Agglomeration under Forward-Looking Expectations: Potentials and Global Stability

This paper considers a class of migration dynamics with forward-looking agents in a multi-country solvable variant of the core-periphery model of Krugman (Journal of Political Economy 99 (1991)). We find that, under a symmetric externality assumption, our static model admits a potential function, which allows us to identify a stationary state that is uniquely absorbing and globally accessible under the perfect foresight dynamics whenever the degree of friction in relocation decisions is sufficiently small. In particular, when trade barriers are low enough, full agglomeration in the country with the highest barrier is the unique stable state for small frictions. New aspects in trade and tax policy that arise due to forward-looking behavior are discussed.economic geography; agglomeration; perfect foresight dynamics; history versus expectations; stability; potential game; equilibrium selection

Monotone and local potential maximizers in symmetric 3x3 supermodular games

Generalized notions of potential maximizer, monotone potential maximizer (MP-maximizer) and local potential maximizer (LP-maximizer), are studied. It is known that 2x2 coordination games generically have a potential maximizer, while symmetric 4x4 supermodular games may have no MP- or LP-maximizer. This note considers the case inbetween, namely the class of (generic) symmetric 3x3 supermodular coordination games. This class of games are shown to always have a unique MP-maximizer, and its complete characterization is given. A nondegenerate example demonstrates that own-action quasiconcave supermodular games may have more than one LP-maximizers.equilibrium selection, supermodular game, monotone potential, MP-maximizer, local potential, LP-maximizer

On the Strategic Impact of an Event under Non-Common Priors

This paper studies the impact of a small probability event on strategic behavior in incomplete information games with non-common priors. It is shown that the global impact of a small probability event (i.e., its propensity to affect strategic behavior at all states in the state space) has an upper bound that is an increasing function of a measure of discrepancy from the common prior assumption. In particular, its global impact can be arbitrarily large under non-common priors, but is bounded from above under common priors. These results quantify the different implications common prior and non-common prior models have on the (infinite) hierarchies of beliefs.common prior assumption; higher order belief; rationalizability; contagion; belief potential

Monotone methods for equilibrium selection under perfect foresight dynamics

This paper studies a dynamic adjustment process in a large society of forward-looking agents where payoffs are given by a normal form supermodular game. The stationary states of the dynamics correspond to the Nash equilibria of the stage game. It is shown that if the stage game has a monotone potential maximizer, then the corresponding stationary state is uniquely linearly absorbing and globally accessible for any small degree of friction. A simple example of a unanimity game with three players is provided where there are multiple globally accessible states for a small friction.Equilibrium selection, perfect foresight dynamics, supermodular game, strategic complementarity, stochastic dominance, potential, monotone potential

On the impact of trade on industrial structures: The role of entry cost heterogeneity

This paper investigates the impacts of progressive trade openness, technological externalities, and heterogeneity of individuals on the formation of entrepreneurship in a two-country occupation choice model. We show that trade opening gives rise to a non-monotonic process of international specialization, in which the share of entrepreneurial firms in the large (small) country first increases (decreases) and then decreases (increases), with the global economy exhibiting first de-industrialization and then re-industrialization. When countries have the same size, we also show that strong technological externalities make the symmetric equilibrium unstable, generating equilibrium multiplicity, while sufficient heterogeneity of individuals leads to the stability and uniqueness of the symmetric equilibrium.entrepreneurship ; trade liberalization ; externality ; heterogeneity ; stability

On the impact of trade on industrial structures : The role of entry cost heterogeneity

entrepreneurship, trade liberalization, externality, heterogeneity, stability

History versus Expectations in Economic Geography Reconsidered

This paper studies global stability of spatial configurations in a dynamic two-region model with quadratic adjustment costs where rational migrants make migration decisions so as to maximize their discounted future utilities. A global analysis is conducted to show that, except for knife-edge cases with symmetric regions, there exists a unique spatial configuration that is absorbing and globally accessible whenever the degree of friction is sufficiently small, and such a configuration is characterized as the unique maximizer of the potential function of the underlying static model

Agglomeration under Forward-Looking Expectations: Potentials and Global Stability

This paper considers a class of migration dynamics with forward-looking agents in a multi-country solvable variant of the core-periphery model of Krugman (Journal of Political Economy 99 (1991)). We find that, under a symmetric externality assumption, our static model admits a potential function, which allows us to identify a stationary state that is uniquely absorbing and globally accessible under the perfect foresight dynamics whenever the degree of friction in relocation decisions is sufficiently small. In particular, when trade barriers are low enough, full agglomeration in the country with the highest barrier is the unique stable state for small frictions. New aspects in trade and tax policy that arise due to forward-looking behavior are discussed

Change in thermal transitions and water uptakes of poly(l-lactic acid) blends upon hydrolytic degradation

AbstractThis article reports experimental data related to the research article entitled “Poly(malic acid-co-l-lactide) as a Superb Degradation Accelerator for Poly(l-lactic acid) at Physiological Conditions” (H.T. Oyama, D. Tanishima, S. Maekawa, 2016) [1]. Hydrolytic degradation of poly(l-lactic acid) (PLLA) blends with poly(aspartic acid-co-l-lactide) (PAL) and poly(malic acid-co-l-lactide) (PML) oligomers was investigated in a phosphate buffer solution at 40°C. It was found in the differential scanning calorimetry measurements that upon hydrolysis the cold crystallization temperature (Tc) and the melting temperature (Tm) significantly shifted to lower temperature. Furthermore, the hydrolysis significantly promoted water sorption in both blends

Iterated Potential and Robustness of Equilibria

For any given set-valued solution concept, it is possible to consider iterative elimination of actions outside the solution set. This paper applies such a procedure to define the concept of iterated monotone potential maximizer (iterated MP-maximizer). It is shown that under some monotonicity conditions, an iterated MP-maximizer is robust to incomplete information (Kajii and Morris, Econometrica 65 (1997)) and absorbing and globally accessible under perfect foresight dynamics for a small friction (Matsui and Matsuyama, Journal of Economic Theory 65 (1995)). Several simple sufficient conditions under which a game has an iterated MP-maximizer are also provided