mixed equilibria are unstable in games of strategic complements in games with strict strategic complementarities properly mixed nash equilibria equilibria that are not in pure strategies are unstable for a broad class of learning dynamics

the stability of price dispersion under seller and consumer learning in many markets it is possible to find rival sellers charging different prices for the same good earlier research has attempted to explain this phenomenon by demonstrating the existence of dispersed price equilibria when consumers must make use of costly search to discover prices we ask whether such equilibria can be learned when sellers adjust prices adaptively in response to current market conditions with consumer behavior fixed convergence to a dispersed price equilibrium is possible in some cases however once consumer learning is introduced the monopoly outcome first found by diamond journal of economic theory3 1971 156 68 is the only stable equilibrium

learning behavior and mixed strategy nash equilibria abstract the paper considers whether an adaptive justification like those commonly available for non interactive optimization models can be found for the mixed strategy nash equilibrium although it is known that such a justification is frequently available for pure strategy equilibria it is shown that all members of a wide class of behaviorally plausible learning mechanisms must fail to converge in almost all games in which the equilibrium involves mixed strategies an exact formal analogy is developed which allows these learning mechanisms to be viewed as discrete ta tonnement processes in properly chosen competitive exchange economies in the analogy the instability derives from the independence of excess demand functions except at the boundaries from own prices this independence arises because of the linearity in probabilities of von neumann morgenstern risk preferences and therefore does not extend to pure strategy equilibria in general thus assuming that agents will play equilibrium strategies implicitly assumes more sophistication when the equilibrium involves mixed strategies than when it involves only pure strategies

estimating the efficiency of the system of healthcare financing in achieving better health this paper contributes to the effort to model and measure how the method of financing of health expenditure affects the efficiency with which better health can be achieved the focus is on the health system efficiency at the country level which provides an alternative to the work done in the who in this regard the approach uses frontier techniques as in the who studies however the paper appeals to the economic index number theory of quantity and productivity indexes which have well established axiomatic properties and provides a means for aggregating multiple health output proxies without having to attach arbitrary weights this allows the proposal of a specification that embeds health sector performance in a broader index of economic inputs and outputs and allows for comparisons across countries and time

a comparison of standard multi unit auctions with synergies in an example with two objects and four bidders some of which have superadditive values we characterize the equilibria of a simultaneous ascending auction and compare the revenue and efficiency generated with ones generated by the sequential the one shot simultaneous and the vickrey clarke groves auctions

on the learning and stability of mixed strategy nash equilibria in games of strategic substitutes abstract this paper analyzes the learning and stability of mixed strategy nash equilibria in games of strategic substitutes gss complementing recent work done in the case of strategic complements gsc mixed strategies in gss are of particular interest because it is well known that such games need not exhibit pure strategy nash equilibria first we establish bounds on the strategy space which indicate where randomizing behavior may occur in equilibrium second we show that mixed strategy nash equilibria are generally unstable under a wide variety of learning rules multiple examples are given

estimation of technical inefficiency in panel data models with firm and time specific effects abstract this paper uses a panel data model and develops methods to estimate production function parameters and technical inefficiency the model distinguishes technical inefficiency from firm and time specific effects determinants of technical inefficiency is introduced by allowing its mean to be a function of exogenous variables both random and fixed effects treatment of firm and time specific effects are considered in estimation

tracking the stepwise effects of regulatory reforms over time a back door approach most of the literature on the efficiency effects of regulatory reforms ignores the gradual nature of the implementation of these reforms this article describes a new simple data manipulation that minimizes data requirements to measure econometrically the impact on efficiency of each stage of multi stages regulatory reforms the approach can easily be implemented using standard stochastic frontier software programs it is illustrated with data on the spanish port system which went through a two stage reform during the 1990s

the impact of the regulation of the cable television industry the effect on quality adjusted cable television prices between the mid 1980s and early 1990s cable television rates increased substantially simple price comparisons over the regulated and deregulated eras are difficult as the programming changed simultaneously using a modified hedonic framework to allow for the lack of competition on the supply side of the industry this paper imputes the price for regulation era cable packages using consumers estimated willingness to pay for individual satellite networks during the unregulated period then a quality adjusted price for the cable package offered in 1985 is estimated on average regulation benefited consumers by keeping prices below monopolist s profit maximizing price

strategic complements and substitutes and potential games abstract we show that games of strategic complements or substitutes with aggregation are pseudo potential games the upshot is that they possess nash equilibria in pure strategies ne even if the strategy sets are not convex and that various dynamic processes converge to ne in particular ne exist in cournot oligopoly with indivisibilities in production our notion of aggregation is quite general and enables us to take a unified view of several disparate models

three problems in learning mixed strategy nash equilibria this paper discusses three problems that can prevent the convergence of learning mechanisms to mixed strategy nash equilibria first while players expectations may converge to a mixed equilibrium the strategies played typically fail to converge second even in 2 2 games fictitious play can produce a sequence of frequency distributions in which the marginal frequencies converge to equilibrium mixed strategies but the joint frequencies violate independence third in a three player matching pennies game with a unique equilibrium it is shown that if players learn as bayesian statisticians then the equilibrium is locally unstable journal of economic literature classification numbers c72 c73 d83

efficiency gains from port reform and the potential for yardstick competition lessons from mexico abstract this paper shows how measures of relative efficiency performance could promote yardstick competition between port infrastructure operators the illustration is based on a study of the efficiency effects of the mexican 1993 port reform it covers 1996 99 and relies on a stochastic production frontier to show that mexico s ports achieved 2 8 3 3 average annual efficiency gains since reform the port specific measures point to consistent leaders and laggards which would not all be identified by common partial productivity indicators this information could be built into an explicit incentive based regulatory regime aiming at promoting catch up by laggards

