Imitators and Optimizers in a Changing Environment

We analyze the dynamic interaction between imitation and myopic optimization in an environment of changing marginal payoffs. Focusing on finite irreducible environments, we unfold a trade-off between the degree of interaction and the size of environmental shocks. The optimizer outperforms the imitator if interaction is weak or if shocks are large. We use the example of Cournot duopoly to give economic meaning to this condition. To establish our main result, we rely on continuous state space Markov theory. In particular, it turns out that introducing a stochastic environment with finitely many states suffices to make an otherwise deterministic process ergodic.imitation; optimization; evolution; heterogeneous learning rules; changing environments

Equilibrium selection in supermodular games with mean payoff technologies

We examine an evolutionary model of equilibrium selection, where all individuals interact with each other, recurrently playing a strictly supermodular game. Individuals play (myopic) best responses to the current population profile, occa- sionally they pick an arbitrary strategy at random. To address the robustness of equilibrium selection in this simultaneous play scenario, we investigate whether different best-response approximations can lead to different long run equilibria.equilibrium selection; supermodular games; simultaneous play; best-response approximation

Sequestration of noble gases in giant planet interiors

The Galileo probe showed that Jupiter's atmosphere is severely depleted in neon compared to protosolar values. We show, via ab initio simulations of the partitioning of neon between hydrogen and helium phases, that the observed depletion can be explained by the sequestration of neon into helium-rich droplets within the postulated hydrogen-helium immiscibility layer of the planet's interior. We also demonstrate that this mechanism will not affect argon, explaining the observed lack of depletion of this gas. This provides strong indirect evidence for hydrogen-helium immiscibility in Jupiter

Tidal Response of Preliminary Jupiter Model

In anticipation of improved observational data for Jupiter's gravitational field from the Juno spacecraft, we predict the static tidal response for a variety of Jupiter interior models based on ab initio computer simulations of hydrogen-helium mixtures. We calculate hydrostatic-equilibrium gravity terms using the non-perturbative concentric Maclaurin Spheroid (CMS) method that eliminates lengthy expansions used in the theory of figures. Our method captures terms arising from the coupled tidal and rotational perturbations, which we find to be important for a rapidly-rotating planet like Jupiter. Our predicted static tidal Love number $k_2 = 0.5900$ is $\sim$10\% larger than previous estimates. The value is, as expected, highly correlated with the zonal harmonic coefficient $J_2$, and is thus nearly constant when plausible changes are made to interior structure while holding $J_2$ fixed at the observed value. We note that the predicted static $k_2$ might change due to Jupiter's dynamical response to the Galilean moons, and find reasons to argue that the change may be detectable, although we do not present here a theory of dynamical tides for highly oblate Jovian planets. An accurate model of Jupiter's tidal response will be essential for interpreting Juno observations and identifying tidal signals from effects of other interior dynamics in Jupiter's gravitational field.Comment: 10 Pages, 6 figures, 4 table

Democratization’s Risk Premium: Partisan and Opportunistic Political Business Cycle Effects on Sovereign Ratings in Developing Countries

We use partisan and opportunistic political business cycle (“PBC”) considerations to develop a framework for explaining election-period decisions by credit rating agencies (“agencies”) publishing developing country sovereign risk-ratings (“ratings”). We test six hypotheses derived from the framework with 482 agency ratings for 19 countries holding 39 presidential elections from 1987-2000. We find that ratings are linked to the partisan orientation of incumbents facing election and to expectations of incumbent victory. Consistent with the framework, rating effects are sometimes greater for right-wing compared to left-wing incumbents, perhaps, because partisan PBC considerations with right-wing (left-wing) incumbents reinforce (counteract) opportunistic PBC considerations.http://deepblue.lib.umich.edu/bitstream/2027.42/39931/3/wp546.pd

DEMOCRACY’S SPREAD: Elections and Sovereign Debt in Developing Countries

We use partisan and opportunistic political business cycle (“PBC”) considerations to develop and test a framework for explaining election-period changes in credit spreads for developing country sovereign bonds. Pre-election bond spread trends are significantly linked both to the partisan orientation of incumbents facing election and to expectations of incumbent victory. Bond spreads for right-wing (leftwing) incumbents increase (decrease) as the likelihood of left-wing (right-wing) challenger victory increases. For right-wing incumbent partisan and opportunistic PBC effects bondholder risk perceptions are mutually reinforcing. For left-wing incumbents partisan PBC effects dominate bondholder risk perceptions compared to opportunistic PBC effects.http://deepblue.lib.umich.edu/bitstream/2027.42/39961/3/wp575.pd

Democratization’s Risk Premium: Partisan and Opportunistic Political Business Cycle Effects on Sovereign Ratings in Developing Countries

We use partisan and opportunistic political business cycle (“PBC”) considerations to develop a framework for explaining election-period decisions by credit rating agencies (“agencies”) publishing developing country sovereign risk-ratings (“ratings”). We test six hypotheses derived from the framework with 482 agency ratings for 19 countries holding 39 presidential elections from 1987-2000. We find that ratings are linked to the partisan orientation of incumbents facing election and to expectations of incumbent victory. Consistent with the framework, rating effects are sometimes greater for right-wing compared to left-wing incumbents, perhaps, because partisan PBC considerations with right-wing (left-wing) incumbents reinforce (counteract) opportunistic PBC considerations.economics, elections, developing countries, ratings