Showing papers in "Journal of Economic Theory in 1991"

TL;DR: In this article, a formal definition of perfect Bayesian equilibrium (PBE) for multi-period games with observed actions is introduced, where the strategies form a Bayes equilibrium for each continuation game, given the specified beliefs, and beliefs are updated from period to period in accordance with Bayes rule whenever possible.

TL;DR: In this paper, the authors employ a martingale approach to study a dynamic consumption-portfolio problem in continuous time with incomplete markets and short-sale constraints, and transform the dynamic problem into a static problem of maximizing expected utility over the consumption bundles.

TL;DR: In this paper, the authors argue that if a firm has information pertinent to its own dividend stream that is not made available to its shareholders, it may be in the interests of the firm and its shareholders to adopt a financial hedging policy.

TL;DR: The authors analyzes a general equilibrium model with search frictions and differentiated commodities and proves the existence of equilibrium with valued fiat money and show it is robust to certain changes in the environment.

TL;DR: In this paper, the authors study the dynamics of growth and investment in a continuous time model with vintage capital, which is characterized by nonexponential rates of depreciation and technical change and can incorporate "gestation lags" as well as "learning by using".

TL;DR: In this paper, the authors show that there is an incentive compatible expansionary policy that dominates all incentive compatible contractionary policies, and they also show that if buyers value consumption substantially more than sellers, there is some randomness and informational constraints make asset trading useful.

TL;DR: In this paper, a sufficient condition for uniqueness of Nash equilibrium in second-price, common value auctions is identified, and sufficient conditions under which the expected seller revenue is maximized at the symmetric equilibrium are provided.

TL;DR: In this article, the authors show that any feasible, individually rational payoffs of an infinitely repeated game can arise as subgame perfect equilibrium payoffs if the discount factor is close enough to one even if mixed strategies are not observable and public randomizations are not available.

TL;DR: In this article, three nested criteria are proposed: strong announcement-proofness, announcement proofness, and weak announcementproofness for Sender-Receiver cheap-talk games.

TL;DR: In this article, rank-dependent utility is generalized to event weights that depend on the event and on whether or not its consequence is preferred to the status quo and to the alternative consequence.

TL;DR: The comparative statics of adding agents to matching markets that generalize the marriage and college admission markets of D. Gale and L. Shapley have been studied in this article, where it is shown that adding an agent to one side of the market weakens the competitive positions of the other agents on that side and strengthens the competitive position of the agents on the other side.

TL;DR: In many situations, persons without disability do not see the barriers that persons with disability are faced with as mentioned in this paper. If the barriers were removed simply by pointing them out, life would be easier for persons with disabilities than now.

TL;DR: In this paper, the authors considered a sequence of stochastic dynamic problems in which the discount rate goes to zero, and sufficient conditions are given under which the limit of discounted optimal policies (and normalized values) are a (i) long-run average optimal and (ii) catching-up optimal policy (and value).

TL;DR: In this paper, the necessary and sufficient condition for a partnership to be able to sustain efficiency when the output is stochastic was provided, and it was shown that only the level of the average liability of the partnership is important; the individual levels of liability are irrelevant.

TL;DR: In this article, the authors study the problem of a monopolist maximizing a sum of discounted profits facing a linear demand curve whose slope and intercept are unknown, and they show that if the monopolist has a mis-specified model, i.e., if the true slopes and intercept lie outside of the support of the monopolists prior beliefs, then actions and beliefs may cycle on every sample path.

TL;DR: In this article, the Strong Axiom of Revealed Preference is used to test the existence of a strictly quasiconcave (or strictly concave, strictly monotone) utility function generating finitely many demand observations.

TL;DR: In this article, patent competition is modeled as a dollar auction game between two firms, incumbent and entrant, whose total amount is constrained by fixed (research) budgets, and the explicit solution (subgame-perfect equilibrium) determines who wins the patent and how the winning expenditures depend on order of play and budgets of firms.

TL;DR: In this paper, the existence of a general equilibrium in an exchange economy whose commodity space is a vector lattice is guaranteed if (in addition to standard hypotheses) the price space is also a lattice.

TL;DR: In this paper, a preference relation defined on the set of conditional lotteries (i.e., sublotteries conditioned on the lotsteries to which they belong) that satisfies consequentialism and the axiom of reduction of compound lotters, satisfies the independence axiom for expected utility theory if and only if it satisfies dynamic consistency.

TL;DR: In this article, the authors generalized Saloner's analysis by allowing for cost differences across periods and showed that if costs fall slightly over time, the continuum of equilibria vanishes for any cost differential.

TL;DR: In this article, it was shown that under limited liability and/or risk aversion, the functions corresponding to the auction's optimal expected gain and to the maximum total surplus are continuous in the space of possible information distributions.

TL;DR: In this paper, an intergenerational allocation is defined to be unjust if there is a feasible allocation with more total consumption and less relative inequality, and the consequences of letting generations choose according to a standard form of altruistic preferences are explored in particular classes of technologies.

TL;DR: In this article, the authors studied repeated games in which players are imperfectly informed about the uncertain consequences of their opponents' actions, and they showed that if the game is informationally connected, the set of sequential equilibrium payoffs includes the enforceable mutually punishable set, if the intertemporal criterion is (i) the time average, or (ii) the limit of e-equilibria with discount factor δ, and e → 0 as δ → 1.

TL;DR: In this article, the authors characterize Pareto optimality of interior stationary allocations in single-good overlapping generations models with stochastic aggregate shocks and heterogeneous but recurring generations and show that there always exists an optimal equilibrium with or without valued fiat money.

TL;DR: In this paper, sufficient conditions for the existence of a Nash equilibrium are given when preferences may violate the reduction of compound lotteries assumption (RCLA), and conditions under which the equilibria will be dynamically consistent.

TL;DR: In this paper, the authors extended the results of Malcomson on the optimal replacement problem in vintage models and provided numerical evidence on the fact that the optimal machine life is constant under certain conditions.

TL;DR: In this article, the problem of hidden endowments is considered, where any agent may be either a buyer or seller, depending on the realization of the privately observed information, and it is often possible to arrange efficient trades.

TL;DR: In this paper, the authors investigated the implications of gross substitutability of excess demand functions for the equilibria of exchange economies with countably many goods and arbitrarily many consumers.

TL;DR: In this article, the authors examine how mean-preserving transformations in the loss distribution affect the optimal level of deductibility in an insurance contract and show that increases in risk affecting losses only below the deductible are shown to lead to a reduction in coverage (higher deductible), which can be viewed as an increase in precautionary savings.

TL;DR: In this paper, the authors criticise the competitive equilibrium from equal split (CEE) method, arguing that it puts no finite upper bound on any agent's welfare, and that it produces envy.