decentralized organizational learning an experimental investigation we experimentally study decentralized organizational learning our objective is to understand how learning members of an organization cope with the con founding effects of the simultaneous learning of others we test the predictions of a stylized rational agent model of organizational learning that provides sharp predictions as to how learning members of an organization might cope with the simultaneous learning of others as a function of fundamental variables e g firm size and the discount factor while the problem of learning while others are learning is quite difficult we find support for the comparative static predictions of the models unique symmetric equilibrium jel c72 d23 d83 if one s own actions are embedded in an ecology of the actions of many others who are simultaneously learning and changing it is not easy to understand what is going on the relationship between the actions of individuals in the organization and overall organiza tional performance is confounded by simultaneous learning of other actors

cultural conflict and merger failure an experimental approach we use laboratory experiments to explore merger failure due to conflicting organizational cultures we introduce a laboratory paradigm for studying organizational culture that captures several key elements of the phenomenon in our experiments we allow subjects in firms to develop a culture and then merge two firms as expected performance decreases following the merging of two laboratory firms in addition subjects overestimate the performance of the merged firm and attribute the decrease in performance to members of the other firm rather than to situational difficulties created by conflicting culture

economic dynamics in the malthusian era evidence from the 1609 spanish expulsion of the moriscos we investigate economic dynamics in the malthusian era using the 1609 expulsion of moriscos from spain sharp population declines in former morisco districts were accompanied by decreased output and increased per capita output while these short run results are consistent with standard malthusian predictions malthusian convergence was delayed up to 1786 in former morisco districts archival sources and historical accounts suggest extractive institutions and cultural differences may have contributed to delayed convergence in population and output per capita this historic episode provides an unusually rich setting to examine malthusian dynamics highlighting the potential for sustained differences in per capita output in the malthusian era

germany s dash for coal exploring drivers and factors abstract the german electricity sector has recently seen extensive planning and construction of new coal fired power plants within a period of only a few years new investments amounting to around 15 of the total sector capacity were brought on the way and plans for a multitude of additional projects are pending this dash for coal in germany has raised considerable public concern especially as it risks to undermine recent political attempts to combat global warming yet the question of why the dash for coal has emerged has not yet been addressed in a thorough analysis this article attempts to close this research gap while at the same time contributing as a case study to the general understanding of investment patterns in liberalized electricity markets it finds that the main reasons for the dash have been 1 replacement requirements due to the nuclear phase out 2 the onset of a new investment cycle in the power market 3 favorable economic and technological prospects for coal compared with natural gas in the long run 4 a status quo bias of investors in regard to future renewable deployment 5 explicit political support for coal and 6 the ineffectiveness of public protest in hampering new projects

the gender gap fertility and growth changes in fertility have long been recognized as important correlates of economic growth with the relationship between the level of fertility and the level of income per capita being one of the strongest observable correlations in cross country data this paper examines the linkages between fertility and growth theory the structure of the model is presented in sections on production couples decision making system dynamics and steady state equilibria the first component of the model is that increases in capital per worker raise womens relative wages since capital is more complementary to womens labor input than to mens the second component is that increasing womens relative wages reduces fertility by raising the cost of children more than household income finally lower fertility raises the level of capital per worker a positive feedback loop generates demographic transition a rapid decline in fertility accompanied by accelerated output growth

compulsory versus voluntary voting an experimental study abstract we report on an experiment comparing compulsory and voluntary voting institutions in a voting game with common preferences rational choice theory predicts sharp differences in voter behavior between these two institutions if voting is compulsory then voters may find it rational to vote insincerely i e against their private information if voting is voluntary so that abstention is allowed then sincere voting in accordance with a voter s private information is always rational while participation may become strategic we find strong support for these theoretical predictions in our experimental data moreover voters adapt their decisions to the voting institution in place in such a way as to make the group decision accuracy differences between the two voting institutions negligible the latter finding may serve to rationalize the co existence of compulsory and voluntary voting institutions in nature

meaning and credibility in cheap talk games i define neologism proofness a refinement of perfect bayesian equilibrium in cheap talk games it applies when players have a preexisting common language so that an unexpected message s literal meaning is clear and only credibility restricts communication i show that certain implausible equilibria are not neologism proof in some games no equilibrium is journal of economic literature classification numbers d83 d82 c73

