A random matching environment is constructed where banks mitigate a mismatch between the timing of investment payoffs and when agents wish to consume. Claims on banks may serve as media of exchange, i.e. private money. Two problems can emerge with private money. First, there may exist...

This paper proposes as a solution concept for games sets of Nash equilibria that are stable against replacement by alternative Nash equilibria. We prove existence, examine some variants that are related to evolutionary solution concepts, and, most importantly, offer a unified approach to...

We investigate the effect of non-binding pre-play communication in experiments with simple two-player coordination games. We reproduce the results of other studies in which play converges to a Pareto-dominated equilibrium in the absence of communication, and communication moves outcomes in the...

Wald and Lagrange Multiplier (LM) tests can be based on three commonly used estimators of the information matrix : the expectation of the Hessian matric, the Hessian matrix without the expectation operator or the outer product (OP) matrix of the score vectors. Although the Wald and LM tests are...

This paper investigates the finite sample performance of three semiparametric estimators of the Box-Cox model. Two of the semiparametric estimators are the nonlinear two-stage least squares (NL2SLS) estimator proposed by Amemiya and Powell (1981) and a rescaled version (RNL2SLS) proposed by...

We analyze simple adaptive learning processes to model the evolution of effective communication in cheap-talk games with initially meaningless signals. We suggest that learning rules may be sensitive to the information available to players at the population level. As a consequence, learning...

We conduct Monte Carlo experiments to examine whether the Hansen and Jagannathan (1991) bound is a useful device for evaluating asset pricing models. Specifically, we use recently developed statistical tests, which are based on a 'distance' between the model and the Hansen-Jagannathan bound, to...