economic tactics commercial policy and the socialization of african agriculture abstract commercial policies in some african countries have come under considerable criticism in recent years and it has become necessary to resolve the problems of existing agricultural marketing forms an alternative approach to the market liberalization commonly recommended is to intervene in the market so as to achieve its regulation and control and a pricing system which can and will support the socialization of agricultural production in collective farms maintain incentives for individual producers and encourage state procurement of basic crops such market control cannot be achieved without an active commercial policy based on the transformation of marketing institutions effective forms of market intervention and the devolution of considerable power over pricing and marketing from the national to the local levels

a behavioral framework for time diversification the box of factors that we call risk is both too large and too small the box is large enough to include many sometimes conflicting measures of risk variance and semivariance probabilities of losses and their amounts but the box is too small to include factors that affect choices but fall outside the boundaries of risk frames and cognitive errors self control and regret we explore the role of these factors in time diversification the belief that time diversification reduces risk underlies the current drive to invest social security funds in stocks but is such investment prudent we discuss the role of advisors in providing prudent advice changes in the standards of prudence over time the use of time diversification in guiding investors to prudent portfolios and its use in the current debate on social security

expanding demand through price advertisement abstract retail stores frequently advertise prices when consumer search is costly advertising low prices expands the number of consumers who visit and buy we show that this demand enhancement may offset a retailer s loss in margins from the low price making advertisement desirable we further show that a multi product monopolist may choose to advertise low prices only for select products even when advertised and non advertised products are substitutes for duopolist retailers at a common location an equilibrium exists in which for some range of advertising costs one store advertises and the other free rides on its competitor

banking panics information and rational expectations equilibrium this paper shows that bank runs can be modeled as an equilibrium phenomenon we demonstrate that some aspects of the intuitive story that bank runs start with fears of insolvency of banks can be rigorously modeled if individuals observe long lines at the bank they correctly infer that there is a possibility that the bank is about to fail and precipitate a bank run however bank runs occur even when no one has any adverse information extra market constraints such as suspension of convertibility can prevent bank runs and result in superior allocations banking panics were a recurrent phenomenon in the united states until the 1930s they have re emerged as a source of public concern and much theoretical research recently in this paper we provide an information theoretic rationale for bank runs the traditional story is that contagion is an important aspect of bank runs the idea seems to be that when the general public observes large withdrawals from the banking system fears of insolvency grow resulting in even larger withdrawals of deposits in our model some individuals withdraw because they get information that future returns are likely to be low uninformed individuals observing this also have an incentive to liquidate their investments in addition some individuals need to withdraw deposits for other than informationally based reasons thus if the random realization of such a group of individuals is unusually large then the uninformed individuals will be misled and will precipitate a run on the bank the technology is such that a large volume of withdrawals involves liquidation costs consequently runs on the bank do impose social costs a mechanism that may reduce these costs in our model is to suspend convertibility if withdrawals are high however those individuals who need to withdraw their assets for liquidity reasons are worse off ex post our model provides a rationalization for restrictions in demand deposits that were widespread prior to 1929 friedman and schwartz 7 suggest that restrictions of payments ensured

understanding bank runs the importance of depositor bank relationships and networks we use a unique new database to examine micro depositor level data for a bank that faced a run we use minute by minute depositor withdrawal data to understand the effectiveness of deposit insurance the role of social networks and the importance of bank depositor relationships in influencing depositor propensity to run we employ methods from the epidemiology literature which examine how diseases spread to estimate transmission probabilities of depositors running and the significant underlying factors we find that deposit insurance is only partially effective in preventing bank runs further our results suggest that social network effects are important but are mitigated by other factors in particular the length and depth of the bank depositor relationship depositors with longer relationships and those who have availed of loans from a bank are less likely to run during a crisis suggesting that cross selling acts not just as a revenue generator but also as a complementary insurance mechanism for the bank finally we find there are long term effects of a solvent bank run in that depositors who run do not return back to the bank our results help understand the underlying dynamics of bank runs and hold important policy implications

