The relation between implementability and the core

This paper proves a simple and general theorem on resource-allocation mechanisms that achieve Pareto efficiency. We say that a mechanism (game form) is normal if at any action profile, an agent who obtains his endowments neither pays nor receives a positive amount. In the context of auctions, this simply means that losers receive no bill. We prove that for any normal mechanism, if its Nash equilibrium allocations are Pareto efficient for all preference profiles, then the equilibrium allocations are necessarily in the core. The result holds for a large class of allocation problems in which monetary transfers are feasible and the consumption space is discrete except for the space of transfers. Examples include auctions with any number of objects, economies with indivisible public goods, marriage problems, and coalition formation

Subgame-perfect implementation of bargaining solutions

This paper provides simple four-stage game forms that fully implement a large class of two-person bargaining solutions in subgame-perfect equilibrium. The solutions that can be implemented by our game forms are those that maximize a monotonic and quasi-concave function of utilities after normalizing each agent's utility function so that the maximum utility is 1 and the utility of the disagreement outcome is 0. This class of solutions includes the Nash, Kalai, Smorodinsky, and Relative Utilitarian solutions. The game forms have a structure of alternating offers and contain no integer device

Nonlinear Pricing with Self-Control Preferences

This paper studies optimal nonlinear pricing for a monopolist when consumers' preferences exhibit temptation and self-control as in Gul and Pesendorfer (2001a). Consumers are subject to temptation inside the store but exercise self-control, and those foreseeing large self-control costs do not enter the store. Consumers differ in their preferences under temptation. When all consumers are tempted by more expensive, higher quality choices, the optimal menu is a singleton, which saves consumers from self-control and extracts consumers' commitment surplus. When some consumers are tempted by cheaper, lower quality choices, the optimal menu may contain a continuum of choices.

Temptation, self-control, and competitive nonlinear pricing

Standard pricing theories consider consumers without temptation. With temptation and costly self-control, consumers dislike choice sets with tempting alternatives. We study firms' strategy against such consumers, using Gul–Pesendorfer preferences and a game where firms compete by offering menus.Publicad

The folk theorem for repeated games with observation costs

This paper studies repeated games with private monitoring where players make optimal decisions with respect to costly monitoring activities, just as they do with respect to stage-game actions. We consider the case where each player can observe other players' current-period actions accurately only if he incurs a certain level of disutility. In every period, players decide whether to monitor other players and whom to monitor. We show that the folk theorem holds for any finite stage game that satisfies the standard full dimensionality condition and for any level of observation costs. The theorem also holds under general structures of costless private signals and does not require explicit communication among the players. Therefore, tacit collusion can attain efficient outcomes in general repeated games with private monitoring if perfect private monitoring is merely feasible, however costly it may be

Random paths to stability in the roommate problem

This paper studies whether a sequence of myopic blockings leads to a stable matching in the roommate problem. We prove that if a stable matching exists and preferences are strict, then for any unstable matching, there exists a finite sequence of successive myopic blockings leading to a stable matching. This implies that, starting from any unstable matching, the process of allowing a randomly chosen blocking pair to form converges to a stable matching with probability one. This result generalizes those of Roth and Vande Vate (1990) and Chung (2000) under strict preferences

Studies on the treatment of keratoconjunctivitis sicca.

Fifteen cases of keratoconjunctivitis sicca (KCS) of unknown etiology were treated with soft contact lenses for the purpose of their bandage effects and moisuture supply. A soft contact lens was worn on one of the eyes of each case but not on the other to compare its effectiveness. New opthalmic drops or contact lens wearers were dropped in both eyes. Furthermore, the KCS-index was worked out on the basis of the complaints of 23 patients of KCS of unknouwn etiology. The indexes before and after treatment were compared. Corneal objective findings were improved in all the eyes wearing soft contact lensen for along period, and seven stopped wearing them although corneal objective findings were much better, because they had some troubles with handlings were much better, because they had some troubles with handling the lenses, because they had lost rhem, or because their visual acuity decreased while wearing the lenses. Forlong term wearing the flattest lenses should be used in the beginning and changed gradually to lenses of greater curvature which are better able to keep their centering. Then immediately after successful fitting, the lenses should be given appropriate refractive power. The new ophthalmic drops for soft contact lens wearers were very much effective as artificial tears to both eyes with and without sofy contact lenses. KCS-indexes were numerical values relating to patients subjective symptoms. KSC-indexes improves by an average of +6.4&#177;7.5 after treatment. On the other hand, KCS-indexes improved by +10.7&#177;7.9 in the group that succeeded in wearing SCL for a long period, and by +7.6&#177;2.1 even in the group that failed. </p