame Perfect Implementation (Now published in Econometrica, vol.56, No.5 (1988), pp.1191-1220.)

John Moore and Rafael Repullo

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1986

Theoretical Economics Paper

Modeling Rational Players (Now published as 'Modeling Rational Players I', in Economics and Philosophy, 3 (1987), pp.179-214.)

Ken Binmore

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1986

Theoretical Economics Paper

The Formal Theory of Electricity Pricing and Investment I: A Continuous-Time Model of Deterministic Production

Anthony Horsley and Andrew J Wrobel

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1986

Theoretical Economics Paper

Games with Repeated Decisions (Now published in SIAM J. Control and Optimization, vol.26, No.2 (1988), pp.468-477.)

Steve Alpern

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1985

Theoretical Economics Paper

Non-Cooperative Bargaining Theory: An Introduction (Now published in Review of Economic Studies, vol.53, No.176 (1986), pp.709-724.)

John Sutton

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1985

Theoretical Economics Paper

An Outside Option Experiment (Now published in Rand Journal of Economics, vol.21 (Spring 1990), pp.45-62.)

Ken Binmore, Avner Shaked and John Sutton

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1985

Theoretical Economics Paper

Perfect Equilibrium, Spatial Competition and Multiple Outlets (Now published (with D. Neven) as 'Can Price Competition Dominate Market Segmentation?' in The Journal of Industrial Economics, vol.36, 4 (1988), pp.431-442.)

Xavier Martinez

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1985

Theoretical Economics Paper

The Optimal Linear Income Tax Revisited (Now published in Journal of Public Economics, 31 (1986), pp.163-179.)

Martin Hellwig

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1985

Theoretical Economics Paper

Matching and Bargaining in Dynamic Markets (Now published as 2 papers (see also TE/84/103): 'Security Equilibrium', in Review of Economic Studies, 55 (1988), pp.33-48; and 'Matching and Bargaining in Dynamic Markets' in Review of Economic Studies, 55 (1988), pp.17-31.)

Ken Binmore and M.J. Herrero

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1985

Theoretical Economics Paper

Incomplete Contracts and Renegotiations (Now published in Econometrica, vol.56, No.4 (1988), pp.755-785.)

Oliver Hart and John Moore

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1985

Theoretical Economics Paper

Product Proliferation and Entry Deterrence Revisited

Giacomo Bonanno

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1985

Theoretical Economics Paper

Product Differentiation and Industrial Structure (Now published in Journal of Industrial Economics, vol.36, No.2 (1987), pp.131-146.)

Avner Shaked

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1985

Theoretical Economics Paper

The Nash Bargaining Solution in Economic Modelling (Now published in Rand Journal of Economics, vol.17 (1986), pp.176-188.)

Ken Binmore, Ariel Rubinstein and Asher Wolinsky

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1985

Theoretical Economics Paper

Finite Automata Play the Repeated Prisoner's Dilemma (Now published in Journal of Economic Theory, No.39 (1986),pp.176-188.)

Ariel Rubinstein

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1985

Theoretical Economics Paper

Game Theory and The Social Contract: Part I

Ken Binmore

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1984

Theoretical Economics Paper

Risk Aversion Without Diminishing Marginal Utility

Menahem E. Yaari

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1984

Theoretical Economics Paper

Equilibrium in a Market With Sequential Bargaining and No Transaction Costs is Walrasian

Douglas Gale

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1984

Theoretical Economics Paper

Frictionless Non-Walrasian Markets (Now published as 2 papers (see also TE/85/117): 'Security Equilibrium', in Review of Economic Studies, 55 (1988), pp.33-48; and 'Matching and Bargaining in Dynamic Markets' in Review of Economic Studies, 55 (1988), pp.17-31.)

Ken Binmore and M.J. Herrero

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1984

Theoretical Economics Paper

Contracting Between Two Parties with Private Information (Now published in Review of Economic Studies, vol.55 (Jan.1988), pp.49-69.)

John Moore

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1984

Theoretical Economics Paper

The Costs and Benefits of Ownership: A Theory of Vertical Integration (Now published in Journal of Political Economy (August 1986))

Sanford Grossman and Oliver Hart

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1984

Theoretical Economics Paper

A General-Equilibrium Model of the Transactions Demand for Money

Douglas Gale and Martin Hellwig

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1984

Theoretical Economics Paper

Fairness or Gamesmanship in Bargaining: An Experimental Study (Now published in American Economic Review, vol.75, (Dec. 1985), pp. 1178-1180.)

