We model the interaction between capitalists and entrepreneurs as a dynamic game. The open-loop Nash equilibrium and the closed-loop Nash equilibrium are distinguished. The purpose is to answer some questions that have arisen in the development of profit-led versus wage-led growth models. We...

To study coordination in complex social systems such as financial markets, the authors introduce a new prediction market set-up that accounts for fundamental uncertainty. Nonetheless, the market is designed so that its total value is known, and thus its rationality can be evaluated. In two...