Supplement to Toward a Strategic Foundation for Rational Expectations Equilibrium
نویسندگان
چکیده
The proof of the main result in Reny and Perry (2006) is provided here. We also provide an example in which the best reply to nondecreasing bidding functions fails to be nondecreasing, and we show how to approximate a degenerate density by one that satis es the assumptions in Reny and Perry (2006). Finally, we establish that Reny and Perrys (2006) main result continues to hold when the notion of genericity is changed from the topological notion of residual sets to the measure-motivated notion of prevalent sets.
منابع مشابه
Toward a Strategic Foundation for Rational Expectations Equilibrium
A step toward a strategic foundation for rational expectations equilibrium is taken by considering a double auction with n buyers and m sellers with interdependent values and a¢ liated private information. If there are su¢ ciently many buyers and sellers, and their bids are restricted to a su¢ ciently ne discrete set of prices, then, generically, there is an equilibrium in nondecreasing biddin...
متن کاملAlternative Conditions to Time Inconsistency Equilibrium of an International Monetary Policy
Monetary policy rule is an approach to avoid time inconsistency problem as regarded by new classical economist to choose a time plan for policy making in order to maximize householdsâ well-being. The foundation of time inconsistency problem is not coincidence of expectations as an ex-ante variable, which is expected variable, with actual variable as an ex-post variable. Expectations in Finn K...
متن کاملRational expectations equilibrium and the strategic choice of costly information
This paper studies costly information acquisition in one-good production economies when agents acquire private information and prices transmit information. Before asset markets open, agents choose the quality of their private information. After this information stage, agents trade assets in sequentially complete markets taking into account their private information and the information revealed ...
متن کاملSentiments and Aggregate Demand Fluctuations
We formalize the Keynesian insight that aggregate demand driven by sentiments can generate output fluctuations under rational expectations. When production decisions must be made under imperfect information about demand, optimal decisions based on sentiments can generate stochastic self-fulfilling rational expectations equilibria in standard economies without persistent informational frictions,...
متن کاملThe competitive advantages analysis of pharmaceutical industry strategic behaviors by game theory
Game theory is the study of mathematical models and cooperation between intelligent rational decision-makers. This paper provides a flexible model to calculate pay-off matrix based on several importance factors. This model is adapted by cooperative game and developed for some competitive advantages sections in pharmaceutical industry. An optimum solution is derived by considering Nash equilibri...
متن کامل