We study ex post implementation in collective decision problems where monetary transfers cannot be used. We find that deterministic ex post implementation is impossible if the underlying environment is neither almost an environment with private values nor almost one with common values. Thus, desirable properties of ex post implementation such as informational robustness become difficult to achieve when preference interdependence and preference heterogeneity are both present in the environment.
{"title":"The limits of ex post implementation without transfers","authors":"Tangren Feng, Axel Niemeyer, Qinggong Wu","doi":"10.3982/te4915","DOIUrl":"https://doi.org/10.3982/te4915","url":null,"abstract":"We study ex post implementation in collective decision problems where monetary transfers cannot be used. We find that deterministic ex post implementation is impossible if the underlying environment is neither almost an environment with private values nor almost one with common values. Thus, desirable properties of ex post implementation such as informational robustness become difficult to achieve when preference interdependence and preference heterogeneity are both present in the environment.","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"35 1","pages":""},"PeriodicalIF":1.7,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90850789","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
David Dillenberger, R. Vijay Krishna, Philipp Sadowski
We propose a class of dynamic models that capture subjective (and, hence, unobservable) constraints on the amount of information a decision maker can acquire, pay attention to, or absorb via an information choice process (ICP). An ICP specifies the information that can be acquired about the payoff‐relevant state in the current period and how this choice affects what can be learned in the future. In spite of their generality, wherein ICPs can accommodate any dependence of the information constraint on the history of information choices and state realizations, we show that the constraints imposed by them are identified up to a dynamic extension of Blackwell dominance. All the other parameters of the model are also uniquely identified.
{"title":"Subjective information choice processes","authors":"David Dillenberger, R. Vijay Krishna, Philipp Sadowski","doi":"10.3982/te4531","DOIUrl":"https://doi.org/10.3982/te4531","url":null,"abstract":"We propose a class of dynamic models that capture subjective (and, hence, unobservable) constraints on the amount of information a decision maker can acquire, pay attention to, or absorb via an information choice process (ICP). An ICP specifies the information that can be acquired about the payoff‐relevant state in the current period and how this choice affects what can be learned in the future. In spite of their generality, wherein ICPs can accommodate any dependence of the information constraint on the history of information choices and state realizations, we show that the constraints imposed by them are identified up to a dynamic extension of Blackwell dominance. All the other parameters of the model are also uniquely identified.","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135784603","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Mean‐preserving contractions are critical for studying Bayesian models of information design. We introduce the class of bi‐pooling policies , and the class of bi‐pooling distributions as their induced distributions over posteriors. We show that every extreme point in the set of all mean‐preserving contractions of any given prior over an interval takes the form of a bi‐pooling distribution. By implication, every Bayesian persuasion problem with an interval state space admits an optimal bi‐pooling distribution as a solution, and conversely, for every bi‐pooling distribution, there is a Bayesian persuasion problem for which that distribution is the unique solution.
{"title":"Optimal persuasion via bi‐pooling","authors":"Itai Arieli, Yakov Babichenko, Rann Smorodinsky, Takuro Yamashita","doi":"10.3982/te4663","DOIUrl":"https://doi.org/10.3982/te4663","url":null,"abstract":"Mean‐preserving contractions are critical for studying Bayesian models of information design. We introduce the class of bi‐pooling policies , and the class of bi‐pooling distributions as their induced distributions over posteriors. We show that every extreme point in the set of all mean‐preserving contractions of any given prior over an interval takes the form of a bi‐pooling distribution. By implication, every Bayesian persuasion problem with an interval state space admits an optimal bi‐pooling distribution as a solution, and conversely, for every bi‐pooling distribution, there is a Bayesian persuasion problem for which that distribution is the unique solution.","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136258715","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Fertility rates are declining in many countries. But are fertility rates inefficiently low? This paper addresses this question by exploring the efficiency properties of equilibria in an overlapping generations setting with endogenous fertility and dynastic parental altruism, using the notion of ‐efficiency proposed by Golosov, Jones and Tertilt (2007). In contrast to Schoonbroodt and Tertilt (2014), who show that any equilibrium for which nonnegativity constraints on intergenerational transfers are binding is ‐inefficient (and, under the assumption that new lives always increase social welfare, also ‐inefficient), I characterize symmetric, ‐efficient allocations as the equilibria arising from different distribution of rights among the agents, and show that many equilibria exhibiting binding constraints on transfers are ‐efficient. To be more precise, except for dynamically inefficient equilibria, there is no need to alter children's rights so as to achieve efficiency.
