This paper studies a model of strategic communication by an informed and upwardly biased sender to one or more receivers. Applications include situations in which (i) it is costly for the sender to misrepresent information, due to legal, technological, or moral constraints, or (ii) receivers may be credulous and blindly believe the sender’s recommendation. In contrast to the predictions obtaine...

Generic extensive form games of perfect information have a unique subgame perfect equilibrium. Nöldeke and Samuelson (1993) show that in a stochastic evolutionary model also non-subgame perfect equilibriumstrategies may well survive in the long run. In a different model of evolution in the agent normal form of generic extensive form games of perfect information Hart (2002) shows that under suit...

We study a model of finitely repeated games where the players can decide whether to monitor the other players’ actions or not each period. The standard model of repeated games can be interpreted as a model where the players automatically monitor each other. Monitoring is assumed to be private and costless. Hence it is weakly dominant to monitor the other players each period. We thus ask whether...

In competitive equilibrium, non-binding price controls (that is, price floors below and ceilings above the equilibrium) should have no effect on market outcomes, but in laboratory experiments they do. We build a simple dynamic model of double auction markets with “zero-intelligence” (ZI) computer traders that accounts for many, though not all, of the discrepancies between the data and the Walra...

Macro-level estimates of the productivity of public capital are typically larger than microlevel estimates. The evidence also shows large cross-country differences in the quality of public capital. A general equilibrium growth model is introduced to explain both facts. The productivity of firms specializing in differentiated intermediate inputs depends on public capital whose provision is subje...

This paper incorporates limited asset markets participation in dynamic general equilibrium and develops a simple analytical framework for monetary policy analysis. Aggregate dynamics and stability properties of an otherwise standard business cycle model depend nonlinearly on the degree of asset market participation. While ‘moderate’ participation rates strengthen the role of monetary policy, lo...

We modify the Kiyotaki and Wright (1991, J. Economic Theory 53, 215 235; 1993, Amer. Econom. Rev. 83, 63-77) framework so that there is a universal double coincidence of wants in all barter matches. We also introduce divisible service sidepayments into the model and allow agents to bargain over bundles of goods, services and money in bilateral matches. In asymmetric matches, the agent that valu...

Large Demographic Shocks and Small Changes in the Marriage Market This paper provides non-parametric estimates of the total effects of famine in China on marital behavior of famine affected cohorts in rural areas of Sichuan and Anhui. The reduced form estimates incorporate general equilibrium and heterogeneous treatment effects, two important components of equilibrium marital behavior. Next the...

We consider the issue of firstversus second-mover advantage in differentiated-product Bertrand duopoly with general demand and asymmetric linear costs. We generalize existing results for all possible combinations where prices are either strategic substitutes and/or complements, dispensing with common extraneous and restrictive assumptions. We show that a firm with a sufficiently large cost lead...

Free entry equilibria are usually determined by resorting to the zero profit condition. We plead instead for a strict application of the Nash equilibrium concept to a symmetric one-stage game played by actual and potential producers, who have a decreasing average cost function without sunk costs. Equilibrium then appears as typically indeterminate, with a number of active firms varying between ...