Academic literature on the topic 'Equilibria (Economics)'

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Journal articles on the topic "Equilibria (Economics)"

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Mossel, Elchanan, Manuel Mueller-Frank, Allan Sly, and Omer Tamuz. "Social Learning Equilibria." Econometrica 88, no. 3 (2020): 1235–67. http://dx.doi.org/10.3982/ecta16465.

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We consider a large class of social learning models in which a group of agents face uncertainty regarding a state of the world, share the same utility function, observe private signals, and interact in a general dynamic setting. We introduce social learning equilibria, a static equilibrium concept that abstracts away from the details of the given extensive form, but nevertheless captures the corresponding asymptotic equilibrium behavior. We establish general conditions for agreement, herding, and information aggregation in equilibrium, highlighting a connection between agreement and information aggregation.
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Cooper, Russell. "Equilibrium Selection in Imperfectly Competitive Economies with Multiple Equilibria." Economic Journal 104, no. 426 (September 1994): 1106. http://dx.doi.org/10.2307/2235067.

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KINSELLA, STEPHEN. "BLUEPRINT FOR AN ALGORITHMIC ECONOMICS." New Mathematics and Natural Computation 08, no. 01 (March 2012): 101–11. http://dx.doi.org/10.1142/s1793005712400066.

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Algorithmic economics helps us stipulate, formulate, and resolve economic problems in a more precise manner than mainstream mathematical economics. It does so by aligning theorizing about an economic problem with both the data generated by the real world and the computers used to manipulate that data. Theoretically coherent, numerically meaningful, and therefore policy relevant, answers to economic problems can be extrapolated more readily using algorithmic economics than present day mathematical economics. An algorithmic economics would allow mathematical economics to prove theorems relating to economic problems, such as the existence of equilibria defined on some metric space, with embedded mechanisms for getting to the equilibria of these problems. A blueprint for such an economics is given and discussed with an example.
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FARMER, ROGER E. A., and MICHAEL WOODFORD. "SELF-FULFILLING PROPHECIES AND THE BUSINESS CYCLE." Macroeconomic Dynamics 1, no. 4 (December 1997): 740–69. http://dx.doi.org/10.1017/s1365100597005051.

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We demonstrate that multiple stationary rational-expectations equilibria exist in a version of Lucas's island economy. The existence of these equilibria follows from the fact that there is an indeterminate set of monetary equilibria in the two-period overlapping-generations model. We show how to construct stationary rational-expectations equilibria by randomizing over the set of nonstationary monetary equilibria. In some of our equilibria, a positively sloped Phillips curve exists even though our economy contains no signal-extraction problem as in the original Lucas paper. Our equilibria are indexed by beliefs and are examples of the existence of sunspot equilibria in which allocations may differ across states of nature for which preferences, technology, and endowments are identical. Our technique for constructing stationary sunspot equilibria should prove useful in a wide class of models in which an indeterminate stationary equilibrium exists.
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Balder, Erik J., and Nicholas C. Yannelis. "Bayesian–Walrasian equilibria: beyond the rational expectations equilibrium." Economic Theory 38, no. 2 (October 2, 2007): 385–97. http://dx.doi.org/10.1007/s00199-007-0288-6.

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Miftakhova, Alena, Karl Schmedders, and Malte Schumacher. "Computing Economic Equilibria Using Projection Methods." Annual Review of Economics 12, no. 1 (August 2, 2020): 317–53. http://dx.doi.org/10.1146/annurev-economics-080218-025711.

