[This paper studies the existence, uniqueness, and stability of equilibrium for a class of random dynamical systems that arise frequently in the study of Markovtemporary equilibrium models and in models arising from maximization behavior over time. It is seen that equilibria in these models have very nice properties.]

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Two of the most important refinements of the Nash equilibrium concept for extensive form games are (trembling hand) perfect equilibrium and sequential equilibrium. It is shown here that, for almost all assignments of payoffs to outcomes, the sets of sequential and perfect equilibrium strategy profiles are identical. This result is obtained by exploiting the semialgebraic nature of equilibrium correspondences, following from a deep theorem of mathematical logic.

This paper develops a decision-theoretic approach to normal-form refinements of Nash equilibrium and provides characterizations of (normal-form) perfect equilibrium and proper equilibrium. The approach relies on a theory of single-person decision-making that is a non-Archimedean version of subjective expected utility theory.

Conventional Bayesian theory of choice under uncertainty, subjective expected utility theory, fails to satisfy the properties of admissibility and existence of well-defined conditional probabilities; weakly dominated acts may be chosen, and the usual definition of conditional probabilities applies only to nonnull events. This paper develops a non-Archimedean variant of subjective expected utility where decisionmakers have lexicographic beliefs. This generalization can be made to satisfy admissibility and yield well-defined conditional probabilities and at the same time allow for "null" events.

The analysis focuses on the question of whether the payment of compensation for land taken by eminent domain is efficient. When the taking decision is independent of land use, zero compensation is efficient, but full compensation is not. When the project decision is no longer independent of land use, and can be affected by investor decisions, neither compensation rule is generally efficient because of the moral hazard problem. With risk-averse consumers and risk-neutral firms, the previous conclusions remain essentially unchanged. However, when the project decision rule involves a budgetary “fiscal illusion,” additional compensation may be necessary to correct the incentives facing the project decision-maker.

We investigate the informational role of volume and its applicability for technical analysis. We develop a new equilibrium model in which aggregate supply is fixed and traders receive signals with differing quality. We show that volume provides information on information quality that cannot be deduced from the price statistic. We show how volume, information precision, and price movements relate, and demonstrate how sequences of volume and prices can be informative. We also show that traders who use information contained in market statistics do better than traders who do not. Technical analysis thus arises as a natural component of the agents' learning process.

This paper provides a systematic analysis of identification in linear social interactions models. This is a theoretical and econometric exercise as the analysis is linked to a rigorously delineated model of interdependent decisions. We develop an incomplete information game for individual choice under social influences that nests standard models as special cases. We consider identification of both endogenous and contextual social effects under alternative assumptions regarding an analyst’s a priori knowledge of social structure or access to individual-level or aggregate data. Finally, we discuss potential ramifications for identification of endogenous formation of social structure.