Knowledge that Transforms

The transfer paradox may occur in a world with only two countri es ata dynamically stable intertemporal competitive equilibrium. In a framework of overlapping generations with production and investment, a transfer of income may immiserize the recipient while enriching thedonor. Away from the golden ru le, a transfer may result in a Paretoimprovement. Copyright 1987 by The Review of Economic Studies Limited.

This paper explores a model of innovation and spatial competition over time. A key implication of the paper is that firms' size is positively autocorrelated across time. The mechanism that generates this persistence works only in heterogenous-product markets and is based on the idea that larger firms possess better information about the design of future products. Some corroborating evidence is cited.

Recent papers have used household equivalence scales to construct measures of welfare inequality. This procedure rests on an often implicit value judgement, namely, that if, after adjustment for demographic characteristics, two households are on the same indifference curve, they are equally well off. That value judgement is not compelling, and there are situations in which it is ethically repugnant. This is particularly likely if tastes are functions of past experience and income.

Journal Article A Note on the Existence of Single Price Equilibrium Price Distributions in Sequential Search Models Get access William P. Rogerson William P. Rogerson Northwestern University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 54, Issue 2, April 1987, Pages 339–342, https://doi.org/10.2307/2297522 Published: 01 April 1987 Article history Received: 01 May 1986 Accepted: 01 November 1986 Published: 01 April 1987

We consider the properties of equilibrium behaviour in an aggregative growth model with intergenerational altruism. Various positive properties such as the cyclicity of equilibrium programs, and the convergence of equilibrium stocks to a steady state, are analyzed. Among other normative properties, it is established that under certain natural conditions, Nash equilibrium programs are efficient and “modified Pareto optimal” in a sense made clear in the paper, but never Pareto optimal in the traditional sense.

This paper examines an infinite horizon bargaining model, incorporating five features: two-sided incomplete information (with potentially information-revealing strategies), an infinite horizon, uncertainly concerning the potential gains from trade, an illumination of interesting qualitative bargaining issues, and plausible (free from arbitrarily specified out-of-equilibrium conjectures) equilibria. These features, motivated in the paper, have powerful implications. A Nash equilibrium exists, and is generically both unique and sequential. Comparative static implications of variations in the game's specifications are developed. We find that natural indications of bargaining strength emerge from the model, and establish the intuitive result that an increase in a player's relative bargaining strength makes that player more likely to capture the gains from bargaining.

Alternative wage structures under conditions of moral hazard are analyzed from a social-welfare standpoint. It is argued that ex post equity judgements in an uncertainty context should incorporate a preference for "positive correlation" of utilities of different individuals. In the design of compensation schemes, this may give rise to a conflict between ex post equity objectives and the need to provide effort incentives: relative performance clauses in compensation schemes that are useful for providing incentives are undesirable from an ex post equity standpoint. Copyright 1987 by The Review of Economic Studies Limited.

We prove an equilibrium existence result for a class of games with an infinite number of strategies. Our theorem generalises an earlier result by Dasgupta and Maskin. We also identify conditions under which the limit of pure-strategy equilibria of a sequence of finite games is an equilibrium for the limit game. We apply this result to obtain new existence results for the multi-firm, l-dimensional version of Hotellings's location game. The techniques used suggest a technique for computing such equilibria.

In this paper a theorem is developed giving necessary and sufficient conditions for the uniqueness of homogeneous product Cournot equilibria. The result appears to be the strongest to date and the first to involve both necessity and sufficiency. The theorem states than an equilibrium is unique if and only if the determinant of the Jacobian of marginal profits for firms producing positive output is positive at all equilibria. The result applies to the case where profit functions are twice differentiable and pseudoconcave, industry output can be bounded, the above Jacobian is non-singular at equilibria, and marginal profits are strictly negative for non-producing firms. The proof uses fixed point index theory from differential topology.