stabilization adjustment and the poor abstract this paper attempts to survey the recent literature on the impact of stabilization and adjustment programs upon the poor and to consider some of the key issues in the context of a particular equity oriented low income country tanzania after looking at some of the approaches of earlier studies this paper analyzes the effects of restructuring policies macroeconomic restraint and strategic policy change the author then reviews available evidence on the recent experience of tanzania with external shock efforts at stabilization and relations with the imf in conclusion the author argues that in order to better understand their impact on poverty we need more detailed analyses of specific countries experience with different kinds of macroeconomic imbalance and different short to medium term policy responses however he does indicate with some certainty that when equivalent external blows impact upon very low income countries there must be a presumption that other things being equal including the distribution of income the proportion of households and people pushed over the line into absolute poverty will be greater than in middle income countries the international community should provide external finance to aid these low income countries in limiting the negative impact on the poorest

extrinsic versus intrinsic problems of agricultural cooperation anti incentivism in tanzania and china peasant willingness to engage in collective farming and the efficiency of collective farms once established may be preconditioned on local self determination participatory control discriminating work incentives and external manoeuvrability in the absence of such preconditions whether or not there exist economies of scale sufficient to offset effectively minimised incentive problems cannot be determined anti incentivism bureaucratic controls and extractive external environments are identified as factors inhibiting successful collective farming in both tanzania and china explanations of these tendencies in the two countries are sought in their political economies and ideological structures

deposit insurance and depositor discipline direct evidence on bank switching behaviour in japan as japan s financial system becomes more market oriented depositor discipline is playing a larger role in the monitoring of banks matching household survey data with banks financial data we examine households response to bank risk and different deposit insurance schemes we find that bank switching in response to risk increased between 1996 and 2001 and households choice of bank adequately reflects banks financial health we also examine the determinants of households knowledge of the deposit insurance scheme and how this affects switching behaviour the results suggest that depositor discipline works and could play an important supplementary role in bank monitoring

what do college seniors know about economics if college seniors who have taken an economics course were asked questions that test their knowledge of basic economics what would the results show would seniors give correct answers to most questions or would they show significant deficiencies students are exposed to many ideas during their undergraduate education so one would not expect them to retain all of the economic content they were taught but one would hope that they would retain at least a knowledge of basic economics this study investigates whether that is the case two data sources were used for the study the first was from a gallup survey of a national random sample of 300 college seniors walstad and max larsen 1992 the survey includes 15 multiple choice questions testing economic knowledge the responses from that survey can be separated according to whether students took economics the second data set came from the economics scores for 12 854 students who took the major field test in business ii mftb sponsored by higher education assessment of the educational testing service ets 1998 the mftb covers content typically taught in an undergraduate program in business and contains about 20 multiple choice questions on basic economics although there are differences between the two data sets we viewed this as an advantage for our study our hypothesis is that most college seniors would show relatively limited knowledge of basic economics no matter what questions were asked or how the data were collected we expected students responding to the gallup questions to score higher than students taking the mftb because the gallup questions were simpler and designed for telephone in

rejoinder food agricultural and trade policy to the year 2000 abstract this article partly in response to fred sanderson s article pp 363 73 challenges the narrow approach of forecasting the future food situation by extrapolating current trends and the view that little can be done to improve the predicament of the poorest of the poor this article argues that we must look for ways of breaking out of the vicious circle of low income low economic demand low productivity and low levels of resource utilization

traders expectations in asset markets experimental evidence we elicit traders predictions of future price trajectories in repeated experimental markets for a 15 period lived asset we find that individuals beliefs about prices are adaptive and primarily based on past trends in the current and previous markets in which they have participated most traders do not anticipate market downturns the first time they participate in a market and when experienced they typically overestimate the time remaining before market peaks and downturns occur when prices deviate from fundamental values belief data are informative to an observer in predicting the direction of future price movements and the timing of market peaks

do depositors punish banks for bad behavior market discipline deposit insurance and banking crises this paper empirically investigates two issues largely unexplored by the literature on market discipline we evaluate the interaction between market discipline and deposit insurance and the impact of banking crises on market discipline we focus on the experiences of argentina chile and mexico during the 1980s and 1990s we find that depositors discipline banks by withdrawing deposits and by requiring higher interest rates deposit insurance does not appear to diminish the extent of market discipline aggregate shocks affect deposits and interest rates during crises regardless of bank fundamentals and investors responsiveness to bank risk taking increases in the aftermath of crises

