Strong normalisation for applied lambda calculi

We consider the untyped lambda calculus with constructors and recursively defined constants. We construct a domain-theoretic model such that any term not denoting bottom is strongly normalising provided all its `stratified approximations' are. From this we derive a general normalisation theorem for applied typed lambda-calculi: If all constants have a total value, then all typeable terms are strongly normalising. We apply this result to extensions of G\"odel's system T and system F extended by various forms of bar recursion for which strong normalisation was hitherto unknown.Comment: 14 pages, paper acceptet at electronic journal LMC

Some Notes on Learning in Games with Strategic Complementarities

Fictitious play is the classical myopic learning process, and games with strategic complementarities are an important class of games including many economic applications. Knowledge about convergence properties of fictitious play in this class of games is scarce, however. Beyond dominance solvable games, global convergence has only been established for games with strategic complementarities and diminishing marginal returns (Krishna, 1992, HBSWorking Paper 92-073). This result is known to depend critically on the assumption of a tie-breaking rule. We show that restricting the analysis to nondegenerate games allows us to drop this assumption. More importantly, an ordinal version of strategic complementarities turns out to suffice. As a byproduct, we also obtain global convergence in generalized ordinal potential games with diminishing marginal returns.Fictitious Play, Learning Process, Strategic Complementarities, Supermodular Games

Access Charges in the Presence of Call Externalities

We introduce call externalities in the standard model of network competition with termination-based price discrimination, and employ a simple graphical analysis to study the outcome of competition. In contrast to recent results in the literature, we find that even under linear pricing, access charges below marginal cost are used as a collusion device, while off-net prices are above on-net prices in equilibrium. Moreover, "bill and keep" arrangements may be welfare improving compared with cost-based access pricing.Access Charge, Call Externality, Interconnection, Telecommunications

Two-way interconnection and the collusive role of the access charge

I show that under network competition with termination-based price discrimination access charges below marginal cost may be used as a collusion device, if the utility of receiving calls is accounted for. This holds even for linear prices and sharply contrasts recent results in the literature suggesting that collusion over the access charge might result in a markup on cost. Moreover, "bill and keep" arrangements may be welfare improving compared with cost-based access pricing.Network Competition, Two-Way Interconnection, Access Charge, Call Externality

A general model of best response adaptation

We develop a general model of best response adaptation in large populations for symmetric and asymmetric conflicts with role-switching. For special cases including the classical best response dynamics and the symmetrized best response dynamics we show that the set of Nash equilibria is attracting for zero-sum games. For asymmetric conflicts and equally large populations, convergence to a Nash equilibrium in the base game implies convergence to a Nash equilibrium on the Wright manifold in the role game.Role Games, Best Response Adaptation, Learning, Evolution

The convergence of fictitious play in games with strategic complementarities: A Comment

In a recent article, Hahn [Hahn, S. (2008). The convergence of fictitious play in games with strategic complementarities. Economics Letters 99, 2, 304-306] claims to prove convergence of fictitious play in games with strategic complementarities. I show here that the proof is flawed and convergence remains an open question.Fictitious play; Strategic complementarities; Supermodular games

Two More Classes of Games with the Fictitious Play Property

Fictitious play is the oldest and most studied learning process for games. Since the already classical result for zero-sum games, convergence of beliefs to the set of Nash equilibria has been established for some important classes of games, including weighted potential games, supermodular games with diminishing returns, and 3x3 supermodular games. Extending these results, we establish convergence for ordinal potential games and quasi-supermodular games with diminishing returns. As a by-product we obtain convergence for 3xm and 4x4 quasi-supermodular games.Fictitious Play, Learning Process, Ordinal Potential Games, Quasi-Supermodular Games

Irrational behavior in the Brown-von Neumann-Nash dynamics

We present a class of games with a pure strategy being strictly dominated by another pure strategy such that the former survives along most solutions of the Brown-von Neumann-Nash dynamics.Nash map, BNN dynamics, Dominated strategies

Does Conservatism Matter? A Time Series Approach to Central Banking

The empirical literature on central banking has found measures of central bank independence/conservatism to be negatively correlated with inflation and inflation variance across countries. But the cross-country approach has been criticised for its focus on policy outcomes instead of policies, and for the unsystematic conflation of the concepts of independence and conservatism. We avoid these shortcomings by estimating a single-country time series model for the German Bundesbank. We find that an increase in central bank conservatism leads to higher short-term interest rates and a more activist stabilisation policy with respect to macroeconomic shocks. More conservative Bundesbank regimes are associated with a less volatile economy, higher output and somewhat lower inflation. We also investigate the interaction between the central bank and the government. It turns out that non-conservative Bundesbank Councils react more strongly to macroeconomic shocks under conservative than under non-conservative government regimes.Central Bank Independence and Conservatism, Monetary Policy, Central Bank Government Relations, Generalised Impulse Responses

Does Conservatism Matter? A Time Series Approach to Central Banking

Rogoff’s "conservative central banker" has received a lot of attention recently. As a rule, central bank independence and inflation seem to be negatively correlated across countries. But the cross-country approach has been criticized for its reliance on legal measures and the measures’ possible endogeneity. We present an alternative test of whether conservatism in monetary policy matters based on generalized impulse response functions for the case of the German Bundesbank. It turns out that more conservative council majorities do indeed follow a more inflation-averse policy. We find the results very robust with regard to changes in the exchange rate regime, government/central bank conflicts, and the partisan composition of the government.Central Bank Independence; Conservative Central Banker; Monetary Policy; Conflicts; Generalized Impulse Responses