a market to implement the core abstract i present a mechanism whose subgame perfect equilibrium outcomes coincide with the core of an underlying convex tu game the mechanism resembles an asset market in which one of the players is randomly selected as a broker who centralizes trade in addition the rules of the mechanism are independent of the coalitional function therefore the mechanism is useful for an incompletely informed designer who wishes to implement the core of these games the mechanism is inspired by the reduced games relevant for the consistency of the core journal of economic literature classification numbers c71 and c72

learning about a new technology pineapple in ghana this paper investigates the role of social learning in the diffusion of a new agri cultural technology in ghana we use unique data on farmers communication patterns to define each individual s information neighborhood conditional on many potentially confounding variables we find evidence that farmers adjust their inputs to align with those of their information neighbors who were surpris ingly successful in previous periods the relationship of these input adjustments to experience further indicates the presence of social learning in addition applying the same method to input choices for another crop of known technol ogy correctly indicates an absence of social learning effects jel d83 013 033 q16

education spillovers in farm productivity revisiting the evidence this paper exploits the social organization of india to revisit the question of education spillovers in farm productivity the fact that social interactions mainly occur within castes in rural india provides tools to show that the observed correlation between farm productivity and neighbors education is likely to be a spillover effect in particular there are no cross caste and no cross occupation effects which underlines that under specific assumptions which are stated and explored in the paper the education of neighbors does not capture the effect of group unobservables this evidence is complemented by separate estimations by crops which show results that are consistent with education spillovers the strategy used in this paper helps understand and interpret previous findings from the literature

a note on discount rate policy and the variability of discount window borrowing abstract the purpose of this note is to evaluate the appropriate discount rate policy rules consistent with minimization of the variability of borrowing at the federal reserve discount window in the context of goodfriend s 1983 model of the bank borrowing decision it is demonstrated that either a penalty rate or a subsidy rate policy will produce minimized variability of borrowing so long as the subsidy rate adjusts point for point to changes in the value of the federal funds rate these policy rules are compatible with a policy procedure designed to target borrowed or non borrowed reserves if the fed does not adhere to one of these specific rules minimization of borrowing variability requires an open market procedure in which the fed pegs the federal funds rate

simple mechanisms to implement the core of college admissions problems abstract this paper analyzes simple mechanisms implementing subselections of the core correspondence of matching markets we provide a sequential mechanism which mimics a matching procedure for many to one real life matching markets we show that only core allocations should be attained when agents act strategically when faced with this mechanism we also provide a second mechanism to implement the core correspondence in subgame perfect equilibrium journal of economic literature classification numbers c78 d78

cooperative outcomes through noncooperative games abstract this paper shows the equivalence between the stable solution set of any cooperative game in characteristic form g1 and the subgame perfect nash equilibria in pure strategies of a certain noncooperative game g2 players of g1 are named agents g2 is played by different players principals who compete in wages to attract agents the equivalence result holds when there are enough principals if the game is superadditive two principals suffice finally another related cooperative game g3 is constructed with both principals and agents as players for g2 and g3 the same result is then proven for any number of principals journal of economic literature classification numbers c71 and c72

the federal funds market under bank deregulation the introduction of competitive interest rates on deposits is shown to effect the optimal decisions of banks by altering their optimal forecast of the federal funds rate the movement toward co mpetitive deposit rates increases the size of the monetary base neces sary for the fed to maintain its deposit targets when deposits and the monetary base are substitutes in addition there is less uncertainty in the federal funds market under competitive deposit rates when deposits and the monetary base are substitutes and the source of uncertainty is not from the supply of deposits copyright 1987 by ohio state university press

caste and tribe inequality evidence from india 1983 1999 abstract despite policies targeting scheduled castes sc and scheduled tribes st there remain large disparities of living standards between sc st and non sc st households in india the sc st households may be poorer because they possess lower human and physical capital but they may also earn lower returns to these assets this study finds that 30 50 of the welfare disparities are attributable to different returns such structural differences between the sc and the non sc st are partly because the sc earn lower returns to schooling a large part of the structural disparities between the st and the non sc st comes from the fact that the areas where the st live are different from those where the non sc st live in addition the st tend to earn lower returns even with controls for geographical conditions