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The analysis of dynamic economic models routinely leads to the mathematical problem of determining an unknown function for which no closed-form solution exists. Economists must then resort to methods of numerical approximation when analyzing such models. Among the computational methods that have been successfully applied in economics and finance, one set of techniques stands out due to its flexibility and robustness: projection methods. In this article, we describe the basic steps of these methods for several different applications, surveying many successful applications of projection methods to dynamic economic models. Importantly, we emphasize that the ever-increasing complexity and dimensionality of dynamic models have made the previously used simpler methods obsolete and the applications of projection methods all but mandatory. We closely examine the most recent endeavors in the literature on solving economic models with projection methods.
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Duffy, John, and Daniela Puzzello. "Gift Exchange versus Monetary Exchange: Theory and Evidence." American Economic Review 104, no. 6 (June 1, 2014): 1735–76. http://dx.doi.org/10.1257/aer.104.6.1735.

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We study the Lagos and Wright (2005) model of monetary exchange in the laboratory. With a finite population of sufficiently patient agents, this model has a unique monetary equilibrium and a continuum of non-monetary gift exchange equilibria, some of which Pareto dominate the monetary equilibrium. We find that subjects avoid the gift exchange equilibria in favor of the monetary equilibrium. We also study versions of the model without money where all equilibria involve non-monetary gift exchange. We find that welfare is higher in the model with money than without money, suggesting that money plays a role as an efficiency enhancing coordination device. ( JEL C92, D12, E40, Z13)
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Farmer, Roger E. A., Daniel F. Waggoner, and Tao Zha. "Generalizing the Taylor Principle: Comment." American Economic Review 100, no. 1 (March 1, 2010): 608–17. http://dx.doi.org/10.1257/aer.100.1.608.

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Troy Davig and Eric Leeper (2007) have proposed a condition they call the generalized Taylor principle to rule out indeterminate equilibria in a version of the new-Keynesian model where the parameters of the policy rule follow a Markov-switching process. We show that although their condition rules out a subset of indeterminate equilibria, it does not establish uniqueness of the fundamental equilibrium. We discuss the differences between indeterminate fundamental equilibria included by Davig and Leeper's condition and fundamental equilibria that their condition misses
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Lyn, Gary, and Andrés Rodríguez-Clare. "External Economies and International Trade Redux: Comment*." Quarterly Journal of Economics 128, no. 4 (August 29, 2013): 1895–905. http://dx.doi.org/10.1093/qje/qjt017.

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Abstract Recently, Gene Grossman and Esteban Rossi-Hansberg (GRH; “External Economies and International Trade: Redux,” Quarterly Journal of Economics 125 [2010], 829–858) proposed a novel way to think about the implications of international trade in the presence of national external economies at the industry level. Instead of perfect competition and two industries, GRH assume Bertrand competition and a continuum of industries. GRH conclude that the equilibrium is unique if transport costs are low, that there is no trade for high transport costs, and that there is no equilibrium in pure strategies when transport costs are intermediate. In this note we reexamine the equilibrium analysis under different transport costs for a single industry (partial equilibrium) version of GRH’s model. We confirm many of GRH’s results, but also find that there are circumstances under which there are multiple equilibria, including equilibria in which trade patterns run counter to “natural” comparative advantage, and also find that there is a profitable deviation to the mixed-strategy equilibrium postulated by GRH for intermediate trading costs. We propose an alternative set of strategies for this case and establish that they constitute an equilibrium.
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Myerson, Roger B., and Philip J. Reny. "Perfect Conditional ε‐Equilibria of Multi‐Stage Games With Infinite Sets of Signals and Actions." Econometrica 88, no. 2 (2020): 495–531. http://dx.doi.org/10.3982/ecta13426.