{"title":"Efficiency with endogenous population growth. Do children have too many rights?","authors":"Mikel Pérez-Nievas","doi":"10.3982/te4391","DOIUrl":"https://doi.org/10.3982/te4391","url":null,"abstract":"Fertility rates are declining in many countries. But are fertility rates inefficiently low? This paper addresses this question by exploring the efficiency properties of equilibria in an overlapping generations setting with endogenous fertility and dynastic parental altruism, using the notion of <math xmlns=\"http://www.w3.org/1998/Math/MathML\" display=\"inline\"> <mi mathvariant=\"script\">P</mi> </math>‐efficiency proposed by Golosov, Jones and Tertilt (2007). In contrast to Schoonbroodt and Tertilt (2014), who show that any equilibrium for which nonnegativity constraints on intergenerational transfers are binding is <math xmlns=\"http://www.w3.org/1998/Math/MathML\" display=\"inline\"> <mi mathvariant=\"script\">A</mi> </math>‐inefficient (and, under the assumption that new lives always increase social welfare, also <math xmlns=\"http://www.w3.org/1998/Math/MathML\" display=\"inline\"> <mi mathvariant=\"script\">P</mi> </math>‐inefficient), I characterize symmetric, <math xmlns=\"http://www.w3.org/1998/Math/MathML\" display=\"inline\"> <mi mathvariant=\"script\">P</mi> </math>‐efficient allocations as the equilibria arising from different distribution of rights among the agents, and show that many equilibria exhibiting binding constraints on transfers are <math xmlns=\"http://www.w3.org/1998/Math/MathML\" display=\"inline\"> <mi mathvariant=\"script\">P</mi> </math>‐efficient. To be more precise, except for dynamically inefficient equilibria, there is no need to alter children's rights so as to achieve efficiency.","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135562261","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-01-01DOI: 10.52342/2587-7666vte_2022_4_83_99
A. Tatarko, V. Mukha
{"title":"THE VALUE BASIS OF INSTITUTIONAL AND SOCIAL TRUST IN THE KRASNODAR REGION","authors":"A. Tatarko, V. Mukha","doi":"10.52342/2587-7666vte_2022_4_83_99","DOIUrl":"https://doi.org/10.52342/2587-7666vte_2022_4_83_99","url":null,"abstract":"","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"9 1","pages":""},"PeriodicalIF":1.7,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81907099","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The analysis of optimal risk sharing has been thus far largely restricted to nonexpected utility models with concave utility functions, where concavity is an expression of ambiguity aversion and/or risk aversion. This paper extends the analysis to α‐maxmin expected utility, Choquet expected utility, and cumulative prospect theory, which accommodate ambiguity seeking and risk seeking attitudes. We introduce a novel methodology of quasidifferential calculus of Demyanov and Rubinov (1986, 1992) and argue that it is particularly well suited for the analysis of these three classes of utility functions, which are neither concave nor differentiable. We provide characterizations of quasidifferentials of these utility functions, derive first‐order conditions for Pareto optimal allocations under uncertainty, and analyze implications of these conditions for risk sharing with and without aggregate risk.
{"title":"Optimal allocations with \u0000 α‐MaxMin utilities, Choquet expected utilities, and prospect theory","authors":"Patrick Beissner, J. Werner","doi":"10.3982/te5060","DOIUrl":"https://doi.org/10.3982/te5060","url":null,"abstract":"The analysis of optimal risk sharing has been thus far largely restricted to nonexpected utility models with concave utility functions, where concavity is an expression of ambiguity aversion and/or risk aversion. This paper extends the analysis to α‐maxmin expected utility, Choquet expected utility, and cumulative prospect theory, which accommodate ambiguity seeking and risk seeking attitudes. We introduce a novel methodology of quasidifferential calculus of Demyanov and Rubinov (1986, 1992) and argue that it is particularly well suited for the analysis of these three classes of utility functions, which are neither concave nor differentiable. We provide characterizations of quasidifferentials of these utility functions, derive first‐order conditions for Pareto optimal allocations under uncertainty, and analyze implications of these conditions for risk sharing with and without aggregate risk.","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"23 1","pages":""},"PeriodicalIF":1.7,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83473717","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use an evolutionary model to determine which misperceptions can persist. Every period, a new generation of agents use their subjective models and the data generated by the previous generation to update their beliefs, and models that induce better actions become more prevalent. An equilibrium can resist mutations that lead agents to use a model that better fits the equilibrium data but induce the mutated agents to take an action with lower payoffs. We characterize which steady states resist mutations to a nearby model, and which resist mutations that drop a qualitative restriction such as independence.