discount window borrowing across federal reserve districts evidence under contemporaneous reserve accounting abstract in recent years bank borrowing at the discount window has been less reliably related to the spread between the federal funds rate and the discount rate complicating the implementation of the borrowed reserves targeting procedure of the federal reserve this paper investigates borrowing across federal reserve districts to see if there are significant differences in borrowing behavior across bank size and discount window administrations the results suggest that borrowing behavior does differ across districts that standard borrowing models are least satisfactory in explaining the borrowing of large banks and that borrowing behavior changed after the 1987 stock market crash the gains in explanatory power from disaggregation however are not large

the demand for borrowed reserves a switching regression model a microeconomic model of bank demand for borrowed reserves from the federal reserve is developed based upon constrained cost minimization the derived demand function was found to correspond to behavior appropriate to the unknown switchpoint switching regression problem when estimated parameters generally conformed to theoretical expectations the model was also tested for existence of switching regression behavior against a model similar to goldfeld and kane 12 significance exceeded 99 in all cases with the advent of reserve intermediate targeting it appears especially necessary to reinvestigate the behavior determining this important source of reserves with the advent of reserve intermediate targeting as of october 6 1979 it appears especially necessary to reinvestigate the behavior determining one source of these reserves borrowings from the discount window although the behavior of borrowed reserves has concerned researchers since the 1920s interest in the subject generally waned after 1970 the reason has much to do with the studies of polakoff 21 and goldfeld and kane 12 polakoff develops a structural model for discount window borrowing based upon the individual bank minimizing its costs among alternative borrowing sources adapting the seminal work of turner 29 goldfeld and kane extend and estimate polakoff s original model because of their well developed microeconomic theory seemingly accurate empirical adjustments and proxy variables and excellent all around empirical results goldfeld and kane s study is widely hailed as a leading study in the field of borrowed reserve demand evidence exists through studies such as keir 18 that the federal reserve continues to use this same basic model in this study a borrowed reserve demand function is derived using a constrained minimum cost setup included in the cost of discount window borrowing is an implicit cost function reflecting bank reluctance to borrow from the discount window caused by federal reserve surveillance the derived demand function found in section i conforms to behavior appropriate to a switching regression model in this case switching occurs dependent upon the size of the interest rate spread relative to an unknown switchpoint after making minor adjustments in section ii the model is estimated employing monthly data from 1955 78 these results and the tests for the existence of

the type agent core for exchange economies with asymmetric information abstract the type agent core is a new solution concept for exchange economies with asymmetric information it coincides with the set of subgame perfect equilibrium outcomes of a simple competitive screening game uninformed intermediaries help the agents to cooperate in an attempt to make some profit the paper extends the work of perez castrillo cooperative outcomes through non cooperative games games econ behav 7 1994 428 440 to exchange economies with non transferable utility and asymmetric information the type agent core is a subset of wilson s coarse core wilson information efficiency and the core of an economy econometrica 46 1978 807 816 it is never empty even though it may be a strict subset of wilson s fine core in addition it converges towards the set of constrained market equilibria as the economy is replicated

a note on the individualistic foundations of the core in economies with asymmetric information abstract two foundations of the core are considered in the context of exchange economies the standard coalition based interpretation and one based on the individual profit seeking behaviour of agents the resulting core notions coincide in symmetric information economies but diverge when generalized to economies with asymmetric information

on the failure of core convergence in economies with asymmetric information in interim economies with asymmetric information we show that the coarse core of wilson 1978 does not converge to price equilibrium allocations as the economy is replicated this failure of core convergence is a basic consequence of asymmetric information and extends to any reasonable notion of either interim core or price equilibrium

