Volume 1 - September 21, 2001 Next
1. Ariel Rubinstein Is it 'Economics and Psychology'?: The Case of Hyperbolic Discounting
If you have never heard of hyperbolic discounting, if you have heard that economics is all screwed up because it has been proven that in reality people use hyperbolic rather than exponential discounting, or if you are just wondering what the fuss is all about, this is the paper to read.
2. Ed Hopkins Two Competing Models of How People Learn in Games
This paper shows that the steady states and local stability properties of stochastic fictitious play and reinforcement learning are very similar. Apparent evidence to the contrary provided by Erev and Roth had ignored the way that the noise terms in reinforcement learning can push the steady states away from the Nash equilibria of the unperturbed game.
3. Tilman Börgers Costly Voting
Should voting be mandatory or voluntary? The paper shows that voluntary voting Pareto dominates in a symmetric environment with costly voting.
4. Gregory Clark The Long March of History: Farm Laborers Wages in England 1208-1850
In which it is once again shown, on the basis of reliable historical records, that the idea of a long economic stagnation until the miracle of the industrial revolution is quite incorrect. Growth in labor productivity comes from far back in human history, and this is true even for England.
5. Helios Herrera Participation Externalities and Asset Price Volatility
Common wisdom and previous literature argue that, due to a law of large number effect, increasing participation decreases price volatility. Available evidence suggests the opposite is true. The model developed here reconciles theory with facts. Key assumptions are: (i) exogenous fixed cost of entry and, (ii) heterogeneity in risk aversion. In equilibrium new entrants are more risk averse than people already in the market. Hence their participation increases the volatility of supporting prices.