This paper reports an experimental study on three well-known solutions for problems of adjudicating con icting claims: the constrained equal-awards, the proportional, and the constrained equal-losses rules. We first let subjects play three games designed such that the unique equilibrium...

This paper explores, theoretically and experimentally, a fixed-price mechanism bywhich, if aggregate demand exceeds supply, bidders are proportionally rationed. Ifdemand is uncertain, equilibrium consists in overstating true demand to alleviate theeffects of being rationed. Overstating is more...

Rational expectations do not require beliefs to be consistent with history and with what agents can conclude from it. Actually, at a rational expectations equilibrium agents may hold beliefs that explain poorly the history they observe, even when restricted to only those rationalizing their...

Extrinsic uncertainty is effective at a competitive equilibrium. This is generic if spot markets are inoperative: the only objects of exchange are assets for the contingent delivery of commodities; and the asset market is incomplete. The structure of payoffs of assets may allow for non-trivial...

Extrinsic uncertainty is effective at a competitive equilibrium. This is generic if spot markets are inoperative: the only objects of exchange are assets for the contingent delivery of commodities; and the asset market is incomplete. The structure of payoffs of assets may allow for non-trivial...

This paper attemps to identify, in a framework deliberately stripped of unnecessary technical- ities, some of the basic reasons why adaptive learning may or may not lead to stability and convergence to self-fulfilling expectations in large socioeconomic systems where no agent, or collection of...

In an economy with asymmetric information, Rational Expectations Equilibria (REE) need not become asymptotically incentive compatible, even if many independent replicas of the economy are merged together. We identify a sub-class of REE for which this is nevertheless the case. It consists of...

We provide a definition of the rational expectations core in an atomless economy with asset markets and show that allocations in the core can be decentralized by a system of asset and spot prices as rational expectations equilibria.

This paper attempts to identify, in a framework deliberately stripped of unnecessary technicalities, some of the basic reasons why adaptative learning may or may not lead to stability and convergence to self-fulfilling expectations in large socioeconomic systems where no agent, or collection of...