no price like home global house prices 1870 2012 how have house prices evolved in the long run this paper presents annual house price indices for 14 advanced economies since 1870 based on extensive data collection we are able to show for the first time that house prices in most industrial economies stayed constant in real terms from the 19th to the mid 20th century but rose sharply in recent decades land prices not construction costs hold the key to understanding the trajectory of house prices in the long run residential land prices have surged in the second half of the 20th century but did not increase meaningfully before we argue that before world war ii dramatic reductions in transport costs expanded the supply of land and suppressed land prices since the mid 20th century comparably large land augmenting reductions in transport costs no longer occurred increased regulations on land use further inhibited the utilization of additional land while rising expenditure shares for housing services increased demand

the dynamics of real estate prices institute of university of i business and v california at i economic research berkeley fisher center for real estate and urban economics p working paper series working paper no 88 151 the dynamics of real estate prices by these papers are preliminary in nature their purpose is to i e z i d 2f iz e ey bradford case are nottobccited ortluotedin john mq quigley any publication without the ex press permission of the author walter a haas school of business

multimarket contact imperfect monitoring and implicit collusion abstract this paper presents a theoretical foundation to the possibility that multimarket contact enhances firms ability to sustain implicit collusion when firms operate in a single market and cannot perfectly monitor their opponents choices it is impossible to achieve efficiency even if these firms have a long term strategic relationship we show that when firms encounter each other in a number of distinct markets and the extent of this market contact is large efficiency can be approximately sustained by a perfect equilibrium this efficiency with imperfect monitoring holds under almost the same condition on the discount factor as with perfect monitoring journal of economic literature classification numbers c70 c72 c73 d43 l11 l22 l41

enforcing international trade agreements with imperfect private monitoring to analyse the role that the world trade organization wto plays in enforcing international trade agreements this paper first explores what countries can achieve alone by characterizing optimal private trigger strategies pts under which each country triggers a punishment phase by imposing an explicit tariff based on privately observed imperfect signals of the other country s concealed trade barriers it identifies the condition under which countries can restrain the use of concealed barriers based on pts and establishes that countries will not reduce the cooperative protection level to its minimum attainable level under the optimal pts this paper then considers third party trigger strategies tts under which the wto allows each country to initiate a punishment phase based on the wto s judgement about potential violations by comparing the optimal pts and optimal tts it demonstrates that the wto facilitates a better cooperative equilibrium by changing the nature of punishment triggering signals from private to public which in turn enables countries to use a more efficient punishment such as an asymmetric and a minimum punishment

daily house price indexes construction modeling and longer run predictions we construct daily house price indexes for ten major u s metropolitan areas our calculations are based on a comprehensive database of several million residential property transactions and a standard repeat sales method that closely mimics the procedure used in the construction of the popular monthly case shiller house price indexes our new daily house price indexes exhibit similar characteristics to other daily asset prices with mild autocorrelation and strong conditional heteroskedasticity which are well described by a relatively simple multivariate garch type model the sample and model implied correlations across house price index returns are low at the daily frequency but rise monotonically with the return horizon and are all commensurate with existing empirical evidence for the existing monthly and quarterly house price series a simple model of daily house price index returns produces forecasts of monthly house price changes that are superior to various alternative forecast procedures based on lower frequency data underscoring the informational advantages of our new more finely sampled daily price series

private monitoring games and decisions under uncertainty abstract we investigate the value of delaying the punishment in private monitoring repeated games with almost public information when players use a grim trigger strategy if the effects of uncertainty and irreversibility are considered the equilibrium set would change

money is privacy an extensive literature in monetary theory has emphasized the role of money as a record keeping device money assumes this role in situations where using credit would be too costly and some might argue that this role will diminish as the cost of information and thus the cost of credit based transactions continues to fall in this paper we investigate another use for money the provision of privacy that is a money purchase does not identify the purchaser while a credit purchase does in a simple trading economy with moral hazard the efficiency of money is compared with that of credit and we find that money may be useful even when information is free

repeated partnership games with imperfect monitoring and no discounting in a partnership game each player s utility depends on the other players actions through a commonly observed consequence e g output profit price which is itself a function of the players actions and an exogenous stochastic environment if a partnership game is repeated infinitely and each player s payoff in the infinite game supergame is the long run average of his expected one period utilities then efficient combinations of one period actions can be sustained as nash equilibria of the supergame even if the players cannot observe other players actions or information but can only observe the resulting consequences