strategy subsets closed under rational behavior a set of strategy profiles is here said to be closed under rational behavior curb of it contains all its best replies each curb set contains the support of at least one nash equilibrium in mixed

the dynamic effects of aggregate demand and supply disturbances we interpret fluctuations in gnp and unemployment as due to two types of disturbances disturbances that have a permanent effect on output and disturbances that do not we interpret the first as supply disturbances the second as demand disturbances demand disturbances have a hump shaped mirror image effect on output and unemployment the effect of supply disturbances on output increases steadily over time peaking after two years and reaching a plateau after five years

development of supersmart grids for a more efficient utilisation of electricity from renewable sources abstract if europe is serious about reaching its target to keep global mean temperature increase below 2 c it must strive for a 100 renewable electricity system by 2050 the supersmart grid approach combines what is often perceived as two exclusive alternatives wide area power generation and decentralised power generation we argue that by combining these in fact complementary measures it is possible to address the crucial issue of renewable generation fluctuating supply in a comprehensive as well as in a technologically and economically viable manner thus the supersmart grid simultaneously can contribute to energy security climate security social security and national security

efficient climate policies under technology and climate uncertainty this article explores efficient climate policies in terms of investment streams into fossil and renewable energy technologies the investment decisions maximise social welfare while observing a probabilistic guardrail for global mean temperature rise under uncertain technology and climate parameters such a guardrail constitutes a chance constraint and the resulting optimisation problem is an instance of chance constrained programming not stochastic programming as often employed our analysis of a model of economic growth and endogenous technological change mind suggests that stringent mitigation strategies cannot guarantee a very high probability of limiting warming to 2 c since preindustrial time under current uncertainty about climate sensitivity and climate response time scale achieving the 2 c temperature target with a probability p of 75 requires drastic carbon dioxide emission cuts this holds true even though we have assumed an aggressive mitigation policy on other greenhouse gases from e g the agricultural sector the emission cuts are deeper than estimated from a deterministic calculation with climate sensitivity fixed at the p quantile of its marginal probability distribution 3 6 c we show that earlier and cumulatively larger investments into the renewable sector are triggered by including uncertainty in the technology and climate response time scale parameters this comes at an additional gwp loss of 0 3 resulting in a total loss of 0 8 gwp for observing the chance constraint we obtained those results with a new numerical scheme to implement constrained welfare optimisation under uncertainty as a chance constrained programming problem in standard optimisation software such as gams the scheme is able to incorporate multivariate non factorial probability measures such as given by the joint distribution of climate sensitivity and response time we demonstrate the scheme for the case of a four dimensional parameter space capturing uncertainty about climate and technology

malthusian dynamism and the rise of europe make war not love this paper argues that malthusian regimes are capable of sustained changes in per capita incomes shifting mortality and fertility schedules can lead to different steady state income levels with long periods of growth during the transition europe checked the downward pressure on wages through late marriage which reduced fertility and a mortality regime that combined high death rates with high incomes we argue that both emerged as a result of the black death

correlated equilibrium as an expression of bayesian rationality if it is common knowledge that the players in a game are bayesian utility maximizers who treat uncertainty about other players actions like any other uncertainty then the outcome is necessarily a correlated equilibrium random strategies appear as an expression of each player s uncertainty about what the others will do not as the result of willful randomization use is made of the common prior assumption according to which differences in probability assessments by different individuals are due to the different information that they have where information may be interpreted broadly to include experience upbringing and genetic makeup copyright 1987 by the econometric society

electricity capacity investment under risk aversion a case study of coal gas and concentrated solar power the policy instrument many economists favor to reduce greenhouse gas emissions and to shift new investment towards low carbon technologies is the tradable allowance system experience with this instrument has been mixed with a crucial design issue being the choice of whether to auction allowances to firms or to grandfather them based on historical emissions in this paper we examine the changing incentives of investment in different technologies when investors are risk averse and are expecting an allowance system with a certain allocation rule but do not know if the policy is going to take place in the near future investors also cannot fully predict future investment costs for the low carbon technology we apply a game theoretic model to examine the combined effects of uncertainty and risk aversion on the actions of potential investors into high and low carbon generating capacity under both allocation rules and uncertain costs we find that uncertainty and risk aversion do have implications towards investment incentives we discuss policy implications of these findings

