This paper deals with a situation of middle-man behavior between two otherwise separated economies. A two-person noncooperative exchange game is proposed whereby each player's strategy consists of two parts taken in a sequence: a price strategy, to be followed by a demand strategy. The concept of a special kind of mixed strategies is introduced, and a solution is defined in terms of a Nash equilibrium pair of such mixed strategies. It is shown that a trivial class of equilibria always exists, and that under certain conditions, more interesting nontrivial equilibria can exist as well.
[The problem of maximizing the gross national product of a country subject to domestic resource constraints, given exogenous international prices, is studied. The primal problem allows for a general technology, including joint and intermediate products and any number of inputs, outputs, and industries. Dantzig's variable coefficients simplex algorithm in conjunction with the duality between production possibility sets and profit functions is suggested as a method for solving the primal problem. The dual problem is used to prove comparative statics theorems, which generalize several theorems of international trade theory. An appendix characterizes the properties of the inverse of a bordered Hessian matrix.]
This paper treats dynamic optimization problems from the point of view of programming in infinite dimensional spaces. Sufficient conditions (of a dominant diagonal nature) for smooth dependence of optimal paths on initial conditions and other parameters are given. It is also shown that the smooth dependence and the so called are very closely related. This relationship is used to prove a turnpike theorem for a model that may be interpreted as a multisectoral model of optimal growth with positive discounting and to show that the turnpike property is kept under small perturbations.
[This paper estimates all possible multidimensional interaction effects in a logit model of homeownership, assesses the relative importance of these interactions, and interprets the results in light of existing theories of housing consumption.]
PROGRAMS ARE AVAILABLE to facilitate calculation of least squares and instrumental variable coefficients and related statistics from data consisting of time-series observations for each of several cross-sectional units.' The (FORTRAN) programs2 must be used with the SPEAKEASY/FEDEASY processor3 and take the form of three FEDEASY commands that (1) form a moment (cross product) matrix from an arbitrarily large number of observations (CPMATRIX), (2) calculate least squares and instrumental variable coefficients and attendant statistics for any subset of variables included in the moment matrix (CPOLSQ and CPINST), and (3) decompose a square matrix into two upper triangular factors by a Cholesky decomposition (DECOMPOSE). The presence of these programs in the FEDEASY vocabulary allows users to easily construct, using SPEAKEASY matrix commands, routines appropriate for their particular error covariance assumptions (e.g., hypotheses of nth order autoregression, block diagonality, etc.). In addition, three pooling routines are available both for immediate use and as a guide in coding special applications. The first (KMENTA), described in [2, pp. 508-512], as cross-sectionally heteroskedastic and time-wise autoregressive is a standard block diagonal covariance design that is computable for any number of years and cross-sections. The second (HAVENNER) emphasizes cross-sectional covariances by calculating a full covariance matrix between all cross-sections at each point in time, while assuming first-order autoregression of errors in the same cross-section.4 The third routine (SWAMY) assumes that the coefficients are random and essentially follows the specification in [3, p. 312], except that the equation errors of each cross-sectional unit are assumed first-order autoregressive.4 All three routines are written in the high-level SPEAKEASY/FEDEASY command language and are easily modified to suit particular cases. All have standard options such as residual and moment matrix printing, and the first two have iteration limits, convergence criterion overrides, and restart provisions. The programs are available on request with the SPEAKEASY/FEDEASY System from Stan Cohen, Speakeasy Center, Argonne National Laboratory, Argonne, Illinois 60439 or separately (if the user already has SPEAKEASY/FEDEASY installed) from Ronald Herman, Board of Governors of the Federal Reserve System, Washington, D.C. 20551.
[This paper presents a general equilibrium model in which private commodities are allocated through competitive markets and public commodities according to government allocation and taxing rules that depend on information communicated to the government by consumers regarding their preferences. A wide range of strategic behavior for consumers in their communication with the government is allowed; in particular, consumers may understate their preferences and be "free riders" if they choose. Although several examples of allocation-taxation schemes falling within the general model are discussed, the major contribution of the paper is the formulation of a particular government allocation-taxation scheme for which the behavioral equilibria are Pareto optimal. That is, given the government rules, consumers find it in their self-interest to reveal their true preferences for public goods.]
[The sets of local demand functions which would generate either linear or nonlinear schedules in a heterogenous as well as homogeneous space economy are determined by iterative applications of the separation of variables technique for solving differential equations. Nonlinear delivered price schedules which reflect profit maximization objectives are thereby identifiable. In turn, these schedules can be distinguished from those which involve strictly predatory price behavior.]
The Lorenz curve relates the cumulative proportion of income units to the cumulative proportion of income received when units are arranged in ascending order of their income. In the past the curve has been mainly used as a convenient graphic device to represent the size distribution of income and wealth. In this paper the Lorenz curve technique is used as a tool to introduce distributional considerations in economic analysis. The concept has been extended and generalized to study the relationships among the distributions of different economic variables. The generalized Lorenz curves are called concentration curves and the Lorenz curve is only a special case of such curves, the concentration curve for income. Section 2 of the paper gives the derivation of the Lorenz curve. Section 3 provides some theorems relative to the concentration curve of a function and its elasticity, which provide the basis for studying relationships among the distributions of different economic variables. Section 4 discusses applications of the theorems.
Previous attempts to estimate labor supply functions based upon the constrained maximization of a utility function with leisure and income as arguments have assumed that all time not spent at work on the job is leisure time. In this paper we formulate a model of a household in which time is allocated between work on the job, leisure, and housework, where leisure is defined to be net of time spent on housework. The model is estimated under two alternative stochastic specifications and the results compared to those obtained (i) assuming that housework time is exogenous and (ii) assuming that housework time is part of leisure time.