We propose a theory of monetary policy and macroprudential interventions in financial markets. We focus on economies with nominal rigidities in goods and labor markets and subject to constraints on monetary policy, such as the zero lower bound or fixed exchange rates. We identify an aggregate...

This study examines what role the concept of endogenous uncertainty can have in explaining a phenomenon of international financial markets, the forward discount bias. The forward discount bias puzzle is unexplained by models assuming economic agents have full knowledge of the structure of the...

A review of the literature on cost sharing solutions for the minimum cost spanning tree problem is proposed, with a particular focus on the folk and Kar solutions. We compare the characterizations proposed, helped by some equivalencies between sets of properties.

No abstract received.

No abstract received.

Restricting the analysis to general 2×2 coordination games, this article shows how under certain conditions, it is highly likely that individuals coordinate on a (pay-off) efficient through risk inferior convention. This contrasts with other equilibrium refinement criteria, such as risk...

The topic is two-fold. First, we prove the convexity of Owen's Airport Profit Game (inclusive of revenues and costs). As an adjunct, we characterize the class of 1-convex Airport Profit Games by equivalent properties of the corresponding cost function. Second, we classify the class of 1-convex...

The interaction between a sophisticated player and a fictitious player is analyzed and applied to the problem of optimal enforcement. An adaptive potential offender myopically responds to the history of past enforcement. How can a sophisticated enforcement official take advantage of this...

No abstract received.