Admissibility and Common Knowledge

The implications of assuming that it is commonly known that players consider only admissible best responses are investigated.Within a states-of-the-world model where a state, for each player, determines a strategy set rather than a strategy the concept of fully permissible sets is defined.General existence is established, and a finite algorithm (eliminating strategy sets instead of strategies) is provided.The concept refines rationalizability as well as the Dekel-Fudenberg procedure, and captures a notion of forward induction.When players consider all best responses, the same framework can be used to define the concept of rationalizable sets, which characterizes rationalizability.game theory

The Hartwick Rule: Myths and Facts

We shed light on the Hartwick rule for capital accumulation and resource depletion by providing semantic clarifications and investigating the implications and relevance of this rule.We extend earlier results by establishing that the Hartwick rule does not indicate sustainability and does not require substitutability between man-made and natural capital.We use a new class of simple counterexamples (i) to obtain the novel finding that a negative value of net investments need not entail that utility is unsustainable, and (ii) to point out deficiencies in the literature.natural resources;sustainable development;capital accumulation

Admissibility and Common Knowledge

The implications of assuming that it is commonly known that players consider only admissible best responses are investigated.Within a states-of-the-world model where a state, for each player, determines a strategy set rather than a strategy the concept of fully permissible sets is defined.General existence is established, and a finite algorithm (eliminating strategy sets instead of strategies) is provided.The concept refines rationalizability as well as the Dekel-Fudenberg procedure, and captures a notion of forward induction.When players consider all best responses, the same framework can be used to define the concept of rationalizable sets, which characterizes rationalizability.

The Hartwick Rule:Myths and Facts

We shed light on the Hartwick rule for capital accumulation and resource depletion by providing semantic clarifications and investigating the implications and relevance of this rule.We extend earlier results by establishing that the Hartwick rule does not indicate sustainability and does not require substitutability between man-made and natural capital.We use a new class of simple counterexamples (i) to obtain the novel finding that a negative value of net investments need not entail that utility is unsustainable, and (ii) to point out deficiencies in the literature

Green National Accounting: Why and How?

The present paper gives an overview of the theory of green national accounting. Three purposes of green national accounting (measurement of sustainable income, social welfare or net social profit) and two measures (Green NNP and Hicksian income) are considered. It is argued that sustainable income and social welfare correspond to different purposes. Under the assumption of no exogenous technological progress, Green NNP is shown equal to Hicksian income if there is a constant interest rate or if consumption is constant.SOCIAL WELFARE ; ENVIRONMENT ; NATIONAL ACCOUNTING