A parallel of education with transformative processes in standard markets suggest that a more severe control of the quality of the output will improve the overall quality of the education. This paper shows a somehow counterintuitive result: an increase in the exam difficulty may reduce the...

A parallel of education with transformative processes in standard markets suggest that a more severe control of the quality of the output will improve the overall quality of the education. This paper shows a somehow counterintuitive result: an increase in the exam difficulty may reduce the...

A preference is invariant with respect to a transformation if its ranking of acts is unaffected by a reshuffing of the states under. We show that any invariant preference must be parametric: there is a unique sufficient set of parameters such that the preference ranks acts according to their...

Forecasting electricity demand for future years is an essential step in resource planning. A common approach is for the system operator to predict future demand from the estimates of individual distribution companies. However, the predictions thus obtained may be of poor quality, since the...

Many conditions have been introduced to weaken the continuity re-quirements for equilibrium existence in games. We introduce a new con-dition, called regularity, that is simple and easy to verify. It is implied both by Reny's better-reply security and Simon and Zame's endogenous sharing rule...

This note questions the behavioral content of second-order acts and their use in decision theoretic models. We show that there can be no verification mechanism to determine what the decision maker receives under a second-order act. This impossibility applies even in idealized repeated...

We introduce a new notion of rational expectations equilibrium (REE) called maximin rational expectations equilibrium (MREE), which is based on the maximin expected utility (MEU) formulation. In particular, agents maximize maximin expected utility conditioned on their own private information and...

De Finetti's concept of exchangeability provides a way to formalize the intuitive idea of similarity and its role as guide in decision making. His classic representation theorem states that exchangeable expected utility preferences can be expressed in terms of a subjective beliefs on parameters....

This paper introduces new core and Walrasian equilibrium notions for an asymmetric information economy with non-expected utility preferences. We prove existence and incentive compatibility results for the new notions we introduce.

Affiliation has been a prominent assumption in the study of economic models with statistical dependence. Despite its large number of applications, especially in auction theory, affiliation has limitations that are important to be aware of. This paper shows that affiliation is a restrictive...