Showing papers in "Journal of Economic Theory in 1987"

TL;DR: In this article, the authors provide a stronger definition of self-enforceability, and label the class of efficient self-ensforcing agreements "coalition-proof" for non-cooperative games.

TL;DR: In this paper, the authors define measures of risk aversion for such preferences which characterize the relation "more risk averse" and apply these measures to the analysis of unconditional and conditional portfolio choice problems.

TL;DR: In this paper, a generalization of regret theory is suggested and is compared and contrasted with Fishburn's generalisation of SSB utility theory, and it is shown that under this generalization an individual with non-transitive pairwise preferences with not be caught in a never-ending cycle and is not vulnerable to being “money-pumped” into bankruptcy.

TL;DR: In a first-price sealed-bid auction with risk-neutral bidders, the optimal auction is the same whether or not the bidderers know who their competitors are as discussed by the authors.

TL;DR: In this paper, the authors study a competitive credit market equilibrium in which all agents are risk neutral and lenders are a priori unaware of borrowers' default probabilities, and the principal result is that in equilibrium lower risk borrowers pay higher interest rates than higher risk borrowers.

TL;DR: In this paper, the authors model trade as a non-coopertative, strategic game played at an inlinite sequence of dates and show that as the costs of search and bargaining become negligible, the outcome converges to the competitve (flow) equilibrium.

TL;DR: In this paper, the authors analyse a single sector economy with H > 1 infinitely-lived agents that operate in a continuous-time framework, where utility functions are recursive but not additive, and both efficient and perfect foresight competitive equilibrium allocations are considered.

TL;DR: In this paper, the authors examine the financing and incorporation modes for new projects and provide a theory of optimal capital structure that links risk, leverage, and value and is particularly applicable to large firms.

TL;DR: In this paper, the authors modify the Cournot model by allowing for two production periods before the market clears, and they show that any outcome on the outer envelope of the best-response functions between and including the firms' smallest Stackelberg outcomes is sustainable as a subgame perfect Nash equilibrium.

TL;DR: In this article, the authors considered the problem of designing a trading institution for a single buyer and seller when their valuation of the good is private information and showed that posted-price mechanisms are essentially the only mechanisms such that each trader has a dominant strategy.

TL;DR: In this paper, the authors characterize financial markets that are complete or that contain portfolios which span all measurable functions of a particular asset payoffs, either finite and infinite-dimensional, and describe the extent to which options trading is sufficient to complete markets, to investigate the existence of efficient funds, and to establish the extent of market completeness required to ensure the unanimity and irrelevance results of modern corporation finance.

TL;DR: In this paper, the authors extend the Cournot model to take account of uncertainty in either the cost function or the demand function, and find that for a linear, continuous information structure there is a unique Nash equilibrium to the game.

TL;DR: In this paper, the authors consider a perfect foresight equilibrium model with a single capital good, a borrowing constraint and many infinitely lived households with fixed, but different discount factors, and give a condition implying income is increasing in capital and use it to show any equilibrium converges to the steady state.

TL;DR: In this article, the relationship between the inequality of income distributions and the social welfare they imply is investigated. But the authors focus on the trade-off between size and distribution of incomes.

TL;DR: In this paper, the search and bargaining model is embedded in a market matching model and the solutions are presented in a manner that clarifies the role of the search abilities and the details of the bargaining procedure in the determination of the outcomes.

TL;DR: In this paper, the equilibrium prices for the Bertrand and Cournot oligopolies with product differentiation are compared and it is shown that if all firms have linear demand and cost functions, and if, in addition, the Jacobian matrix of the demand functions has a dominant negative diagonal, then the Cournot equilibrium prices are not lower than Bertrand ones.

TL;DR: In this article, the existence of equilibria with incomplete financial markets for stochastic economies whose information structure is given by an event tree is shown, restricting attention to purely financial securities, those paying in units of account (e.g., dollars).

TL;DR: In this paper, Bernheim, Peleg, and Whinston proposed the notion of coalition-proof Nash equilibria for games in which players can freely discuss their strategies, but cannot make binding commitments.

TL;DR: In this article, the authors examined the asymptotic behavior of the set of equilibrium payoffs in a repeated game when there are bounds on the complexity of the strategies players may select.

TL;DR: In this article, the authors study whether information is concentrated within a fraction of the market or is diffuse, and they present conditions under which each of these effects is particularly strong, showing that the ability to use some signals together with prices to predict other signals may increase the degree of substitutability among signals.

TL;DR: In this article, the best known solutions to the bargaining problem were investigated for a fixed feasible set and it was shown that if the disagreement point d increases, while for each j ≠ i, d j remains constant, then these solutions recommend an increase in agent i's payoff, in agreement with intuition.

TL;DR: In this paper, the existence of equilibrium in Hart's unbounded securities exchange model is shown to hold without overlapping expectations, and it is shown that the no unbounded arbitrage condition is equivalent to the sufficiency condition.

TL;DR: In this paper, the authors study the properties of Edgeworth equilibria for economies with production and infinite-dimensional commodity spaces, and establish (among other things) that (1) edgeworth equilibrium exist, (2) every edgewort equilibrium is a quasi-equilibrium, and (3) an allocation is an Edgewort if and only if it can be "decentralized" by a price system.

TL;DR: In this paper, it was shown that in optimal control problems with one state variable cyclical solutions and other non-monotonicities, exogenous shocks can only occur if exogeneous shocks are brought into the model while for autonomous problems the state trajectory must always be monotonic.

TL;DR: In this article, it was shown that for any element in a specified class of distributions of the buyer's and the seller's valuations of the item, all of the individually rational and efficient allocation rules are characterized.

TL;DR: In this paper, the authors develop a concept of equilibrium behavior and establish its existence in a model of non-paternalistic intergenerational altruism, where each generation derives utility from its own consumption and the utilities of its successors, and when each generation's utility depends on that of at least two successors, equilibria may be inefficient.

TL;DR: In this article, an equilibrium in a game theoretic setting with a broader structure is proved, and the framework is general enough to encompass both the Aumann (Econometrica 34 (1966), 1-17) economy of perfect competition and the nonordered preferences setting of Mas-Colell (J. Math. Econ. 1 (1974), 237-246).

TL;DR: In this paper, a general equilibrium, choice theoretic, spatial model which explains the preference for holding barren money rather than interest-bearing securities or capital goods is provided, and a fairly general proof of the existence of a monetary equilibrium is provided.

TL;DR: In this paper, a game theoretic-mechanism characterization of perfect competition is presented, and it is shown that the perfectly competitive mechanism is the only Pareto optimal, individually rational, dominant strategy allocation mechanism that can solve the incentive/bargaining problem when there is incomplete information.

TL;DR: In this article, the existence of subgame-perfect equilibria in infinite-action games of perfect information with finitely or countably many players was proved. And they proved that the subgame that is played from date t on depends on the history up to t only as this history affects some vector of state variables.