Pub Date : 2024-11-07DOI: 10.1016/j.jet.2024.105929
Yusufcan Masatlioglu , Tri Phu Vu
We model a boundedly rational agent who exhibits limited and heterogeneous attention. The agents' attention can be naturally sorted in an ascending order. We provide a characterization result using two simple behavioral postulates. Unlike earlier models, consideration sets' composition and frequency are uniquely identified. Within our framework, we accommodate unobserved heterogeneity in attention and unobserved preferences. Furthermore, we explore various extensions of our model and provide insights into the comparative statics of attentiveness levels in two probabilistic choices.
{"title":"Growing attention","authors":"Yusufcan Masatlioglu , Tri Phu Vu","doi":"10.1016/j.jet.2024.105929","DOIUrl":"10.1016/j.jet.2024.105929","url":null,"abstract":"<div><div>We model a boundedly rational agent who exhibits limited and heterogeneous attention. The agents' attention can be naturally sorted in an ascending order. We provide a characterization result using two simple behavioral postulates. Unlike earlier models, consideration sets' composition and frequency are uniquely identified. Within our framework, we accommodate unobserved heterogeneity in attention and unobserved preferences. Furthermore, we explore various extensions of our model and provide insights into the comparative statics of attentiveness levels in two probabilistic choices.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":null,"pages":null},"PeriodicalIF":1.4,"publicationDate":"2024-11-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142654841","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 : 2024-11-07DOI: 10.1016/j.jet.2024.105930
Luciano Méndez-Naya , José Méndez-Naya
We study the existence of competitive equilibria in economies with indivisible goods. The first result provides a novel sufficient condition for an economy with indivisible goods to have competitive equilibrium. This condition states that the cooperative game associated with the economy has a non-empty core. Crucially, this sufficient condition is also necessary when the economy is convex. This characterization implies that every two-agent convex economy has at least one competitive equilibrium.
{"title":"Indivisible goods, equilibrium and convex economies","authors":"Luciano Méndez-Naya , José Méndez-Naya","doi":"10.1016/j.jet.2024.105930","DOIUrl":"10.1016/j.jet.2024.105930","url":null,"abstract":"<div><div>We study the existence of competitive equilibria in economies with indivisible goods. The first result provides a novel sufficient condition for an economy with indivisible goods to have competitive equilibrium. This condition states that the cooperative game associated with the economy has a non-empty core. Crucially, this sufficient condition is also necessary when the economy is convex. This characterization implies that every two-agent convex economy has at least one competitive equilibrium.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":null,"pages":null},"PeriodicalIF":1.4,"publicationDate":"2024-11-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142654840","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-07DOI: 10.1016/j.jet.2024.105932
Miaomiao Dong , Tatiana Mayskaya
We study how a reduction in communication cost affects equilibrium diversity (in expertise) in hiring decisions. The key trade-off is that, while hiring a more diverse team may enlarge the team's pool of knowledge, it also makes communication between the hired experts more challenging. Equilibrium diversity balances this trade-off. We find that equilibrium diversity may exhibit a U-shape relationship with communication cost, reaching its lowest point at moderate cost values, where experts' incentives to communicate are most sensitive to changes in diversity.
我们研究了沟通成本的降低如何影响招聘决策中的均衡多样性（专业知识）。关键的权衡因素是，虽然聘用更多样化的团队可以扩大团队的知识库，但也会使受聘专家之间的沟通更具挑战性。均衡多样性可以平衡这种权衡。我们发现，均衡多样性与沟通成本呈 U 型关系，在中等成本值时达到最低点，此时专家的沟通动机对多样性的变化最为敏感。
{"title":"Does reducing communication barriers promote diversity?","authors":"Miaomiao Dong , Tatiana Mayskaya","doi":"10.1016/j.jet.2024.105932","DOIUrl":"10.1016/j.jet.2024.105932","url":null,"abstract":"<div><div>We study how a reduction in communication cost affects equilibrium diversity (in expertise) in hiring decisions. The key trade-off is that, while hiring a more diverse team may enlarge the team's pool of knowledge, it also makes communication between the hired experts more challenging. Equilibrium diversity balances this trade-off. We find that equilibrium diversity may exhibit a U-shape relationship with communication cost, reaching its lowest point at moderate cost values, where experts' incentives to communicate are most sensitive to changes in diversity.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":null,"pages":null},"PeriodicalIF":1.4,"publicationDate":"2024-11-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142654747","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 : 2024-10-30DOI: 10.1016/j.jet.2024.105928
Jenny Chan
Sentiments, or beliefs about aggregate demand, can be self-fulfilling in models departing slightly from the complete information benchmark in the New Keynesian framework. Through its effect on aggregate variables, the policy stance determines the degree of complementarity in firms' production (pricing) decisions and consequently, the precision of endogenous signals that firms receive. As a result, aggregate fluctuations can be driven by both fundamental and non-fundamental shocks. The distribution of non-fundamental shocks is endogenous to policy, introducing a novel tradeoff between stabilizing output and inflation. Both strong inflation targeting and nominal flexibilities increase the variance of non-fundamental shocks, which are shown to be suboptimal. Moreover, the Taylor principle is no longer sufficient to rule out indeterminacy. Instead, an interest rate rule that places sufficiently low weight on inflation eliminates non-fundamental volatility and thereby the output-inflation tradeoff.
{"title":"Monetary policy and sentiment-driven fluctuations","authors":"Jenny Chan","doi":"10.1016/j.jet.2024.105928","DOIUrl":"10.1016/j.jet.2024.105928","url":null,"abstract":"<div><div>Sentiments, or beliefs about aggregate demand, can be self-fulfilling in models departing slightly from the complete information benchmark in the New Keynesian framework. Through its effect on aggregate variables, the policy stance determines the degree of complementarity in firms' production (pricing) decisions and consequently, the precision of endogenous signals that firms receive. As a result, aggregate fluctuations can be driven by both fundamental and non-fundamental shocks. The distribution of non-fundamental shocks is endogenous to policy, introducing a novel tradeoff between stabilizing output and inflation. Both strong inflation targeting and nominal flexibilities increase the variance of non-fundamental shocks, which are shown to be suboptimal. Moreover, the Taylor principle is no longer sufficient to rule out indeterminacy. Instead, an interest rate rule that places sufficiently low weight on inflation eliminates non-fundamental volatility and thereby the output-inflation tradeoff.</div></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":null,"pages":null},"PeriodicalIF":1.4,"publicationDate":"2024-10-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142654746","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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