EconStor Community: Department of Economics - Center for Economic Research, University of Minnesota
http://hdl.handle.net/10419/292
Department of Economics - Center for Economic Research, University of Minnesota2024-03-19T11:35:20ZAn ANC payoff function for networks with sequentially Nash coherent plans
http://hdl.handle.net/10419/58353
Title: An ANC payoff function for networks with sequentially Nash coherent plans
Authors: Nieva, Ricardo
Abstract: I add endogenous bargaining possibilities do develop criteria to determine which statements are credible in a three-player model with complete information where pairs, in a sequential order, can formulate simultaneous negotiation statements. Joint plans are credible if they are the outcome of a plan Nash bargaining problem - the pair bargains cooperatively over the equilibrium payoffs induced by tenable and reliable plans - unless one or both bargainers are indifferent to bargaining. Then, a credible plan is up to the future-request by the oldest pair (of friends) among the past pairs that successfully cooperated and included one of the indifferent players. I interpret this model as an almost non cooperative (ANC) modification of the three-player Aumann-Myerson (1988) sequential network formation game. Whenever discussing a link two players can bargain non cooperatively out of the sum of their Myerson values (1977) in the prospective network and enunciate simultaneous negotiation statements. The disagreement plan suggests link rejection. Sequentially Nash (1950) coherent plans can be defined and exist. Analytical payoffs are unique. In strictly superadditive cooperative games the complete graph never forms.2005-01-01T00:00:00ZA theory of demand for gambles
http://hdl.handle.net/10419/58354
Title: A theory of demand for gambles
Authors: Nyman, John A.
Abstract: Although gambling is primarily an economic activity, no single theory of the demand for gambles has gained wide-spread acceptance among economists. This paper proposes a simple model of the demand for gambling that is based on the standard economic assumptions that (1) resources are scarce and (2) consumers utility increases with income at a decreasing rate. This model has the advantages that (1) it is based solely on changes in income, (2) is potentially applicable to most consumers, (3) preserves the assumption of diminishing marginal utility of income, (4) is consistent with the insurance-buying gambler, and (5) has intuitive appeal.2004-01-01T00:00:00ZHealth Insurance Theory: The Case of the Vanishing Welfare Gain
http://hdl.handle.net/10419/23497
Title: Health Insurance Theory: The Case of the Vanishing Welfare Gain
Authors: Nyman, John A.
Abstract: This paper presents theory that an important source of value is missing from conventional theory of the demand for health insurance, namely, the effect of the transfer of income (from those who purchase insurance and remain healthy to those who purchase insurance and become ill) on purchases of medical care. Because the portion of moral hazard that is attributable to income is welfare increasing and would replace some of moral hazard that is spuriously deemed to be welfare decreasing, the new theory suggests that the value of health insurance has been dramatically undervalued. Implications for policy are outlined.2003-01-01T00:00:00ZThe Market for Liars: Reputation and Auditor Honesty
http://hdl.handle.net/10419/23499
Title: The Market for Liars: Reputation and Auditor Honesty
Authors: McLennan, Andrew
Abstract: In the model there are two types of financial auditors with identical technology, one of which is endowed with a prior reputation for honesty. We characterize conditions under which there exists a "two-tier equilibrium" in which "reputable" auditors refuse bribes offered by clients for fear of losing reputation, while "disreputable" auditors accept bribes because even persistent refusal does not create a good reputation. The main findings are: (a) honest auditors charge higher fees, and have economic profits accruing to reputation; (b) as the fraction of auditors who are honest increases, the premium charged by reputable auditors eventually decreases, which diminishes the incentive to refuse bribes; (c) if the fraction of honest auditors exceeds an upper bound, there does not exist a two-tier equilibrium; (d) thus the reputation mechanism may be undermined by entry into the honest segment of the industry, if it is possible; (e) increasing auditor independence increases the upper bound.2003-01-01T00:00:00Z