misrepresentation and stability in the marriage problem it has been shown previously that for two sided discrete markets of the kind exemplified by the marriage problem no strategy proof procedure for aggregating preferences into stable outcomes exists here it is shown that nash equilibrium misrepresentation of preferences nevertheless results in a stable outcome in terms of the true preferences when the aggregation procedure yields the optimal stable outcome in terms of the stated preferences for one side of the market journal of economic literature classification numbers 022 025 026 0 1984 academic

the demand bargaining set general characterization and application to majority games abstract the cooperative solution concept introduced here the demand bargaining set contains the core and is included in the zhou bargaining set eliminating the dominated coalition structures the demand vectors belonging to the demand bargaining set are self stable in the class of constant sum homogeneous weighted majority games the demand bargaining set is nonempty and predicts a unique demand vector namely a proportional distribution within minimal winning coalitions the noncooperative implementation of the demand bargaining set is obtained for all the games that satisfy the one stage property

administering the window abstract this paper presents a game theoretic model of nonprice rationing at the discount window it focuses on the federal reserve s use of frequency guidelines and harassment to deter excessive use of the discount window by banks the model investigates the role of the discount officer the effect of uncertainty and the credibility of threats used by the discount officer to deter excessive borrowing by banks

non cooperative bargaining and the incomplete informational core abstract in an exchange economy with incomplete information the signaling core is defined by the set of state contingent allocations to which no coalitions object under informational leakage through proposals by informed agents an objection underlying the signaling core is supported by a sequential equilibrium of an ultimatum bargaining game with an informed proposer we prove that a stationary sequential equilibrium allocation in a rubinstein type sequential bargaining game with a restart rule belongs to the signaling core if the belief of players satisfies a self selection property

bidding for the surplus a non cooperative approach to the shapley value abstract we propose a simple mechanism to determine how the surplus generated by cooperation is to be shared in zero monotonic environments with transferable utility the mechanism consists of a bidding stage followed by a proposal stage we show that the subgame perfect equilibrium outcomes of this mechanism coincide with the vector of the shapley value payoffs we extend our results to implement the weighted shapley values finally we generalize our mechanism to handle arbitrary transferable utility environments the modified mechanism generates an efficient coalition structure and implements the shapley values of the super additive cover of the environment journal of economic literature classification numbers c71 c72

matching with couples stability and incentives in large markets accommodating couples has been a longstanding issue in the design of centralized labor market clearinghouses for doctors and psychologists because couples view pairs of jobs as complements a stable matching may not exist when couples are present this paper s main result is that a stable matching exists when there are relatively few couples and preference lists are suciently short relative to market size we also discuss incentives in markets with couples we relate these theoretical results to the job market for psychologists in which stable matchings exist for all years of the data despite the presence of couples

a new bargaining set of an n person game and endogenous coalition formation abstract the two most fundamental questions in cooperative game theory are when a game is played what coalitions will be formed and what payoff vectors will be chosen few solution concepts or theories in the current literature provide satisfactory answers to both questions answers are especially lacking for the first one in this paper we introduce a new bargaining set which is the first solution concept in cooperative game theory that provides answers to both fundamental questions endogenously journal of economic literature classification number c71

non revelation mechanisms for many to many matching equilibria versus stability we study many to many matching markets in which agents from a set a are matched to agents from a disjoint set b through a two stage non revelation mechanism in the rst stage a agents who are endowed with a quota that describes the maximal number of agents they can be matched to simultaneously make proposals to the b agents in the second stage b agents sequentially and respecting the quota choose and match to available a proposers we study the subgame perfect nash equilibria of the induced game we prove that stable matchings are equilibrium outcomes if all a agents preferences are substitutable we also show that the implementation of the set of stable matchings is closely related to the quotas of the a agents in particular implementation holds when a agents preferences are substitutable and their quotas are non binding

