This paper specifies and empirically analyzes a continuous-time, linear-quadratic, representative consumer model wit h time-nonseparable preferences of several forms. Within this framewor k, the author shows how time aggregation and time nonseparabilities in preferences over consumption streams can interact. The behavior of b oth seasonally adjusted and unadjusted consumption data is consistent wi th time-nonseparable preferences if consumption goods are durable and i f individuals develop habit over the flow of services from the good. T he data do not support a version of the model that ignores time nonseparabilities in preferences and focuses solely upon time aggregation

It is shown that any informationally decentralized mechanism that realizes fair allocations over the class of classical pure exchange environments has a message space of dimension no smaller than the number of agents times the number of commodities. Since the equal income Walrasian mechanism, in which all agents take prices parametrically and maximize utility subject to the average income constraint, realizes fair outcomes over the class of classical pure exchange environments and has a message space of that dimension it is informationally efficient. Further, it is shown that it is the unique informationally efficient mechanism realizing fair allocations.

Anecdotal and experimental evidence suggests that bargaining sessions subject to deadlines often begin with cheap talk and rejected proposals. Agreements, if they are reached at all, tend to be concluded near the deadline. We attempt to capture and explain these phenomena in a strategic bargaining model that incorporates a bargaining deadline, the possibility of strategic delay, and a lack of perfect player control over the timing of offers. Imperfect player control is generated by an exogenous uniformly-distributed random delay in offer transmission. Our model has a symmetric Markov-perfect equilibrium, unique at almost all nodes, in which players adopt strategic delay early in the game, make and reject offers later on, and reach agreements late in the game if at all. In equilibrium players miss the deadline with positive probability. The expected division of the surplus is unique and close to an even split.

Perfect equilibria of finitely repeated games may be vulnerable to the possibility of renegotiation among players. We study the limiting properties of the set of payoffs from equilibria that are immune to renegotiation. Our main result is that the limit of the set of payoffs from renegotiation proof equilibria is either a singleton or a connected subset of the Pareto efficient frontier. A simple sufficient condition for the latter to occur is also provided.

This paper examines how the possibility of renegotiation affects contractual outcomes in signaling games when an infinite number of rounds of renegotiations are allowed before contracts are executed. The main results of the paper are (1) contracts may still contain distortions, (2) the popular 'efficient' separating-equilibrium outcome is never an equilibrium outcome with renegotiation, (3) incentive-compatibility constraints can be generalized to incorporate renegotiation, (4) equilibrium outcomes can be separating and nevertheless depend on the uninformed player's prior, and (5) renegotiation in signaling games may lead to outcomes similar to equilibrium outcomes of screening games in which multiple contract purchases are allowed

Each of n players, in an infinitely repeated game, starts with subjective beliefs about his opponents' strategies. If the individual beliefs are compatible with the true strategies chose, then Bayesian updating will lead in the long run to accurate prediction of the future of play of the game. It follows that individual players, who know their own payoff matrices and choose strategies to maximize their expected utility, must eventually play according to a Nash equilibrium of the repeated game. An immediate corollary is that, when playing a Harsanyi-Nash equilibrium of a repeated game of incomplete information about opponents' payoff matrices, players will eventually play a Nash equilibrium of the real game, as if they had complete information.

A system of consumer expenditure functions is estimated from Norwegian household budget data. Specific features o f our approach are: (I) Panel data on individual households are used, which offer far richer opportunities for identification, estimation and testing than usual cross section data. (II) Measurement errors are carefully modelled. Total consumption expenditure is modelled as a latent variable, purchase expenditures on different goods and two income measures are used as indicators of this basic latent variable. (III) The distribution of latent total expenditure across households, and its evolution over time, is estimated and important properties tested. (IV) Individual differences in preferences, represented by individual, time invariant latent variables, are modelled, identified, estimated, and tested. (V) We test the hypothesis that preferences are uncorrelated with total consumption expenditure, which is basic to all cross section estimation of consumer demand functions. (VI) The model can be formalized as a special case of the LISREL model, and the maximum likelihood algorithm of the computer program LISREL VI is applied.

Accessible sur JSTOR : http://www.jstor.org/stable/2951649

A global game is an incomplete information game where the actual payoffstructure is determined by a rairdom draw from a given class of games and where each player makes a noisy observation of the selected game.For 2 x 2 games, it is shown that equilibrium play in a global game with vanishing noise forces the players to conform to Harsanyi and Selten's risk dominance criterion.When the uncertainty is one-dimensional, the result may be obtained by repeated elimination of dominated strategies in the global game."1'his pxper is a combinat.ion,and a subatantial generalization, of Carlxson (19R9) and Carlason and Van Damme (1989).Some basic ideas on global games and their telation to risk dominance originate from a note, written by Cadseon in 1985.The suthora thank R.einhard Selten, Lars-Gunnar Svensson, Jdrgen Weibull and various seminar audiences Cor helpful comments.The conatructive criticiam of several referees considerably improved the paper's quality