In the traditional static implementation literature it is often impossible for implementors to enforce their optimal outcomes. And when restricting the choice to dominant-strategy implementation, only the dictatorial choices of one of the participants are implementable. Repeated implementation...

Two theoretical literatures, one using Bayesian Nash equilibrium, and the other using noisy rational expectations equilibrium, both provide a foundation for understanding how private information is impounded into asset prices, yet some of their predictions are conflicting. Here, we compare for...

We propose a Marshallian model for price and allocation adjustments in parallel continuous double auctions. Agents quote prices that they expect will maximize local utility improvements. The process generates Pareto optimal allocations in the limit. In experiments designed to induce CAPM...

Prediction markets are markets for contracts that yield payments based on the outcome of an uncertain future event, such as a presidential election. Using these markets as forecasting tools could substantially improve decision making in the private and public sectors. We argue that U.S....

We wish to study optimal dynamic nonlinear income taxes. Do real-world taxes share some of their features? What policy prescriptions can be made? We study a two-period model, where the consumers and government each have separate budget constraints in the two periods, so income cannot be...