This paper considers a credit mechanism for selecting a unique competitive equilibrium (CE). It is shown that in general there exists a quot;price-normalizingquot; bundle, with which the enlargement of the general-equilibrium structure to allow for default subject to appropriate penalties...

A credit mechanism is considered that selects a unique competitive equilibrium (CE) of an exchange economy. It is shown that a price normalization calling for a fixed monetary value for the total wealth in the economy and the addition of appropriate default penalties together result in a...

We study economic natural selection in classical oligopoly settings. When underlying pure strategies consist of a finite number of prices, convex monotonic dynamics always converge under a weak condition to the smallest price in the support of the initial state that exceeds marginal cost. When...

We study experimentally a two-stage compensation mechanism for promoting cooperation in prisoner's dilemma games. In stage 1, players simultaneously choose binding non-negative amounts to pay their counterparts for cooperating in a given prisoner's dilemma game, and then play the prisoner's...

We analyze sunspot-equilibrium prices in nonconvex economies with perfect markets and a continuous sunspot variable. Our primary result is that every sunspot equilibrium allocation can be supported by prices that, when adjusted for probabilities, are constant across states. This result extends...

We study dynamic network games with two types of players (i.e., heterogeneous players) characterized by their different intrinsic preferences. Instead of calculating the Nash equilibrium, we focus on the asymptotic behavior of an asynchronous best response dynamics. We develop a dynamic approach...