Savage motivated his Sure-Thing Principle b y arguing that, whenever an act would be preferred if an event obtains and preferred if an event did not obtain, then it should be preferred overall. The idea that it should be possible to decompose and recompose decision problems in this way has...

We examine a recursive algorithm for learning steady states and cycles in stochastic nonlinear models. Necessary and sufficient conditions for local convergence are shown to be equivalent to easily computable expectational-stability conditions. These conditions are affected by the distribution...

Bewley's programme of excluding price singularities in equilibrium solutions for commodity spaces of bounded functions is reconsidered. From two recent examples in which singularities are indispensable, viz., marginal cost pricing in continuous time and an overlapping generations model, it is...

This paper suggests a reason, other than asymmetric formation, why agency contracts are not explicitly contingent on the contracting parties' performances or actions. This reason is the formal nature of contracts: the form, usually written, that contracts are required to take to be enforceable...

In this paper the internal organisation of firms is reduced to the organisation of a communication network. In the presence of information communication and processing costs it is important to design rules guiding which members of the firm ought to communicate with one another on a regular...

An extension of Berge's Maximum Theorem is given, with two different topologies on the choice set used for the two semicontinuity assumptions on preferences. It is used to establish the norm-to-weak* continuity of (truncated) excess-demand, announced without proof by Jones (1986). This...

Rational expectations as the standard solution concept for dynamic economic models leaves open two fundamental questions: (1) how can RE be attained if agents do not actually begin with RE?, and (2) which RE solution will the economy follow hen there are multiple RE solutions? Expectational...

I study a matching model where heterogeneous firms publicly announce wage offers. A Walrasian type of equilibrium is derived, and the concept of stability used to restrict the set of equilibria. It is shown that the equilibrium is always separable, with high productivity firms announcing...

Large public bureaucracies are usually less efficient than modern private corporations. This paper explains how the degree of discretionary power might account for this difference in efficiency. In fact, increasing the discretionary power of the intermediate layers of an organization can enhance...