I formulate recommendations to young authors for writing economic theory well. I state general principles of good writing, and emphasize the role of the different components of a paper and the importance of the structure of one's work being clear. I explain how to choose notation and language, and how to present and illustrate proofs.

Theory of Value

The Young Person's Guide to Writing Economic Theory

This paper introduces time-inconsistent preferences in a multicommodity general equilibrium framework with incomplete markets. The standard concept of competitive equilibrium is extended in order to allow for changes in intertemporal preferences. Depending on whether or not agents recognize that their intertemporal preferences change, agents are called sophisticated or naive. This paper presents competitive equilibrium notions for economies with naive agents and economies with sophisticated agents and provides assumptions under which both types of equilibria exist. Surprisingly, the set of naive equilibria in societies populated by time-consistent households is not allocationally equivalent to the set of competitive equilibria. For sophisticated equilibria, the equivalence holds. Time-inconsistency also raises conceptual issues about the appropriate concept of efficiency. Choices have to be made concerning the incorporation of future preferences and the appropriate instruments to create Pareto improvements. For both naive and sophisticated societies, we present four possible efficiency concepts. Suitable conditions are specified for which both naive and sophisticated equilibria satisfy appropriate efficiency concepts.

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Time-inconsistent preferences in a general equilibrium model

We provide a solution to the problem of mechanism selection by a privately in- formed principal in generalized-private-value environments. In a broad class of these environments, the mechanism-selection game has a perfect-Bayesian equi- librium that has a strong neologism-proofness property. Equilibrium allocations that satisfy this property are characterized in terms of the players' incentive and participation constraints, and can be computed using standard methods. In many applications of mechanism design, the principal has private information that is not directly payoff-relevant to the agents, but may influence her design: a seller's oppor- tunity cost influences the design of her sales mechanism, a supplier's valuation influ- ences her design of a collusive agreement, a speculator's prior beliefs, in environments with heterogeneous priors, influence the design of the bet she offers, and the weight a regulator puts on consumer surplus influences the design of her regulation scheme. In this paper, we solve the problem of mechanism selection by an informed principal in such "generalized-private-value" environments where the agents' payoff functions are independent of the principal's type. Mechanism selection by an informed principal differs fundamentally from mecha- nism design by a principal with no private information. The latter can be formulated, due to the revelation principle, as a maximization problem of the principal's payoff func- tion subject to the agents' incentive and participation constraints. If, however, the prin- cipal has private information, then upon observing a mechanism proposal, the agents

https://onlinelibrary.wiley.com/doi/pdf/10.3982/TE787

Informed-principal problems in environments with generalized private values

On social welfare functions and the aggregation of preferences

Publisher Summary Utility and subjective probability involve the systematic study of people's preferences and beliefs, including quantitative representations of preference and belief that facilitate analyses of problems in decision making and choice behavior. Its history spans more than 250 years and is mainly because of people in economics, mathematics, statistics, and psychology. Utility theory is primarily concerned with properties of a binary relation on a set X , where X could be a set of commodity bundles, decision alternatives, monetary gambles, n -tuples of pure strategies, and so forth, and x > y is interpreted as x is preferred to y . The formal development of utility and subjective probability is based on the notion of a binary relation. Special types of binary relations are identified by conjunctions of properties that are equivalence, linear order, weak order, and partial order.

Theory of Value

Citations

The Young Person's Guide to Writing Economic Theory

Time-inconsistent preferences in a general equilibrium model

Informed-principal problems in environments with generalized private values

On social welfare functions and the aggregation of preferences

Chapter 39 Utility and subjective probability

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