Ken Binmore, Avner Shaked and John Sutton

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1984

Theoretical Economics Paper

The Semi-Walrasian Economy

Avner Shaked and John Sutton

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1984

Theoretical Economics Paper

Incentive-Compatible Debt Contracts: The One-Period Problem (Revised version now published in Review of Economic Studies, 1985).)

Douglas Gale and Martin Hellwig

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1984

Theoretical Economics Paper

Power and Agrarian Relations: Some Concepts and Measurements (Now published in Agrarian Power and Agricultura Productivity in South Asia, edited by M. Desai and A. Rudra, (U.P.C., Berkeley, CA, 1984); and (OUP, Delhi, 1984).)

Meghnad Desai

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1984

Theoretical Economics Paper

Equilibrium in a Market With Sequential Bargaining (Now published in Econometrica 53 (1985), pp. 1133-1150.)

Ariel Rubinstein and Asher Wolinsky

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1984

Theoretical Economics Paper

The Existence of Nash Equilibria in a Model of Growth with Altruism between Generations (Now published in Review of Economic Studies, LIII (1986), pp.349-367.)

Wolfgang Leininger

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1984

Theoretical Economics Paper

Global Incentive Constraints in Auction Design (Now published in Econometrica, vol.52, No.6 (November 1984), pp.1523-1535.)

John Moore

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1983

Theoretical Economics Paper

Existence and Price Characterisation of Sub-Game Perfect Nash Equilibria, Relative to the Class of All Continuous Functions, in Altruistic Economies (Now published as two papers in Journal of Economics, vol.44, No.4, (1984) and vol.46, no.4.)

John Lane and Wolfgang Leininger

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1983

Theoretical Economics Paper

Monopolistic Competition in the Spirit of Chamberlain: Special Results (Now published in Economic Journal, 95, (1985).)

Oliver Hart

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1983

Theoretical Economics Paper

The Competitive Stock Market as Cartel Maker: Some Examples

Ariel Rubinstein and Menahem E. Yaari

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1983

Theoretical Economics Paper

Monopolistic Competition in the Spirit of Chamberlain: A General Model (Now published in Review of Economic Studies, LII, (1985).)

Oliver Hart

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1983

Theoretical Economics Paper

Marshall's Consumer and Quality Choice

Anthony Horsley

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1983

Theoretical Economics Paper

Incentive Compatible Debt Contracts I: The One-Period Problem (Revised version now published in Review of Economic Studies (1985).)

Douglas Gale and Martin Hellwig

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1983

Theoretical Economics Paper

Implementation in Dominant Strategies Under Complete and Incomplete Information (Now published in Review of Economic Studies, LII (1985), pp.223-229.)

Rafael Repullo

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1983

Theoretical Economics Paper

Lives and Welfare (Now published as 'Lives and Well-Being' in Social Choice and Welfare, vol.5, pp.103-126.)

Partha Dasgupta

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1983

Theoretical Economics Paper

Bargaining and Coalitions I (Now published in Game-theoretic Models of Bargaining edited by Al Roth, (Cambridge University Press, 1985).)

Ken Binmore

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1983

Theoretical Economics Paper

Implementation of Direct Mechanism Under Incomplete Information (Now published in Economic Organizations as Games, edited by K. Binmore and P. Dasgupta, (Basil Blackwell, Oxford, 1986), pp.179-195.)

Rafael Repullo

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1983

Theoretical Economics Paper

Imperfect Competition in General Equilibrium: An Overview of Recent Work (Now published in Frontiers of Economics, edited by K. Arrow and S. Honkapohja, (Basil Blackwell, Oxford, 1985).)

Oliver Hart

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1983

Theoretical Economics Paper

Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model (Now published in Econometrica, vol.52, (1984), pp.1351-1364.)

Avner Shaked and John Sutton

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1983

Theoretical Economics Paper

On the Efficiency of Equilibrium with Incomplete Markets (Now published in Journal of Economic Theory, vol.44, No.2 (1988), pp.217-230.)

Rafael Repullo

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1983

Theoretical Economics Paper

Reasonable Conjectures

Oliver Hart

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1982

Theoretical Economics Paper

Two Search Games on Graphs (Now published in SIAM J. Control and Optimization, vol.24, No.1 (1986), pp.66-75.)