an intergenerational model of population growth the problem of population growth has been only partially formulated in an intertemporal context therefore a link between population theory and economic growth theory is still missing this paper attempts to provide such a link by analyzing an intergenerational model of optimum population growth the model accommodates the idea that decisions on increases in population should consider the new population s quality of life this concept is elaborated upon in a static framework by gary becker and gregg lewis dennis de tray and robert willis other literature on population growth such as harold votey disregards this consideration altogether 2 more explicitly this paper assumes that the utility of each generation is a function of the level of its consumption and the number and utility of the newly born people we are thus led to consider the utility of an infinite number of generations this model differs from paul samuelson s intergenerational model of pure consumption in which the utility of each generation depends only on that generation s own consumption recently philip neher 1971 analyzed a model of fertility in primitive economies it is based on the assumption that parents use children as investments to insure future consumption needs neher s analysis focuses entirely on the pension motive for having children 3 our model assumes that fertility is determined so as to balance the parents welfare derived from additional children against that derived from the children s quality of life we first outline a general model of optimum population growth in order to discuss explicitly various economic aspects of population we use a simple case in the analysis section i sets up the basic model

the impact of china s economic reforms on agricultural productivity growth this paper presents a method for assessing the relative importance of price increases and strengthened individual incentives due to the introduction of the responsibility system for the post 1978 increase in china s agricultural productivity data on post 1978 chinese agricultural performance suggest that a little over three quarters of the measured productivity increase is due to payment system changes and the remainder to price increases we also use our method to calculate incentive indices giving an estimate of the fraction of their marginal product that peasants received under the pre 1978 regime

international business cycles the authors estimate a dynamic two country model in which economic fluctuations are driven by a worldwide supply shock country specific supply shocks and relative fiscal money and preference shocks identification is achieved using only long run restrictions based on a theoretical model the main results are 1 supply shocks particularly country specific ones are very important in generating international business cycles and 2 although the post 1973 flexible exchange rate period has been inherently more volatile there are no differences in transmission properties of economic disturbances across exchange rate regimes for the endogenous variables they focus on copyright 1993 by american economic association

the impact of investors risk aversion on the performances of capacity remuneration mechanisms abstract this paper analyses the impact of risk aversion on the performances of capacity remuneration mechanisms with investors facing an uncertain peak load three market designs are studied for this purpose a competitive energy only market a capacity market and a strategic reserve mechanism a simulation model based on system dynamics is developed in order to represent investment decisions and analyse the behaviour of each market design risk aversion is modelled through the computation of conditional value at risk the results are discussed in terms of impact on the reliability ability to limit shortages and cost total generation costs of the studied market designs when comparing the three market designs the capacity market seems to be the least affected by the introduction of risk aversion both in terms of cost and reliability this result suggests that implementing a capacity market is preferable in order to deal with the adverse effects of risk aversion given the simulations and parameters that were used