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We extend Kreps and Wilson's concept of sequential equilibrium to games with infinite sets of signals and actions. A strategy profile is a conditional ε‐equilibrium if, for any of a player's positive probability signal events, his conditional expected utility is within ε of the best that he can achieve by deviating. With topologies on action sets, a conditional ε‐equilibrium is full if strategies give every open set of actions positive probability. Such full conditional ε‐equilibria need not be subgame perfect, so we consider a non‐topological approach. Perfect conditional ε‐equilibria are defined by testing conditional ε‐rationality along nets of small perturbations of the players' strategies and of nature's probability function that, for any action and for almost any state, make this action and state eventually (in the net) always have positive probability. Every perfect conditional ε‐equilibrium is a subgame perfect ε‐equilibrium, and, in finite games, limits of perfect conditional ε‐equilibria as ε → 0 are sequential equilibrium strategy profiles. But limit strategies need not exist in infinite games so we consider instead the limit distributions over outcomes. We call such outcome distributions perfect conditional equilibrium distributions and establish their existence for a large class of regular projective games. Nature's perturbations can produce equilibria that seem unintuitive and so we augment the game with a net of permissible perturbations.
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Dissertations / Theses on the topic "Equilibria (Economics)"

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Anwar, Ahmed Waqar. "Multiple equilibria in theory and practice." Thesis, University College London (University of London), 1998. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.297967.

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Mackensen, Heide C. U. "Equilibria in overlapping generations models." Master's thesis, University of Cape Town, 1992. http://hdl.handle.net/11427/17347.

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Bibliography: pages vi-viii.
Interest rates are fundamental in the explanation of equilibrium prices over time, because they provide the link between the present and the future. Capturing this dynamic feature, the overlapping generations model is particularly suitable to address the interest rate problem, as has been shown by Paul Samuelson, David Gale and Costas Azariadis. This thesis reviews their contribution to the theory of interest: with his consumption-loan model, Samuelson sets the analytical framework for subsequent research. Furthermore, he demonstrates that the optimal interest rate is unstable, implying that a competitive economy may fail to approach the social optimum. The Samuelson and classical sets of assumptions are consolidated in the intertemporal exchange model of Gale. Its equilibrium nature, however, ignores the sequential adjustment of disequilibrium interest rates to their equilibrium values. Consequently it is difficult to comment on the direction of causality involved in the interest rate determination, unless a clearing house is introduced which simultaneously resolves the starting-up, continuity and causality problems. Departing from the full certainty scenario, Azariadis analyses the existence and likelihood of self-fulfilling prophecies. It is shown that the implications of the economy's assumed Markovian structure are twofold: while facilitating the parametric treatment of the transition probabilities, it negates the question concerning the likelihood of sunspot equilibria. Within the specified framework it is impossible to explain how the economy arrives at such equilibria; it is only possible to identify the conditions that maintain (once they exist) these self-fulfilling prophecies.
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Burke, Jonathan Lewis. "Essays on equilibria in dynamic economies." Thesis, Massachusetts Institute of Technology, 1985. http://hdl.handle.net/1721.1/15138.

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Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1985.
MICROFICHE COPY AVAILABLE IN ARCHIVES AND SCIENCE.
Vita.
Bibliography: leaves 187-189.
by Jonathan Lewis Burke.
Ph.D.
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Bonanno, Giacomo. "Topics in oligopoly : local equilibria, choice of product, entry deterrence." Thesis, London School of Economics and Political Science (University of London), 1985. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.267267.

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The first chapter is an introductory one. In chapter 2 I study the existence of oligopoly equilibria when firms have only a local knowledge of their demand curves. I introduce two notions of equilibrium: "local" and "first-orde'r" Nash equilibria. The first is a point where all firms are at a local maximum of their profit functions, the latter is.a point wh~re the first-order conditions for profit maximization are simultaneously satisfied for all firms (this is an equilibrium if each firm only knows the linear approximation to its own demand curve at that point). The main result is that a first-order equilibrium exists always, that is, with arbitrary demand functions. In chapter 3 I consider the problem of choice of product quality by two firms which enter the market simultaneously. I show that Hotelling's principle of minimum differentiation may hold or not, depending on the solution concept which is adopted for the post-entry game and on the structure of costs. In chapter 4 I re-examine the common claim that in the presence of threat of entry firms tend to produce more products than they would otherwise. I show that entry deterrence is always optimal, but it need not be achieved through p~oduct proliferation: in some cases the incumbent monopolist resorts to an entry-deterring strategy based on location choice rather than product proliferation. I also show that in some cases the number of products chosen by the incumbent facing the threat of entry is strictly greater than the minimum number required to deter entry. ,In chapter 5'1 show that advertising can be used as a barrier to entry even if there are no asymmetries in the effectiveness of advertising between existing ... f!irms ,and, new entrants .HI also show-that entry deterrence is achieved through "excessive" advertising.
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Shea, Paul. "Adaptive learning and multiple equilibria /." view abstract or download file of text, 2007. http://proquest.umi.com/pqdweb?did=1404347271&sid=2&Fmt=2&clientId=11238&RQT=309&VName=PQD.

