Insurance aspects of tax policies are studied in a simple intertemporal general equilibrium model in which agents are uncertain about both the future wage rates and the rate of return on capital. Taxation and lump-sum subsidy policies generally reduce employment, output, and the capital stock...

This paper is concerned with the need for, and the implications of, $-optimality in learning problems. The authors consider a control problem in which a Bayesian decisionmaker faces a trade-off between expected current reward and accumulation of information. An example showing the need for the...

We provide an overview of the methods of analysis and results obtained, and, most important, an assessment of the success of rational learning dynamics in tying down limit beliefs and limit behavior. We illustrate the features common to rational or Bayesian learning in single agent, game...

This paper provides an analysis of the asymptotic properties of Pareto optimal consumption allocations in a stochastic general equilibrium model with heterogeneous consumers. In particular, we investigate the market selection hypothesis that markets favor traders with more accurate beliefs. We...

The problem of controlling a stochastic process, with unknown parameters over an infinite horizon, with discounting is considered. Agents express beliefs about unknown parameters in terms of distributions. Under general conditions, the sequence of beliefs converges to a limit distribution. The...

This essay introduces the symposium on computer science and economic theory.

Contemporary approaches to decision making describe a decision problem by sets of states and outcomes, and a rich set of acts: functions from states to outcomes over which the decision maker (DM) has preferences. Real problems do not come so equipped. It is often unclear what the state and...

This paper provides an analysis of the asymptotic properties of consumption allocations in a stochastic general equilibrium model with heterogeneous consumers. In particular we investigate the market selection hypothesis, that markets favor traders with more accurate beliefs. We show that in any...