another look at yield spreads the role of liquidity liquidity plays an important role in explaining how banks determine their allocation of funds this paper examines whether this fact can explain yield spreads and the term structure of interest rates the paper models banks demand for liquidity in a manner similar to that used to study household need for liquidity namely by using a cash in advance type model the paper finds that the shadow price of the cash in advance constraint plays an important role in determining yield spreads the empirical part of the paper shows that the expectations hypothesis might be salvaged under the maintained hypothesis concerning the liquidity premium and risk premium

farm productivity and efficiency in rural bangladesh the role of education revisited this article reassesses the debate over the role of education in farm production in bangladesh using a large dataset on rice producing households from 141 villages average and stochastic production frontier functions are estimated to ascertain the effect of education on productivity and efficiency a full set of proxies for farm education stock variables are incorporated to investigate the internal as well as external returns to education the external effect is investigated in the context of rural neighbourhoods our analysis reveals that in addition to raising rice productivity and boosting potential output household education significantly reduces production inefficiencies however we are unable to find any evidence of the externality benefit of schooling neighbour s education does not matter in farm production we discuss the implication of these findings for rural education programmes in bangladesh

hiring procedures to implement stable allocations abstract we implement the stable correspondence of a job matching market in subgame perfect equilibrium we use a simple sequential mechanism in which firms propose a salary to each worker first stage and then each worker accepts at most one proposal second stage moreover if agents preferences are additive this mechanism implements in subgame perfect equilibrium the firms optimal corre spondence when firms use undominated strategies finally we construct another simple sequential mechanism where the order of decisions is permuted and which implements the workers optimal correspondence when agents preferences are additive journal of economic literature classification numbers c78 d78

learning by doing and learning from others human capital and technical change in agriculture household level panel data from a nationally representative sample of rural indian households describing the adoption and profitability of high yielding seed varieties hyvs associated with the green revolution are used to test the implications of a model incorporating learning by doing and learning spillovers the estimates indicate that i imperfect knowledge about the management of the new seeds was a significant barrier to adoption ii this barrier diminished as farmer experience with the new technologies increased iii own experience and neighbors experience with hyvs significantly increased hyv profitability and iv farmers do not fully incorporate the village returns to learning in making adoption decisions

near integration bank reluctance and discount window borrowing abstract this study puts forth stationarity considerations in explaining the observed breakdown between aggregate discount window borrowing and the spread between the federal funds rate and the discount rate during the post 1987 period tests with biweekly data indicate stationarity for adjustment borrowing but cannot reject the unit root for the spread the goodfriend dutkowsky dynamic implicit cost formulation can accommodate the contrasting stationarity properties structural restrictions are compatible with stationary borrowing and a stationary or near integrated spread while empirical findings from the static model indicate greater bank reluctance to borrow over time the dynamic model gives considerably less support

a consistent bargaining set abstract both the core and the bargaining set fail to satisfy a natural requirement of consistency in excluding imputations to which there exist objections the core does not assess the credibility of such objections the bargaining set goes a step further only objections which have no counterobjections are considered justified however the credibility of counterobjections is not similarly assessed we formulate a notion of a consistent bargaining set in which each objection in a chain of objections is tested in precisely the same way as its predecessor various properties of the consistent bargaining set are also analyzed

implementation of bargaining sets via simple mechanisms abstract we propose two simple mechanisms that implement two bargaining sets in super additive environments the first bargaining set is a close variation of the one proposed by l zhou 1994 games econom behav 6 512 526 and the second is the pareto optimum payoffs of the a mas colell 1989 j math econom 18 129 139 bargaining set we adopt a simple framework in which the cooperative outcomes are realized as non cooperative subgame perfect equilibria in pure strategies of a two stage game played by an auxiliary set of individuals competing over the cooperative agents journal of economic literature classification numbers c71 c72

