The simulation result of Nunes, Kuan, and Newbold suggests that it is possible to estimate a spurious break for a regression model with I(1) disturbances. In this note, we provide a rigorous proof for this phenomenon.

The standard version of "q" theory, in which investment is positively related to marginal "q", breaks down in the presence of fixed costs of adjustment. With fixed costs, q is a non-monotonic function of investment. Therefore its inverse, which is the traditional investment function, does not...

I illustrate the convergence to Rubinstein's (1982) bargaining outcome of the solutions of the finite-horizon truncations of that game. The depiction is new, and hopefully instructive, and has the flavour of international trade diagrams.

This paper has pushed Becker's matching insights into a quite plausible search setting. Exploiting the implicit integral equation (10), we gave a thorough characterization of cross-sectional matching patterns in the equilibrium and constrained s ocial optimum of a frictional matching model. In...

We prove that the recently proposed informational herding models are but special cases of a standard single person experimentation model with myopia. We then re-interpret the incorrect herding outcome as a familiar failure of complete learning in an optimal experimentation problem.