Static and dynamic games are important tools for the analysis of strategic interactions among economic agents and have found many applications in economics. In many games, equilibria can be described as solutions of polynomial equations. In this paper, we describe state-of-the-art techniques for finding all solutions of polynomial systems of equations, and illustrate these techniques by computing all equilibria of both static and dynamic games with continuous strategies. We compute the equilibrium manifold for a Bertrand pricing game in which the number of equilibria changes with the market size. Moreover, we apply these techniques to two stochastic dynamic games of industry competition and check for equilibrium uniqueness.
We compare asset prices in an overlapping generations model for incomplete and complete markets. Individuals within a generational cohort have heterogeneous beliefs about future states of the economy and thus would like to make bets against each other. In the incomplete-markets economy, agents cannot make such bets. Asset price volatility is very small. The situation changes dramatically when markets are completed through financial innovations as the set of available securities now allows agents with different beliefs to place bets against each other. Wealth shifts across agents and generations. Such changes in the wealth distribution lead to substantial asset price volatility.
This note tests the assumption of dynamic discrete choice models that underlying utility shocks have an extreme value type I distribution. We find that extreme value type I shocks cannot be rejected in most specifications of the Rust (1987) bus engine replacement model.
There are two important rules to patent races: minimal accomplishment necessary to receive the patent and the allocation of the innovation benefits. We study the optimal combination of these rules. A planner, who cannot distinguish between competing firms in a multistage innovation race, chooses the patent rules by maximizing either consumer or social surplus. We show that efficiency cost of prizes is a key consideration. Races are undesirable only when efficiency costs are low, firms are similar, and social surplus is maximized. Otherwise, the optimal policy involves a race of nontrivial duration to spur innovation and filter out inferior innovators.
Ein unternehmensübergreifendes Verständnis von Organisation ist von zentraler Bedeutung. Denn es hat sich gezeigt, dass die Organisation des Unternehmensumfeldes, z. B. Wettbewerbspolitik, und die Organisation an den Grenzen der Unternehmung - z.B. Outsourcing, Kooperationen - erheblichen Einfluss auf den Erfolg und die Gestaltung von Unternehmensstrukturen haben. Das Lehrbuch wurde in der 5. Auflage aktualisiert und ergänzt um die Bereiche ?Dienstleistungs-?Service-Organisation? und ?Organisation von Wertschöpfung?.
We investigate the socially optimal intervention in the global carbon cycle. Limiting factors are (i) increasing atmospheric carbon concentration due to fossil fuel-related carbon emissions, and (ii) the inertia of the global carbon cycle itself. Accordingly, we explicitly include the largest non-atmospheric carbon reservoir, the ocean, to achieve a better representation of the global carbon cycle than the proportional-decay assumption usually resorted to in economic models. We also investigate the option to directly inject CO2 into the deep ocean (a form of carbon sequestration), deriving from this a critical level for ocean sequestration costs. Above this level, ocean sequestration is merely a temporary option; below it, ocean sequestration is the long-term option permitting extended use of fossil fuels. The latter alternative involves higher atmospheric stabilization levels. In this connection it should be noted that the efficiency of ocean sequestration depends on the time-preference and the inertia of the carbon cycle.
