We consider a closed economy where risk neutral bank competes with competitive bond market. Firms can finance risky project either by credit or issuing which is directly sold to averse investors who also hold safe deposits at the bank. show that monopolistic tends allocate more capital lower quality projects but there are some interesting qualifications. If asymmetric information concerns only success probability, then we observe adverse selection while if it expected return, bad types driven out of

We study the possibilities for agenda manipulation under strategic voting two prominent sequential procedures: amendment procedure and successive procedure. show that a well known result tournaments, namely is (weakly) more manipulable than at any given preference profile, extends to arbitrary majority quotas. Moreover, our characterizations of attainable outcomes quotas allow us compare across different It turns out simple quota maximizes domain profiles which neither manipulable, but same...

We explain excess volatility, short-term momentum and long-term reversal of asset prices by a repeated game version Keynes‚ beauty contest. In every period the players can either place buy or sell order on market. The actual price movement is determined average market orders noise. It common knowledge that noise process an exogenous random walk. Our model explains stock unpredictable switches in coordination players. When are coordinated buying (selling), we say up (down) mood. this changing...

Authors who consider efficient bargaining on the labor market predominantly focus Nash-bargaining solution. It seems, however, that actual negotiations between an employers' federation and a union are often characterized by mutual concessions, which may be accounted for application of Kalai-Smorodinsky solution to labor-market negotiations. Correspondingly, we investigate how government can influence equilibrium changing reservation wage when is determined We find induced employment effects...

This paper considers preferences over risky timed outcomes and proposes the weighted temporal utility (WTU) model which separates anticipated subjective evaluations of from attitudes toward psychological distance induced by risks delays. Anticipating evaluation an outcome requires decision maker to project himself future imagine how much he will appreciate once receives it. projection may, but need not, be accurate. We provide a characterization WTU in static setting propose nonparametric...

We provide theoretical conjectures about and experimental evidence on the emergence of redistributive societies. Individuals first vote a distribution rule with their feet then invest redistribute total income according to chosen rule. vary individuals’ information productivity at time they choose find that there is more redistribution behind veil ignorance than in glare full information. However, scope less sensitive degree uncertainty predicted by model selfish rational expected utility...

This paper proposes a simple two-stage mechanism to establish positive contributions public goods in the absence of powerful institutions provide good and sanction free-riders. In this players commit by paying deposit prior contribution stage. If there is universal commitment, deposits are immediately refunded whenever player contributes her specified share good. no all standard game played. For suitable deposits, commitment full ex post supported as strict subgame perfect Nash equilibrium...

The alpha is one of the most used terms in finance.Yet, mystical since it has no theory.It is, for example, contradiction to standard CAPM with homogenous beliefs.The purpose this paper show that naturally arises a financial market equilibrium when extended heterogenous beliefs.We hunt alpha-opportunities zero-sum game and erode assets under management.Moreover, shown positive not necessarily good criterion choice between active passive investment.Finally, we argue beliefs can be seen as...

In this note we show that no solution to coalition formation games can satisfy a set of axioms propose as reasonable. Our result points out solutions the cannot be interpreted predictions what would resting for game in way stable structures are usually interpreted.

We study learning in finitely repeated 2x2 normal form games, when players have incomplete information about their opponents' payoffs. In a laboratory experiment we investigate whether (a) learn the game they are playing, (b) to predict behavior of opponent, and (c) play according Nash equilibrium game. Our results show that success opponent's type depends on characteristics true The is much higher for games with pure strategy equilibria than unique mixed equilibrium, it symmetric asymmetric...