We present a general method for computing the entire set of equilibrium payoffs for dynamic games with state variables, with and without complete information. We extend our earlier methods (Judd, Yeltekin, Conklin (Econometrica, 2003)) to games with physical states variables, and apply the...

We examine the welfare effects of costly information acquistion in a version of the Grossman-Stiglitz (1980) exchange economy in which all traders are fully rational. We find, as emphasized by Hirschleifer, that information gathering leads the suboptimal risk sharing. Furthermore, information...

We develop numerically stable stochastic simulation approaches for solving dynamic economic models. We rely on standard simulation procedures to simultaneously compute an ergodic distribution of state variables, its support and the associated decision rules. We differ from existing methods,...

There are two important rules in a patent race: what an innovator must accomplish to receive the patent and the allocation of the benefits that flow from the innovation. Most patent races end before R&D is completed and the prize to the innovator is often less than the social benefit of the...

Economic analysis often leads to multidimensional numerical problems. The {\em Curse of Dimensionality\/} often leads researchers to adopt methods designed for very high-dimension problems, but inefficient for problems of intermediate dimension. However, a little mathematics can greatly help...