Journal of Dynamics & Games
January 2018 , Volume 5 , Issue 1
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Myopic economic agents are well studied in economics. They are impatient. A myopic topology is a topology such that every continuous preference relation is myopic. If the space is
This work provides an analysis of linear rules for bankruptcy problems and allocation problems from an axiomatic point of view and we extend the study of the additivity property presented in Bergantiños and Méndez-Naya [
We propose two methodologies to price sovereign bond options in emerging markets. The motivation is to provide hedging protection against price fluctuations, departing from the not liquid data provided by the stock exchange. Taking this into account, we first compute prices provided by the Jamshidian formula, when modeling the interest rate through Vasicek model, with parameters estimated with the help of the Kalman filter. The second methodology is the pricing strategy provided by the Black-Derman-Toy tree model. A numerical comparison is carried out. The first equilibrium approach provides parsimonious modeling, is less sensitive to daily changes and more robust, while the second non-arbitrage approach provides more fluctuating but also what can be considered more accurate option prices.
In this paper we show several results regarding to the classical cost sharing problem when each agent requires a set of services but they can share the benefits of one unit of each service, i.e. there is non rival consumption. Specifically, we show a characterized solution for this problem, mainly adapting the well-known axioms that characterize the Shapley value for TU-games into our context. Finally, we present some additional properties that the shown solution satisfy.
We develop an endogenous growth model with two sectors, manufacturing (learning) and non-manufacturing (non-learning). Domestic technological knowledge is only produced in the manufacturing sector through learning by doing. The knowledge produced in the manufacturing sector is available to the non-manufacturing sector. We obtain policy functions for the market economy and the social planner's economy. Thus, with the Pareto-optimal solution, we obtain the path of the optimal investment subsidy rate to the manufacturing sector for the market economy. The optimal investment subsidy rate increases as the market economy moves to the Pareto-optimal steady state.
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