Models of bounded rationality and mechanism design
In: World Scientific series in economic theory volume 7
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In: World Scientific series in economic theory volume 7
In: The economic journal: the journal of the Royal Economic Society, Band 131, Heft 638, S. 2629-2641
ISSN: 1468-0297
Abstract
Each member of a group chooses a position and has preferences regarding his chosen position. The group's harmony depends on the profile of chosen positions meeting a specific condition. We analyse a solution concept (Richter and Rubinstein, 2020) based on a permissible set of individual positions, which plays a role analogous to that of prices in competitive equilibrium. Given the permissible set, members choose their most preferred position. The set is tightened if the chosen positions are inharmonious and relaxed if the restrictions are unnecessary. This new equilibrium concept yields more attractive outcomes than does Nash equilibrium in the corresponding game.
In: American economic review, Band 105, Heft 8, S. 2570-2594
ISSN: 1944-7981
We propose a new abstract definition of equilibrium in the spirit of competitive equilibrium: a profile of alternatives and a public ordering (expressing prestige, price, or a social norm) such that each agent prefers his assigned alternative to all lower-ranked ones. The equilibrium operates in an abstract setting built upon a concept of convexity borrowed from convex geometry. We apply the concept to a variety of convex economies and relate it to Pareto optimality. The "magic" of linear equilibrium prices is put into perspective by establishing an analogy between linear functions in the standard convexity and "primitive orderings" in the abstract convexity. (JEL I11, I18, J44, K13)
In: Journal of political economy, Band 120, Heft 6, S. 1057-1082
ISSN: 1537-534X
In: American economic review, Band 102, Heft 7, S. 3561-3573
ISSN: 1944-7981
We study experimentally a new two-player game: each player requests an amount between 11 and 20 shekels. He receives the requested amount and if he requests exactly one shekel less than the other player, he receives an additional 20 shekels. Level-k reasoning is appealing due to the natural starting point (requesting 20) and the straightforward best-response operation. Nevertheless, almost all subjects exhibit at most three levels of reasoning. Two variants of the game demonstrate that the depth of reasoning is not increased by enhancing the attractiveness of the level-0 strategy or by reducing the cost of undercutting the other player.
In: The economic journal: the journal of the Royal Economic Society, Band 117, Heft 522, S. 883-896
ISSN: 1468-0297
In: Mathematical social sciences, Band 37, Heft 3, S. 205-209
In: Economica, Band 56, Heft 223, S. 401
In: Public choice, Band 36, Heft 1
ISSN: 1573-7101
"Models in Microeconomic Theory covers basic models in current microeconomic theory. Part I (Chapters 1-7) presents models of an economic agent, discussing abstract models of preferences, choice, and decision making under uncertainty, before turning to models of the consumer, the producer, and monopoly. Part II (Chapters 8-14) introduces the concept of equilibrium, beginning, unconventionally, with the models of the jungle and an economy with indivisible goods, and continuing with models of an exchange economy, equilibrium with rational expectations, and an economy with asymmetric information. Part III (Chapters 15-16) provides an introduction to game theory, covering strategic and extensive games and the concepts of Nash equilibrium and subgame perfect equilibrium. Part IV (Chapters 17-20) gives a taste of the topics of mechanism design, matching, the axiomatic analysis of economic systems, and social choice.
The book focuses on the concepts of model and equilibrium. It states models and results precisely, and provides proofs for all results. It uses only elementary mathematics (with almost no calculus), although many of the proofs involve sustained logical arguments. It includes about 150 exercises.
With its formal but accessible style, this textbook is designed for undergraduate students of microeconomics at intermediate and advanced levels.
"
In: Economic theory, econometrics, and mathematical economics
In: The Canadian Journal of Economics, Band 28, Heft 3, S. 726
In: Economica, Band 56, Heft 221, S. 15