assessing the relative performance of u k university technology transfer offices parametric and non parametric evidence abstract we present evidence on the relative performance of u k university technology transfer offices ttos using data envelopment analysis dea and stochastic frontier estimation sfe u k ttos are found to exhibit low levels of absolute efficiency there also appear to be decreasing returns to scale implying that ttos may need to be reconfigured into smaller units the development of regionally based sector focused ttos is also advised consistent with qualitative evidence from u s ttos we find that there is a need to upgrade the business skills and capabilities of u k tto managers and licensing officers

the coalitional nash bargaining solution the coalitional nash bargaining solution is defined to be the core allocation for which the product of players payoffs is maximal we consider a non cooperative model with discounting in which one team may form and every player is randomly selected to make a proposal in every period the grand team consisting of all players generates the largest surplus but a smaller team may form we show that as players get more patient if an efficient and stationary equilibrium exists it must deliver payoffs that correspond to the coalitional nash bargaining solution we also characterize when an efficient and stationary equilibrium exists which requires conditions that go beyond the nonemptiness of the core

reinterpreting the kernel the reduced game relevant for the consistency of the prekernel is used to reinterpret this solution concept in a way that makes it independent of interpersonal utility comparisons based on this reinterpretation a non cooperative model is presented that yields in stationary equilibria the prekernel kernel for the class of monotonic transferable utility games next we apply the same non cooperative model to more general coalitional games for pure bargaining problems the model yields the nash solution for general non transferable utility games a natural extension of the prekernel arises thus the prekernel is obtained as the set of payoffs where the relevant bargaining range between every pair of players is split in half journal of economic literatureclassification numbers c71 c72 c78

incomplete information incentive compatibility and the core abstract we consider an exchange economy in which agents possess private information at the time of engaging in state contingent contracts while communication of private information is permitted the true information state is not verifiable the enforcement of contracts is therefore limited by incentive compatibility constraints we formalize a notion of the core for such an economy our analysis can be viewed as an attempt to incorporate incentive compatibility in the coarse core of r wilson 1978 econometrica46 807 816 or as an attempt to introduce coalitional contracts in the notion of incentive efficiency of b holmstrom and r myerson 1983 econometrica51 1799 1819 while there are some special cases in which the incentive compatible core is non empty our main result shows that is not generally true journal of economic literatureclassification numbers c71 c72 d51

a simple selling and buying procedure abstract for the assignment game we analyze the following mechanism sellers simultaneously fix their prices first then buyers sequentially decide which object to buy also each buyer may report his or her indifferences along with the previous buyers indifferences to the following buyer the first phase determines the potential prices while the second phase determines the actual matching reporting truthfully the indifferences is always a dominant strategy for the buyers moreover when buyers state their true indifferences the subgame perfect equilibria outcomes of the mechanism correspond to the maximum equilibrium price vector together with optimal matchings journal of economic literature classification numbers c78 d78

the demand bargaining set the cooperative solution concept introduced here the demand bargaining set contains the core and is included in the zhou bargaining set eliminating the dominated coalition structures the demand vectors belonging to the demand bargaining set are self stable in the class of constant sum homogeneous weighted majority games the demand bargaining set is non empty and predicts a unique demand vector namely a proportional distribution within minimal winning coalitions the noncooperative implementation of the demand bargaining set is obtained for all the games that satisfy the one stage property

a comment on the nash program and the theory of implementation abstract the nash program for cooperative games is made compatible with the framework of the theory of implementation it is shown that the core is the only major cooperative solution that is maskin monotonic the mechanisms in the nash program are adapted into our model closer to that of the theory of implementation

discount window borrowing monetary policy and the post october 6 1979 federal reserve operating procedure abstract a demand schedule for discount window borrowing based on profit maximizing bank behavior is derived a feature of non price rationing at the discount window making longer duration borrowing more costly is shown to make lagged borrowing and expected future spreads between the federal funds rate and the discount rate relevant to the current borrowing decision consequently both the size of the coefficients in the borrowing functions as well as the form of the function itself depend on expected fed policy toward the spread the demand function for discount window borrowing provides the critical link by which non borrowed reserve control affects short term interest rates and ultimately the money supply under post october 6 1979 reserve targeting the analysis suggests some reasons why the fed has experienced difficulty in specifying estimating and utilizing a discount window borrowing function in the non borrowed reserve operating procedure