what does an oligopoly maximize a monopolist maximizes a well defined objective function monetary profit in a competitive industry although each individual pursues selfish objectives the market behaves as if an agent was maximizing an objective function social welfare can we say the same for an oligopoly do firms pursuing selfish objectives and behaving strategically act as if an agent was maximizing a fictitious objective function necessary and sufficient conditions for nash equilibria of static and state space games to be observationally equivalent to single optimization problems are derived nash equilibria of the game that are not maxima of the function are shown to be generically unstable copyright 1994 by blackwell publishing ltd

informative advertising with differentiated products in this paper we study the role of promotional expenditures by sellers in a model of product differentiation advertising conveys full and accurate information about the characteristics of products heterogeneous consumers who have no source of information other than advertisements seek to purchase the products that best fit their needs despite the roles played by advertising in improving the matching of products and consumers and in increasing the elasticity of demand faced by each firm we find that the market determined levels of advertising are excessive given the extent of diversity in the market we derive a promotional equilibrium based on a specific information transmission technology paying explicit attention to the structure of consumer information and its impact on firms demand curves this allows us to study the effects of changes in the advertising technology including an increased ability to target messages to specific groups of consumers on the equilibrium in the product market we find that decreased advertising costs may reduce profits by increasing the severity of price competition

product variety and firm agglomeration for the purpose of explaining interindustry variation in the geographic distribution of firms we explore the impact of product heterogeneity on the incentives for firms to cluster in the presence of a ubiquitous periphery of stand alone firms our analysis revolves around two counteracting forces greater product heterogeneity increases consumer search which raises the amount of shopping at a cluster since this results in greater demand for a firm that joins the cluster this effect increases the incentive to cluster however greater product heterogeneity gives stand alone firms more local monopoly power since this raises their price cost margins this effect increases the incentive for a firm to stand alone our analysis shows that the former effect typically dominates so that greater firm agglomeration is associated with industries characterized by greater product heterogeneity

irrational exuberance and option smiles disagreement among investors is pervasive some investors see a trend and predict continuation others see the same trend and predict reversal some investors overreact others underreact i explain how disagreement can and does cause markets to be inefficient and i argue that option markets are particularly vulnerable in this respect the volatility smile associated with index options is one manifestation of inefficiency stemming from heterogeneous beliefs as part of the argument i discuss an event study about irrational exuberance the term alan greenspan chair of the u s federal reserve board used in late 1996 to describe stock market sentiment to study this event i combined the information gleaned from option pricing data with other information about market sentiment to assess the impact of heterogeneous beliefs on market efficiency

advertising in competitive markets in this paper small firms sell a homogeneous good to small consumers under conditions of free entry but consumers receive price information only through firms advertising in equilibrium every firm on the continuous price distribution buys less advertising than is socially optimal the result is robust if firms advertise in just one medium if readers of different advertising media are positively correlated excess advertising can occur in media used exclusively to advertise discount prices copyright 1991 by american economic association

balance of payments output and prices in tanzania abstract this paper examines the relationship between changes in international reserves and changes in output prices and monetary balances in tanzania using annual data for 1962 86 a short run macroeconomic model of the balance of payments is formulated and estimated in which output and prices are endogenized and the behaviors of the monetary and fiscal authorities are explicitly modeled the estimation results are used to examine the relative effectiveness of alternative policy instruments on the key macroeconomic variables of the model the monetary variables appear to have played a relatively significant role in the development of prices but they were only marginally significant in the process of balance of payments adjustment the simulation results indicate that a tradeoff existed between faster economic growth and better balance of payments performance

selling formats for search goods the paper offers a comparative analysis of different ways to sell products selling formats when buyers incur evaluation costs since these costs are sunk at the moment of trade buyers may refrain from incurring them for fear of later opportunism on the part of sellers it is found that the use of many common selling formats can be explained in terms of their ability to alleviate this problem specifically i explain price advertising seller colocation and bargaining the theory explains much of the divergence in retail trading institutions and leads to several testable predictions