experimental evidence on the evolution of the meaning of messages in sender receiver games an experiment this paper experimentally investigates the evolution of message meanings when talk is cheap we consider communication between a privately informed sender and a receiver when the sender s message does not affect payoffs directly sender receiver games introduced by jerry green and nancy stokey 1980 and vincent p crawford and joel sobel 1982 provide the simplest stylized environment in which communication is essential communication is the only way to link the receiver s action to the sender s private information in addition sender receiver games have been widely used to study communication in accounting economics finance and political science intuition strongly suggests that effective communication will evolve when the players interests are closely aligned however there is always a nash equilibrium in which the sender randomizes uniformly across all messages such babbling equilibria are proper roger b myerson 1978 blume 1994 and even strategic stability elon kohlberg and jeanfrancois mertens 1986 does not rule out uninformative equilibria in general in response a literature developed that formulates equilibrium selection criteria by appealing to the existence of a commonly understood language matthew rabin 1990 steven a matthews et al 1991 joseph farrell 1993 that can be used to formulate credible deviations from equilibrium unfortunately the selection criteria from this literature are frequently strong enough to remove all equilibria from consideration in addition these arguments are vulnerable to stiglitz s observation in koo cho and david m kreps 1987 that successful deviations from equilibrium may induce further deviations which in turn may undermine the credibility of the original deviations both problems can be avoided by a dynamic approach as in rabin and sobel 1996 we also adopt a dynamic perspective but do not require messages to have a priori meanings instead distinct meanings may emerge endogenously this is important for communication across cultures and for language change 2 we are guided by recent results of blume department of economics university of iowa iowa city ia 52242 dejong department of accounting university of iowa iowa city ia 52242 kim department of economics sung kyun kwan university seoul 110 745 korea sprinkle department of accounting university of wisconsin madison wi 53706 we thank joyce berg vince crawford robert forsythe joel horowitz deirdre mccloskey forrest nelson larry samuelson gene savin joel sobel and especially two anonymous referees for their advice and suggestions we benefitted from comments and discussions resulting from presentations at the 1994 summer meetings of the econometric society the 1996 social learning workshop at suny stony brook the io me gt workshop at the university of iowa the university of bonn the university of bielefeld the center for economic research at tilburg university ohio state university seoul national university and texas a m university we are grateful for financial support from the college of business administration at the university of iowa the ira b mcgladrey institute and the national science foundation

fertility choice and economic growth theory and evidence this proposed theoretical model is based on new models of barro and becker and becker murphy and tamura and explains the interaction of family decisions about fertility and the macroeconomy in a growth situation the proposed model captures a dynamic interaction between labor leisure and fertility choice and a structural fertility preference shock endogenous factor are consumption labor leisure and fertility while exogenous factors are production and utility parameters the aim was to develop a general equilibrium model which expresses short and long term dynamics to test the impact of economic disturbances on fertility and to explain the us baby boom and subsequent fertility patterns savings in capital accumulation and in labor supply were expected to have ambiguous effects while improved productivity was expected to increase steady state consumption the methodology a structural vector auto regression var model was developed by blanchard and quah and ihmed ickes wang and yoo structural impacts include disturbances in employment fertility theoretical preference shift and output long term restrictions are based on theory rather than on ad hoc causal orderings sims method or current responses bernanke method the structural var model is estimated using the logged differences of labor fertility rate and output the empirical results are based on analysis of us data 1949 88 on fertility weekly hours worked and real gross national product the model revealed that fertility choice should not be considered exogenous to the labor market or to economic growth variance of the forecast error for the fertility rate was significantly explained by employment shocks the effect was reduced fertility and increased labor force effort output responses to fertility and technology shocks were similar to those reported by shapiro and watson in the variance decomposition analysis output shocks explained about 33 of output variance fertility shocks explained about 33 of labor growth and 25 of output growth after the first year with a lag of one year about 37 of fertility variance was explained by employment shocks concluding remarks underscore the importance of knowing which shock initiated the motion and causal ordering

