Cost Innovation: Schumpeter and Equilibrium. Part 1. Robinson Crusoe

Modifying a parallel dynamic programming approach to a simple deterministic economy, we consider the effect of an innovation in the means of production. The success of the innovation is assumed to depend on the availability of financing, locus of financial control, the amount of resources invested, and on a random event. The relationship between money and physical assets is critical. In this first part stress is laid on the innovation behavior of Robinson Crusoe in a premonetary economy, then on his actions in a monetary economy in partial equilibrium. Part 2 considers the closed monetary economy with several differentiated agents.Cost innovation, Schumpeter, Circular flow, Strategic market games

A Stochastic Overlapping Generations Economy with Inheritance

An overlapping generations model of an exchange economy is considered, with individuals having a finite expected life-span. Conditions concerning birth, death, inheritance and bequests are fully specified. Under such conditions, the existence of stationary Markov equilibrium is established in some generality, and several explicitly solvable examples are treated in detail.Overlapping generations, inheritance, stochastic process, life span

Two -person zero-sum stochastic games with semicontinuous payoff

Considérons un jeu stochastique à deux joueurs et à somme-nulle avec un espace d'état Borélien S, des espaces d'actions métriques et compacts A, B et une probabilité de transition q telle que l'intégrale sous q de toute fonction mesurable et bornée dépend mesurablement de l'état initial s et continument des actions (a,b) des joueurs. Supposons que le paiement est une fonction bornée f des histoires infinies des états et actions. Admettons enfin que f soit mesurable pour le produit des topologies Boréliennes (des espaces des cordonnées) et semi-continue inférieurement pour le produit des topologies discrètes. Alors, le jeu a une valeur et le joueur II a une stratégie optimale parfaite en sous jeux

Development of longitudinal handling qualities criteria for large advanced supersonic aircraft

A piloted simulation study was conducted with the aim of advancing the development of longitudinal handling qualities criteria for large supersonic cruise aircraft. The areas of study investigated included high-speed cruise maneuvering, and stall-recovery control power. Comparisons were made with existing criteria and, for the cruise condition, a time response criterion was developed which correlated well with pilot ratings and comments. For low-speed stall recovery a new criterion was developed in terms of nose-down angular acceleration capability

A Strategic Market Game with Secured Lending

We study stationary Markov equilibria for strategic, competitive games, in a market-economy model with one non-durable commodity, fiat money, borrowing/lending through a central bank or a money market, and a continuum of agents. These use fiat money in order to offset random fluctuations in their endowments of the commodity, are not allowed to borrow more than they can pay back (secured lending), and maximize expected discounted utility from consumption of the commodity. Their aggregate optimal actions determine dynamically prices and/or interest rates for borrowing and lending, in each period of play. In equilibrium, random fluctuations in endowment- and wealth-levels offset each other, and prices and interest rates remain constant. As in our related recent work, KSS (1994), we study in detail the individual agents' dynamic optimization problems, and the invariance measures for the associated, optimally controlled Markov chains. By appropriate aggregation, these individual problems lead to the construction of stationary Markov competitive equilibrium for the economy as a whole. Several examples are studied in detail, fairly general existence theorems are established, and open questions are indicated for further research.

Information and the Existence of Stationary Markovian Equilibrium

We describe conditions for the existence of a stationary Markovian equilibrium when total production or total endowment is a random variable. Apart from regularity assumptions, there are two crucial conditions: (i) low information -- agents are ignorant of both total endowment and their own endowments when they make decisions in a given period, and (ii) proportional endowments -- the endowment of each agent is in proportion, possibly a random proportion, to the total endowment. When these conditions hold, there is a stationary equilibrium. When they do not hold, such equilibrium need not exist.Information, stochastic process, money, and disequilibrium