Knowledge that Transforms

THIS PAPER PRESENTS a numerical algorithm for computing full information maximum likelihood (FIML) and nonlinear three-stage least squares (3SLS) coefficient estimates for large nonlinear models. (The proposed algorithm will be denoted algorithm A.) Although the theory of FIML estimation has been available for thirty years [20], FIML estimation has long been regarded as impossible on large nonlinear models.2 The more recently proposed nonlinear 3SLS estimator [191 also poses difficulties for large models.3 Using the algorithm presented in this paper, FIML and 3SLS are now feasible alternatives for estimation of large nonlinear models. The principles behind algorithm A's efficiency can be summarized as follows. First, most of the algorithm's steps explicitly control the mean of each equation's residuals. Large changes in those means are avoided because the FIML and 3SLS estimation problems are extremely sensitive to the residuals' means. Second, the coefficients are grouped by equations and the groups are treated separately during most of each iteration. This focus on individual equations is effective because coefficients within the same equation are generally more

In Section 2, we review some important results of the received auction theory, introduce a new general auction model, and summarize the results of our analysis. Section 3 contains a formal statement of our model, and develops the properties of affiliated random variables. The various theorems are presented in Sections 4-8. In Section 9, we offer our views on the current state of auction theory. Following Section 9 is a technical appendix dealing with affiliated random variables.

Focuses on a study which examined perfect equilibrium in a bargaining model. Overview of the strategic approach adopted for the study; Details of the bargaining situation used; Discussion on perfect equilibrium. (From Ebsco)

We give necessary conditions for a neutral social choice function to be partially implementable by means of a strong equilibrium (i.e., implementable by cooperative agents): the veto power of the various coalitions should be maximally distributed. If moreover the social choice function is veto-anonymous, then the veto power of a coalition must be (roughly) proportional to its size: x per cent of the agents have the power to veto x per cent of the candidates. The procedure of "voting by successive veto" is an example of a neutral and (nearly) veto-anonymous social choice function which is implementable.

In this paper the method of least absolute deviations is applied to the estimation of the parameters of a structural equation in the simultaneous equations model. A class of estimators called two stage least absolute deviations estimators is defined, their asymptotic properties are derived, and the problem of finding the optimal member of the class is considered. IN THIS PAPER WE APPLY the method of least absolute deviations to the estimation of the parameters of a structural equation in the simultaneous equations model. We define a class of estimators called two stage least absolute deviations estimators (2SLAD) and derive their asymptotic properties. They are so named as their relationship to the two stage least squares estimator (2SLS) is analogous to the relationship of the least absolute deviations estimator (LAD) to the least squares estimator (LS) in the standard regression model. The LAD estimation has been extensively studied in the context of the standard regression model and its usefulness is universally recognized. In this paper we show that the advantage of 2SLAD over 2SLS in the simultaneous equations model can be as great as that of LAD over LS in the standard regression model, if 2SLAD is properly defined. This last clause is very important, since the results of this paper indicate that the LAD analogue of 2SLS that has been considered before in the literature is not an appropriate method.

This paper focuses on a theoretical issue involved in modeling the functioning of a centrally planned economy. Results derived in a model of inventory behavior indicate that the uncertain consequences of economic decisions and their cumulative impact on the functioning of the economy need to be explicitly recognized in order to study plan implementation. When this is done the need for institutions or procedures with homeostatic properties, i.e., negative feedback mechanisms, is revealed. Without such mechanisms orders consistent with a feasible plan may be unable to insure implementation of that plan even when all economic agents are perfectly motivated. Three types of feedback mechanisms resolving this difficulty are formulated and discussed with respect to inventory behavior in a centrally planned economy.

A theory of dynamic optimal resource allocation to R and D in an n-firm industry is developed using differential games. This technique represents a synthesis of the analytic methods previously applied to the problem: static game theory and optimal control. The use of particular functional forms allows the computation and detailed discussion of the Nash equilibrium in investment rules.

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you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at