This paper derives analytical results for determination of the window size that explores the trade-off between bias and forecast error variance to minimize the mean squared forecast error in the presence of breaks. We show analytically how to determine the estimation window optimally for the case with strictly exogenous regressors. Through Monte Carlo simulations the paper compares the performa...

This article studies the design of optimal mechanisms to regulate entry in natural oligopoly markets, assuming the regulator is unable to control the behavior of firms once they are in the market. We adapt the Clarke–Groves mechanism, characterize the optimal mechanism that maximizes the weighted sum of expected social surplus and expected tax revenue, and show that thesemechanisms generally av...

Researchers of regional and international productivity comparisons are increasingly adopting various frontier approaches to examine convergence and the possible causes of productivity differences. We argue that economy-wide technology frontiers estimated with aggregate measures of output are downward biased. This bias extends not only to estimates of the technology frontier, but also produces i...

We offer a detailed examination of a broad class of 2 × 2 matrix games as a first step toward considering measures of resource distribution and efficiency of outcomes. In the present essay, only noncooperative equilibria and entropic outcomes are considered, and a crude measure of efficiency employed. Other solution concepts and the formal construction of an efficiency index will be addressed i...

This paper attempts to explain several empirical findings regarding religion. The main one is between religion and the fear of death. Some empirical evidence indicates moderately religious individuals fear death more than either atheists or extremely religious individuals. The model also explains the positive relationship often found between religious activity (e.g. church attendance) and age. ...

We propose an allocation rule that takes into account the importance of players and their links and characterizes it for a fixed network. Unlike previous rules, our characterization does not require component additivity. Next, we extend it to flexible networks à la Jackson (2005). Finally, we provide a comparison with other fixed (network Myerson and Position value) and flexible network (player...

In this paper we study the optimal file-sharing mechanism in a peer-to-peer network with a mechanism design perspective. This mechanism improves upon existing incentive schemes. In particular, we show that peer-approved scheme is never optimal and service-quality scheme is optimal only under certain circumstances. Moreover, we find that the optimal mechanism can be implemented by a mixture of p...

This paper explores the effects of a goods and services tax on the degree of competition in an oligopolistic industry and identifies a new mechanism through which the tax influences product market competition. The analysis focuses upon the effects of the tax in a concentrated industry and it is demonstrated that there exist circumstances under which the tax may promote competition by rendering ...

The standard state-spaces of asymmetric information preclude non-trivial forms of unawareness (Modica and Rustichini, 1994, Dekel, Lipman and Rustichini, 1998). We introduce a generalized state-space model that allows for non-trivial unawareness among several individuals, and which satisfies strong properties of knowledge as well as all the desiderata on unawareness proposed this far in the lit...

By employing a model with international trade costs and imperfect competition, in which a domestic firm serves both the domestic market and the foreign market, we show that intraindustry trade compared to intersectoral trade is globally, but not mutually, welfare improving. When also foreign firms become active, competition strengthens but domestic welfare declines, because domestic consumers h...