Cross section consumer expenditure data are frequently used to make conclusions about consumer demand behavior. Such conclusions, however, can only be justified under certain assumptions, which are often left unstated in the empirical demand literature. An assumption of this type, the metonymy...

In a seminal paper, Ariel Rubinstein has shown that impatience implies determinateness of the 2-person bargaining problem. In this note we show that this result depends also on the assumption that the set of alternatives is a continuum. If the pie can be divided only in finitely many different...

Recent research has shown that small deviations from optimizing behavior can have substantial effects on economic equilibria. Nonoptimizing demand behavior is of particular importance since individual consumer expenditure data often violate the strong axiom of revealed preference, and since the...

We analyze the allocative role of money as a numeraire in an intertemporal general equilibrium model with incomplete financial markets and nominal financial instruments. It is shown that regardless of their return specification nominal assets in net supply increase the consumption risk and...

This paper studies the form of the tax equilibrium set in simple Diamond-Mirrlees models and characterizes the corresponding Laffer curves. The curves need not ever slope downward and can have multiple local maxima. Local information about them is thus not sufficient to place restrictions on...

In an epistemic framework due to Aumann we characterize the condition on the rationality of the players that is both necessary and sufficient to imply backward induction in perfect information games in agent form. This condition requires each player to know that the players are rational at...