Discounted Stochastic Games with Voluntary Transfers

This paper studies discounted stochastic games perfect or imperfect public monitoring and the opportunity to conduct voluntary monetary transfers. We show that for all discount factors every public perfect equilibrium payoff can be implemented with a simple class of equilibria that have a stationary structure on the equilibrium path and optimal penal codes with a stick and carrot structure. We develop algorithms that exactly compute or approximate the set of equilibrium payoffs and find simple equilibria that implement these payoffs.Stochastic games, Monetary transfers, Computation, Imperfect public monitoring, Public perfect equilibria

In?nitely Repeated Games with Public Monitoring and Monetary Transfers

In this paper, we study in?nitely repeated games with imperfect public monitoring and the possibility of monetary transfers. We develop an effcient algorithm to compute the set of pure strategy public perfect equilibrium payoffs for each discount factor. We also show how all equilibrium payoffs can be implemented with a simple class of stationary equilibria that use stick-and-carrot punishments

Kinetic theory for strong uniform shear flow of granular media at high density

We discuss the uniform shear flow of a fluidized granular bed composed of monodisperse Hertzian spheres. Considering high densities around the glass transition density of inelastic Hertzian spheres, we report kinetic theory expressions for the Newtonian viscosity as well as the Bagnold coefficient. We discuss the dependence of the transport coefficients on density and coefficient of restitution.Comment: Powders & Grains 201

Imperfect Legal Unbundling of Monopolistic Bottlenecks

We study an industry with a monopolistic bottleneck (e.g. a transmission network) supplying an essential input to several downstream firms. Under legal unbundling the bottleneck must be operated by a legally independent upstream firm, which may be partly or fully owned by an incumbent active in downstream markets. Access prices are regulated but the upstream firm can perform non-tariff discrimination. Under perfect legal unbundling the upstream firm maximizes only own profits; with imperfections it considers to some extend also the profits of its downstream mother. We find that reducing imperfections in legal unbundling (keeping ownership fixed) generally increases total output. Increasing the incumbent's ownership share increases total output if imperfections are sufficiently small, otherwise the effects are ambiguous. Surprisingly, higher ownership shares of the downstream incumbent may sometimes lead to lower degrees of imperfections. Our analysis suggests that consumers may benefit most from legal unbundling with strong regulation and parts of ownership given to a minority outside shareholder.Network industries, regulation, vertical relations, ownership, corruption, sabotage

Using Forward Contracts to Reduce Regulatory Capture

A fully unbundled, regulated network fi?rm of unknown efficiency level can undertake unobservable effort to increase the likelihood of low downstream prices, e.g., by facilitating downstream competition. To incentivize such effort, the regulator can use an incentive scheme paying transfers to the ?firm contingent on realized downstream prices. Alternatively, the regulator can propose to the ?firm to sell the following forward contracts: the fi?rm pays the downstream price to the owners of a contract, but receives the expected value of the contracts when selling them to a competitive fi?nancial market. We compare the two regulatory tools with respect to regulatory capture: if the regulator can be bribed to suppress information on the underlying state of the world (the basic probability of high downstream prices, or the type of the firm), optimal regulation uses forward contracts only.Incentive regulation, regulatory capture, virtual power plants

In?nitely Repeated Games with Public Monitoring and Monetary Transfers

In this paper, we study in?nitely repeated games with imperfect public monitoring and the possibility of monetary transfers. We develop an effcient algorithm to compute the set of pure strategy public perfect equilibrium payoffs for each discount factor. We also show how all equilibrium payoffs can be implemented with a simple class of stationary equilibria that use stick-and-carrot punishments.

The Glass Transition in Driven Granular Fluids: A Mode-Coupling Approach

We consider the stationary state of a fluid comprised of inelastic hard spheres or disks under the influence of a random, momentum-conserving external force. Starting from the microscopic description of the dynamics, we derive a nonlinear equation of motion for the coherent scattering function in two and three space dimensions. A glass transition is observed for all coefficients of restitution, epsilon, at a critical packing fraction, phi_c(epsilon), below random close packing. The divergence of timescales at the glass-transition implies a dependence on compression rate upon further increase of the density - similar to the cooling rate dependence of a thermal glass. The critical dynamics for coherent motion as well as tagged particle dynamics is analyzed and shown to be non-universal with exponents depending on space dimension and degree of dissipation.Comment: 16 pages, 9 figure