A. B. Atkinson, N. H. Stern; Pigou, Taxation and Public Goods12, The Review of Economic Studies, Volume 41, Issue 1, 1 January 1974, Pages 119–128, https://doi.

Information collection and processing in financial institutions is challenging. This can delay the observation by traders of the exact capital charges and constraints of their institution. During this delay, traders face preference uncertainty. In this context, we study optimal trading strategies and equilibrium prices in a continuous centralized market. We focus on liquidity shocks, during which preference uncertainty is likely to matter most. Preference uncertainty generates allocative inefficiency, but need not reduce prices. Progressively learning about preferences generate round–trip trades, which increase volume relative to the frictionless market. In a cross section of liquidity shocks, the initial price drop is positively correlated with total trading volume. Across traders, the number of round–trips is negatively correlated with trading profits and average inventory.

We provide an asymptotic distribution theory for a class of generalized method of moments estimators that arise in the study of differentiated product markets when the number of observations is associated with the number of products within a given market. We allow for three sources of error: sampling error in estimating market shares, simulation error in approximating the shares predicted by the model, and the underlying model error. It is shown that the estimators are CAN provided the size of the consumer sample and the number of simulation draws grow at a large enough rate relative to the number of products. We consider the implications of the results for the Berry, Levinsohn and Pakes (1995) random coefficient logit model and the pure characteristics model analysed in Berry and Pakes (2002). The required rates differ for these two frequently used demand models. A small Monte Carlo study shows that the differences in asymptotic properties of the two models are reflected, in quite a striking way, in the models' small sample properties. Moreover the limit distributions provide a good approximation to the actual Monte Carlo distribution of the parameter estimates. The results have important implications for the computational burden of the two models.

This paper reconsiders the Strotz-Pollak problem of consistent planning and argues that a solution to this problem requires a refinement of subgame-perfectness. Such a refinement is offered through an analysis based on Greenberg's “theory of social situations”. The properties of this refinement are investigated and illustrated. A unifying framework is presented whereby consistent one-person planning as a problem of individual time-consistency and renegotiation-proofness as a problem of collective time-consistency are captured through the same general concept.

The purpose of this paper is to explore the welfare properties of dynastic equilibria. There are three central findings. First, under relatively weak conditions, welfare optima cannot be implemented as dynastic equilibria with positive levels of transfers. Second, intergenerational altruism ordinarily renders the objectives of social planners dynamically inconsistent, thereby making implementation of welfare optima problematic. Third, if a planner successfully resolves dynamic inconsistency by committing himself to respect the preferences of deceased generations, then, in a specific set of cases, dynastic equilibria are approximately welfare optimal.

We study a union formation decision problem when workers consist of two groups distinguished by different productivities. Workers may form either a joint union or two separate unions. The whole decision process is modelled as an extensive-form bargaining game. Workers form a joint union when the sizes or productivities of the groups are similar. In the first case, there is a wage differential which is more (less) than proportional to the productivity difference if the size of the more productive is smaller (larger) than that of the less productive. In the second case, there is no wage differential.

The Rawlsian maximin criterion is combined with nonpaternalistic altruistic preferences in a nonrenewable resource technology. The maximin program is shown to be time-inconsistent for a subset of initial conditions. A solution to this intergenerational conflict is found, under a given assumption, as a generically unique subgame-perfect equilibrium.

The duration of employment has been studied by Betancourt and Clague (1981), Winston and McCoy (1974) and Betancourt (1986). Results obtained, summarized in Section 3 below, supposed homotheticity of production functions and a constant speed or intensity of capital usage. The simultaneous cost minimising determination of speed and duration is studied here with an explicit analytical expression being developed relating duration to parameters of interest, including returns to scale and the substitution elasticity, both traditionally measured. The propositions of Betancourt, Clague and Winston and McCoy are then established using differential analysis.

The point of this paper is that inventory adjustment attenuates downward pressure on price when realized demand is low because firms accumulate inventory hold-overs, speculating that demand will be stronger in the succeeding period. When realized demand is high the firm draws down its inventories until a "stock-out" occurs and price rises to clear the market.

Journal Article Stabilization Policies in a Growing Economy: A Comment Get access John B. Taylor John B. Taylor Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 39, Issue 4, September 1972, Pages 515–519, https://doi.org/10.2307/2296522 Published: 01 September 1972