Definable and Contractible Contracts

This paper analyzes Bayesian normal form games in which players write contracts that condition their actions on the contracts of the other players. These contracts are required to be representable in a formal language. This is accomplished by constructing contracts which are definable functions of the Godel code of every other player's contract. We provide a complete characterization of the set of allocations supportable as pure strategy Bayesian equilibrium of this contracting game. When information is complete, this characterization provides a folk theorem. In general, the set of supportable allocations is smaller than the set supportable by a centralized mechanism designer.

Innis Lecture: Hedonic Equilibrium

This paper describes hedonic equilibrium and shows how and why the concept has to be modified when characteristics of traders on both sides of the market are endogenous.hedonic, matching, ex ante investment

A Folk Theorem for Competing Mechanisms

We prove a folk theorem for games in which mechanism designers compete in mechanisms and in which there are at least 4 players. All allocations supportable by a centralized mechanism designer, including allocations involving correlated actions (and correlated punishments) can be supported as Bayesian equilibrium outcomes in the competing mechanism game.

On the Revelation Principle and Reciprocal Mechanisms in Competing Mechanism Games

This paper provides a set of mechanisms that we refer to as emph{reciprocal mechanisms. }These mechanisms have the property that every outcome that can be supported as a Bayesian equilibrium in a competing mechanism game can be supported as an equilibrium in reciprocal mechanisms. In this sense, reciprocal mechanisms play the same role as direct mechanisms do in single principal problems. The advantage of these mechanisms over alternatives like the universal set of mechanisms is that they are conceptually straightforward and no more difficult to deal with than the simple direct mechanisms used in single principal mechanism design.competing mechanisms, revelation principle

Equilibrium Rejection of a Mechanism

We study a mechanism design problem in which players can take part in a mechanism to coordinate their actions in a default game. By refusing to participate in the mechanism, a player can revert to playing the default game non-cooperatively. We show with an example that some allocation rules are implementable only with mechanisms which will be rejected on the equilibrium path. In our construction, a refusal to participate conveys information about the types of the players. This information causes the default game to be played under different beliefs, and more importantly under different higher order beliefs, than the interim ones. We find a lower bound on all the implementable payoffs. We use this bound to establish a condition on the default game under which all the implementable outcomes are truthfully implementable, without the need to induce rejection of the mechanism.Mechanism design; Default game; Cartel agreements

Non-cooperative foundations of hedonic equilibrium

This paper studies Bayesian equilibrium in a worker firm matching problem in which workers choose their human capi- tal investment and firms choose wages before the matching process occurs. Symmetric equilibrium exists, and supports assortative matching. However, when the number of traders is large, low types tend to invest too much, while higher types invest in a way that is bilaterally efficient. In this sense the upper end of the market be- haves in a manner that is similar to the way they would behave in a competitive (hedonic) equilibrium. The lower end of the market, however, does not. All types end up investing more and being paid higher wages than they are in a simple hedonic equilibrium. In the limit, the Bayesian game supports and outcome that looks like a Truncated Hedonic Equilibrium as described in Peters (2006).bayesian equilibrium, pre-match investment, assortative matching

Fearless: Mike Altman

After participating in the 2011 Heston Internship in Uganda working in a community on clean water projects, Mike gained a new interest in Global Health. His interest grew and a few months ago he started an internship with charity: water, an organization working to bring access to clean water throughout the world in a way that attempts to break the traditional donation model. At charity: water, Mike is part of a greater group that is working to more closely connect people to specific water projects through financial transparency and innovative fundraising campaigns. [excerpt

Other Regarding Preferences: Outcomes, Intentions, or Interdependence

The Ultimatum Game seems to be the ideal experiment to test for the structure of preferences or the sequential rationality assumptions underlying subgame perfection. We study the theoretical implications of introducing the possibility of misconceptions - that actions may potentially affect continuation payoffs - and show that the set of Perfect Bayesian Nash Equilibria does not converge to the subgame perfect equilibrium when the possibility of misconception approaches zero. The perfect equilibria studied corresponds qualitatively to the experimental findings of offers made and unfair offers rejected.ulitmatum game, asymmetric information, interdependent preferences

Assessment of different modelling studies on the spatial hydrological processes in an arid alpine catchment

To assess the model description of spatial hydrological processes in the arid alpine catchment, SWAT and MIKE SHE were jointly applied in Yarkant River basin located in northwest China. Not only the simulated daily discharges at the outlet station but also spatiotemporal distributions of runoff, snowmelt and evapotranspiration were analyzed contrastively regarding modules' structure and algorithm. The simulation results suggested both models have their own strengths for particular hydrological processes. For the stream runoff simulation, the significant contributions of lateral interflow flow were only reflected in SWAT with a proportion of 41.4 %, while MIKE SHE simulated a more realistic distribution of base flow from groundwater with a proportion of 21.3 %. In snowmelt calculation, SWAT takes account of more available factors and got better correlations between snowmelt and runoff in temporal distribution, however, MIKE SHE presented clearer spatial distribution of snowpack because of fully distributed structure. In the aspect of water balance, less water was evaporated because of limitation of soil evaporation and less spatially distributed approach in SWAT, on another hand, the spatial distribution of actual evapotranspiration (ETa) in MIKE SHE clearly expressed influence of land use. Whether SWAT or MIKE SHE, without multiple calibrations, the model's limitation might bring in some biased opinions of hydrological processes in a catchment scale. The complementary study of combined results from multiple models could have a better understanding of overall hydrological processes in arid and scarce gauges alpine region

Empirical regularities of order placement in the Chinese stock market

Using ultra-high-frequency data extracted from the order flows of 23 stocks traded on the Shenzhen Stock Exchange, we study the empirical regularities of order placement in the opening call auction, cool period and continuous auction. The distributions of relative logarithmic prices against reference prices in the three time periods are qualitatively the same with quantitative discrepancies. The order placement behavior is asymmetric between buyers and sellers and between the inside-the-book orders and outside-the-book orders. In addition, the conditional distributions of relative prices in the continuous auction are independent of the bid-ask spread and volatility. These findings are crucial to build an empirical behavioral microscopic model based on order flows for Chinese stocks.Comment: 15 Elsart page including 1 table and 5 figure