Steve Alpern and M. Asic

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1982

Theoretical Economics Paper

Long-Term Relationships Governed by Short-Term Contracts (Now published in American Economic Review, (1988).)

V.P. Crawford

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1982

Theoretical Economics Paper

Perfect Equilibria in Bargaining Models (Now published in The Economics of Bargaining, edited by K. Binmore and P. Dasgupta, (Basil Blackwell, Oxford, 1987.)

Ken Binmore

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1982

Theoretical Economics Paper

Optimal Incentive Schemes in Multiagent Situations (Now published in Review of Economic Studies, (1984).)

Dilip Mookherjee

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1982

Theoretical Economics Paper

The Existence of Equilibrium in Discontinuous Economic Games, 2: Applications (Now published in Review of Economic Studies, LIII (1986), pp.27-41.)

Partha Dasgupta and Eric Maskin

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1982

Theoretical Economics Paper

The Existence of Equilibrium in Discontinuous Economic Games, 1: Theory (Now published in Review of Economic Studies, LIII (1986), pp.1-26.)

Partha Dasgupta and Eric Maskin

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1982

Theoretical Economics Paper

Strategic Considerations in Invention and Innovation: The Case of Natural Resources (Now published in Econometrica, vol. 51, no.5 (1983).)

Partha Dasgupta, Richard Gilbert and Joseph Stiglitz

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1982

Theoretical Economics Paper

Agglomeration as Spatial Interdependence Between Firms and Households (Now published in Journal of Economic Theory, vol.37 (1985), pp.19-31.)

Y.Y. Papageorgiou and J.F. Thisse

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1982

Theoretical Economics Paper

Natural Oligopolies and the Gains from Trade

Avner Shaked and John Sutton

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1982

Theoretical Economics Paper

Natural Oligopolies and International Trade: An Introduction (Now published in Monopolistic Competition and International Trade, (editor) H. Kierszkowski (O.U.P., 1984).)

Avner Shaked and John Sutton

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1982

Theoretical Economics Paper

Electricity Pricing for Large Supply Systems

Anthony Horsley

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1982

Theoretical Economics Paper

The Core of an Economy with Transaction Costs (Now published in Review of Economic Studies, LV (1988), pp.447-458.)

Rafael Repullo

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1982

Theoretical Economics Paper

The Theory of Technological Competition (Now published in New Developments in the Analysis of Market Structure, edited by J.E. Stiglitz and F.Mathewson (Macmillan, London and Cambridge, MA, 1986).)

Partha Dasgupta

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1982

Theoretical Economics Paper

The Timing of Sales (Now published in Review of Economic Studies, L1 (1984), p.353-368.)

Joel Sobel

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1982

Theoretical Economics Paper

Optimal Labour Contracts Under Asymmetric Information: An Introduction (Now published in Review of Economic Studies, (January 1983).)

Oliver Hart

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1982

Theoretical Economics Paper

Price Dynamics Based on the Adjustment of Firms (Now published in The American Economic Review, vol.72, No.5 (December 1982), pp.1088-1096.)

Hugo Sonnenschein

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1982

Theoretical Economics Paper

Dynamic Optimization in Non-Convex Models with Irreversible Investment: Monotonicity and Turnpike Results (Now published in Zeitschrift fur National-Okonomie (Journal of National Economics), vol.42, No.4 (1982), pp.339-362.)

Mukul Majumdar and Manfred Nermuth

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1982

Theoretical Economics Paper

Price Competition Among Differentiated Products: A Detailed Study of a Nash Equilibrium

J. Jaskold Gabszewicz, Avner Shaked, John Sutton and J.F. Thisse

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1981

Theoretical Economics Paper

Non-Cooperative Equilibria in Supergames with 'Almost' Cooperative Outcomes

Dilip Mookherjee

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1981

Theoretical Economics Paper

Natural Oligopolies (Now published in Econometrica, vol.51, No.5, (1983), pp.1469-1483.)

Avner Shaked and John Sutton

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1981

Theoretical Economics Paper

Cournot-Nash Equilibria in Large Markets: The Case of Declining Average Cost Curves (Now published in Review of Economic Studies, vol.50, (1983), pp.347-354.)

Yoshiaki Ushio

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1981

Theoretical Economics Paper

Altruism and Pareto Optimality (Now published in Economics Letters, (1983).)

