Heal is at Columbia Business School and Columbia School of International Affairs, [email protected]. Kunreuther is at the Wharton School of the University of Pennsylvania, [email protected]. We are especially grateful to Larry Samuelson for assistance with this paper, and also grateful to Doug Bernheim, Vince Crawford and two referees for constructive comments. The views expressed he...

As Solow once remarked to me, we would not now be concerned with the question [the existence of the aggregate production function] had Paul Douglas found labor's share of American output to be twenty-five per cent and capital's share seventy-five instead of the other way around [Fisher, 1969, 572]. I hope that someone skilled in econometrics and labor will audit and evaluate my critical finding...

In a recent paper [“Paretian Welfare Judgements and Bergsonian Social Choice,” Economic Journal, Vol. 109, 1999, pp. 204-220], Suzumura proposed a possible way of relating the two schools of “new” welfare economics. According to his proposal, the logical possibility of the Paretian “new” welfare economics can be reduced to the constrained dual choice-functional recoverability of the Pareto-comp...

This paper analyses the effects of trade liberalisation and technical change on real and relative wages. It builds a model with monopolistic competition, heterogeneous firms and two countries, North and South, and solves it numerically. Skill-biased technical change, caused by decreases in the price of imported equipment as a result of reduced trade costs or falls in its world price, tends to i...

The LeChatelier-Samuelson principle (“the principle”) states that as a reaction to a shock, an agent’s short-run adjustment of an action is smaller than the long-run adjustment of that action when the other related actions can also be adjusted. We extend the principle to strategic environments and to shocks that affect more than one action directly. We define long run as an adjustment that also...

The explosion of interest amongst game-theorists in recent years in the ‘evolutionary’ (learning) dynamics of repeated games, has generally been concerned with 2-player (usually symmetric) games in which each player has available a finite number of pure strategies. The learning dynamics of players chosen from large, usually infinite, populations of such players, are then taken to describe the e...

We analyze normal form games where a player has to pay a price to a supplier in order to play a speci…c action. Our focus is on supplier competition, arising from the fact that distinct suppliers supply different players, and possibly di¤erent actions of the same player. With private contracts, where a player only observes the prices quoted by his own suppliers, the set of equilibrium distribut...

Accepting a sequence of independent positive mean bets that are individually unacceptable is what Samuelson called a fallacy of large numbers. Recently, utility functions were characterized where this occurs rationally, and examples were given of utility functions where any finite number of good bets should never be accepted.1 Here the author shows how things change if you are allowed the optio...

We analyze a class of imitation dynamics with mutations for games with any …nite number of actions, and give conditions for the selection of a unique equilibrium as the mutation rate becomes small and the population becomes large. Our results cover the multiple-action extensions of the aspiration-andimitation process of Binmore and Samuelson [3] and the related processes proposed by Benaïm and ...