the cross over effect of irrational sentiments in housing commercial property and stock markets abstract this paper examines the dependence in irrational sentiments across housing commercial property and stock markets our empirical results document an important and lasting impact that commercial real estate sentiment and returns have on broader financial markets we also show that the cross over effects of market sentiments are not consistent with cross over effects in market returns sentiments and returns in housing and stock markets exhibit strong dependence on other markets whereas they evolve independently in commercial real estate while housing and stock market returns respond to irrational sentiment in commercial real estate markets the opposite is not true

reflections on northern rock the bank run that heralded the global financial crisis in september 2007 television viewers and newspaper readers around the world saw pictures of what looked like an old fashioned bank run that is depositors waiting in line outside the branch offices of a united kingdom bank called northern rock to withdraw their money the previous u k bank run before northern rock was in 1866 at overend gurney a london bank that overreached itself in the railway and docks boom of the 1860s bank runs were not uncommon in the united states up through the 1930s but they have been rare since the start of deposit insurance backed by the federal deposit insurance corporation in contrast deposit insurance in the united kingdom was a partial affair funded by the banking industry itself and insuring only a part of the deposits at the time of the run u k bank deposits were fully insured only up to 2 000 pounds and then only 90 percent of the deposits up to an upper limit of 35 000 pounds when faced with a run the incentive to withdraw one s deposits from a u k bank was therefore very strong for economists the run on northern rock at first seemed to offer a rare opportunity to study at close quarters all the elements involved in their theoretical models of bank runs the futility of public statements of reassurance the mutually reinforcing anxiety of depositors as well as the power of the media in galvanizing and channeling that anxiety through the power of television images however the storyline of the northern rock bank run does not fit the conventional narrative on september 13 2007 the bbc s evening television news broadcast first broke the news that northern rock had sought the bank of england s support the next morning the bank of england announced that it would provide emergency liquidity support it was only after that announcement that is after the

optimal financial crises empirical evidence suggests that banking panics are related to the business cycle and are not simply the result of sunspots panics occur when depositors perceive that the returns on bank assets are going to be unusually low we develop a simple model of this in this setting bank runs can be first best efficient they allow efficient risk sharing between early and late withdrawing depositors and they allow banks to hold efficient portfolios however if costly runs or markets for risky assets are introduced central bank intervention of the right kind can lead to a pareto improvement in welfare from the earliest times banks have been plagued by the problem of bank runs in which many or all of the bank s depositors attempt to withdraw their funds simultaneously because banks issue liquid liabilities in the form of deposit contracts but invest in illiquid assets in the form of loans they are vulnerable to runs that can lead to closure and liquidation a financial crisis or banking panic occurs when depositors at many or all of the banks in a region or a country attempt to withdraw their funds simultaneously prior to the twentieth century banking panics occurred frequently in europe and the united states panics were generally regarded as a bad thing and the development of central banks to eliminate panics and ensure financial stability has been an important feature of the history of financial systems it has been a long and involved process the first cerntral bank the bank of sweden was established more than 300 years ago the bank of england played an especially important role in the development of effective stabilization policies in the eighteenth and nineteenth centuries by the end of the nineteenth century banking panics had been eliminated in europe the last true panic in england was the overend gurney company crisis of 1866

competition by choice the effect of consumer search on firm location decisions this paper relates firm location choice and consumer search firms that cluster together attract consumers by facilitating price comparison but clustering increases the intensity of local competition the author constructs a simple model which shows that firms may choose head on competition by locating together under reasonable conditions this is the only equilibrium outcome copyright 1990 by american economic association

oligopolistic pricing with heterogeneous consumer search abstract a finite number of identical stores sell a homogeneous good to consumers with heterogeneous search costs who search sequentially with perfect recall and without replacement consumers search rules are optimal with respect to the stores pricing strategies and consumers must visit a store to obtain information about its actual price a symmetric nash equilibrium sne always exists the model exhibits a variety of equilibrium behaviors between monopoly pricing and marginal cost pricing the competitiveness of a market depends crucially on the shape of the search cost distribution moreso than on the number of competing firms

