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Are Groups more Rational than Individuals? A Review of Interactive Decision Making in Groups

Kugler, Tamar; Kausel, Edgar E.; Kocher, Martin G. - CESifo - 2012

consistent in revealing that groups behave closer to the game-theoretical assumption of rationality and selfishness than …

Persistent link: https://www.econbiz.de/10009416117

The Weak Rationality Principle in Economics

Kirchgässner, Gebhard - CESifo - 2005

The weak rationality principle is not an empirical statement but a heuristic rule of how to proceed in social sciences …-foundation and, therefore, employ the rationality assumption in economic models. Then, with reference to the ‘bounded rationality … a part of the rationality assumption. We conclude with some remarks on handling the problems of ‘free will’ as well as …

Persistent link: https://www.econbiz.de/10005406455

Strategic Wage Setting and Coordination Frictions with Multiple Applications

Gautier, Pieter A.; Moraga-González, José Luis - CESifo - 2004

We examine wage competition in a model where identical workers choose the number of jobs to apply for and identical firms simultaneously post a wage. The Nash equilibrium of this game exhibits the following properties: (i) an equilibrium where workers apply for just one job exhibits unemployment...

Persistent link: https://www.econbiz.de/10005094458

Convexity, Differential Equations, and Games

Flåm, Sjur Didrik - CESifo - 2002

Theoretical and experimental studies of noncooperative games increasingly recognize Nash equilibrium as a limiting outcome of players‘ repeated interaction. This note, while sharing that view, illustrates and advocates combined use of convex optimization and differential equations, the purpose...

Persistent link: https://www.econbiz.de/10005181528

Trade Retaliation in a Monetary-Trade Model

Whalley, John; Yu, Jun; Zhang, Shunming - CESifo - 2009

We explore how outcomes of trade policy retaliation (Nash tariff games) are affected when trade simultaneously takes places geographically across countries and through time via financial intermediation. In such models deficits and surpluses in goods trade are endogenously determined, and...

Persistent link: https://www.econbiz.de/10005416485

Optimal Tariffs, Retaliation and the Welfare Loss from Tariff Wars in the Melitz Model

Felbermayr, Gabriel J.; Jung, Benjamin; Larch, Mario - CESifo - 2011

This paper characterizes analytically the optimal tariff of a large one-sector economy with monopolistic competition and firm heterogeneity in general equilibrium, thereby extending the small-country results of Demidova and Rodriguez-Clare (JIE, 2009) and the homogeneous firms framework of Gros...

Persistent link: https://www.econbiz.de/10009147740

A Strategic R&D Investment with Flexible Development Time in Real Option Game Analysis

Villani, Giovanni - CESifo - 2009

The real option theory provides a useful tool to evaluate an R&D investment under uncertainty because, unlike the NPV (Net Present Value), it considers the managerial flexibility that may be expand the investment opportunity value. However, most R&D investment projects are open to competing...

Persistent link: https://www.econbiz.de/10005013067

Tacit Collusion under Imperfect Monitoring in the Canadian Manufacturing Industry: An Empirical Study

Resende, Marcelo; Zeidan, Rodrigo M. - CESifo - 2011

The paper undertakes a cross-sectoral analysis of a salient empirical implication of the model of tacit collusion advanced by Abreu et al (1986). Specifically, the prevalence of a first order Markovian process for alternating between price wars and collusive periods is assessed by means of...

Persistent link: https://www.econbiz.de/10009352229

The Eurozone Needs Exit Rules

Fahrholz, Christian; Wójcik, Cezary - CESifo - 2012

This paper argues that the key issue for defining and solving the Eurozone’s (EZ) difficulties lies in readjusting the relationship between the centre and the periphery of the EZ. Our argument proceeds in two steps. Firstly, the basic finance problem of a centre-periphery system is captured by...

Persistent link: https://www.econbiz.de/10010553271

A Theory of Reciprocity

Falk, Armin; Fischbacher, Urs - CESifo - 2001

This paper presents a formal theory of reciprocity. Reciprocity means that people reward kind actions and punish unkind ones. The theory takes into account that people evaluate the kindness of an action not only by its consequences but also by the intention underlying this action. The theory...

Persistent link: https://www.econbiz.de/10005765909