market participation and sunspot equilibria we investigate the structure of competitive equilibria in an exchange economy parametrized by i endowments and ii restrictions on market participation for arbitrary regular endowments if few consumers are restricted there are no sunspot equilibria if endowments are allowed to vary while restrictions on market participation are fixed there is a generic set of preferences such that sunspot equilibria exist for a non empty subset of endowments our analysis extends to the general case of an arbitrary number of restricted consumers the results of cass and shell for the polar cases in which either i no consumers are restricted or ii all consumers are restricted

bargaining and bargaining sets abstract we argue that in exchange economies various versions of the bargaining set cannot be implemented in nash equilibrium we then propose an extensive form mechanism that exactly implements the aumann davis maschler bargaining set in subgame perfect equilibrium the mechanism corresponds closely to the description of the bargaining set and respects feasibility in and out of equilibrium journal of economic literature classification numbers c71 c72 c78 d51

is the conventional view of discount window borrowing consistent with the behavior of weekly reporting banks discount window borrowing by weekly reporting banks disaggregated by federal reserve district is used to estimate marvin goodfriend s 1983 model of borrowed reserves little evidence is found to support the argument that a bank s borrowing decision is determined by the spread between the funds rate and the discount rate and by prior bank borrowing a weekly reporting bank has only a 2 7 percent chance of visiting the discount window during any given maintenance period this result is consistent with the presence of considerable harassment costs imposed by the discount window officer copyright 1994 by mit press

implementation in the many to many matching market abstract this paper deals with a discrete many to many matching market of firms and workers we analyze the following mechanism firms announce the set of workers they want to hire then workers select the set of firms with which they want to work the first phase of the game determines the potential partners while the second phase determines the actual matching we prove that subgame perfect nash equilibria spne always exist while strong equilibria se may not exist we characterize the spne outcomes as the pairwise stable matchings and show that there may be no spne outcome in the core when the preferences of the agents are not maximin however when the preferences of the firms respectively workers are maximin the core always contains the equilibrium outcomes

subgame perfect implementation this paper examines the use of stage mechanisms in implementation problems and provides a partial characterization of the set of subgam e perfect implementable choice rules it is shown that in many economic environments virtually an y choice rule can be implemented to illustrate the power of this approach the paper discusses a number of models in which it is possible to implement the first best although it wouldn t have been possible to do so without using stage mechanisms the diversity of these models suggests that subgame perfect implementation may find wide application copyright 1988 by the econometric society

rational bargaining in games with coalitional externalities this paper provides a flexible strategic framework to analyze bargaining and values in environments with coalitional externalities within this framework we propose a new value that extends the shapley value to partition function form games the so called rational belief shapley rbs value we investigate the strategic foundation of the rbs value by constructing an implementation mechanism this mechanism extends existing models of multilateral bargaining by allowing players a higher degree of freedom to form coalitions the same framework of bidding and renegotiation allows for natural variations of the rbs mechanism in this way alternative shapley like values are obtained and a unified platform to analyze and compare these solutions is provided

egalitarian equivalence under asymmetric information abstract we propose a definition of egalitarian equivalence that extends pazner and schmeidler s 1978 concept to environments with incomplete information if every feasible allocation rule can be implemented by an incentive compatible mechanism as for instance in the case of non exclusive information then interim egalitarian equivalence and interim incentive efficiency remain compatible as they were under complete information when incentive constraints are more restrictive on the other hand the two criteria may become incompatible

