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Fehr, Ernst; Tyran, Jean-Robert - C.E.P.R. Discussion Papers - 2004

Economists long considered money illusion to be largely irrelevant. Here we show, however, that money illusion has powerful effects on equilibrium selection. If we represent pay-offs in nominal terms, choices converge to the Pareto inefficient equilibrium; however, if we lift the veil of money...

Persistent link: https://www.econbiz.de/10005791766

Prisoners' Other Dilemma

Blonski, Matthias; Spagnolo, Giancarlo - C.E.P.R. Discussion Papers - 2003

Collusive agreements and relational contracts are commonly modeled as equilibria of dynamic games with the strategic features of the repeated Prisoner's Dilemma. The pay-offs agents obtain when being ‘cheated upon’ by other agents play no role in these models. We propose a way to take these...

Persistent link: https://www.econbiz.de/10005666887

Quantifying Confidence

Angeletos, George-Marios; Collard, Fabrice; Dellas, Harris - C.E.P.R. Discussion Papers - 2015

We enrich workhorse macroeconomic models with a mechanism that proxies strategic uncertainty and that manifests itself as waves of optimism and pessimism about the short-term economic outlook. We interpret this mechanism as variation in "confidence" and show that it helps account for many...

Persistent link: https://www.econbiz.de/10011186619

Sequencing and the Size of the Budget: A Reconsideration

Hallerberg, Mark; von Hagen, Jürgen - C.E.P.R. Discussion Papers - 1997

there exists a common pool problem. An agenda setter can provide the necessary coordination to force politicians to consider …

Persistent link: https://www.econbiz.de/10005123816

Learning and Complementarities: Implications for Speculative Attacks

Goldstein, Itay; Ozdenoren, Emre; Yuan, Kathy - C.E.P.R. Discussion Papers - 2010

affects its policy decision. We show that the learning process gives rise to coordination motives among speculators leading to …

Persistent link: https://www.econbiz.de/10008468601

Trading Frenzies and Their Impact on Real Investment

Goldstein, Itay; Ozdenoren, Emre; Yuan, Kathy - C.E.P.R. Discussion Papers - 2010

. Coordination among speculators is sometimes desirable for price informativeness and investment efficiency, but speculators … coordination among speculators and study policy measures that affect patterns of coordination to improve price informativeness and …

Persistent link: https://www.econbiz.de/10008530385

Fines, Leniency and Rewards in Antitrust: an Experiment

Bigoni, Maria; Fridolfsson, Sven-Olof; Le Coq, Chloé; … - C.E.P.R. Discussion Papers - 2009

This paper reports results from an experiment studying how fines, leniency programs and reward schemes for whistleblowers affect cartel formation and prices. Antitrust without leniency reduces cartel formation, but increases cartel prices: subjects use costly fines as (altruistic) punishments....

Persistent link: https://www.econbiz.de/10004976790

Should We Worry About the Fiscal Numerology of Maastricht?

Buiter, Willem H. - C.E.P.R. Discussion Papers - 1992

The paper reviews and evaluates in a non-technical manner the economic and political arguments for and against the two fiscal convergence criteria written into the Treaty of Maastricht and its Protocols. In order to qualify for full membership in Economic and Monetary Union (EMU), net general...

Persistent link: https://www.econbiz.de/10005123517

Coordination, Cooperation, Contagion and Currency Crises

Loisel, Olivier; Martin, Philippe - C.E.P.R. Discussion Papers - 1999

We analyse the effect of trade spillovers and of international coordination on currency crises. To do this, we present … and the larger the set of multiple equilibria. Coordination decreases the possibility of simultaneous self …-fulfilling speculative crises in the region and reduces the set of multiple equilibria. However, regional coordination, even though welfare …

Persistent link: https://www.econbiz.de/10005124321

When Does Coordination Require Centralization?

Alonso, Ricardo; Dessein, Wouter; Matouschek, Niko - C.E.P.R. Discussion Papers - 2006

This paper compares centralized and decentralized coordination when managers are privately informed and communicate … for coordination improves horizontal communication but worsens vertical communication. As a result, no matter how … important coordination is, decentralization dominates centralization if the division managers are not too biased towards their …

Persistent link: https://www.econbiz.de/10005124372