Policy towards speculative bubbles is examined in a model of a finite horizon 'greater fool' bubble, with rational agents, asymmetric information and short-sales constraints. This model permits the use of standard tools of comparative dynamics and welfare economics to analyze bubble policies....

We revisit the question of price formation in general equilibrium theory. We explore whether evolutionary forces lead to Walrasian equilibrium in the context of a market game, introduced by Shubik (1972). Market games have Pareto inferior (strict) Nash equilibria, in which some, and possibly...

In the model of Funaki and Yamato (1999) the tragedy of the commons can be avoided with pessimistic players, while this does not hold for optimistic players. We propose a new core concept to overcome this puzzle and provide numerical simulations of simple games where the conclusions coincide or...

This paper generalizes a result by Samet concerning iterated expecta- tions and common priors. When a player in some state of the world is allowed to ascribe probability zero to that state, something not allowed in Samet s framework, iterated expectations may not converge, and when they do,...

Many different rules for decision making have been introduced in the literature. We show that a notion of generalized expected utility proposed in 'Great Expectations. Part I' is a universal decision rule, in the sense that it can represent essentially all other decision rules.

This paper defines temporal risk aversion in the context of a simple choice framework: that of time varying utility of wealth. The attention is focused on a decision maker who acts as a buyer: temporal risk premium, instantaneous risk premium and time preference premium are defined.

We present a class of games with a pure strategy being strictly dominated by another pure strategy such that the former survives along most solutions of the Brown-von Neumann-Nash dynamics.

Shapley proved the existence of an ordinal, symmetric and efficient solution for three-player bargaining problems. Ordinality refers to the covariance of the solution with respect to order-preserving transformations of utilities. The construction of this solution is based on a special feature of...

We introduce a new solution concept for games in extensive form with perfect information: the valuation equilibrium. The moves of each player are partitioned into similarity classes. A valuation of the player is a real valued function on the set of her similarity classes. At each node a player...

This paper analyses the structure of the Internet marketplace and the business relationships of key players involved in network services provision. A brief overview of existing pricing policies and research work in this area is presented and some new issues are introduced. We believe that the...