{"title":"Which misspecifications persist?","authors":"D. Fudenberg, Giacomo Lanzani","doi":"10.3982/te5298","DOIUrl":"https://doi.org/10.3982/te5298","url":null,"abstract":"We use an evolutionary model to determine which misperceptions can persist. Every period, a new generation of agents use their subjective models and the data generated by the previous generation to update their beliefs, and models that induce better actions become more prevalent. An equilibrium can resist mutations that lead agents to use a model that better fits the equilibrium data but induce the mutated agents to take an action with lower payoffs. We characterize which steady states resist mutations to a nearby model, and which resist mutations that drop a qualitative restriction such as independence.","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"67 1","pages":""},"PeriodicalIF":1.7,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84046373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-01-01DOI: 10.52342/2587-7666vte_2023_1_32_45
G. Gloveli, E. Minaeva
{"title":"THE CRITICAL AND NON-CRITICAL SMITHIANISM OF HEINRICH STORCH, OR THE RIGHT AND LEFT HANDS OF THE «SYSTEM OF NATURAL FREEDOM»","authors":"G. Gloveli, E. Minaeva","doi":"10.52342/2587-7666vte_2023_1_32_45","DOIUrl":"https://doi.org/10.52342/2587-7666vte_2023_1_32_45","url":null,"abstract":"","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"28 4 1","pages":""},"PeriodicalIF":1.7,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91030680","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I model an incomplete markets economy where unaware agents do not perceive all states of nature, so unintended default can occur when asset returns differ from what was perceived. The presence of default plays a crucial role in the proof of existence—particularly in economies where beliefs are biased—by removing perceived arbitrage opportunities with respect to delivery‐adjusted asset returns. The First Fundamental Welfare Theorem fails because of default and pecuniary inefficiencies, but the Second Fundamental Welfare Theorem holds for economies with no aggregate risk. Welfare is shown to not necessarily be monotonic in discovery or the increasing of awareness.
{"title":"Surprise and default in general equilibrium","authors":"Keisuke Teeple","doi":"10.3982/te4943","DOIUrl":"https://doi.org/10.3982/te4943","url":null,"abstract":"I model an incomplete markets economy where unaware agents do not perceive all states of nature, so unintended default can occur when asset returns differ from what was perceived. The presence of default plays a crucial role in the proof of existence—particularly in economies where beliefs are biased—by removing perceived arbitrage opportunities with respect to delivery‐adjusted asset returns. The First Fundamental Welfare Theorem fails because of default and pecuniary inefficiencies, but the Second Fundamental Welfare Theorem holds for economies with no aggregate risk. Welfare is shown to not necessarily be monotonic in discovery or the increasing of awareness.","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"105 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135561030","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study large‐population repeated games where players are symmetric but not anonymous, so player‐specific rewards and punishments are feasible. Players may be commitment types who always take the same action. Even though players are not anonymous, we show that an anti‐folk theorem holds when the commitment action is “population dominant,” meaning that it secures a payoff greater than the population average payoff. For example, voluntary public goods provision in large populations is impossible when commitment types never contribute, even if monetary rewards can be targeted to contributors; however, provision is possible if noncontributors can be subjected to involuntary fines. A folk theorem under incomplete information provides a partial converse to our result. Along the way, we develop some general results on symmetric games with incomplete information and/or repeated play.
{"title":"Bad apples in symmetric repeated games","authors":"Takuo Sugaya, Alexander Wolitzky","doi":"10.3982/te5351","DOIUrl":"https://doi.org/10.3982/te5351","url":null,"abstract":"We study large‐population repeated games where players are symmetric but not anonymous, so player‐specific rewards and punishments are feasible. Players may be commitment types who always take the same action. Even though players are not anonymous, we show that an anti‐folk theorem holds when the commitment action is “population dominant,” meaning that it secures a payoff greater than the population average payoff. For example, voluntary public goods provision in large populations is impossible when commitment types never contribute, even if monetary rewards can be targeted to contributors; however, provision is possible if noncontributors can be subjected to involuntary fines. A folk theorem under incomplete information provides a partial converse to our result. Along the way, we develop some general results on symmetric games with incomplete information and/or repeated play.","PeriodicalId":46923,"journal":{"name":"Theoretical Economics","volume":"166 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135562258","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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