Alfred Marshall (1842-1924) was one of the earliest professional economists at the University of Cambridge in the nineteenth century, and a founder of the Cambridge School of economics which nurtured leading economists such as A. C. Pigou and J. M. Keynes. However, in his early research, before becoming a professional economist, Marshall explored what psychology had to say about the human facul...

The strategic pricing decisions of assembly products in assembly products supply chain are studied in this paper. Firstly, a two-stage assembly products supply chain model is developed. By building Nash game model, the Nash equilibrium solution of pricing strategy of supplier and assemblers is obtained. Next, a union decision model is built to analyze the optimal combination pricing strategy of...

A strategic-form game is a potential game if the incentive of all players to change their strategy can be expressed in one global function, called the game’s potential. Potential games have many applications in Economics and other disciplines (cf. Rosenthal 1973, Monderer and Shapley 1996, Ostrovsky and Schwarz 2005, Armstrong and Vickers 2001, Myatt and Wallace 2009, inter alia). Potential gam...

In this paper, we study whether simple heuristics can arise as equilibrium strategies in mutual sequential mate search. To this aim, we extend the mate search model of Todd and Miller (1999), involving an adolescence (learning) phase followed by an actual mating phase, to a strategic game where the players, as the individuals in the mating population, choose before starting the adolescence phas...

– We use techniques from the statistical mechanics of disordered systems to analyse the properties of Nash equilibria of bimatrix games with large random payoff matrices. By means of an annealed bound, we calculate their number and analyse the properties of typical Nash equilibria, which are exponentially dominant in number. We find that a randomly chosen equilibrium realizes almost always equa...

Economics is the study of optimal use of scarce resources to promote social welfare. Of particular interest has been the role of prices in achieving a socially optimal allocation of resources through co-ordinating the actions of self-seeking individuals in a decentralized economy. Alternative notions of economic equilibrium and their efficiency properties are sketched. Finally, some of the basi...

The key issue in selecting between equilibria in signalling games is determining how receivers will interpret deviations from the path of play. We develop a foundation for these off-path beliefs, and an associated equilibrium refinement, in a model where equilibrium arises from non-equilibrium learning by long-lived senders and receivers. In our model, non-equilibrium signals are sent by young ...

We develop an equilibrium framework that relaxes the standard assumption that people have a correctly-specified view of their environment. Each player is characterized by a (possibly misspecified) subjective model, which describes the set of feasible beliefs over payoff-relevant consequences as a function of actions. We introduce the notion of a Berk-Nash equilibrium: Each player follows a stra...

Is general equilibrium theory empirically testable? Our perspective on this question differs fromthe standard, Sonnenschein–Debreu–Mantel (SDM) viewpoint. While the SDM tradition considersaggregate (excess) demand as a function of prices, we suppose that what is observable is the equilibriumprice vector as a function of the fundamentals of the economy.We apply this perspective to anexchange eco...