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Thesis (Ph. D.)--University of Oregon, 2007.
Typescript. Includes vita and abstract. Includes bibliographical references (leaves 100-125). Also available for download via the World Wide Web; free to University of Oregon users.
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Zhosan, Dmytro. "Nash equilibria on a spatial commons theory and experimental evidence /." [Bloomington, Ind.] : Indiana University, 2009. http://gateway.proquest.com/openurl?url_ver=Z39.88-2004&rft_val_fmt=info:ofi/fmt:kev:mtx:dissertation&res_dat=xri:pqdiss&rft_dat=xri:pqdiss:3386734.

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Thesis (Ph.D.)--Indiana University, Dept. of Economics, 2009.
Title from PDF t.p. (viewed on Jul 15, 2010). Source: Dissertation Abstracts International, Volume: 70-12, Section: A, page: 4790. Adviser: Roy J. Gardner.
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Yang, Chao. "Social Interactions under Incomplete Information: Games, Equilibria, and Expectations." The Ohio State University, 2015. http://rave.ohiolink.edu/etdc/view?acc_num=osu1429117943.

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James, Kevin. "Estimating Auction Equilibria using Individual Evolutionary Learning." Chapman University Digital Commons, 2019. https://digitalcommons.chapman.edu/cads_dissertations/1.

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I develop the Generalized Evolutionary Nash Equilibrium Estimator (GENEE) library. The tool is designed to provide a generic computational library for running genetic algorithms and individual evolutionary learning in economic decision-making environments. Most importantly, I have adapted the library to estimate equilibria bidding functions in auctions. I show it produces highly accurate estimates across a large class of auction environments with known solutions. I then apply GENEE to estimate the equilibria of two additional auctions with no known solutions: first-price sealed-bid common value auctions with multiple signals, and simultaneous first-price auctions with subadditive values
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Steiger, Laura Christina 1977. "Three essays on adaptive learning, institutions and multiple equilibria." Thesis, University of Oregon, 2009. http://hdl.handle.net/1794/10241.

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x, 132 p. : ill. A print copy of this thesis is available through the UO Libraries. Search the library catalog for the location and call number.
This dissertation examines the role that institutions play in the existence of multiple equilibria in models of economic development. In addition, it examines the dynamics of transition between such equilibria. In the first chapter of this dissertation, I build a dynamic model of institutional choice, wherein the government invests in the legal infrastructure in response to the need for the protection of output from appropriation. A unique equilibrium exists only under commitment, not under discretion. This would suggest that a measure of institutional quality must not only consider the extent to which current policies protect property rights but also include the ability of the government to commit to reform in the long run. The second chapter of this dissertation examines the effect of adaptive learning on stability and transitional dynamics between multiple equilibria in a growth model with human capital externalities. I find that there are two equilibria, one a poverty trap with no education. Only the poverty trap is locally stable under learning. However, productivity shocks are not sufficient to generate transitions between the equilibria. Indeed, productivity shocks must lie below a threshold in order for the economy to escape the poverty trap. These escape paths do not allow the economy to transition to the upper steady state. I propose instead the use of shocks to expectations to permit such a transition. The third chapter of this dissertation presents an empirical test for the role that human capital and institutions may play in transitions between equilibria by estimating a Markov-switching regression. This methodology allows me to characterize both distinct growth regimes and transitions between them. I explore the effects of time-varying institutional measures and human capital on transition probabilities. I find that political and economic institutions are similar in their effects on transitions arid that the time variation in the institutional measure increases the probability of identifying both miracle growth and stagnation regimes. Furthermore, human capital has a significant effect on switches between miracle growth, stable growth and stagnation.
Committee in charge: George Evans, Co-Chairperson, Economics; Shankha Chakraborty, Co-Chairperson, Economics; Jeremy Piger, Member, Economics; Yue Fang, Outside Member, Decision Sciences
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McCune, Benton John Varadarajan Kasturi. "Algorithmic game theory and the computation of market equilibria." [Iowa City, Iowa] : University of Iowa, 2009. http://ir.uiowa.edu/etd/405.

