The paper is a review of results on the asymptotic behavior of Markov processes generated by i.i.d. iterates of monotone maps. Of particular importance is the notion of splitting introduced by Dubins and Freedman (1966). Some extensions to more general frameworks are outlined, and, finally, a...

We consider strategic interaction on a network of heterogeneous long-term relationships. The bilateral relationships are independent of each other in terms of actions and realized payoffs, and we assume that information regarding outcomes is private to the two parties involved. In spite of this,...

Central banks in developing countries, wanting to devalue the domestic currency, usually intervene in the foreign exchange market by buying up foreign currency using domestic money--often backing this up with sterilization to counter inflationary pressures. Such interventions are usually...

Using a model of O-ring production function, the paper demonstrates how certain communities can get caught in a low-literacy trap in which each individual finds it not worthwhile investing in higher skills because others are not high-skilled. The model sheds light on educational policy. It is...

Stochastically ordered random variables with given marginal distributions are combined into a joint distribution preserving the ordering and the marginals using a maximum entropy formulation. A closed-form expression is obtained. An application is in default estimation for different portfolio...

In this paper we prove the existence, uniqueness and stability of the invariant distribution of a random dynamical system in which the admissible family of laws of motion consists of monotone maps from a closed subset of a finite dimensional Euclidean space into itself.

The financial crisis of 2007-09 began as a local problem in the mortgage finance market in the United States and Europe but, within months, escalated into a general global financial crisis, resulting in collapsing investment not just in developed nations but also in Shanghai, Rio and Mumbai, and...

This paper considers the problem of pet overpopulation. It develops a tractable dynamic model whose positive predictions square well with key features of the current U.S. market for pets. The model is used to understand, from a welfare economic perspective, the sense in which there is...

This note reports part of a larger study of "petty corruption" by government bureaucrats in the process of approving new business projects. Each bureaucrat may demand a bribe as a condition of approval. Entrepreneurs use the services of an intermediary who, for a fee, undertakes to obtain all of...

An intriguing problem in stochastic growth theory is as follows: even when the return on investment is arbitrarily high near zero and discounting is arbitrarily mild, long run capital and consumption may be arbitrarily close to zero with probability one. In a convex one-sector model of optimal...