This paper develops a model of pricing and advertising in a matching environment with capacity constrained sellers. Sellers' expenditure on directly informative advertising attracts consumers only probabilistically. Consumers who happen to observe advertisements randomize over the advertised...

This paper studies an adaptive artificial agent model using a genetic algorithm to analyze how a population of decision-makers learns to coordinate on the selection of an equilibrium or a social convention in a two-sided matching game. In the contexts of centralized and decentralized entry-level...

We study a strategic model of dynamic trading where agents are asymmetrically informed over common value sources of uncertainty. There is a continuum of uninformed buyers and a finite number of sellers, some of them informed. When there is only one seller, full information revelation never...

In a version of the Diamond and Dybvig (1983) model with aggregate uncertainty, we show that there exists an equilibrium with the following properties: all consumers deposit at the bank, all patient consumers wait for the last period to withdraw, and the bank fails with strictly positive...

We introduce an element of centralization in a random matching model of money that allows for private liabilities to circulate as media of exchange. Some agents, which we identify as banks, are endowed with the technology to issue notes and to record-keep reserves with a central clearinghouse,...

Edward Chamberlin, who initiated classroom market experiments, used the results of these experiments to argue that competitive equilibrium performs poorly in explaining the outcomes of real markets. Vernon Smith altered the design of Chamberlin's experiment to increase the amount of price...

Suppose Player A is playing two apparently independent repeated games with two other people, B and C, with A randomly matched, each period, with either B or C. Each dyad maintains the maximum incentive-compatible level of cooperation within the dyad, even if cooperation has broken down in the...

This paper studies the existence of single-price price equilibrium from a given initial distribution of money holdings in a search-theoretic model of money where agents have no time preference. The model is similar to the authors' recent models of search economies with no constraints on money...

This paper examines, in the context of future EMU membership of the Central and Eastern European countiries (CEECs), the interaction between fiscal policy and the price level in different exchange rate regimes. The theoretical framework is based on the Fiscal Theory of the Price Level (FTPL)....

Economic theory is dominated by abstract structures. Underneath, there is no firm foundation. Above, there is a lack of rigorous confrontation with established fact. Basic theoretical concepts have no acknowledged definition. The apparatus of graphs, algebra and technical vocabulary are often...