efficiency results in n player games with imperfect private monitoring abstract we demonstrate that efficiency is achievable in a certain class of n player repeated games with private almost perfect monitoring our equilibrium requires only one period memory and can be implemented by two state automata furthermore we show that this efficiency result holds with any degree of accuracy of monitoring if private signals are hemiindependent whereas most existing research focuses on two player cases or only a special example of n player games our results are applicable to a wide range of n player games of economic relevance such as trading goods games and price setting oligopolies

the vulnerability of auctions to bidder collusion previous work has addressed the relative vulnerability of different auction schemes to collusive bidding the common wisdom is that ascending bid and second price auctions are highly susceptible to collusion we show that the details of ascending bid and second price auctions including bidder registration procedures and procedures for information revelation during the auction can be designed to completely inhibit or unintentionally facilitate certain types of collusion if auctions are designed without acknowledging the possibility of collusion then the design will ignore key features that impact the potential success of colluding bidders

improved price indexes for real estate measuring the course of swedish housing prices this paper presents an improved methodology for estimating asset prices for real estate and other durables the method is used to analyze house price dynamics by exploiting an unusually rich and detailed body of data extensive descriptive and financial information on every house sale in sweden during a 12 year period the results confirm the importance of many aspects of quality in affecting the course of housing prices as well as the role of individual specific and idiosyncratic aspects of housing the results are compared with the price trends produced by more primitive methods and published by official sources q 1998 academic press

impossibility of collusion under imperfect monitoring with flexible production we show that it is impossible to achieve collusion in a duopoly when 1 goods are homogenous and firms compete in quantities 2 new imperfect information arrives continuously without sudden events and 3 firms are able to respond to this new information quickly the result holds even if we allow for asymmetric equilibria or monetary transfers the intuition is that the flexibility to respond to new information quickly unravels any collusive scheme and that signals about the aggregate behavior only cannot be used effectively to provide individual incentives via transfers our result applies both to a simple stationary model and a more complicated one with prices following a mean reverting markov process

collusion with almost no information we analyze noncooperative collusion in an infinitely repeated bertrand game where each of the n firms receives a privately observed i i d cost shock in each period and firms only and privately observe whether they have won the unit mass of consumers no other information is available and no communication is allowed we prove that there exist equilibria in private strategies approximating first best profits when firms are sufficiently patient in particular productive efficiency obtains in the limit

democracy market liberalization and political preferences abstract we estimate the impact of market development and democratization on subjective political preferences we rely on the specific situation of frontier zones and the considerable regional variations in culture and economic development in the countries of the former socialist bloc for identification using a survey conducted in 2006 we find a positive and significant effect of democracy on support for a market economy but no effect of market liberalization on support for democracy hence in contrast with the conventional wisdom concerning the sequencing of political and economic reforms democratization may become a necessary condition to obtain public support for further economic liberalization

depreciation of housing capital maintenance and house price inflation estimates from a repeat sales model abstract the rate at which physical capital depreciates is fundamental to investment in the economy nevertheless although housing capital accounts for one third of the total capital stock the rate at which housing capital depreciates has only rarely been directly estimated in part because prior studies do not control for maintenance for that same reason widely publicized measures of house price appreciation overstate the capital gain from homeownership using data from the american housing survey we examine these issues over the 1983 to 2001 period results indicate that gross of maintenance housing depreciates at roughly 2 5 percent per year while net of maintenance housing depreciates at approximately 2 percent per year moreover although the typical home appreciated at an annual real rate of roughly 0 75 percent after allowing for depreciation and maintenance the average homeowner experienced little capital gain

a belief based approach to the repeated prisoners dilemma with asymmetric private monitoring abstract this paper extends the belief based approach to the repeated prisoners dilemma with asymmetric private monitoring we first find that the previous belief based techniques t sekiguchi efficiency in repeated prisoners dilemma with private monitoring j econ theory 76 1997 345 361 v bhaskar i obara belief based equilibria in the repeated prisoners dilemma with private monitoring j econ theory 102 2002 40 69 cannot succeed when players private monitoring technologies are sufficiently different we then modify the previous belief based approach by letting the player with smaller observation errors always randomize between cooperate and defect along the cooperative path of the play we show that with vanishing observation errors efficiency and a folk theorem can be approximated using our modified belief based strategies

