Microeconomic Origins of Macroeconomic Tail Risks

Using a multisector general equilibrium model, we show that the interplay of idiosyncratic microeconomic shocks and sectoral heterogeneity results in systematic departures in the likelihood of large economic downturns relative to what is implied by the normal distribution. Such departures can emerge even though GDP fluctuations are approximately normally distributed away from the tails, highlighting the different nature of large economic downturns from regular business-cycle fluctuations. We further demonstrate the special role of input-output linkages in generating tail comovements, whereby large recessions involve not only significant GDP contractions, but also large simultaneous declines across a wide range of industries

A New Paradigm: Correlation between Laboratory and Field Tests of Coordination

AbstractThe study aimed to compare the coordination tests in the study and those used in the laboratory and field. Thus coordination tests used in the field and in the lab were applied to individuals in pursuit of these aims and the relation between the results was investigated. It was thus aimed to demonstrate the utilitarian value of the measurement methods in the field in contrast to the high cost laboratory coordination tests. 69 Individuals (male:49: female 20) between the ages of 18-30 participated in the study on volunteer basis. In order to determine the coordination skills of the study participants, Throwing a Ball at the Target Test, Dart Test from the field tests and Double Hand Eye Coordination Test and the Flamingo Balance Test from amongst the laboratory protocols was applied. In conclusion there was a correlation between the double hand eye coordination test and the dart test (r=0,245; p=0,43). As a result it was decided that the dart test was adequate in measurement of the coordination skills and taking them into account its usability in the field, it was decided that it could be used in place of the expensive laboratory tests

Flows and Decompositions of Games: Harmonic and Potential Games

In this paper we introduce a novel flow representation for finite games in strategic form. This representation allows us to develop a canonical direct sum decomposition of an arbitrary game into three components, which we refer to as the potential, harmonic and nonstrategic components. We analyze natural classes of games that are induced by this decomposition, and in particular, focus on games with no harmonic component and games with no potential component. We show that the first class corresponds to the well-known potential games. We refer to the second class of games as harmonic games, and study the structural and equilibrium properties of this new class of games. Intuitively, the potential component of a game captures interactions that can equivalently be represented as a common interest game, while the harmonic part represents the conflicts between the interests of the players. We make this intuition precise, by studying the properties of these two classes, and show that indeed they have quite distinct and remarkable characteristics. For instance, while finite potential games always have pure Nash equilibria, harmonic games generically never do. Moreover, we show that the nonstrategic component does not affect the equilibria of a game, but plays a fundamental role in their efficiency properties, thus decoupling the location of equilibria and their payoff-related properties. Exploiting the properties of the decomposition framework, we obtain explicit expressions for the projections of games onto the subspaces of potential and harmonic games. This enables an extension of the properties of potential and harmonic games to "nearby" games. We exemplify this point by showing that the set of approximate equilibria of an arbitrary game can be characterized through the equilibria of its projection onto the set of potential games

Optical Propagation and Communication

Contains an introduction and reports on three research projects.Maryland Procurement Office Contract MDA 903-94-C6071Maryland Procurement Office Contract MDA 904-93-C4169U.S. Air Force - Office of Scientific Research Grant F49620-93-1-0604U.S. Air Force - Office of Scientific Research Grant F49620-96-1-0028U.S. Army Research Office Grant DAAHO4-95-1-0494U.S. Air Force - Office of Scientific Research Grant F49620-96-1-0126U.S. Army Research Office Grant DAAHO4-93-G-018

Optical Propagation and Communication

Contains an introduction and reports on three research projects.Maryland Procurement Office Contract MDA 903-94-C6071Maryland Procurement Office Contract MDA 904-93-C4169U.S. Air Force - Office of Scientific Research Grant F49620-93-1-0604U.S. Air Force - Office of Scientific Research Grant F49620-96-1-0028U.S. Army Research Office Grant DAAH04-95-1-0494U.S. Air Force - Office of Scientific Research Grant F49620-95-1-0505U.S. Air Force - Office of Scientific Research Grant F49620-96-1-0126U.S. Army Research Office Grant DAAH04-93-G-0399U.S. Army Research Office Grant DAAH04-93-G-018