The literature on private information as a source of trade is probably most well known via the seminal work by Jean Tirole and Paul Milgrom and Nancy Stokey. We consider an arbitrage opportunity to be the result of the existence of such private information. We are interested to propose a model...

This paper analyzes conditions for existence of a strongly rational expectations equilibrium (SREE) in models with private information, where the amount of private information is endogenously determined. It is shown that the conditions for existence of a SREE known from models with exogenously...

The Use of a Simple Decision Rule in Repeated Oligopoly Games Much interest has been directed towards decision rules and conditions when firms make decisions converging to a non-cooperative Nash equilibrium in repeated oligopoly games. We explore the use of a simple decision rule where firms...

We quantify the inefficiency of the retirement component of the US social security system within a model where agents receive idiosyncratic labor-productivity shocks that are privately observed

In this paper we study a local version of the Minority Game where agents are placed on the nodes of a directed graph. Agents care about beingin the minority of the group of agents they are currently linked to and employ myopic best-reply rules to choose their next-period state. We show that, in...

In the past decades, the amount of worldwide security transactions that was processed by electronic trading platforms increased significantly. In this paper we develop a theoretical framework for the pricing of limit orders of the Electronic Security Trading System Xetra operated by the German...

This work aims at connecting developments in the theory of agency and implicit contracts with research on bounded rationality and agent based computational models. These are two related areas as implicit contracts are justified on the basis of bounded rationality, which additionally is one of...

In the last years, many contributions have been exploring population learning in economies where myopic agents play bilateral games and are allowed to repeatedly choose their pure strategies in the game and, possibly, their opponents in the game. These models explore bilateral stage-games...