individual learning and cooperation in noisy repeated games we investigate whether two players in a long run relationship can maintain cooperation when the details of the underlying game are unknown specifically we consider a new class of repeated games with private monitoring where an unobservable state of the world influences the payoff functions and or the monitoring structure each player privately learns the state over time but cannot observe what the opponent learned we show that there are robust equilibria in which players eventually obtain payoffs as if the true state were common knowledge and players played a belief free equilibrium we also provide explicit equilibrium constructions in various economic examples copyright 2014 oxford university press

the folk theorem with imperfect public information the authors study repeated games in which players observe a public outcome that imperfectly signals the actions played they provide conditions guaranteeing that any feasible individually rational payoff vector of the stage game can arise as a perfect equilibrium of the repeated game with sufficiently little discounting the central condition requires that there exist action profiles with the property that for any two players no two deviations one by either player give rise to the same probability distribution over public outcomes the results apply to principal agent partnership oligopoly and mechanism design models and to one shot games with transferable utilities copyright 1994 by the econometric society

robustness of public equilibria in repeated games with private monitoring a repeated game with private monitoring is close to a repeated game with public monitoring or perfect monitoring when i the expected payoff structures are close and ii the informational structures are close in the sense that private signals in the private monitoring game can be aggregated by some public coordination device to generate a public signal whose distribution is close to the distribution of the public signal in the public monitoring game we provide a sufficient condition for the set of uniformly strict perfect public equilibria for a public monitoring game to be robust in nearby private monitoring games in the sense that they remain equilibria with respect to the public signal that is generated by such public coordination devices with truthful reporting our sufficient condition requires that every player is informationally small in a well defined sense

communication in repeated games with imperfect private monitoring this paper examines repeated games in which each player observes a private and imperfect signal on the actions played and in which players are allowed to communicate using public messages providing incentives for players to reveal their observations generates revelation constraints that combined with signal imperfections may be a source of inefficiencies however by delaying the revelation of their observations players may economize on the cost of deterring deviations and thereby avoid these inefficiencies because a player would not want to trigger a sanction that would penalize him too revelation constraints also tend to make sanctions difficult to enforce however with at least three players detecting deviations may not require that all the players reveal their observations in that case we obtain a nash threat version of the folk theorem with two players we do not obtain a similar result nevertheless we show that an efficient outcome can almost always be approximated

a robust folk theorem for the prisoner s dilemma we prove the folk theorem for the prisoner s dilemma using strategies that are robust to private monitoring from this follows a limit folk theorem when players are patient and monitoring is sufficiently accurate but private and possibly independent any feasible individually rational payoff can be obtained in sequential equilibrium the strategies used can be implemented by finite randomizing automata journal of economic literature classification numbers c72 c73 d82

on the theory of repeated games with private information part ii revelation through communication abstract we consider repeated games with private information discounting and communication similarly to abreu et al 1986 1987 we characterize supergame equilibrium allocations with truthful revelation in the two player case efficiency cannot be attained with supergame equilibria with truthful revelation

comments on money is privacy by charles kahn james mcandrews and william roberds monetary theory and game theory three classes of models on money closely related to game theoretic models are i search theoretic models ii repeated games in a narrow sense and iii trading post games this note tries to point out the sense of affinity between the theory of microfoundations of money and the theory of repeated games in a broad sense of the term

a limit characterization of belief free equilibrium payoffs in repeated games abstract the present paper studies repeated games with private monitoring and characterizes the set of belief free equilibrium payoffs in the limit as the discount factor approaches one and the noise on private information vanishes contrary to the conjecture by ely et al j c ely j horner w olszewski belief free equilibria in repeated games econometrica 73 2005 377 415 the equilibrium payoff set is computed by the same formula no matter how many players there are as an application of this result a version of the folk theorem is established for n player prisoner s dilemma games

optimal cartel equilibria with imperfect monitoring abstract there exist optimal symmetric equilibria in the green porter model 4 8 having an elementary intertemporal structure such an equilibrium is described entirely by two subsets of price space and two quantities the only production levels used by firms in any contingency the central technique employed in the analysis is the reduction of the repeated game to a family of static games

introduction to repeated games with private monitoring abstract we present a brief overview of recent developments in discounted repeated games with imperfect private monitoring the literature explores the possibility of cooperation in a long term relationship where each agent receives imperfect private information about the opponents actions although this class of games admits a wide range of applications such as collusion under secret price cutting exchange of goods with uncertain quality and observation errors it has fairly complex mathematical structure due to the lack of common information shared by players this is in sharp contrast to the well explored case of repeated games under public information with the celebrated folk theorems and until recently little had been known about the private monitoring case however rapid developments in the past few years have revealed the possibility of cooperation under private monitoring for some class of games journal of economic literature classification numbers c72 c73 d43 d82 l13 l41