the advertising mix for a search good we extend the persuasion game to bring it squarely into the economics of advertising we model advertising as exciting consumer interest into learning more about the product and determine a firm s equilibrium choice of advertising content over quality information price information and horizontal match information equilibrium is unique whenever advertising is necessary the outcome is a separating equilibrium with quality unravelling lower quality firms need to provide more information for a given quality level as a function of consumer visit costs first quality information is disclosed then price information and then horizontal product information are added to the advertising mix some suggestive evidence is provided from airline ads in newspapers this paper was accepted by j miguel villas boas marketing

agricultural price policy in tanzania abstract this paper examines agricultural price policy implementation and its strategic impact in tanzania over the period 1969 1980 trends in producer prices and the rural urban terms of trade are analysed by constructing weighted price and income indices for major categories of crops marketed through official channels the results indicate a substantial deterioration of real prices and incomes from crop sales during the 1970s when taken in conjunction with a concomitant deterioration in the efficiency of agricultural marketing the analysis suggests that price policy has had a major adverse impact both on peasant living standards and on the economic performance of tanzania since the mid 1960s

maize food self sufficiency and policy in east and southern africa abstract in recent years maize has become a major food staple in the east and southern african region national average yields of maize remain low and yield gains are generally below population growth rates agricultural policy particularly maize pricing marketing and trade is examined and it is noted that despite an objective of maize self sufficiency many countries in the region continue to face erratic supplies finally a brief look is taken at the technologies available for maize and at those groups of smallholders who are unable to meet their annual household food requirements

urbanization and underdevelopment a global study of modernization urban bias and economic dependency the causes and effects of 3rd world urbanization have been addressed in theories of modernization urban bias and economic dependency but no single cross national study has tested the arguments advanced by all 3 theories this paper uses panel regression analysis to assess the validity of the 3 perspectives in 61 underdeveloped countries between 1960 and 1980 the modernization theory asserts that industrial employment attracts people to urban areas where they work in modern sector employment that facilitates national economic expansion the urban bias theory posits that the disparity in welfare between country and city increases rural to urban migration and thereby expands both urbanization and service informal employment dependency and world system arguments assert that foreign investment promotes both urbanization and service informal labor with foreign investment in agriculture pushing farmers townward and foreign investment in urban manufacturing pulling them there results suggest that underdeveloped nations are experiencing a gradual transition from an agrarian to a service and informal economy a transformation that impedes economic expansion unfavorable agricultural conditions alone will not push rural citizens to urban areas 2 theories help explain the relationship between relatives urbanization and economic growth if future studies of urbanization and underdevelopment are going to be useful then they must transcend current theoretical and ideological particularism

economic reform and smallholder agriculture in tanzania a discussion of recent market liberalization road rehabilitation and technology dissemination efforts abstract this paper discusses the reforms affecting tanzania s small farm sector during 1984 1993 it focuses on changes in marketing and input supply including the revival of regional cooperative societies the ending of the state monopoly in food crop procurement and changes in the export crop sector efforts to rehabilitate the country s road network and the effects of institutional change on a technology dissemination program sasakawa global 2000 are also discussed the author concludes that improvements in the performance of the smallholder sector cannot be expected to follow automatically from a withdrawal of government

a model of directed consumer search abstract we present a framework to study directed consumer search firms sell products with two attributes one is readily observable the other is observed only after visiting a firm search is directed as the order of search is influenced by the observable characteristics moreover if prices are readily observable firms also influence search direction by their choice of price we show that when consumers observe prices before search prices and profits are lower than when they do not a lower price then not only retains more consumers but is also more likely to attract them the latter effect makes demand more elastic when consumers observe prices before searching prices decrease in search costs consumer surplus initially increases in search costs but may ultimately decrease

