Event

Past Events

CARF Workshops (2013)

Contract Negotiation and the Coase Conjecture

Dates 2013/9/10(Tue)16:40-18:20
Venue Seminar Room #1 on the 1st floor of the Economics Research Annex (Kojima Hall)
Speaker Bruno Strulovici(Northwestern University)
Co-Sponsor Microworkshop
Abstract This paper analyzes an explicit protocol of contract negotiation between a principal who has all the bargaining power and an agent with a privately known type, and provides a foundation for renegotiation-proof contracts in such environments. The model extends the framework of the Coase conjecture to situations in which the seller and the buyer must determine the quantity or the quality of the good being sold. All equilibria converge to the same type-specific contracts as renegotiation frictions become negligible. Those contracts are efficient and the principal extracts a strictly positive share of the gain from negotiation.

Continuous Revision Games (joint with Akitada Kasahara)

Dates 2013/7/30(Tue)16:40-18:20
Venue Seminar Room on the 1st floor of the Economics Research Annex (Kojima Hall)
Speaker Ryota Iijima (Harvard University)
Co-Sponsor Microworkshop
要約 We embed a one-shot strategic interaction in continuous-time models with a preparation phase. During the preparation phase before the final payoffs realize, players can make flexible and frequent adjustments. In the first model, imperfect monitoring model, players observe public signals about opponents’ adjustment. In the second model, public noise model, players are subject to commonly observable noises that disturb game payoffs. We show that introducing such noise and adjustment cost, even if arbitrarily small, leads to a unique equilibrium. The proof is based on backward stochastic differential equations. Partial differential equations that describe players’ equilibrium strategy are derived. They are generally applicable to a variety of economic settings and yield analytical solutions in special cases. Furthermore, we use our model to analyze equilibrium selection problem in potential games, and prove that the potential maximizer is selected as frictions vanish.

It is not just confusion! Strategic uncertainty in an experimental asset market

Dates 2013/7/23(Tue)16:40-18:20
Venue Seminar Room on the 1st floor of the Economics Research Annex (Kojima Hall)
Speaker Nobuyuki Hanaki (Aix-Marseille University)
Co-Sponsor Microworkshop
要約 To what extent the observed price deviations from the fundamental values in experimental asset markets Smith, et al. 1988 are caused by strategic uncertainty (uncertainty about others behavior) and by individual bounded rationality (or confusion)? We address this question by comparing the initial, as well as subsequent, price forecasts submitted by subjects in two call market environments a la Haruvy et al 2007 — one where all six traders are human subjects (6H), and the other where one human subject interacts with five computer traders who submit orders at the fundamental values (1H5C). Subjects in the latter environments are all told how computer traders behave and the fact that all the other traders in their markets are computer traders. Our analysis shows that about 50% of the median initial forecast deviations from the FVs are due to strategic uncertainty and remaining 50% are due to individual bounded rationality. While the effect of strategic uncertainty is larger (about 70%) for subjects with the perfect score (3) in Cognitive Reflection Test (Frederick 2005), it is not significant for those with low scores of CRT (0 or 1).

The Folk Theorem in Repeated Games with Individual Learning (joint with Takuo Sugaya)

Dates 2013/7/16(Tue)16:40-18:20
Venue Seminar Room on the 1st floor of the Economics Research Annex (Kojima Hall)
Speaker Yuichi Yamamoto (University of Pennsylvania)
Co-Sponsor Microworkshop

Behavioral Repeated Game Theory: Imperfect Private Monitoring (joint with Hitoshi Matsushima and Tomohisa Toyama)

Dates 2013/7/16(Tue)14:50-16:30
Venue Seminar Room on the 1st floor of the Economics Research Annex (Kojima Hall)
Speaker Tomomi Tanaka (World Bank)
Co-Sponsor Microworkshop

The Generalized Random Priority Mechanism with Budgets

Dates 2013/6/25(Tue)16:40-18:20
Venue Seminar Room on the 1st floor of the Economics Research Annex (Kojima Hall)
Speaker Tadashi Hashimoto (Stanford University)
Co-Sponsor Microworkshop
Abstract This paper studies allocation problems with and without monetary transfers, such as multi-unit auctions, school choice, and course assignment. For this class of problems, we introduce a generalized random priority mechanism with budgets (GRP). This mechanism is always ex-post incentive compatible and feasible. Moreover, as the market grows large, this mechanism can approximate any incentive compatible mechanism in the corresponding continuum economy. In particular, GRP can be used to approximate efficient and envy-free allocations, while preserving incentive compatibility and feasibility.

Impact of Financial Regulation and Innovation on Bubbles and Crashes due to Limited Arbitrage: Awareness Heterogeneity

Dates 2013/4/16(Tue)16:40-18:20
Venue Seminar Room on the 1st floor of the Economics Research Annex (Kojima Hall)
Speaker Hitoshi Matsushima (University of Tokyo)
Co-Sponsor Microworkshop
Abstract We examine the impact of financial regulation and innovation on bubbles and crashes due to limited arbitrage by modeling timing games among strategic arbitrageurs whose rationality is not commonly known. An unproductive company raises funds by issuing shares, and for purchasing shares, arbitrageurs borrow money from positive feedback traders. The key concept is awareness heterogeneity: positive feedback traders are unaware of euphoria, but arbitrageurs are aware of it. We show the impact of high leverage ratio depends on whether naked CDS is available, and the impact of naked CDS depends on growth balance between positive feedback traders’ capital and loan.