repeated games with private monitoring two players we investigate two player infinitely repeated games where the discount factor is less than but close to unity monitoring is private and players cannot communicate we require no condition concerning the accuracy of players monitoring technology we show the folk theorem for the prisoners dilemma with conditional independence we also investigate more general games where players private signals are correlated only through an unobservable macro shock we show that efficiency is sustainable for generic private signal structures when the size of the set of private signals is sufficiently large finally we show that cartel collusion is sustainable in price setting duopoly

collusion in dynamic bertrand oligopoly with correlated private signals and communication abstract this paper studies collusion in repeated bertrand oligopoly when stochastic demand levels for the product of each firm are their private information and are positively correlated it derives general sufficient conditions for efficient collusion through communication and a simple grim trigger strategy this analysis is then applied to a model where the demand signal has multiple random components which respond differently to price deviations in this model it is shown that the above sufficient conditions hold if idiosyncratic noise terms are sufficiently small journal of economic literature classification numbers c72 d82

the repeated prisoner s dilemma with imperfect private monitoring abstract in this paper i study a repeated prisoner s dilemma game in which monitoring is private and imperfect a partial folk theorem is proved for the case of almost perfect monitoring

belief based equilibria in the repeated prisoners dilemma with private monitoring abstract we analyze repeated prisoners dilemma games with imperfect private monitoring and construct mixed trigger strategy equilibria such strategies have a simple representation where a player s action only depends upon her belief that her opponent s are continuing to cooperate when monitoring is almost perfect the symmetric efficient outcome can be approximated in any prisoners dilemma game while every individually rational feasible payoff can be approximated in a class of such games the efficiency result extends when there are more than two players it requires that monitoring be sufficiently accurate but does not require very low discounting when a public randomization device is available journal of economic literature classification numbers c73 d82

how robust is the folk theorem the folk theorem of repeated games has established that cooperative behavior can be sustained as an equilibrium in repeated settings early papers on private monitoring and a recent paper of cole and kocherlakota games and economic behavior 53 2005 59 72 challenge the robustness of this result by providing examples in which cooperation breaks down when players observe only imperfect private signals about other players actions or when attention is restricted to strategies with finite memory this paper shows that cole and kocherlakota s result is an artefact of a further restriction that they impose we prove that the folk theorem with imperfect public monitoring holds with strategies with finite memory as a corollary we establish that the folk theorem extends to environments in which monitoring is close to public yet private

the efficiency of bonus or terminate incentive schemes under subjective evaluations abstract we study a repeated principal agent model with subjective evaluations we construct simple bonus or terminate incentive schemes in these schemes the principal evaluates the agent every t periods the principal pays a bonus and asks the agent to work for t more periods if the evaluation is positive the relationship is terminated if the evaluation is negative the inefficiencies in these schemes vanish as the agent can be more frequently evaluated this result holds generally under objective or subjective evaluations

the folk theorem for repeated games with observation costs abstract the folk theorem literature has been relaxing the assumption on how much players know about each other s past action here we consider a general model where players can buy precise information every period each player decides whether to pay a cost to accurately observe the actions chosen by other players in the previous period when a player does not pay the cost he obtains only imperfect private signals observational decisions are unobservable to others known strategies such as trigger strategies do not work since they fail to motivate players to pay for information this paper shows that the folk theorem holds for any level of observation costs unlike existing folk theorems with private monitoring ours imposes virtually no restriction on the nature of costless imperfect signals the theorem does not use explicit or costless communication thereby having implications on antitrust laws that rely on evidence of explicit communication the main message is that accurate observation alone however costly enables efficient cooperation in general repeated games

efficiency in repeated prisoner s dilemma with private monitoring abstract this paper analyzes repeated games with private monitoring where in each period each player receives a signal of the other player s action in the previous period and that signal is private information previous literature on discounted repeated games with private monitoring has not shown whether or not nearly efficient equilibria exist for a repeated prisoner s dilemma satisfying a certain assumption regarding stage game payoffs we show that there exists a nearly efficient sequential equilibrium provided that imperfectness of signals is small and players are patient journal of economic literature classification number c73