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Books on the topic "Equilibria (Economics)"

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General equilibrium analysis: Existence and optimality properties of equilibria. Boston: Kluwer Academic, 2003.

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Florenzano, Monique. General equilibrium analysis: Existence and optimality properties of equilibria. Boston, MA: Kluwer Academic, 2002.

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Fixed points and economic equilibria. Singapore: World Scientific, 2010.

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An introduction to general equilibrium analysis: Walrasian and non-Walrasian equilibria. New Delhi: Oxford University Press, 2002.

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Walrasian and non-Walrasian equilibria: An introduction to general equilibrium analysis. Oxford: Clarendon Press, 1990.

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King, Robert G. Discretionary policy and multiple equilibria. Cambridge, Mass: National Bureau of Economic Research, 2006.

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Aliprantis, Charalambos D. Existence and optimality of competitive equilibria. Berlin: Springer-Verlag, 1989.

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Luo, Guo Ying. Evolutionary Foundations of Equilibria in Irrational Markets. New York, NY: Springer Science+Business Media, LLC, 2012.

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Durlauf, Steven N. Multiple equilibria and persistence in aggregate fluctuations. Cambridge, MA: National Bureau of Economic Research, 1991.

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Yannelis, Nicholas C. On the existence of correlated equilibria. Champaign: University of Illinois at Urbana-Champaign, 1988.

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Book chapters on the topic "Equilibria (Economics)"

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Drèze, Jacques H., and Heracles M. Polemarchakis. "Monetary Equilibria." In Economics Essays, 83–108. Berlin, Heidelberg: Springer Berlin Heidelberg, 2001. http://dx.doi.org/10.1007/978-3-662-04623-4_7.

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Jean-Jacques Herings, P. "Underemployment Equilibria." In The New Palgrave Dictionary of Economics, 1–9. London: Palgrave Macmillan UK, 2008. http://dx.doi.org/10.1057/978-1-349-95121-5_2562-1.

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Benassy, Jean-Pascal. "Rationed Equilibria." In The New Palgrave Dictionary of Economics, 1–8. London: Palgrave Macmillan UK, 1987. http://dx.doi.org/10.1057/978-1-349-95121-5_1618-1.

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Jean-Jacques Herings, P. "Underemployment Equilibria." In The New Palgrave Dictionary of Economics, 14012–20. London: Palgrave Macmillan UK, 2018. http://dx.doi.org/10.1057/978-1-349-95189-5_2562.

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Hahn, F. H. "Conjectural Equilibria." In The New Palgrave Dictionary of Economics, 2049–56. London: Palgrave Macmillan UK, 2018. http://dx.doi.org/10.1057/978-1-349-95189-5_596.

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McLennan, Andrew. "Monotone Equilibria." In Advanced Fixed Point Theory for Economics, 371–416. Singapore: Springer Singapore, 2018. http://dx.doi.org/10.1007/978-981-13-0710-2_17.

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Hahn, F. H. "Conjectural Equilibria." In The New Palgrave Dictionary of Economics, 1–8. London: Palgrave Macmillan UK, 1987. http://dx.doi.org/10.1057/978-1-349-95121-5_596-1.

