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Stabilizing the economy: Market design and general equilibrium

Goeree, Jacob K.; Lindsay, Luke - 2012

Review, 1960). Tatonnement theory predicts that prices are globally unstable for this economy, i.e. unless prices start at … the competitive equilibrium they oscillate without converging. Anderson et al. (Journal of Economic Theory, 2004) report … convergence. We replicate their experiments and confirm that tatonnement theory predicts the direction of price changes remarkably …

Persistent link: https://www.econbiz.de/10010316891

A geometric approach to mechanism design

Goeree, Jacob K.; Kushnir, Alexey - 2011

theory. The optimal mechanism can subsequently be derived from the support function using Hotelling's lemma. We first assume …

Persistent link: https://www.econbiz.de/10010316902

On the equivalence of Bayesian and dominant strategy implementation in a general class of social choice problems

Goeree, Jacob K.; Kushnir, Alexey - 2011

We consider a standard social choice environment with linear utilities and independent, one-dimensional, private values. We provide a short and constructive proof that for any Bayesian incentive compatible mechanism there exists an equivalent dominant strategy incentive compatible mechanism that...

Persistent link: https://www.econbiz.de/10010316903

Specification and estimation of rating scale models: With an application to the determinants of life satisfaction

Studer, Raphael; Winkelmann, Rainer - 2011

This article proposes a new class of rating scale models, which merges advantages and overcomes shortcomings of the traditional linear and ordered latent regression models. Both parametric and semi-parametric estimation is considered. The insights of an empirical application to satisfaction data...

Persistent link: https://www.econbiz.de/10010316906

All-pay auctions: Implementation and optimality

Jönsson, Stefan; Schmutzler, Armin - 2013

This paper analyzes how all-pay auctions with endogenous prizes can be used to provide effort incentives. We show that wide classes of effort distributions can be implemented as equilibrium outcomes of such games. We also ask how all-pay auctions have to be structured so as to induce high...

Persistent link: https://www.econbiz.de/10010316920

Uncertain demand, consumer loss aversion, and flat-rate tariffs

Herweg, Fabian; Mierendorff, Konrad - 2011

We consider a model of firm pricing and consumer choice, where consumers are loss averse and uncertain about their future demand. Possibly, consumers in our model prefer a flat rate to a measured tariff, even though this choice does not minimize their expected billing amount - a behavior in line...

Persistent link: https://www.econbiz.de/10010316924

Em-powering economics: Some thoughts on policy and financial markets

Falkinger, Josef - 2012

This paper addresses the discussion between economic power and the power of politics with particular focus on financial markets. After general reflections about the economic basis of power, the paper discusses in a general equilibrium framework how financial innovations can lead to risk creation...

Persistent link: https://www.econbiz.de/10010316928

Spectrum estimation: A unified framework for covariance matrix estimation and PCA in large dimensions

Ledoit, Olivier; Wolf, Michael - 2013

Covariance matrix estimation and principal component analysis (PCA) are two cornerstones of multivariate analysis. Classic textbook solutions perform poorly when the dimension of the data is of a magnitude similar to the sample size, or even larger. In such settings, there is a common remedy for...

Persistent link: https://www.econbiz.de/10010316930

Optimal estimation of a large-dimensional covariance matrix under Stein's loss

Ledoit, Olivier; Wolf, Michael - 2013

This paper revisits the methodology of Stein (1975, 1986) for estimating a covariance matrix in the setting where the number of variables can be of the same magnitude as the sample size. Stein proposed to keep the eigenvectors of the sample covariance matrix but to shrink the eigenvalues. By...

Persistent link: https://www.econbiz.de/10010316932

The redistributive effects of monetary policy

Ledoit, Olivier - 2011

We introduce a model of the economy as a social network. Two agents are linked to the extent that they transact with each other. This generates well-defined topological notions of location, neighborhood and closeness. We investigate the implications of our model for monetary economics. When a...

Persistent link: https://www.econbiz.de/10010316933