This paper creates a mathematical model in which the banks are faced with two optimization problems. The first optimization problem is how to optimize their behavior in order to maximize profits. The second optimization is how to optimize the structure of liabilities in order to have minimum...

This study analyzes a continuous-time N-agent Brownian hidden-action model with exponential utilities, in which agents' actions jointly determine the mean and the variance of the outcome process. In order to give a theoretical justi¯cation for the use of linear contracts, as in Holmstrom and...

Based on recent proposals on non cooperative dynamic games for analysing climate negotiation outcomes, such as Dutta and Radner (2004, 2006a), we generalize a specific framework for modelling differential games of this type and describe the set of conditions for the existence of closed loop...

In this paper we will solve some linear programming problems by solving systems of differential equations using game theory. The linear programming problem must be a classical constraints problem or a classical menu problem, i.e. a maximization/minimization problem in the canonical form with all...

The investment-timing problem has been considered by many authors under the assumption that the instantaneous volatility of the demand shock is constant. Recently, Ting et al. [9] carried out an asymptotic approach in a monopoly model by letting the volatility parameter follow a stochastic...

According to Alfred Korzybski (1921) humans unlike plants and animals have the property to bind time, i.e. they are able to transfer experience through time. Humans are capable to collenct knowledge from the past and communicate their knowledge to the future. This paper investigates the...

In this paper we discuss the necessity of models including complex adaptive systems in order to eliminate the shortcomings of neoclassical models based on equilibrium theory. A simulation model containing artificial adaptive agents is used to explore the dynamics of a market of highly...

In this paper we extend earlier work on the economics of shallow lakes by M\"aler, Xepapadeas and de Zeeuw (2003) to the case where two communities have incommensurable preferences about lake eutrophication. In the case of incommensurable preferences interest group behavior arises, we therefore...

The model considered here will be formulated in relation to the “fishing problem,” even if other applications of it are much more obvious. The angler goes fishing, using various techniques, and has at most two fishing rods. He buys a fishing pass for a fixed time. The fish are caught using...

Our paper considers a “negotiation game” between two players which combines the features of two-players alternating offers bargaining and repeated games. Generally, the negotiation game in general admits a large number of equilibriums but some of which involve delay and inefficiency. Thus,...