Resultados da Busca
Creator: Bassetto, Marco Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 624 Abstract:
How should a government use the power to commit to ensure a desirable equilibrium outcome? In this paper, I show a misleading aspect of what has become a standard approach to this question, and I propose an alternative. I show that the complete description of an optimal (indeed, of any) policy scheme requires outlining the consequences of paths that are often neglected. The specification of policy along those paths is crucial in determining which schemes implement a unique equilibrium and which ones leave room for multiple equilibria that depend on the expectations of the private sector.
Palavra-chave: Government strategy, Implementation, Commitment, and Competitive equilibrium Sujeito: E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination, F34 - International Lending and Debt Problems, and C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
Creator: Bassetto, Marco Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 612 Abstract:
The goal of this paper is to probe the validity of the fiscal theory of the price level by modeling explicitly the market structure in which households and the governments make their decisions. I describe the economy as a game, and I am thus able to state precisely the consequences of actions that are out of the equilibrium path. I show that there exist government strategies that lead to a version of the fiscal theory, in which the price level is determined by fiscal variables alone. However, these strategies are more complex than the simple budgetary rules usually associated with the fiscal theory, and the government budget constraint cannot be merely viewed as an equilibrium condition.
Palavra-chave: Government strategy, Fiscal theory of the price level, Intertemporal budget constraint, Equilibrium determinacy, Commitment, and Policy rule
Creator: Bryant, John B. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 146 Abstract:
The determination of the mechanism for ordering strategies in a game theoretic conflict is the keystone of economic science, at least insofar as economics is to remain an outgrowth of that (otherwise relatively minor) school of English philosophy, Utilitarianism. A method for the solution of the general game is presented in this paper, and the implications for economic theorizing discussed.
Palavra-chave: Multiple equilibria, Political economy, Minimax-Nash, Economic theory, and Games Sujeito: C72 - Noncooperative Games and D50 - General Equilibrium and Disequilibrium: General
Creator: Phelan, Christopher and Skrzypacz, Andrzej, 1973- Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 383 Abstract:
This paper develops new recursive methods for studying stationary sequential equilibria in games with private monitoring. We first consider games where play has occurred forever into the past and develop methods for analyzing a large class of stationary strategies, where the main restriction is that the strategy can be represented as a finite automaton. For a subset of this class, strategies which depend only on the players’ signals in the last k periods, these methods allow the construction of all pure strategy equilibria. We then show that each sequential equilibrium in a game with infinite histories defines a correlated equilibrium for a game with a start date and derive simple necessary and sufficient conditions for determining if an arbitrary correlation device yields a correlated equilibrium. This allows, for games with a start date, the construction of all pure strategy sequential equilibria in this subclass.
Palavra-chave: Repeated Games and Private Monitoring Sujeito: C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
Creator: Kehoe, Timothy Jerome, 1953-, Kiyotaki, Nobuhiro, and Wright, Randall D. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 140 Abstract:
We extend the analysis of Kiyotaki and Wright, who study an economy in which the different commodities that serve as media of exchange are determined endogenously. Kiyotaki and Wright consider only symmetric, steady-state, pure-strategy equilibria, and find that for some parameter values no such equilibria exist. We consider mixed-strategy equilibria and dynamic equilibria. We prove that a steady-state equilibrium exists for all parameter values and that the number of steady-state equilibria is generically finite. We also show, however, that there may be a continuum of dynamic equilibria. Further, some dynamic equilibria display cycles.
Palavra-chave: Economic Theory, Commodity Money, and Dynamic Equilibrium
Creator: Green, Edward J. and Lin, Ping Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 576 Abstract:
In a finite-trader version of the Diamond-Dybvig (1983) model, the symmetric, ex-ante efficient allocation is implementable by a direct mechanism (i.e., each trader announces the type of his own ex-post preference) in which truthful revelation is the strictly dominant strategy for each trader. When the model is modified by formalizing the sequential-service constraint (cf. Wallace, 1988), the truth-telling equilibrium implements the symmetric, ex-ante efficient allocation with respect to iterated elimination of strictly dominated strategies.
Palavra-chave: Implementation, Financial intermediation, and Bank run Sujeito: G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages and D82 - Asymmetric and Private Information; Mechanism Design
Creator: Blume, Andreas and Franco, April Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 299 Abstract:
We study decentralized learning in organizations. Decentralization is captured through a symmetry constraint on agents’ strategies. Among such attainable strategies, we solve for optimal and equilibrium strategies. We model the organization as a repeated game with imperfectly observable actions. A fixed but unknown subset of action profiles are successes and all other action profiles are failures. The game is played until either there is a success or the time horizon is reached. For any time horizon, including infinity, we demonstrate existence of optimal attainable strategies and show that they are Nash equilibria. For some time horizons, we can solve explicitly for the optimal attainable strategies and show uniqueness. The solution connects the learning behavior of agents to the fundamentals that characterize the organization: Agents in the organization respond more slowly to failure as the future becomes more important, the size of the organization increases and the probability of success decreases.
Palavra-chave: Decentralized Learning, Organizations, and Game Theory Sujeito: C70 - Game Theory and Bargaining Theory: General and D21 - Firm Behavior: Theory
Creator: Platt, Glenn J. Series: Law and economics of federalism Abstract:
This paper develops a model of firm location where communities differ by exogenous endowments of a factor of production. Firms choose to locate based on local subsidies to production. Community and firm optimal strategies are then examined. Through the introduction of information asymmetries about the communities' endowments, equilibrium bidding strategies for communities are found. The results show that auction institutions used by firms may in fact be signaling on the part of communities. These results also indicate that community bids reveal information, and restrictions on this bidding may do more harm than good.
Palavra-chave: Tax breaks, Subsidies, Plant location, Tax competition, and Asymmetric information Sujeito: H70 - State and local government ; Intergovernmental relations - General, R30 - Production analysis and firm location - General, and D80 - Information, knowledge, and uncertainty - General