can government enforcement permanently alter fertility the case of china i introduction in developing countries per capita output growth objectives are often stymied by high birth rates 1 traditional values ignorance of birth control technology and labor intensive farming are all factors which contribute to high fertility rates for those reasons many developing countries experiencing high birth rates adopt population control policies while most programs combine educational efforts with some form of persuasion many also provide strong economic disincentives to high fertility 2 of particular interest from this vantage point is the experience of the people s republic of china which stands alone in its use of quotas on child bearing decisions 3 china s population control policy began with a massive campaign in 1953 reversing an earlier pro natalist stance however that campaign was curtailed by the political turmoil arising from the great leap forward and the cultural revolution population control programs resumed in 1970 with the issuance and enforcement of three reproductive norms late marriage longer spacing between births and fewer children in 1979 the authorities went even further allowing each household to have only one child interest in china s experience arises not only from the severity of the restrictions but also due to the government s ability to enforce them the feasibility of enforcing these restrictions is a result of the deep penetration of the communist party into most aspects of an individual s life including its control over housing employment and salaries 4 however despite the government s extensive involvement in birth planning those who study chinese demography have debated the extent to which government policies are responsible for the large fertility decline in the 1970s 5 this paper uses recent advances in economic theory and econometrics to quantitatively assess the main sources of fertility fluctuations in china specifically we employ a model with endogenous fertility choice which modifies the framework of razin and ben zion 1975 and barro and becker 1989 6 in contrast to other papers we focus on the relationship between government enforcement of population control policies and fertility outcomes we also allow the fertility rate to be affected by 1 household preferences including alterations in taste as well as in education health care and the changing role of women and 2 production technology which mostly captures changes in agricultural output or income we perform simple comparative static analysis to examine long cycles in fertility and output and characterize the transitional dynamics which govern short cycles easterlin 1968 and lee and loschky 1987 provide nice discussions of long fertility cycles the long run steady state predictions will be used to identify the empirical structural vector autoregression var system as well as interpret the underlying structural disturbances additionally the transitional dynamics results can be compared to the estimated dynamic structure finally we employ a structural var as in blanchard and quah 1989 and ahmed ickes wang and yoo 1993 to econometrically disentangle the relative contributions of policy and economic development factors to changes in fertility growth the structural disturbances include a change in the government s enforcement power a technological advance in agricultural production and a preference shift toward a higher fertility rate all of which are capable of generating both short and long cycles in fertility and output we find that government enforcement power has a significant negative effect on fertility accounting for about one third of the variance of the forecast error for fertility growth after the first year an expansion in agricultural output on the other hand yields a short run positive impact on fertility growth and is responsible for almost one fifth of fertility growth variations furthermore while theoretically all shocks have the potential to generate long cycles only preference shifts have statistically significant long run effects

malthusian population oscillations the authors first note that malthus saw the interactions between economic and demographic factors as a dynamic process whereby population growth rates fluctuated as real wages oscillated around a societys subsistence income this process is tested using data collected by wrigley and schofield from english parish registers from the mid sixteenth century onward the results support the validity of the malthusian concept under examination annotation

risk aversion and technology mix in an electricity market this article analyzes the eff ect of risk and risk aversion on the long term equilibrium technology mix in an electricity market it develops a model where fi rms can invest in baseload plants with a fi xed variable cost and peak plants with a random variable cost and demand for electricity varies over time but is perfectly predictable at equilibrium the electricity price is partly determined by the random variable cost and the returns from the two kinds of plants are negatively correlated when the variable cost of the peak technology is high the return of peak plants is low but the return to baseload plants is high risk averse fi rms reduce the capacity of the riskiest technology and develop the capacity of the other compared to risk neutral fi rms in the particular case where a risk neutral fi rm invests heavily in baseload technology and only sparely in peak capacity a risk averse fi rm would invest less in baseload increase peak capacity and increase total installed capacity

cheap talk and the fed a theory of imprecise policy announcments this paper examines the problem faced by the federal reserve in announcing its private information about its future policies because it would like to manipulate expectations and pursue a time inconsistent policy the fed cannot reveal its policy objectives precisely and credibly it can however communicate some information about its goals through the cheap talk mechanism of vincent crawford and joel sobel making announcements that are imprecise and only giving ranges within which these goals may lie copyright 1989 by american economic association

learning and communication in sender receiver games an econometric investigation this paper compares the performance of stimulus response sr and belief based learning bbl using data from game theory experiments the environment extensive form games played in a population setting is novel in the empirical literature on learning in games both the sr and bbl models fit the data reasonably well in common interest games with history while the test results accept sr and reject bbl in games with no history and in all but one of the divergent interest games estimation is challenging since the likelihood function is not globally concave and the results may be subject to convergence bias

egalitarianism and efficiency in repeated symmetric games abstract we analyze the symmetric equilibria of repeated symmetric games where there is a conflict of interests over equilibria the battle of the sexes or the hawk dove game are key examples if one restricts attention to symmetric equilibria efficient equilibria must be egalitarian for finitely repeated games and generic discount factors there is a unique outcome path which ensures efficiency within the class of symmetric equilibria this is also true for the infinitely repeated games if the players are sufficiently impatient journal of economic literature classification numbers c72 c73

economic performance through time prize lecture to the memory of alfred nobel december 9 1993 this abstract was borrowed from another version of this item

