Who drew first?
Alfred Marshall is frequently credited with the supply-and-demand diagram, so much so that the familiar graph of equilibrium in the market for a single good is called the “Marshallian cross” . Here as in many other cases, however, Stigler’s Law of Eponymy holds.
Arrow
Barely noticed in our part of the world, Kenneth Arrow, probably the greatest economist in the second half of the last century, passed away on 21 February 2017.
Crossed lines
This following question could come up if a student is particularly bright and observant, or if she just wants to make trouble...
Salience and cooperation among rational egoists
We introduce the concept of the Ostrom threshold, the failure cost in excess of which cooperation is the best reply to itself. For high enough cost of failure, cooperation among rational egoists is sustained. The Ostrom threshold first rises and then falls as the fury of nature rises.
Moral hazard and cooperation in competing teams
We give the conditions for the attainment of self-enforcing Pareto efficiency under complete effort non-observability, strict agent rationality and global budget balance among teams involved in a winner-takes-all contest for a prize.
‘Time inconsistency’: the Phillips Curve example
We provide the algebra and a panel diagram to attempt to examine the so-called inflation- unemployment (or Phillips curve, or aggregate supply) example. This is used to analyze whether there is indeed “time inconsistency” or “dynamic inconsistency” in the said example.
An exercise on discrete-time intertemporal optimization
Using the different alternative methods of dynamic optimization we derive the conditions that must be satisfied by the solution to the so-called Ramsey problem in a way that can be understood by advanced undergraduate economics students.
Stable commitment in an intertemporal collusive trade
In intertemporal collusive trade each oligopolist, apart from regularly producing the normal cooperative output, is allowed in a systematic way to earn higher than the rest at some stages of the game. This admits subgame-perfection and is shown under some conditions to be Pareto-superior to the typical cooperative outcome.
The robust Nash equilibrium and equilibrium selection in 2×2 coordination games
( with Vigile M. B. Fabella) We propose an equilibrium concept, the Robust Nash equilibrium (RNE), that combines best-reply rationality and the "first-mover invariance" condition.
Coordination games, “mano”, and “silya”
A two-by-two version of a “coordination game” goes as follows: two agents prefer different activities but would still rather do things together than do things alone—even to the extent of engaging in the less preferred activity.
