Showing papers in "Journal of Economic Theory in 2009"

TL;DR: In this article, the authors propose a more general framework to capture dynamic psychological effects (such as sequential reciprocity, psychological forward induction, regret, and anxiety) that were previously ruled out.

TL;DR: In this paper, the authors build a life cycle model of labor supply that incorporates changes along both the intensive and extensive margin and use it to assess the consequences of changes in tax and transfer policies on equilibrium hours of work.

TL;DR: This work studies the preference revelation game where students can only declare up to a fixed number of schools to be acceptable and identifies rather stringent necessary and sufficient conditions on the priorities to guarantee stability or efficiency of either of the two mechanisms.

TL;DR: In this article, the authors axiomatize an intertemporal version of the Smooth Ambiguity decision model developed in [P. Klibanoff, M. Marinacci, S. Mukerji, 2005].

TL;DR: It is proved that the set of Nash equilibria of a stable game is globally asymptotically stable under a wide range of evolutionary dynamics.

TL;DR: A Savage-type model of choice under uncertainty in which agents identify uncertain prospects with subjective compound lotteries is developed and it is shown that uncertainty aversion implies aversion to second-order risk which implies issue preference and behavior consistent with the Ellsberg paradox.

TL;DR: It is found that unmediated negotiation performs as well as mediation if and only if the degree of conflict between the parties is low.

TL;DR: It is shown that the cognitive hierarchy model is a special case of Truncated QRE, and significant evidence of payoff responsive stochastic choice, and of heterogeneity and downward looking beliefs in some games is found.

TL;DR: A max-min expected utility theory lets Tallarini's risk-aversion parameter as measuring a representative consumer's doubts about the model specification be calibrated, and plausible values of detection error probabilities give prices of model uncertainty that approach the Hansen and Jagannathan bounds.

TL;DR: In this paper, the authors developed an equilibrium directed search model of the labor market where workers can simultaneously apply for multiple jobs and the main theoretical contribution is to integrate the portfolio choice problem faced by workers into an equilibrium framework.

TL;DR: The growth model is extended to include firm-specific technology capital and used to assess the gains from opening to foreign direct investment and predicts large gains to being open.

TL;DR: It is found that optimal positions depend significantly and naturally on liquidity: when expected future liquidity is high, agents take more extreme positions, given that they do not have to hold those positions for long when they become undesirable.

TL;DR: This paper uses laboratory experiments to test the implications of the theory of repeated games on equilibrium payoffs and estimate strategies in an infinitely repeated prisoners’ dilemma game with imperfect public monitoring and finds that subjects’ payoffs decrease as noise increases, but are lower than the theoretical maximum for low noise.

TL;DR: In this paper, the authors extend Afriat's theorem to a class of nonlinear, nonconvex budget sets and show that by increasing in a regular way the number of observed choices from their class of budget sets one can fully identify the underlying preference relation.

TL;DR: It is demonstrated that there are learning spillovers across games but participants learn to play strategically equivalent games in the same way.

TL;DR: This paper developed necessary and sufficient conditions for equilibria to be determinate in a class of forward-looking Markov-switching rational expectations models and developed an algorithm to check these conditions in practice.

TL;DR: In this article, the authors construct a model with endogenous entry and operation decisions by firms to assess their impact on cross-country differences in output and TFP, and calibrate the model to match the U.S. distribution of employment and firms by size.

TL;DR: Subsidy-free VCG mechanisms assign p identical objects to n agents and the efficiency loss is the largest ratio of budget surplus to efficient surplus, over all profiles of non-negative valuations.

TL;DR: It is shown that, of all mechanisms, a sequential one is optimal and works as follows: one agent at a time is selected to acquire information and report the resulting signal and the restriction to ex-post efficiency is shown to be without loss when the available signals are sufficiently imprecise.

TL;DR: In this paper, the authors show that a decision maker exhibiting (N + M ) th-order stochastic dominance preference will allocate the state-contingent lotteries in such a way as not to group the two bad lottery lotsteries into the same state.

TL;DR: In this article, the authors present a theory to rationalize these facts and predict the relation between county employment growth and initial county employment in manufacturing at the turn of the 20th century.

TL;DR: In this paper, a state space model with unawareness is proposed, where information is modeled as a pair, consisting of both factual information and awareness information, and the model preserves the central properties of the standard information partition model.

TL;DR: This paper studies the question of auction design in an IPV setting characterized by ambiguity, and assumes that bidders have an imprecise knowledge of the distribution of values of others, and are faced with a set of priors that exhibit ambiguity aversion.

TL;DR: In this paper, Boyer and Kihlstrom showed that under the common assumption of quadratic payoffs and a certain regularity condition on the distribution of private information and the agent's bias, the optimal mechanism is deterministic.

TL;DR: It is shown that, in some cases, the intermediary cannot uniquely implement the efficient allocation using a direct revelation mechanism and these runs are necessarily partial, with only some agents participating in the Green-Lin model.

TL;DR: A preference foundation for rank-dependent utility with parametric inverse-S shaped weighting function is obtained by decomposing the independence axiom of expected utility into separate meaningful properties.

TL;DR: A simple variant of the canonical model of social learning is considered and it is shown that in many situations it is optimal for an agent to abandon her own information and follow the minority rather than the majority.

TL;DR: In this article, an optimal collusion-proof auction in an environment where subsets of bidders may collude not only on their bids but also on their participation is studied.

TL;DR: It is argued that interest-bearing money is essential when individual money balances are private information and one reason for why it is sufficient (as well as necessary) for interest to be paid only on large money balances is suggested.

TL;DR: A theory of labor market failure for the Depression is developed based on Hoover's industrial labor program that provided industry with protection from unions in return for keeping nominal wages fixed.