No Speculation in Rational Expectations under Generalized Information

Let us consider a pure exchange economy under non-partitional information where the traders are assumed to have a reflexive and transitive information structure and to have strictly monotone preferences. We show the no speculation theorem: If the initial endowment is ex-ante Pareto optimal then there exists no other rational expectations equilibrium for any price with respect to which all traders are rational about expectations everywhere.Pure exchange economy with knowledge, No speculation, Rational expectations equilibrium, Ex-ante Pareto optimum

Complete Characterization of Functions Satisfying the Conditions of Arrow's Theorem

Arrow's theorem implies that a social choice function satisfying Transitivity, the Pareto Principle (Unanimity) and Independence of Irrelevant Alternatives (IIA) must be dictatorial. When non-strict preferences are allowed, a dictatorial social choice function is defined as a function for which there exists a single voter whose strict preferences are followed. This definition allows for many different dictatorial functions. In particular, we construct examples of dictatorial functions which do not satisfy Transitivity and IIA. Thus Arrow's theorem, in the case of non-strict preferences, does not provide a complete characterization of all social choice functions satisfying Transitivity, the Pareto Principle, and IIA. The main results of this article provide such a characterization for Arrow's theorem, as well as for follow up results by Wilson. In particular, we strengthen Arrow's and Wilson's result by giving an exact if and only if condition for a function to satisfy Transitivity and IIA (and the Pareto Principle). Additionally, we derive formulas for the number of functions satisfying these conditions.Comment: 11 pages, 1 figur

The Second Welfare Theorem with public goods in general economies

In this paper we prove a general version of the Second Welfare Theorem for a non-convex and non-transitive economy, with public goods and other externalities in consumption. For this purpose we use the sub-gradient to the distance function (normal cone) to define the pricing rule in this general context.Non-convex separation, Second Welfare Theorem, public goods, externalities.

Estimation of the Behavioral Equilibrium Real Exchange Rate of the Czech Koruna

Purpose of the article The paper examines the behavior of the real exchange rate in the Czech Republic. It focuses on the analysis of its driving forces with the emphasis on the turbulences which have been lately seen in the financial and real sector of the economy. Methodology/methods Real equilibrium exchange rate can be estimated using various approaches ranging from purely statistical to fully structural models. In this paper it is estimated using the BEER methodology, i.e. behavioral equilibrium exchange rate. The BEER approach as applied here rests on building vector error correction models which relate the behavior of the actual real exchange rate to various economic fundamentals from both the real and financial sector of the economy. Scientific aim The estimated behavioral equilibrium exchange rate serves as a benchmark to which the actual behavior of real exchange rate is compared. The paper also points to various problems that are faced when estimating the real equilibrium exchange rate in a posttransitive economy. Findings Three variants of the model, which differ in the respective fundamental variables inluded in the estimation, are estimated in the paper. The gap between the estimated real equilibrium exchange rate and real exchange rate as well as the key determinants of the real equilibrium exchange rate are analyzed and compared. The models show that the misalignment between the real exchange rate and fundamentals have narrowed in the recession and post recession period. The key drivers of the real equilibrium exchange rate are the productivity differential, real interest rate differential and net foreign assets. Conclusions (limits, implications etc) The relatively short time series for the Czech economy, especially for some of the variables, do not enable to make reliable estimation of models which would include all of the variables discussed in this paper

The Indonesian Verbal Suffix –Nya; Nominalization or Subordination?

The suffix ‑nya is one of the most frequent and polysemic suffixes in Indonesian. It can provide definite determination and topicalization. The “Verb‑nya“, which often appears in a topicalized subject Noun Phrase (NP), is generally labelled as a deverbal noun. Nevertheless, many syntactic constraints set it apart from Indonesian deverbal nouns. “Verb‑nya“ must be complemented by a NP, which can easily be reconstructed as a former subject: a sentence is topicalized and thus becomes a noun clause, generally the subject of the main clause Verb Phrase (VP). I argue that “Verb‑nya“ is a subordinate noun clause, almost always conveying causality. This causal noun clause, an innovation in formal written Indonesian (especially in the media), seems to fill a “gap“: the impossibility of beginning a sentence with a subordinating morpheme (‘that', ‘because')