structural adjustment as a policy process the case of tanzania abstract analyses of structural adjustment in developing countries have increasingly come to emphasize the importance of grounding reforms in the political realities of the countries concerned while this approach is a step forward from the more economistic and prescriptive analyses that prevailed in the first part of the 1980s we believe that the dynamics of structural adjustment is only fully captured by an approach that treats the policy context as an explicit and independent variable on the basis of a case study of tanzania this article uses a policy process approach in which the notions of ambiguity and conflict in policy situations help us better understand the opportunities and constraints for action on structural adjustment issues

systemic risk and bank size abstract in this paper we analyse firm level systemic risk for us and european banks from 2004 to 2012 we observe that common systemic risk indicators are primarily driven by firm size which implies an overriding concern for too big to fail institutions however smaller banks may still pose considerable systemic threats as exemplified by the northern rock debacle in 2007 by introducing a simple standardisation we obtain new risk measures that often prove to be superior predictors of financial distress during the 2007 2009 subprime crisis we conclude that the new measures could be a valuable addition to the existing indicators employed in basel iii to identify systemically important banks

pricing product diversity and search costs a bertrand chamberlin diamond model we study price competition in the presence of search costs and product differentiation the limit cases of the model are the bertrand paradox the diamond paradox and chamberlinian monopolistic competition market prices rise with search costs and decrease with the number of firms prices may initially fall with the degree of product differentiation because more diversity leads to more search and more competition equilibrium diversity rises with search costs while the optimum level falls so entry is excessive the market failure is most pronounced for low preference for variety and high search costs

impact of the financial crisis on bank run risk danger of the days after abstract we examine the developments of depositor knowledge attitudes and behavior throughout the recent financial crisis and discuss their impact on bank run risk based on a self collected data set surveying depositors before 2007 at 2008 and after the peak of the crisis 2009 we observe a worrying dynamic pattern at the peak depositors knew more about deposit insurance placed more importance on deposit security and slightly raised their deposits however in the aftermath of the crisis the enhanced depositor knowledge proved to be non permanent while the increased importance of deposit security and the exposure of depositors persisted the proportion of completely uninformed strongly involved and highly exposed depositors who carry the highest risk of triggering a bank run was reduced around the peak of the crisis but rebounded strongly afterwards even exceeding pre crisis levels these findings point to a higher bank run risk in the aftermath than during the financial crisis

relative agricultural prices and the urban bias model a comparative analysis of tanzania and fiji the paper critically examines agricultural price aspects of the urban bias model especially the links between class interests government policies and the trend of real agricultural prices the paper contains an analysis of the principal factors both economic and political underlying agriculture s terms of trade in two contrasting countries tanzania and fiji both case studies in different ways raise doubts about the generality of urban bias propositions as they relate to agricultural prices they also suggest important weaknesses in the model s interpretation of the politics of farm prices

irrational exuberance and option smiles disagreement among investors is pervasive some investors see a trend and predict continuation others see the same trend and predict reversal some investors overreact others underreact i explai

an experimental exploration of self fulfilling banking panics their occurrence persistence and prevention this article tests the possibility and the degree of persistence of self fulfilling banking panics through an experimental protocol panics are proved to be persistent phenomena that are difficult to prevent however it seems possible to curb them through a learning effect caused by a temporary but sufficient suspension of the deposit availability combined with a narrow banking solution which makes banks more liquid additionally panic prevention requires a full deposit coverage to be effective this suggests that the moral hazard issue should not be tackled through a lower deposit coverage especially in emerging countries banking systems where depositors are likely to lose confidence

oligopolistic pricing and advertising abstract n sellers advertise a homogeneous good to m buyers whose only source of information is this advertising there is a unique nash equilibrium ne in which sellers choose a common advertising level and mix over prices this ne approaches marginal cost pricing as advertising costs decrease and approaches monopoly pricing as advertising costs increase more sellers induce lower prices and less advertising per seller however the social welfare effect can be negative for some advertising technologies the ne advertising level is generically less than socially optimal journal of economic literature classification numbers d00 d4 d43 d8 d83 i00 i1 i13 m37

balance of payments adjustment in low income developing countries the experiences of kenya and tanzania in the 1970s abstract in the wake of the oil price shock of the mid 1970s the two low income economies of kenya and tanzania adopted growth oriented adjustment strategies the oil shock also coincided with drought which affected tanzania much more adversely by the end of the 1970s the glaring failures in the two countries adjustment performance was in relation to balance of payments and in particular to export growth pricing policies in agriculture were actively applied in the two countries the results of these policies continue to underline the importance of a farmer rewarding price policy but also indicate a strong possibility of crop substitution problems in low income economies special measures were applied to promote manufactured exports subsidies in kenya and primary export processing in tanzania but they were a conspicuous failure policy lessons from these experiences are briefly indicated

