Dynamic Matching and Bargaining: The Role of Deadlines

We consider a dynamic model where traders in each period are matched randomly into pairs who then bargain about the division of a fixed surplus. When agreement is reached the traders leave the market. Traders who do not come to an agreement return next period in which they will be matched again, as long as their deadline has not expired yet. New traders enter exogenously in each period. We assume that traders within a pair know each other's deadline. We define and characterize the stationary equilibrium configurations. Traders with longer deadlines fare better than traders with short deadlines. It is shown that the heterogeneity of deadlines may cause delay. It is then shown that a centralized mechanism that controls the matching protocol, but does not interfere with the bargaining, eliminates all delay. Even though this efficient centralized mechanism is not as good for traders with long deadlines, it is shown that in a model where all traders can choose which mechanism toBargaining, Deadlines, Markets

Implementation Cycles in the New Economy

The economic boom of the USA in the 1990s was remarkable in its duration, the sustained rise in equipment investment, the reduced volatility of productivity growth, and continued uncertainty about the trend growth rate. In this paper we link these phenomena using an extension of the classic model of implementation cycles due to Shleifer (1986). The key idea is that uncertainty about the trend growth rate can lead firms to bring forward the implementation of innovations, temporarily eliminating expectations-driven business cycles, because delay is risky when beliefs are not common knowledge.Implementation cycles, New Economy, multiple equilibria.

Labour Market Insecurity: The Effects of Job, Employment and Income Insecurity on the Mental Well-being of Employees

This article proposes that the insecurity facing employees in the labour market can be viewed as a multifaceted concept that encompasses job insecurity, employment insecurity and income insecurity, as well as the cognitive and affective dimensions of each of these. The results indicate the validity of using this concept in order to better understand how insecurity relates to mental well-being by affecting both the manifest and latent functions of work

Interbank comptetition with costly screening

We analyse credit market equilibrium when banks screen loan applicants. When banks have a convex cost function of screening, a pure strategy equilibrium exists where banks optimally set interest rates at the same level as their competitors. This result complements Broecker’s (1990) analysis, where he demonstrates that no pure strategy equilibrium exists when banks have zero screening costs. In our set up we show that interest rate on loans are largely independent of marginal costs, a feature consistent with the extant empirical evidence. In equilibrium, banks make positive profits in our model in spite of the threat of entry by inactive banks. Moreover, an increase in the number of active banks increases credit risk and so does not improve credit market effciency: this point has important regulatory implications. Finally, we extend our analysis to the case where banks have differing screening abilities.Interbank Competition, Screening, Credit Risk, Adverse Selection

Endogenous Private Information Structures

Many models in the economics literature deal with strategic situations with privately informed agents. In those models the information structure is assumed to be exogenous and common knowledge. In many applications information gathering is one of the strategic options available to agents. We formally incorporate this option into the game and the information structure will arise endogenously. We ask whether models with exogenous information structures, and the results they provide, are robust with respect to this endogenization. We show that any Nash equilibrium of the game with information acquisition induces a Nash equilibrium in the corresponding game with an exogenous structure. The same is not always true when `Nash equilibrium' is replaced by `sequential equilibrium' but we provide sufficient conditions on the structure of the game for which this is true. Moreover, we characterize the (sequential) Nash equilibria of games with an exogenous information structure that can arise as a (sequential) Nash equilibrium of a game with endogenous information acquisition,

Free entry does not imply zero profits

Traditional economic wisdom says that free entry in a market will drive profits down to zero. This conclusion is usually drawn under the assumption of perfect information. We assume that a priori there exists imperfect information about the profitability of the market, but that potential entrants may learn the demand curve perfectly at negligible cost by engaging in market research. Even if in equilibrium firms learn the demand perfectly, profits may be strictly positive because of insufficient entry. The mere fact that it will not become common knowledge that every entrant has perfect information about demand causes this surprising result. Belief means doubt. Knowing means certainty. Introduction to the Kabalah.Information_acquisition, entry, zero-profit_condition

Endogenous information structures

Many models in the economics literature deal with strategic situations with privately informed agents. In those models the information structure is assumed to be exogenous and common knowledge. We consider whether such models, and the results they produce, are robust with respect the endogenization of the information structure. The results depend on whether information acquisition is secret or private, and on whether the strategic situation involves simultaneous or sequential moves. In particular we find that only when information is secretly acquired and moves are simultaneous, the results are fully robust. When information is acquired secretly but moves are sequential additional equilibria may appear. Instead, private information acquisition may make the equilibrium set smaller.Information acquisition, private information, equilibrium

Dynamic matching and bargaining : the role of deadlines

We consider a dynamic model where traders in each period are matched randomly into pairs who then bargain about the division of a fixed surplus. When agreement is reached the traders leave the market. Traders who do not come to an agreement return next period in which they will be matched again, as long as their deadline has not expired yet. New traders enter exogenously in each period. We assume that traders within a pair know each other's deadline. We define and characterize the stationary equilibrium configurations. Traders with longer deadlines fare better than traders with short deadlines. It is shown that the heterogeneity of deadlines may cause delay. It is then shown that a centralized mechanism that controls the matching protocol, but does not interfere with the bargaining, eliminates all delay. Even though this efficient centralized mechanism is not as good for traders with long deadlines, it is shown that in a model where all traders can choose which mechanism t

What About The Third-Agers?: A Study Of Participation In Informal/Non-Formal Learning By Older Adults

Set in the context of an ageing population where longevity is often presented as a problem, this study aims to examine the participation of 60 - 90 year-olds in learning outside the formal sector and to contest the prevailing negative image of older people as non-participants in education. A survey of the literature illustrates the ageist attitudes prevalent amongst some educationalists and demonstrates how older people are often marginalized from the social and economic process, not necessarily by active discrimination but more by oversight and omission, their educational needs being largely ignored. The research seeks to understand the meanings older people give to education and to illuminate the processes by which some, even if only a few, come to learning in later life. Calling for the inclusion of older learners in educational provision, the Carnegie Inquiry into the Third Age (1993) hinted that learning in a social context, with participants involved in planning their own learning, was a constructive way forward for this age group. A life history approach is used to compile learning biographies of twelve members of a self-help educational organisation, the University of the Third Age. Tracing the routes that have brought these people to learning in later life, the study examines their motivations to learn at different life stages and demonstrates how decisions to participate or not participate are conditioned by a complex interplay of reactions to social, cultural and historical events. Many of the current generation of older people constructed their lives against a background of limited initial education, economic depression and the disruptions of a world war, all factors which would seem to predict nonparticipation in learning. Yet many thousands of this generation are participants. The study examines the role of learning in the lives of older people and seeks to understand their reasons for choosing to participate in a specific type of informal or non-formal learning where participants take responsibility for their own learning