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Hahn, F. H. "Conjectural Equilibria." In The New Palgrave Dictionary of Economics, 1–8. London: Palgrave Macmillan UK, 2008. http://dx.doi.org/10.1057/978-1-349-95121-5_596-2.

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Benassy, Jean-Pascal. "Rationed Equilibria." In The New Palgrave Dictionary of Economics, 11305–12. London: Palgrave Macmillan UK, 2018. http://dx.doi.org/10.1057/978-1-349-95189-5_1618.

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Goeree, Jacob K., Charles A. Holt, and Thomas R. Palfrey. "quantal response equilibria." In Behavioural and Experimental Economics, 234–42. London: Palgrave Macmillan UK, 2010. http://dx.doi.org/10.1057/9780230280786_29.

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Conference papers on the topic "Equilibria (Economics)"

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Dughmi, Shaddin, Alon Eden, Michal Feldman, Amos Fiat, and Stefano Leonardi. "Lottery Pricing Equilibria." In EC '16: ACM Conference on Economics and Computation. New York, NY, USA: ACM, 2016. http://dx.doi.org/10.1145/2940716.2940742.

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Mossel, Elchanan, Manuel Mueller-Frank, Allan Sly, and Omer Tamuz. "Social Learning Equilibria." In EC '18: ACM Conference on Economics and Computation. New York, NY, USA: ACM, 2018. http://dx.doi.org/10.1145/3219166.3219207.

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Govindan, Srihari, Rida Laraki, and Lucas Pahl. "On Sustainable Equilibria." In EC '20: The 21st ACM Conference on Economics and Computation. New York, NY, USA: ACM, 2020. http://dx.doi.org/10.1145/3391403.3399514.

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Ramsey, David M., and Krzysztof Szajowski. "Correlated equilibria in competitive staff selection problem." In Game Theory and Mathematical Economics. Warsaw: Institute of Mathematics Polish Academy of Sciences, 2006. http://dx.doi.org/10.4064/bc71-0-21.

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Dütting, Paul, Thomas Kesselheim, and Éva Tardos. "Mechanism with unique learnable equilibria." In EC '14: ACM Conference on Economics and Computation. New York, NY, USA: ACM, 2014. http://dx.doi.org/10.1145/2600057.2602838.

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Kroer, Christian, Alexander Peysakhovich, Eric Sodomka, and Nicolas E. Stier-Moses. "Computing Large Market Equilibria using Abstractions." In EC '19: ACM Conference on Economics and Computation. New York, NY, USA: ACM, 2019. http://dx.doi.org/10.1145/3328526.3329553.

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Babichenko, Yakov, Siddharth Barman, and Ron Peretz. "Simple approximate equilibria in large games." In EC '14: ACM Conference on Economics and Computation. New York, NY, USA: ACM, 2014. http://dx.doi.org/10.1145/2600057.2602873.

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Fiat, Amos, Anna Karlin, Elias Koutsoupias, and Christos Papadimitriou. "Energy Equilibria in Proof-of-Work Mining." In EC '19: ACM Conference on Economics and Computation. New York, NY, USA: ACM, 2019. http://dx.doi.org/10.1145/3328526.3329630.

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Meir, Reshef, Omer Lev, and Jeffrey S. Rosenschein. "A local-dominance theory of voting equilibria." In EC '14: ACM Conference on Economics and Computation. New York, NY, USA: ACM, 2014. http://dx.doi.org/10.1145/2600057.2602860.

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Busch, Costas, and Rajgopal Kannan. "Polynomial Time Equilibria in Bottleneck Congestion Games." In EC '18: ACM Conference on Economics and Computation. New York, NY, USA: ACM, 2018. http://dx.doi.org/10.1145/3219166.3219221.

