Non-robustness of the Cash-in-Advance Equilibrium in the Trading-Post Model

The main justification for cash-in-advance (CIA) equilibria when there are multiple assets is a Shapley-Shubik trading-post model where the agents coordinate on a particular medium of exchange. Of course, there are other equilibria. We introduce a refinement and show that the CIA equilibrium does not satisfy our refinement while there exist equilibria that do.

Extended Conversations in Sender-Receiver Games

Aumann and Hart (Econometrica, Nov. 2003) have shown that in games of one-sided incomplete information, the set of equilibrium outcomes achievable can be expanded considerably if the players are allowed to communicate without exogenous time limits and completely characterise the equilibria from such communication. Their research provokes (at least) four questions. (i) Is it true that the set of equilibriumpayoffs stabilises (i.e. remains unchanged) if there are sufficiently many rounds of communication? (ii) Is the set of equilibria from communication which is unbounded but finite with probability one is the same as equilibria from communication which is just unbounded? (iii) Are any of these sets of equilibria “simple” and if so, is there an algorithm to compute them? (iv) Does unbounded communication (of order type w) exhaust all possibilities so that further communication is irrelevant? We show that in the context of finite Sender-Receiver games, the answer to all four is yes if the game satisfies a certain geometric condition. We then relate this condition to some geometric facts about the notion of bi-convexity and argue that if any of the questions has a negative answer then all three of the questions are likely to have a negative answer.

Contracting for Information under Imperfect Commitment

Organizational theory suggests that authority should lie in the hands of those with information, yet the power to transfer authority is rarely absolute in practice. We investigate the validity and application of this advice in a model of optimal contracting between an uninformed principal and informed agent where the principal's commitment power is imperfect. We show that while full alignment of interests combined with delegation of authority is feasible, it is never optimal. The optimal contract is 'bang-bang'---in one region of the state space, full alignment takes place, in the other, no alignment takes place. We then compare these contracts to those in which the principal has full commitment power as well as to several 'informal' institutional arrangements.Imperfect commitment, optimal contracting, delegation

On the Benefits of Costly Voting

We study strategic voting in a Condorcet type model in which voters have identical preferences but differential information. Voters incur private costs of going to the polls and may abstain if they wish; hence voting is voluntary. We show that under majority rule with voluntary voting, it is an equilibrium to vote sincerely. Thus, in contrast to situations with compulsory voting, there is no conflict between strategic and sincere behavior. In large elections, the equilibrium is shown to be unique. Furthermore, participation rates are such that, in the limit, the correct candidate is elected with probability one. Finally, we show that in large elections, voluntary voting is welfare superior to compulsory voting.

Estimation of calorific value of biomass from its elementary components by regression analysis

The calorific value is one of the most important properties of biomass fuels for design calculations or numerical simulations in thermochemical conversion systems for biomass. There are a number of formulae proposed in the literature to estimate the calorific value of biomass fuels from its elementary components by i.e. proximate, ultimate and chemical analysis composition. In this thesis, these correlations were evaluated statistically by Regression Analysis based on a larger database of biomass samples collected from the open literature. It was found that the correlations based on linear multiple regression analysis is the most accurate. The correlations based on the non-linear regression analysis have very low accuracy. The low accuracy of previous correlations is mainly due to the limitation of samples used for deriving them. To achieve a higher accuracy, new correlations were proposed to estimate the Calorific value by Regression analysis based on present database. The new correlation between the Calorific value and elemental components of biomass could be conveniently used to estimate the Calorific Value from Regression analysis. The new formula, based on the composition of main elements (in wt. %) C, H, O, N and S based on nonlinear regression analysis is C2+ C × O2+ 0.03 C × H + 0.60 C – O + 0.11 O × N + 0.53 S – 0.33 S × O = Calorific Value (Mj/Kg) whose R-squared value is 0.95

Non-robustness of the cash-in-advance equilibrium in the trading post model

The main justification for cash-in-advance (CIA) equilibria when there are multiple assets is a Shapley-Shubik trading-post model where the agents coordinate on a particular medium of exchange. Of course, there are other equilibria. We introduce a refinement and show that the CIA equilibrium does not satisfy our refinement while there exist equilibria that do.