Perfect information games have a particularly simple structure of equilibria in the associated normal form. For generic such games each of the finitely many connected components of Nash equilibria is contractible. For every perfect information game there is a unique connected and contractible...

This paper discusses the theoretical and practical aspects of new methods for solving DEA problems under real-life geometrical uncertainty and probability uncertainty of sample data. The proposed minimax approach to solve problems with geometrical uncertainty of sample data involves an...

This paper analyzes the role of nominal assets in ranking intertemporal budget policies in a growing open economy. The budget policies are ranked in terms of the public's intertemporal stock of tax liabilities. Our main result is that, in a small open economy, the valuation of private and public...

We offer a game-theoretic proof of Hamilton's rule for the spread of altruism. For a simple case of siblings, we show that the rule can be derived as the outcome of a one-shot prisoner's dilemma game between siblings.

This paper studies the role of public policy to promote efficiency in human capital accumulation in the representative agent framework. Agents accumulate human capital by spending time in home study and in publicly provided schools. The individual faces an aggregate externality in the...

The typical social security program is designed as follows: (1) It is organized as a pay-asyou-go system. (2) It is financed with a payroll tax. (3) Employers and employees share the tax. (4) Benefits are largely independent of asset income. (5) Benefits are increasing with the taxes paid. (6)...

This paper applies to the static hedge of barrier options a technique, mean-square hedging, designed to minimize the size of the hedging error when perfect replication is not possible. It introduces an extension of this technique which preserves the computational efficiency of mean-square...

The endowment effect, status quo bias, and loss aversion are robust and well documented results from experimental psychology. They introduce a wedge between the prices at which one is willing to sell or buy a good. The objective of this paper is to address this wedge. We show that the presence...

The life-cycle framework is the standard way that economists think about the intertemporal allocation of time, effort and money. The framework has a venerable history in the economics profession with roots in the in…nite horizon models of Ramsey (1926) and Friedman (1957) and the …nite...

Friedman's book on the Óƒonsumption FunctionÔ is one of the great works of Economics demonstrating how the interplay between theoretical ideas and data analysis could lead to major policy implications. We present a short review of Friedman's Permanent Income Hypothesis, the origins of the...