This paper presents a model of Rule of Law in which a continuum of agents plays against the State for the appropriation of the economic assets of a stylised economy. The model shows how each agent can either challenge the State or acquiesce, with the latter having the choice of either protecting property rights or abandoning the economy to anarchy. Players’ payoffs are affected by strategic com...

Tacit Collusion in Auctions and Conditions for Its Facilitation and Prevention: Equilibrium Selection in Laboratory Experimental Markets Jin Li Massachusetts Institute of Technology Charles R. Plott California Institute of Technology The paper studies bidder behavior in simultaneous, continuous, ascending price auctions. The purpose is to create (possibly extreme) conditions under which tacit c...

In this paper, we give a uni ed approach to equilibrium asset pricing theories. We de ne a factor subspace and develop a general equilibrium model with an in nite dimensional contingent claim space which will be applied to asset pricing models. We show that there exists a minimal factor subspace F in the sense that no proper subspace of F can serve a factor subspace. We discuss how the minimal ...

This paper attempts to give an overview of the pricing of risks in a pure exchange economy, where trade takes place at time zero and where uncertainty is revealed at time one. An economic equilibrium model under uncertainty is formulated, where conditions characterizing a Pareto optimal exchange equilibrium are derived. We present two sets of sufficient conditions for the existence of an equili...

In real life problems, agents are generally faced with situations where they only have partial or no knowledge about their environment and the other agents evolving in it. So far, most game theory approaches have assumed that this knowledge about the other agents was known by all agents and that observations could be made about all the agents’ actions. In order to alleviate these assumptions, w...

A vast number of gaming situations that economists, political scientists, and evolutionary biologists consider have the essential feature of the prisoners' dilemma game. A cardinal feature of the equilibrium in such situations is that the outcome is individually rational (in the sense that no individual by herself has an incentive to do anything different from what she is doing in equilibrium) ...