High dimensional general unrestricted models (GUMs) may include important individual determinants, many small relevant effects, and irrelevant variables. Automatic model selection procedures can handle more candidate variables than observations, allowing substantial dimension reduction from GUMs...

A differential oligopoly game with advertising is investigated, where different dynamics occur between two groups of agents, the former playing a competitive Nash game and the latter cooperating as a cartel. Sufficient conditions for stability and a qualitative analysis of the profit ratio and...

The seminal paper by Abreu (1986) is revisited to reassess the optimality of one-shot stick-and-carrot punishments. It is shown that there are admissible conditions under which the use of grim trigger strategies with an infinite Nash reversion is more efficient than implementing Abreu’s penal...

The model proposed in this paper investigates a differential Cournot oligopoly game with nonrenewable resource exploitation, in which each firm may exploit either its own private pool or a common pool jointly with the rivals. Firms use a deterministic technology to invest in exploration...

We revisit Benchekroun (2008) to describe a differential oligopoly game of resource extraction under static, linear feedback and nonlinear feedback strategies, to show that (i) feedback rules entail resource exhaustion for a finite number of firms; and (ii) feedback strategies are more...

We model the perspective faced by nuclear powers involved in a supergame where nuclear deterrence is used to stabilise peace. This setting allows us to investigate the bearings of defensive weapons on the effectiveness of deterrence and peace stability, relying on one-shot optimal punishments....

The Hodrick-Prescott (HP) method is a popular smoothing method for economic time series to get a smooth or long-term component of stationary series like growth rates. We show that the HP smoother can be viewed as a Bayesian linear model with a strong prior using differencing matrices for the...

The Hodrick-Prescott (HP) method is a popular smoothing method for economic time series to get a longterm component of stationary series like growth rates. The new extended HP smoothing model is applied to data-sets with an underlying metric and requires a Bayesian linear regression model with a...

The forecast combination puzzle refers to the finding that a simple average forecast combination outperforms more sophisticated weighting schemes and/or the best individual model. The paper derives optimal (worst) forecast combinations based on stochastic dominance (SD) analysis with...

This paper proposes an infinite hidden Markov model (iHMM) to detect, date stamp, and estimate speculative bubbles. Three features make this new approach attractive to practitioners. first, the iHMM is capable of capturing the nonlinear dynamics of different types of bubble behaviors as it...