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

manufactured goods supply and cash crops in sub saharan africa abstract this paper deals with the impact of manufactured goods supply mainly consumer goods on cash crop expansion in sub saharan africa a close link between agricultural performance and trends of manufactures supply becomes apparent through a descriptive analysis concerning 12 african countries this is confirmed by the econometric analysis undertaken we improve significantly on the results of nerlove s model by adding a variable which reflects manufactures supply moreover a new model taking into account this supply as well as short term price effects represents in an acceptable way the reality of some countries

time varying risk aversion abstract exploiting portfolio data and repeated surveys of an italian bank s clients we test whether investors risk aversion increases following the 2008 crisis we find that after the crisis both qualitative and quantitative measures of risk aversion increase substantially and that affected individuals divest more stock we investigate four explanations changes in wealth expected income perceived probabilities and emotion based changes of the utility function our data are inconsistent with the first two channels while they suggest that fear is a potential mechanism underlying financial decisions whether by increasing the curvature of the utility function or the salience of negative outcomes

aggregation and imperfect competition on the existence of equilibrium we present a new approach to the theory of imperfect competition and apply it to study price competition among differentiated products the central result provides general conditions under which there exists a pure strategy price equilibrium for any number of firms producing any set of products this includes products with multi dimen sional attributes in addition to the proof of existence we provide conditions for uniqueness our analysis covers location models the characteristics approach and probabilistic choice together in a unified framework to prove existence we employ aggregation theorems due to prekopa 1971 and borell 1975 our companion paper caplin and nalebuff 1991 introduces these theorems and develops the application to super majority voting rules we present a new approach to the theory of imperfect competition and apply it to study price competition among differentiated products the central result is that there exists a pure strategy price equilibrium for any number of firms producing any set of products in addition to the proof of existence we provide conditions for uniqueness our model both unites diverse strands of the earlier literature and opens up uncharted areas for future analysis in particular we expand the traditional one dimensional framework to allow for multi dimen sional product differentiation our approach involves twin restrictions on consumer preferences one on individuals preferences the other on the distribution of preferences across society these are generalizations of the restrictions supporting 64 majority rule presented in caplin and nalebuff 1988 to prove existence we apply a new technique of aggregation this technique is valuable in a variety of other problems in the companion paper we use the aggregation result to generalize our earlier work on 64 majority rule and to characterize the relationship between the distribution of human capital and the distribution of income caplin and nalebuff 1991 there are additional applications in statistics and in search theory we begin with a brief review of the early literature on imperfect competition describing in more detail the existence problem and previous solutions section 3 presents our twin assumptions and shows that they cover many standard cases in section 4 we introduce the aggregation theorem and use it in the analysis of demand functions the proof of existence of equilibrium is in section

bullish or bearish the sentiment of newsletter writers whether bullish or bearish does not forecast future returns but past returns and the volatility of those returns do affect sentiment high returns over four week periods are associated with a migration of newsletter writers from the bearish camp into the bullish camp high returns over periods of 26 and 52 weeks are associated with nervous bullishness a migration of newsletter writers from the bearish camp into both the bullish and the correction camps high volatility instead of scaring newsletter writers into bearishness reduces the effects of both positive and negative returns on sentiment also contrary to a popular hypothesis the crash of 1987 had no significant effect on the pattern of forecasts

true monopolistic competition as a result of imperfect information the paper restates hart s 1985a 1985b definition of large group monopolistic competition distinguishes it from oligopolistic competition and raises the question of whether there are reasonable circumstances that give rise to true monopolistic competition as defined the purpose is to show that consumers imperfect information may create conditions that will turn an otherwise oligopolistic market into a truly monopolistically competitive one