The value of ignorance

Article Abstract:

The likelihood of remaining ignorant in the case of two states of nature has a positive strategic value for agents. Despite the reality that the agent's private information assures earning a positive rent in equilibrium, the agent may choose to remain uninformed. The likelihood for ignorance presents an additional range of informational asymmetry. Since a poor information structure produces strategic advantages, an equilibrium in which the agent is excellently informed will not occur, even if additional information is costless at the margin.

Letting of contracts, Competitive bidding

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Comparing four models of aggregate fluctuations due to self-fulfilling expectations

Article Abstract:

A comparative study of four equilibrium business cycle models is presented. The four models' common feature of increasing returns to scale production technologies permitted aggregate fluctuations brought about by self-fulfilling expectations. The four models are calibrated and presented in a unified framework because the minimum markup required to generate endogenous fluctuations as well as the dynamic properties of expectations driven cycles will depend on the specific parameterization adopted.

Models, Business cycles

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On monitoring and collusion in hierarchies

Article Abstract:

Collusion and the role of information are analyzed in a model using hard information.

Economic aspects, Social hierarchies

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