controlling preferences for lotteries on units of experimental exchange in an experimental setting when outcomes are stochastically related to actions predictions of equilibrium behavior depend not only on the participants preference orderings of outcomes but also on their orderings of lotteries on outcomes as well we introduce and test a reward structure that can be utilized in any experimental setting to allow the experimenter to decree beforehand the subjects preferences for lotteries on experimental outcomes we show analytically that the proposed reward structure can induce subjects to behave as if they have the decreed preference function defined on experimental outcomes empirical tests using two different choice settings provide evidence to support this ability to control preferences

how the west invented fertility restriction europeans restricted their fertility long before other parts of the world did so by raising the marriage age of women and ensuring that a substantial proportion remained celibate the european marriage pattern emp reduced childbirths by up to 40 we analyze the rise of this first socio economic institution in history that limited fertility through delayed marriage our model emphasizes changes in agricultural production following the black death the production of meat wool and dairy pastoral products increased while grain production declined women had a comparative advantage producing pastoral goods they often worked as servants in husbandry where they remained unmarried long after they had left the parental household in a malthusian world this translated into lower population pressure raising average wages by up to a quarter the black death thus set into motion a virtuous circle of higher wages and fertility decline that underpinned europe s high per capita incomes we demonstrate the importance of this effect in a calibration of our model

risk aversion and co2 regulatory uncertainty in power generation investment policy and modeling implications abstract we consider a simulation of risk averse producers when making investment decisions in a competitive energy market who face uncertainty about future regulation of carbon dioxide emissions investments are made under regulatory uncertainty then the regulatory state is revealed and producers realize returns we consider anticipated taxes grandfathered permits and auctioned permits and show that some anticipated policies increase investment in the relatively dirty technology beliefs about the policy instrument that will be used to price carbon may be as important as certainty that carbon will be priced more generally a failure to consider risk aversion may bias policy analysis for the power sector

evolutionary stability with equilibrium entrants abstract the strategy that upsets a potential evolutionarily stable strategy may in itself be very unstable or may differ from the candidate strategy only in irrelevant ways this paper develops a solution concept addressing these difficulties we lood for a set of nash equilibria such that small groups of entrants whose members are satisfied with their entry cannot take the population out of the set such a set is robust to the iterated removal of weakly dominated strategies depends only on the reduced normal form and has the never a weak best response property for generic two person extensive form games such sets generate payoffs consistent with proper equilibria

expert information and majority decisions this paper shows theoretically and experimentally that hearing expert opinions can be a double edged sword for collective decision making we present a majoritarian voting game of common interest where committee members receive not only private information but also expert information that is more accurate than private information and observed by all members in theory there are bayesian nash equilibria where the committee members voting strategy incorporates both types of information and access to expert information enhances the efficiency of the majority decision however there is also a class of potentially inefficient equilibria where a supermajority always follow expert information and the majority decision does not aggregate private information in the laboratory the majority decisions and the subjects voting behaviour were largely consistent with those in the class of inefficient equilibria we found a large efficiency loss due to t he presence of expert information especially when the committee size was large we suggest that it may be desirable for expert information to be revealed only to a subset of committee members

the three horsemen of riches plague war and urbanization in early modern europe how did europe escape the iron law of wages we construct a simple malthusian model with two sectors and multiple steady states and use it to explain why european per capita incomes and urbanization rates increased during the period 1350 1700 productivity growth can only explain a small fraction of the rise in output per capita population dynamics changes of the birth and death schedules were far more important determinants of steady states we show how a major shock to population can trigger a transition to a new steady state with higher per capita income the black death was such a shock raising wages substantially because of engel s law demand for urban products increased and urban centers grew in size european cities were unhealthy and rising urbanization pushed up aggregate death rates this effect was reinforced by diseases spread through war financed by higher tax revenues in addition rising trade also spread diseases in this way higher wages themselves reduced population pressure we show in a calibration exercise that our model can account for the sustained rise in european urbanization as well as permanently higher per capita incomes in 1700 without technological change wars contributed importantly to the rise of europe even if they had negative short run effects we thus trace europe s precocious rise to economic riches to interactions of the plague shock with the belligerent political environment and the nature of cities

cheap talk coordination and evolutionary stability abstract asymmetric information games where the informed player can send a costless message sender receiver games typically have equilibria where meaningful communication occurs we therefore know such cheap talk can matter still even when there is no conflict of interest there are also equilibria where no information transmission occurs this paper shows that for a class of games with perfectly coinciding interests modeled as asymmetric contests where players are unsure of which role they will have only meaningful communication is evolutionarily stable journal of economic literature classification numbers c70 c72 d82

