NAJ Economics
Peer Reviews of Economics Publications


Charter Editorial Board
ISSN 15584682 
Volume 10  March 21, 2005 Previous Next
1. Patrick Legros Art and the Internet: Blessing the Curse? Brilliant survey of the field, containing also original work. The boldrinlevine model is extended to model the markets for art. An artist can embody each original idea in m different works of art y(1), ..., y(m). The creativity of an artist is indexed by n, the number of original ideas. Each artist has a fixed capacity k of making works of art, hence he will make s=k/n embodiments for each of his own n ideas. This defines his portfolio. Consumers and artists have access to reproduction technologies. The welfare theorems apply, and are used to derive supporting prices and decentralization mechanisms. He argues that incentive provisions for new creative ideas have little to do, at least in principle, with most of the crying about piracy and in support of copyrights.
2. Johannes Horner and Wojciech Olszewski The Folk Theorem for Games with Private, AlmostPerfect Monitoring This completes a step toward the Folk Thereom for repeated games with private monitoring. It establishes the result for all nplayer games where monitoring is "almostperfect" (and the usual dimensionality conditions are satisfied.) Previous authors had accomplished as much as possible using limited methods to avoid getting their hands dirty. The quantity of dirt on these authors' hands is impressive.
3. Hector Chade and Lones Smith Simultaneous Search The authors study the following "college application" problem. A student who assigns different probabilities to getting in to different colleges and faces a percollege cost of application must identify the optimal set of schools to which to submit applications. The paper develops a marginal improvement algorithm to solve for the optimal application portfolio and provides elegant characterization results. The optimal portfolio turns out to be less risky than if applications are made sequentially but more risky than if the student picked the most individually promising schools in order ignoring the portfolio aspect of the problem.
4. Francesco Squintani Contracts, Liability Restrictions and Costly Verification This paper is an original attempt to open the black box known as "the court"  specifically, the notion of "verifiability"  in contract theory. Before playing a normalform game, two players sign a contract that conditions on the outcome of the game. The verifiability constraint is modeled as a partition of the set of outcomes. So far, this description follows Bernheim and Whinston (AER 1998). Squintani takes a step forward and allows for nonproduct partitions: even when the court can verify a breach of contract, it may be unable to verify who did it. In such cases (assuming individual liability), the players may want to write a "roundabout" contract containing an explicit commitment which the players expect to be violated in equilibrium. Although such a contract is unenforceable, it may dominate all enforceable contracts. Squintani also considers nonpartitional verifiability structures and examines conditions for their desirability, in terms of familiar properties of nonpartitional information structures.
5. Maria SaezMarti and Jorgen W. Weibull Discounting and altruism to future decisionmakers Suppose that parents have an altruistic utility function that is a weighted sum of the "selfish" utilities of their own consumption and that of each of their descendants. Each descendant in turn has such an altruistic utility function. When can a parent's altruistic utility be written as a positively weighted linear combination of her own selfish utility and the altruistic utilities of her descendants. The authors show that there are interesting cases where this cannot be done and where it can be done. They provide remarkably crisp necessary and sufficient conditions for when it can be done.