Joseph Greenberg

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1981

Theoretical Economics Paper

Human Environment as a Local Public Good (Now published in Journal of Mathematical Economics, vol.9 (1982), pp.275-283.)

Avner Shaked

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1981

Theoretical Economics Paper

Utilitarianism, Information and Rights (Now published in Utilitarianism and Beyond, edited by Amartya Sen & Bernard Williams, (Cambridge University Press, 1982).)

Partha Dasgupta

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1981

Theoretical Economics Paper

Capital Market Imperfections in Stock Market Economies

Douglas Gale

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1981

Theoretical Economics Paper

Profitability of Export Restraint (Now published in Journal of International Economics, vol.16 (1984), pp. 335-343.)

Yoshiyasu Ono

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1981

Theoretical Economics Paper

The Existence of Equilibrium in Discontinuous Economic Games, 1: Theory (Revised version now published in Review of Economic Studies, LIII (1986), pp.1-26.)

Partha Dasgupta and Eric Maskin

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1981

Theoretical Economics Paper

Imperfect Capital Markets and the Monetarist Black Box: Liquidity Constraints, Inflation and the Asymmetric Effects of Interest Rate Policy (Now published in Economic Journal, vol. 92, pp.108-128.)

Richard Jackman and John Sutton

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1981

Theoretical Economics Paper

Anti-Hotelling: Relaxing Price Competition Through Product Differentiation (Now published in Review of Economic Studies, vol.49 (January 1982), pp.3-14.)

Avner Shaked and John Sutton

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1981

Theoretical Economics Paper

Resource Pricing and Technological Innovations under Oligopoly: A Theoretical Exploration (Now published in Scandinavian Journal of Economics, vol.83 (1981), pp.289-371.)

Partha Dasgupta

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1981

Theoretical Economics Paper

The Kinked Demand Curve - A Theoretical Approach

Yoshiyasu Ono

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1980

Theoretical Economics Paper

Nash Bargaining Theory III (Now published in The Economics of Bargaining, edited by K. Binmore and P. Dasgupta, (Basil Blackwell, Oxford, 1987).)

Ken Binmore

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1980

Theoretical Economics Paper

Nash Bargaining Theory II (Now published in The Economics of Bargaining, edited by K. Binmore and P. Dasgupta, Basil Blackwell, Oxford, 1987.)

Ken Binmore

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1980

Theoretical Economics Paper

Perfect Equilibrium in a Bargaining Model (Now published in Econometrica, vol.50, (1982), pp. 97-100.)

Ariel Rubinstein

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1980

Theoretical Economics Paper

Imperfect Information, Perceived Quality and the Formation of Professional Groups (Now published in Journal of Economic Theory, vol.27, No.1 (1982), pp. 170-18.)

John Sutton

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1980

Theoretical Economics Paper

The Self Regulating Profession (Now published in Review of Economic Studies, vol.48 (1981), pp.217-234.)

Avner Shaked and John Sutton

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1980

Theoretical Economics Paper

Money, Equilibrium and Efficiency (Now published in Money in Equilibrium, ch. 7, (O.U.P, 1982).)

Douglas Gale

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1980

Theoretical Economics Paper

Nash Bargaining Theory I (Now published in The Economics of Bargaining, edited by K. Binmore and P. Dasgupta (Basil Blackwell, Oxford, 1987).)

Ken Binmore

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1980

Theoretical Economics Paper

The Single Profile Analogues to Multi- Profile Theorems: Mathematical Logic's Approach (Now published in International Economic Review, (1984) pp.719-730.)

Ariel Rubinstein

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1980

Theoretical Economics Paper

Industrial Structure and the Nature of Innovative Activity (Now published in Economic Journal, Vol.90 (June 1980)pp.226-293.)

Partha Dasgupta and Joseph Stiglitz

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1980

Theoretical Economics Paper

A Formal Model of the Long Run Phillips Curve with Trade-off (Now published in Economica, Vol.48 (Nov.1981) pp.329-343.)

John Sutton

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1980

Theoretical Economics Paper

On economic games which are not necessarily superadditive: solution concepts and application to a local public good problem with 'few' agents (Now published in Economic Letters, No.3 (1979) pp.301-306.)

Roger Guesnerie and C. Oddou

Core-like solution concepts based on stable coalition structures are studied in the context of games which are not necessarily superadditive. It is shown that a simple economic model involving local public goods financed...Read more...

1979