efficiency in new zealand sheep and beef farming the impacts of regulatory reform in this study we consider the impacts of dramatic regulatory reform during the 1980s on the efficiency of farms in new zealand using unbalanced panel data a translog distance function representing the multiple output and input technology and incorporating nonneutral regulatory impacts is used for the analysis determinants of technical inefficiency including a regulatory variable a time term and a debt equity ratio are also incorporated in a one step model estimated by maximum likelihood stochastic production frontier methods we find evidence of regulatory induced changes in output composition toward beef and deer and away from wool and especially lamb but little associated technical inefficiency these patterns motivated investment in complementary capital land and beef deer livestock inputs firms that were more flexible in their adaptation toward these new mixes adjusted to regulatory changes with less upheaval so any existing inefficiency appears linked to debt equity levels

jump bidding and overconcentration in decentralized simultaneous ascending auctions abstract a model of english auctions is proposed to incorporate the possibility of jump bidding when two objects are sold separately via such auctions bidders signal their willingness to pay via jump bids thereby forming rational expectations of the prices without relying on any central mediator hence a multi item bidder does not suffer the exposure problem of having to buy an item while he is uncertain about the price of its complement single item bidders however free ride one another in competing against a multi item bidder consequently the auctions overly concentrate the goods to a multi item bidder and never overly diffuse them to single item bidders

on the proper modelling of multioutput port cargo handling costs cargo handling activities involve various heterogeneous outputs e g general cargo containers dry and liquid bulk and so on these activities in ports however have been usually analysed using aggregate descriptions of output such as total tons moved the main purpose of this article is to show that ignoring this heterogeneity may lead to two types of problems i the underestimation of the relevance of key dimensions i e marginal costs per product and economies of scope and ii a bias in the estimates of the relevance of other dimensions economies of scale to do so we rely on a unique new dataset on three cargo handling firms operating in a spanish port between 1991 and 1999 we use it to estimate both a multi output cost for these three operators as well as an aggregate cost function the policy conclusions are derived from an explicit and detailed comparison of these two sets of estimates

learning in games with unstable equilibria we propose a new concept for the analysis of games the tasp which gives a precise prediction about non equilibrium play in games whose nash equilibria are mixed and are unstable under fictitious play like learning we show that when players learn using weighted stochastic fictitious play and so place greater weight on recent experience the time average of play often converges in these unstable games even while mixed strategies and beliefs continue to cycle this time average the tasp is related to the cycle identified by shapley l s shapley some topics in two person games in m dresher et al eds advances in game theory princeton university press princeton 1964 the tasp can be close to or quite distinct from nash equilibrium

mergers and technical efficiency in spanish savings banks a stochastic distance function approach abstract the aim of this paper is to test the temporal variation of technical efficiency of spanish savings banks during the period 1985 1998 furthermore we test whether merged and non merged firms have different levels and temporal patterns of technical efficiency a stochastic output distance function r w shephard theory of cost and production functions princeton university press princeton nj is employed to accommodate multiple output technology the distance function provides the advantage that it does not need information about prices so it can accommodate the multi product nature of the financial sector only using the quantities as data an important point when the assumptions about perfectly competitive markets are unlikely to be met the temporal variation of efficiency is modeled extending the battese and coelli journal of productivity analysis 3 1992 153 169 approach in two ways relaxing the monotonicity of the temporal variation pattern of the efficiency term and allowing for different patterns of efficiency change between merged and non merged firms

technical efficiency of european railways a distance function approach this study has two principal objectives the first objective is to measure and compare the performance of european railways the second objective is to illustrate the usefulness of econometric distance functions in the analysis of production in multioutput industries where behavioural assumptions such as cost minimization or profit maximization are unlikely to be applicable using annual data on 17 railways companies during 1988 1993 multioutput distance functions are estimated using corrected ordinary least squares cols the resulting technical efficiency estimates range from 0 980 for the netherlands to 0 784 for italy with a mean of 0 863 the distance function results are also compared with those obtained from single output production functions where aggregate output measures are formed using either total revenue or a tornqvist index the results obtained indicate substantial differences in parameter estimates and technical efficiency rankings casting significant doubt upon the reliability of

the dynamic instability of dispersed price equilibria abstract we adopt an evolutionary framework to explain price dispersion as a time varying phenomenon by developing a finite strategy analogue of the burdett and judd 1983 price dispersion model we show that all dispersed price equilibria are unstable under the class of perturbed best response dynamics instead numerical simulations using the logit dynamic show that price dispersion manifests itself as a limit cycle we verify that limit cycles persist even when the finite strategy model approaches the original continuous strategy model for a particularly simple case of the model we prove the existence of a limit cycle

learning mixed equilibria we study learning processes for finite strategic form games in which players use the history of past play to forecast play in the current period in a generalization of fictitious play we assume only that players asymptotically choose best responses to the historical frequencies of opponents past play this implies that if the stage game strategies converge the limit is a nash equilibrium in the basic model plays seems unlikely to converge to a mixed strategy equilibrium but such convergence is natural when the stage game is perturbed in the manner of harsanyi s purification theorem journal of economic literature classification number c72

sequential auctions with synergies an example abstract an equilibrium in an example of a two unit sequential ascending price auction where some bidders have superadditive values is presented the equilibrium is in pure strategies in equilibrium the expected price declines from the first to the second auction