strength in numbers networks as a solution to occupational traps the new classical theory states that families in low skill occupations with low levels of human capital can stay poor from one generation to the next while families in high skill occupations with correspondingly high levels of human capital stay wealthy despite being endowed with the same level of ability on average this paper proposes an informal institutional mechanism the community based network through which families belonging to the same neighbourhood or kinship group can bootstrap their way out of such low skill occupational traps the insight from the dynamic model that is developed is that once they form new networks providing mutual support to their members and substituting for inherited parental human capital and wealth will strengthen most rapidly in historically disadvantaged communities generating a correspondingly high level of intergenerational mobility these predictions are successfully tested using unique data from india the analysis in this paper coupled with an emerging empirical literature on networks and migration provides a new perspective on mobility in developing countries with restrictive traditional networks decaying even as new networks supporting collective mobility form and strengthen over time

subgame perfect cooperation in an extensive game abstract we propose a new solution concept for games in extensive form that incorporates both cooperation and subgame perfection from its definition and properties the new solution concept named the subgame perfect core is a refinement of the core of an extensive game in the same sense as the set of subgame perfect nash equilibria is a refinement of the set of nash equilibria to further characterize the subgame perfect core we show that each subgame perfect core payoff vector can be implemented as a non cooperative solution as it is a subgame perfect nash equilibrium payoff vector of an extensive form game that is closely related to the original game we also motivate and introduce a related concept of subgame perfect strong nash equilibrium of an extensive game that is coalition proof

the growing reluctance to borrow at the discount window an empirical investigation federal reserve regulation a imposes formal guidelines on borrowing from the discount window and ensures that the facility is used for appropriate purposes in a way this regulation imposes a nonprice mechanism that compels depository institutions to be more prudent in exercising their borrowing privileges in the 1980s however banks became increasingly more reluctant to borrow adjustment credit from the discount window this behavior is puzzling because discount window guidelines have not changed this paper investigates the reasons behind the weakened demand for borrowed reserves our empirical findings suggest that the growing reluctance to borrow stems from the deteriorating financial position of banks during this period in particular banks avoided the discount window because they feared that market participants might have interpreted their visits as a signal of serious funding difficulties

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

transparency complementarity and holdout this paper characterizes the conditions under which holdout i e bargaining inefficiency may or may not be significant in a two sided one buyer many seller model with complementarity we address this problem in a very general setup with a bargaining protocol that is symmetric and allows for both publicly observable as well as secret offers and a technology that allows for variable degrees of complementarity the central insight is that the transparency of the bargaining protocol formalized by whether offers are publicly observable or secret as well as the extent of complementarity play a critical role in generating efficiency even with perfect complementarity holdout seems to be largely resolved whenever the bargaining protocol is public but not if it is secret further irrespective of the bargaining protocol holdout is resolved if the marginal contribution of the last seller is not too large

implementation of stable solutions to marriage problems abstract this note analyzes the possibility of implementing stable outcomes for marriage markets our first result shows a contradiction between the use of stable mechanisms and the hypothesis of agents behavior considered in the nash equilibrium concept we analyze the possibility of implementing two sets of stable allocations by employing two types of mechanisms the first mechanism is a now or never choice process that permits us to implement in undominated nash equilibria the set of all the stable allocations the second choice process is the classic algorithm in matching theory the gale shapley mechanism a reversal property is observed in such a mechanism when agents act strategically the use of a mechanism which selects the best solution for one side of the market in the absence of strategic behavior yields the best stable solution for the agents on the other side under dominance solvability journal of economic literatureclassification numbers c72 d78 j41

the strategy structure of two sided matching markets we study two sided markets in which agents are buyers and sellers or firms and workers or men and women the agents are to form partnerships which provide them with satisfaction and at the same time make monetary transfers e g salaries or dowries the core of this market game is shown to have a particularly nice structure so that precise answers can be given to questions concerning comparative statics and manipulability the idea of using walrasian equilibrium as a mechanism for making allocations with desirable properties of fairness and efficiency has been studied extensively the scheme involves having agents specify their supply and demand functions the competitive equilibria are then calculated and allocations are made accordingly in general this procedure may run into two difficulties first nonuniqueness if there are several equilibria there may be no fair way to decide which one should be implemented and second manipulability if there is only one equilibrium an informed agent may be able to influence it by suitably falsifying his demand data however as we will show here using the walrasian mechanism does work remarkably well for a certain class of important markets these are the matching markets of our title and they include markets for single items like houses where it is assumed that traders do not wish to acquire more than one item they also include labor markets in which it is desired to match workers with jobs at suitable salaries academic markets in which students are to be assigned to educational institutions marriage markets where men and women are matched through negotiating of dowries it turns out that in these markets both the problems of nonuniqueness and manipulability can be resolved in a

