We root this tribute to Nicholas Yannelis in Chapter II of his 1983 Rochester Ph.D. dissertation, and paper with Prabhakar: work strengthens the lower semicontinuity assumption Michael’s continuous selection theorem open sections, leads correspondences defined on a paracompact space values Hausdorff linear topological space. move beyond literature provide necessary sufficient condition for uppe...

a borrowing limit—and find that when the model must match the observed distribution of the growth rate of the output of individual firms, the contribution of market imperfections to TFP is rather small. In “Middlemen in Limit-Order Markets,” Jovanovic and Menkveld analyze the role of middlemen in asset markets who are assumed to have superior information and, hence, potentially improve the allo...

This essay derives the monetary character of trade, the existence of a common medium of exchange, as an outcome of the economic general equilibrium in a class of examples. The setting is a (non-monetary) Arrow-Debreu Walrasian model with the addition of two constructs: multiple budget constraints (one at each transaction) and transaction costs. The multiplicity of budget constraints creates a d...

I investigate the impact of noise trading on securities market efficiency using data from short-horizon Arrow-Debreu securities traded on an online exchange. Using liquidity as a proxy for the amount of noise trading, I show that securities markets with persistently high noise trade exhibit significant pricing anomalies, such as overpricing low probability events and underpricing high probabili...

Although economists have studied various indicators of resource scarcity (e.g., unit cost, resource rent, and market price), the phenomenon of “peaking” has largely been ignored due to its connection to non-economic theories of resource exhaustion (the Hubbert Curve). I take a somewhat different view, one that interprets peaking as a reflection of fundamental economic determinants of an interte...

We consider a financial contract that delivers a single cash flow given by the terminal value of a cumulative gains process. The problem of modelling such an asset and associated derivatives is important, for example, in the determination of optimal insurance claims reserve policies, and in the pricing of reinsurance contracts. In the insurance setting, aggregate claims play the role of cumulat...

Arrow’s independence of irrelevant alternatives (IIA) condition makes social choice depend only on personal rather than interpersonal comparisons of relevant social states, and so leads to dictatorship. Instead, a new “independence of irrelevant interpersonal comparisons” (IIIC) condition allows anonymous Paretian social welfare functionals such as maximin and Sen’s “leximin,” even with an unre...

In this paper we analyse the optimal infinite-horizon advertising policy of a monopolist firm in a market for durable goods, based on classic models by Vidale–Wolfe (Oper. Res. 1957; 5(3):370–381) and Nerlove– Arrow (Economica 1962; 29(114):129–142). A set of necessary conditions for optimality generalizing previous results is provided for the resulting non-convex system. In addition, we establ...