costly communication and learning from failure in organizational coordination abstract this paper investigates the coordination failure that arises from combining two small pre existing groups and focuses on the reaction of group members to this change in environment in an experiment small groups were first able to establish a coordination history in a repeated minimum effort game in the second phase two groups with different histories were combined into a larger group unlike most of the previous literature subjects could endogenously choose to communicate in the newly formed group for a small fee while communication proved to be necessary for preventing coordination failure in the newly formed group only every second subject was willing to implement communication particularly subjects from groups with a less efficient coordination experience in the first phase were more likely to realize the potential of coordination failure in the new group and were thus more likely to decide for communication the results may be useful for understanding how groups coordinate in changing environments as they are common in economic contexts

endogenous fertility multiple growth paths and economic convergence abstract this paper extends the cass koopmans optimal growth model to allow for endogenous fertility choice it is shown that if agents choose their fertility rate then the net rate of return on capital marginal product of capital minus the population growth rate may not be monotonically decreasing in capital in this case multiple steady states and growth paths may emerge which can explain the persistent differentials in income between poor and rich countries as well as the existence of development miracles and disasters the paper provides also empirical evidence which supports the existence of multiple convergence groups and is consistent with the theoretical model

rationalizability learning and equilibrium in games with strategic complementarities we study a rich class of noncooperative games that includes models of oligopoly competition macroeconomic coordination failures arms races bank runs technology adoption and diffusion r d competition pretrial bargaining coordination in teams and many others for all these games the sets of pure strategy nash equilibria correlated equilibria and rationalizable strategies have identical bounds also for a class of models of dynamic adaptive choice behavior that encompasses both best response dynamics and bayesian learning the players choices lie eventually within the same bounds these bounds are shown to vary monotonically with certain exogenous parameters we study the class of noncooperative supermodular games introduced by topkis 1979 and further analyzed by vives 1985 1989 who also pointed out the importance of these games in industrial economics supermodular games are games in which each player s strategy set is partially ordered the marginal returns to increasing one s strategy rise with increases in the competitors strategies so that the game exhibits strategic complementarity 2 and if a player s strategies are multidimensional marginal returns to any one com ponent of the player s strategy rise with increases in the other components this class turns out to encompass many of the most important economic applications of noncooperative game theory in macroeconomics diamond s 1982 search model and bryant s 1983 1984 rational expectations models can be represented as supermodular games in each of these models more activity by some members of the economy raises the returns to increased levels of activity by others in oligopoly theory some models of bertrand oligopoly with differentiated products qualify as supermodu lar games in these games when a firm s competitors raise their prices the marginal profitability of the firm s own price increase rises a similar structure is present in games of new technology adoption such as those of dybvig and spatt 1983 farrell and saloner 1986 and katz and shapiro 1986 when more users hook into a communication system or more manufacturers adopt an interface standard the marginal return to others of doing the same often rises similarly in some specifications of the bank runs model introduced by diamond and dybvig 1983 when more depositors withdraw their funds from a bank it is more worthwhile for other depositors to do the same in the warrant exercise

the condition of the working class in england 1209 2004 i use building workers wages for 1209 2004 and the skill premium to consider the causes and consequences of the industrial revolution real wages were trendless before 1800 as would be predicted for the malthusian era comparing wages with population however suggests that the break from the technological stagnation of the malthusian era came around 1640 long before the classic industrial revolution and even before the arrival of modern democracy in 1689 building wages also conflict with human capital interpretations of the industrial revolution as modeled by gary becker kevin murphy and robert tamura oded galor and david weil and robert lucas human capital accumulation began when the rewards for skills were unchanged and when fertility was increasing

a model of chinese national income determination a model consisting of a consumption function and an investment function is used to explain chinese annual data in constant prices from 1953 to 1982 the data confirm robert hall s version of the permanent income hypothesis and the accelerations principle deviations of the observations from predictions of this model are attributed to political factors including the great leap forward in 195962 the cultural revolution in 1967 68 and the special government policies in 1978 and 1981