a noncooperative view of coalition formation and the core a noncooperative implementation of the core is provided for games with transferable utility the implementation obtained here is meant to reflect the standard motivation for the core as closely as possible in the model proposed time is continuous this idealized treatment of time is most amenable for capturing an essential feature of the core there is always time to reject a noncore proposal before it is consumated

the model structure of discount window borrowing this article investigates the specification of discount window borrowing the author establishes empirically that the borrowing function is heteroskedastic and nonlinear subsequently he proceeds to propose a simple theoretical framework that generates endogenously these anomalies in particular the author demonstrates that such phenomena are precipitated by the response of depository institutions to discount credit rationing and federal reserve collateral limitations copyright 1991 by ohio state university press

multi item auctions a collection of items is to be distributed among several bidders and each bidder is to receive at most one item assuming that the bidders place some monetary value on each of the items it has been shown that there is a unique vector of equilibrium prices that is optimal in a suitable sense for the bidders in this paper we describe two dynamic auction mechanisms one achieves this equilibrium and the other approximates it to any desired degree of accuracy

central bank secrecy fed watching and the predictability of interest rates abstract a common criticism of central bank secrecy is the assertion that it will lead to lower forecast accuracy on the part of private agents the model considered here demonstrates that reducing central bank secrecy can actually reduce the forecasting accuracy of many of the private agents in the economy when it is recognized that some agents engage in fed watching and others do not this result comes about because the interest rate process depends in part on the information that agents use in forecasting future interest rates

core convergence with asymmetric information we analyze the ex ante incentive compatible core for replicated private information economies we show that any allocation in the core when the economy is replicated sufficiently often is approximately walrasian for the associated arrow debreu economy

order independent equilibria we study a noncooperative game of coalition formation based on an underlying game in coalitional form we introduce order independent equilibria oie a strategy profile is an oie if for any specification of first movers in the sequential game it remains an equilibrium and leads to the same payoff our results are 1 payoffs in oie that use pure stationary strategies must be in the core of the underlying game in coalitional form 2 if the underlying game has the property that all its subgames have nonempty cores then for each payoff vector there exists an oie with the same payoff journal of economic literature classification numbers c70 c71 c72 c78

nash equilibrium and welfare optimality if is a set of social alternatives a social choice rule scr assigns a subset of a to each potential profile of individuals preferences over a where the subset is interpreted as the set of welfare optima a game form or mechanism implements the social choice rule if for any potential profile of preferences 1 any welfare optimum can arise as a nash equilibrium of the game form implying in particular that a nash equilibrium exists and 2 all nash equilibria are welfare optimal the main result of this paper establishes that any scr that satisfies two properties monotonicity and no veto power can be implemented by a game form if there are three or more individuals the proof is constructive

connecting the cooperative and competitive structures of the multiple partners assignment game multiple partners assignment game is the name used by sotomayor the multiple partners game in m majumdar ed equilibrium and dynamics essays in honor of david gale the macmillan press ltd new york 1992 the lattice structure of the set of stable outcomes of the multiple partners assignment game int j game theory 28 1999 567 583 to describe the cooperative structure of the many to many matching market with additively separable utilities stability concept is proved to be different from the core concept an economic structure is proposed where the concept of competitive equilibrium payoff is introduced in connection to the equilibrium concept from standard microeconomic theory the paper examines how this equilibrium concept compares with the cooperative equilibrium concept properties of interest to the cooperative and competitive markets are derived