The stochastic dominance ordering over probability distributions is one of the most familiar concepts in economic and financial analysis. One difficulty with stochastic dominance is that many distributions are not ranked at all, even when arbitrarily close to other distributions that are....

Random dynamical systems encountered in economics have certain distinctive characteristics that make them particularly well suited to analysis using the tools for studying Markov processes developed by Rabi N. Bhattacharya and his coauthors over the last few decades. In this essay we discuss the...

In this note, we show that the least fixed point of the Bellman operator in a certain set can be computed by value iteration whether or not the fixed point is the value function. As an application, we show one of the main results of Kamihigashi (2014, "Elementary results on solutions to the...

We consider infinite-horizon deterministic dynamic programming problems in discrete time. We show that the value function is always a fixed point of a modified version of the Bellman operator. We also show that value iteration monotonically converges to the value function if the initial function...

This paper presents a representative agent model in which stock market bubbles cause output fluctuations. Assuming that utility depends directly on wealth, we show that stock market bubbles arise if the marginal utility of wealth does not decline to zero as wealth goes to infinity. Bubbles may...

This paper studies a class of infinitely repeated games with two players in which the action space of each player is an interval, and the one-shot payoff of each player is additively separable in their actions. We define an immediately reactive equilibrium (IRE) as a pure-strategy subgame...

We analyze an infinitely repeated tariff-setting game played by two large countries with alternating moves. We focus on the subgame perfect equilibria in which each country chooses its tariff according to a stationary function of the other country's tariff. We show that there are many equilibria...

We analyze a infinitely repeated tariff-setting game by two large countries with alternating moves. We focus on the subgame perfect equilibria in which each country chooses its tariff according to a stationary function of the other country's tariff. We show that there are many equilibria with...

In this paper we show that multiple interior steady states are possible in the Ramsey model with elastic labor supply. In particular we establish the following three results: (i) for any discount factor and production function, there is a utility function such that a continuum of interior steady...

We study existence and uniqueness of a fixed point for the Bellman operator in deterministic dynamic programming. We show that removing many of the assumptions of the theorem on the Bellman operator recently shown by Martins-da-Rocha and Vailakis ("Existence and Uniqueness of a Fixed Point for...