As a behavioural economist (an economist who brings psychological insights to bear on economic phenomena), preparing a controversy corner piece criticising experimental economics (the use of experimentation to address economic questions) is like working yourself up to enter the boxing ring against a friend. Experimental economics and behavioural economics have much in common. Both groups can tr...

This short paper provides an example which shows that the type of the spillover effect from one individual to another (and hence whether we under-tax, or overtax, in a Nash equilibrium relative to a cooperative one) can be reversed when we introduce dynamics into a model with public goods. Specifically, the spillover effect changes from positive (which is the static, traditional case) to negati...

the broader context of service provision, it is important that this does not race ahead of clear prescribing policies, underpinned by pharmocoeconomic considerations. We agree with the respondents that since buprenorphine is more expensive than methadone, the pharmocoeconomic aspects of prescribing need rigorous investigation. Whilst the studies they cite provide preliminary evidence of equipoi...

The welfare cost of imperfect competition in the product and labor markets in the United States is quantified in a dynamic general equilibrium model. We find that the welfare cost of imperfect competition in the product market is 3.62 percent while it is 0.58 percent in the labor market, taking the transition path from the distorted to the optimal steady state into account. If we also take into...

Cross disciplinary dialogue between economics and ecology has within economics centered on the two subdisciplines of bioeconomics and ecological economics. This division in economics reflects the division in ecology between population and systems ecologists. Recent developments in ecology are aimed at a more integrated approach to ecologic al research. One example of such an approach is that of...

We develop a rational expectations model in which the issuer of a nancial instrument purchases credit ratings(s) in order to provide useful information to investors and attract investor demand. We examine the nature of a credit-rating equilibrium in a staged game in which an issuer purchases rating(s) sequentially and then decides which ratings to disclose. Our analysis emphasizes the importanc...

The aim of this paper is to use agent-based computational economics to explore the economic thinking of Keynes. Taking his starting point at the macroeconomic level, Keynes argued that economic systems are characterized by fundamental uncertainty an uncertainty that makes rule-based behaviour and reliance on monetary magnitudes more optimal to the economic agent than profitand utility optimizat...

This paper develops a tractable macroeconomic model with production and limited commitment (limited enforceability of contracts). The paper provides a characterization of recursive equilibria that is independent of the (endogenous) wealth distribution, which implies that recursive equilibria can be computed solving a finite-dimensional fixed-point problem. The paper also shows that a calibrated...

E conomists hail it as “a powerful tool,” “a work of genius,” and “one of the most ingenious geometrical constructions ever devised in economics.” It graces the pages of countless textbooks on price theory, welfare economics, and international trade. It is associated with some of the greatest advances ever made in economic theory. It elegantly depicts the two fundamental welfare theorems that a...