An environment is studied in which mechanisms suggest public goods allocations and individuals then choose whether or not to submit their requested transfer to the central planner. The set of allocations such that unanimous participation is an equilibrium is shown to be sub-optimal in a wide variety of environments and shrinks to the endowment as the economy is replicated. Optimal public goods ...

This paper extends the formulation of complementarity in Milgrom and Shannon (1994) to the case of incomplete but acyclic preferences. It is shown that the problem can be reformulated as one with complete but intransitive preferences. In this case, quasi-supermodularity and single-crossing on their own do not guarantee either monotone comparative statics or equilibrium existence in pure strateg...

This paper analyzes a stochastic best reply evolutionary model with inertia in normal form games. The long-run behavior of individuals in this model is investigated in the limit where experimentation rates tend to zero, while the expected number of experimenters, and hence also population sizes, tend to infinity. Conditions on the learning-rate which are necessary and sufficient for the evoluti...

We introduce public spending, financed through income taxation, in the Ramsey model with heterogeneous agents. Public spending as a source of welfare generates more complex dynamics. In contrast to previous contributions focusing on similar models but with wasteful public spending, limit cycles through Hopf bifurcation and expectation-driven fluctuations appear if the degree of capital-labor su...

This paper proposes a new approach for dealing with general dependence in auctions. The method allows both theoretical and numerical characterization of monotone pure strategy equilibria in first price auctions. Given the close connection between the theoretical and numerical parts, one can draw conjectures from the observation of computer experiments (simulations), which can suggest directions...

We study the properties of generalized stochastic gradient (GSG) learning in forward-looking models. We examine how the conditions for stability of standard stochastic gradient (SG) learning both differ from and are related to E-stability, which governs stability under least squares learning. SG algorithms are sensitive to units of measurement and we show that there is a transformation of varia...

In this paper we argue that in realistically calibrated two period general equilibrium models with incomplete markets CAPM-pricing provides a good benchmark for equilibrium prices even when agents are not mean-variance optimizers and returns are not normally distributed. We numerically approximate equilibria for a variety of di erent speci cations for preferences, endowments and dividends and c...

We show that for any roommate market the set of stochastically stable matchings coincides with the set of absorbing matchings. This implies that whenever the core is non-empty (e.g., for marriage markets), a matching is in the core if and only if it is stochastically stable, i.e., stochastic stability is a characteristic of the core. Several solution concepts have been proposed to extend the co...

In this paper we present an endogenous growth model with productive public capital and pollution. As to pollution we assume that it is a by-product of aggregate production and that it negatively affects utility of the household but not production possibilities directly. The paper studies the dynamics of the model and demonstrates that there exists either a unique balanced growth path which is a...