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Reports on the topic "Equilibria (Economics)"

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Hayashi, Tadateru, Sanchita Basu Das, Manbar Singh Khadka, Ikumo Isono, Souknilanh Keola, Kenmei Tsubota, and Kazunobu Hayakawa. Economic Impact Analysis of Improved Connectivity in Nepal. Asian Development Bank, November 2020. http://dx.doi.org/10.22617/wps200312-2.

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This study estimates and analyzes the economic impact of ongoing and future infrastructure development projects in Nepal by using the geographical simulation model developed by the Institute of Developing Economies (IDE-GSM). The IDE-GSM is a computational general equilibrium model based on spatial economics. The simulation analysis reveals that ongoing infrastructure development projects in Nepal benefit the country’s economy, and that the planned connectivity improvement with India will have positive impact with anticipated major shift in mode of transport for trade. The study takes into consideration efforts by the Government of Nepal to promote and strengthen international connectivity under the South Asia Subregional Economic Cooperation framework.
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Cooper, Russell. Dynamic Behavior of Imperfectly Competitive Economies with Multiple Equilibria. Cambridge, MA: National Bureau of Economic Research, September 1987. http://dx.doi.org/10.3386/w2388.

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Stiglitz, Joseph, and Andrew Weiss. Macro-Economic Equilibrium and Credit Rationing. Cambridge, MA: National Bureau of Economic Research, February 1987. http://dx.doi.org/10.3386/w2164.

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Acemoglu, Daron. Theory, General Equilibrium and Political Economy in Development Economics. Cambridge, MA: National Bureau of Economic Research, April 2010. http://dx.doi.org/10.3386/w15944.

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Carrasco, Alex, and David Florián Hoyle. External Shocks and FX Intervention Policy in Emerging Economies. Inter-American Development Bank, August 2021. http://dx.doi.org/10.18235/0003457.

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This paper discusses the role of sterilized foreign exchange (FX) interventions as a monetary policy instrument for emerging market economies in response to external shocks. We develop a model for a commodity-exporting small open economy in which FX intervention is considered as a balance sheet policy induced by a financial friction in the form of an agency problem between banks and their creditors. The severity of banks agency problem depends directly on a bank-level measure of currency mismatch. Endogenous deviations from the standard UIP condition arise at equilibrium. In this context, FX interventions moderate the response of financial and macroeconomic variables to external shocks by leaning against the wind with respect to real exchange rate pressures. Our quantitative results indicate that, conditional on external shocks, the FX intervention policy successfully reduces credit, investment, and output volatility, along with substantial welfare gains when compared to a free-floating exchange rate regime. Finally, we explore distinct generalizations of the model that eliminate the presence of endogenous UIP deviations. In those cases, FX intervention operations are considerably less effective for the aggregate equilibrium.
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6

Bisin, Alberto, Andrea Moro, and Giorgio Topa. The Empirical Content of Models with Multiple Equilibria in Economies with Social Interactions. Cambridge, MA: National Bureau of Economic Research, July 2011. http://dx.doi.org/10.3386/w17196.

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7

Diebold, Francis, Lee Ohanian, and Jeremy Berkowitz. Dynamic Equilibrium Economies: A Framework for Comparing Models and Data. Cambridge, MA: National Bureau of Economic Research, February 1995. http://dx.doi.org/10.3386/t0174.

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8

Carvajal, Andrés. Testable restrictions of general equilibrium theory in exchange economies with externalities. Bogotá, Colombia: Banco de la República, February 2003. http://dx.doi.org/10.32468/be.231.

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9

Edwards, Sebastian. Economic Liberalization and the Equilibrium Real Exchange rate in Developing Countries. Cambridge, MA: National Bureau of Economic Research, March 1987. http://dx.doi.org/10.3386/w2179.

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10

Kuminoff, Nicolai, V. Kerry Smith, and Christopher Timmins. The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation. Cambridge, MA: National Bureau of Economic Research, September 2010. http://dx.doi.org/10.3386/w16349.

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