Deductive reasoning in Extensive Games

We justify the application to extensive games of the concept of ‘fully permissible sets’, which corresponds to choice sets when there is common certain belief of the event that each player prefer one strategy to another if and only if the former weakly dominates the latter on the set of all opponent strategies or on the union of the choice sets that are deemed possible for the opponent. he e tensive games considered illustrate how our concept yields support to forward induction, without necessarily promoting backward induction.Extensive Game; Deductive reasoning; backward induction

Green National Accounting for Welfare and Sustainability: A Taxonomy of Assumptions and Results

This paper summarizes assumptions made and results obtained in parts of the literature on welfare and sustainability accounting. I consider five different assumptions that can be imposed independently of each other, producing 32 different combinations. This taxonomy is used to organize results in welfare and sustainability accounting. The analysis illustrates how stronger results require stronger assumptions and thereby impose harder informational requirements.national accounting, dynamic welfare, sustainability

Proper Consistency

Proper consistency is defined by the properties that each player takes all opponent strategies into account (is cautious) and deems one opponent strategy to be infinitely more likely than another if the opponent prefers the one to the other (respects preferences). When there is common certain belief of proper consistency, a most preferred strategy is properly rationalizable. Any strategy used with positive probability in a proper equilibrium is properly rationalizable. Only strategies that lead to the backward induction outcome is properly rationalizable in the strategic form of a generic perfect information game. Proper rationalizability can be used to test the robustness of inductive procedures.

Sustainability : ethical foundations and economic properties

The author interprets development to be sustainable if it involves a nondecreasing quality of life. He introduces a concept of justice, and shows that a development path must be sustainable to prevent injustice. He argues, and illustrates through growth models, that altruism alone does not - even in the context of an economically efficient market economy - ensure sustainability. In particular, technologies with complementarity between manmade and natural capital represent cases where sustainability need not result. Thus, policies aimed at economic efficiency, such as internalizing external effects, need not generate sustainable development. The author argues that a positive interest rate is not inconsistent with sustainable development. He also maintains that, even in a perfect market economy, prices may not convey whether investments in manmade capital are sufficient to compensate for the depletion of natural capital. In particular, a non-negative market value of net investment is not sufficient for the present quality of life to be sustainable. Finally, he emphasizes that public policy aimed at sustainable development should strengthen the mechanisms for redistribution from the present to the future.Economic Theory&Research,Environmental Economics&Policies,Banks&Banking Reform,International Terrorism&Counterterrorism,Development Economics&Aid Effectiveness

The Role of Regional Innovation Systems in a Globalizing Economy: Comparing Knowledge Bases and Institutional Frameworks in Nordic Clusters

In order to advance the understanding of which types of regional innovation system represent effective innovation support for what kinds of industry in different regions analyses must be contextualized by reference to the actual knowledge base of various industries as well as to the regional and national institutional framework, which strongly shape the innovation processes of firms. Of special importance is the linkage between the larger institutional frameworks of the national innovation and business systems, and the character of regional innovation systems. In making the arguments about a general correspondence between the macro-institutional characteristics of the economy and the dominant form and character of its regional innovation systems a link is provided to the literature on ‘varieties of capitalism’ and national business systems.regional innovation systems; Industrial Knowledge; Nordic clusters

Strong anonymity and infinite streams.

The extended rank-discounted utilitarian social welfare order introduced and axiomatized by Stéphane Zuber and Geir B. Asheim satisfies strong anonymity (J. Econ. Theory (2011), doi:10.1016/j.jet.2011.08.001). We question the appropriateness of strong anonymity in the context of a countably infinite sequence of subsequent generations. A modified criterion that is incomplete and satisfies finite anonymity is presented.

Talents and Innovative Regions: exploring the Importance of Face-to-Face Communication and Buzz

This paper argues that face-to-face communication and buzz are becoming increasingly important in the regionalizing le arning economy. This reflects the importance of inn ovations as a means of enhancing regional competitiveness. While concurring with the new streams of literature in geography highlighting the importance of face-to-face and buzz, it is argued that this lite rature is misleading on three interrelated accounts. Firstly, it conflates face-to-face and buzz by e.g. looking at buzz as the result of positive effects of face-to-face. Secondly, it fails to distinguish between the importance of respectively face-to-face and buzz for industries drawing on different knowledge bases; being analytical, synthetic and symbolic. Thirdly, these conceptual inadequacies lead to exaggerating the importance of cities as sites for creation of innovations, hence regional competitiveness. Through unpacking the distinctions between face-to-face and buzz and applying an industrial knowledge base approach we seek to reconstruct an alternative framework that allows for a systematic differentiation between the importance of both face-to- face and buzz for industries drawing on the different knowledg e-bases. This provides a frame work for developing more realistic locational predictions, with respect to the attractiveness of cities and regions as sites for generating regional competitiveness.Face-to-Face Communication; Innovative regions

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