A humanistic approach to organizations and to organizational decision-making

This paper attempts to take steps towards the formulation of a more human approach to the theory of the firm than the conventional economics-based models. Unbounded rationality, self-interest and the absence of learning are shown to be crucial assumptions of conventional economic theory. Then, the essential assumptions of an alternative approach are put forward and discussed. Next, I present an alternative view of organizations, which has its foundations in the concepts of mission, distinctive competence, identification and unity. Finally, the implications of such an approach for management decision-making are shown, emphasizing that three criteria have to be considered in any non-trivial decision in an organizational context.theory of the firm; bounded rationality; self-interest; distinctive competence; mission; identification;

Arguing against obligatory feature inheritance: Evidence from French transitive participle agreement

In this article, we accept the view that the relevant type of case/agreement features originate on phase heads, but argue against a strong view of the Percolation Hypothesis on which uninterpretable features obligatorily percolate down from a phase head onto a selected head: on the contrary, we maintain that there are structures in which uninterpretable case/agreement features remain on the phase head throughout the derivation. The main empirical evidence we adduce in support of our claim comes from a novel analysis of French past participle agreement which builds on earlier work by Radford and Vincent (2007) and Vincent (2007). In section 2, we briefly characterise French past participle agreement, and outline the key assumptions which our analysis makes. We show how our analysis handles past participle agreement with a local direct object in section 3, and go on to show how it correctly specifies when (and why) agreement can take place with the subject of an embedded infinitive complement in section 4. In section 5, we present further empirical evidence against the Percolation Hypothesis from a range of independent phenomena, and highlight some theoretical inadequacies of the hypothesis, as well as reconsidering the motivation for feature percolation. Finally, in section 6 we summarize our overall conclusions

Network Triads: Transitivity, Referral and Venture Capital Decisions in China and Russia

This article examines effects of dyadic ties and interpersonal trust on referrals and investment decisions of venture capitalists in the Chinese and Russian contexts. The study uses the postulate of transitivity of social network theory as a conceptual framework. The findings reveal that referee-venture capitalist tie, referee-entrepreneur tie, and interpersonal trust between referee and venture capitalist have positive effects on referrals and investment decisions of venture capitalists. The institutional, social and cultural differences between China and Russia have minimal effects on referrals. Interpersonal trust has positive effects on investment decisions in Russia.http://deepblue.lib.umich.edu/bitstream/2027.42/40138/3/wp752.pd

Venture capital financing as a mechanism for impelling innovation activity

This paper aims to provide an insight into the foundations of the development of the institution of venture capital financing, as well as summarize and conceptualize the experience of more economically developed countries, where the more favorable conditions have been created for the conduct of venture capital business. The authors’ summarization of theoretical, methodological, and empirical data has made it possible to formulate the major issues characteristic of the making of the venture capital sector in countries with a transitive economy (Russia, in particular), as well as propose a set of solutions aimed at optimizing the legal and institutional space in the venture capital sector with a view to boosting the innovation activity of businesses. The authors derive the following major inferences: Venture capital financing is a modern institution whose activity is aimed at accumulating and redistributing temporarily available investment resources that are sought after in the sphere of innovation entrepreneurship; Countries whose economy may currently be recognized as transitive are characterized by a set of uniform issues: underdeveloped infrastructure in the national innovation system; lack of sources of venture capital financing; businesses reporting decreased innovation activity levels due to lack of economic incentives; lack of personnel resources; The evidence from the experience of more economically developed countries suggests that to enable the proper making of the institution of venture capital financing in countries with a transitive economy a set of interrelated objectives may need to be undertaken, namely: ensuring legal optimization; boosting investment attractiveness; altering the nature of partnership between the state, business, and science-and-education sector; reducing state participation in economic and research activity.peer-reviewe

Topological Connectedness and Behavioral Assumptions on Preferences: A Two-Way Relationship

This paper offers a comprehensive treatment of the question as to whether a binary relation can be consistent (transitive) without being decisive (complete), or decisive without being consistent, or simultaneously inconsistent or indecisive, in the presence of a continuity hypothesis that is, in principle, non-testable. It identifies topological connectedness of the (choice) set over which the continuous binary relation is defined as being crucial to this question. Referring to the two-way relationship as the Eilenberg-Sonnenschein (ES) research program, it presents four synthetic, and complete, characterizations of connectedness, and its natural extensions; and two consequences that only stem from it. The six theorems are novel to both the economic and the mathematical literature: they generalize pioneering results of Eilenberg (1941), Sonnenschein (1965), Schmeidler (1971) and Sen (1969), and are relevant to several applied contexts, as well as to ongoing theoretical work.Comment: 47 pages, 4 figure