Equilibrium, Markets and Dynamics

This book contains essays in honour of Claus Weddepohl who, after 22 years, is retiring as professor of mathematical economics at the Department of Quantitative Economics of the University of Amsterdam. Claus Weddepohl may be viewed as th~ first Dutch mathematical economist in the general equi librium tradition of Arrow, Debreu and Hahn. The essays in this book are centered around the themes Equilibrium, Markets and Dynamics, that have been at the heart of Weddepohl's work on mathematical economics for more than three decades. The essays have been classified according to these three themes. Admittedly such a classification always is somewhat arbitrary, and most essays would in fact fit into two or even all three themes. The essays have been written by international as well as Dutch friends and colleagues including Weddepohl's former Ph. D. students. The book starts with a review of Claus Weddepohl's work by Roald Ramer, who has been working with him in Amsterdam for all those years. The review describes how Weddepohl became fascinated by general equilibrium theory in the early stages of his career, how he has been working on the theory of markets throughout his career, and how he turned to applications of nonlinear dynamics to price adjustment processes in a later stage of his career. The first part of the book, Equilibrium, collects essays with general equilib rium theory as the main theme.

Includes supplementary material: sn.pub/extras

Claus Weddepohl: the First Dutch Mathematical Economist.- 1 Introduction.- 2 Axiomatic Choice Theory.- 3 General Competitive Equilibrium.- 4 Non-Walrasian Equilibria.- 5 Overlapping Generations.- 6 Markets.- 7 Price Dynamics.- 8 Final Remarks.- Publication of H.N. Weddepohl.- Equilibrium.- Indeterminateness of Equilibria and Macroeconomics.- 1 Introduction and Preview.- 2 Two Extensions of the Arrow-Debreu Model.- 3 Combining Money and Price Rigidities.- 4 Elementary Dynamics.- 5 Incomplete-Markets Heuristics.- References.- Equilibrium Properties of Status Seeking and Conformism.- 1 Introduction.- 2 Status Seeking and Conformism Revisited.- 3 Final Remarks.- References.- Recent Criticism of General Equilibrium Theory.- 1 Introduction.- 2 Walker and General Equilibrium.- 3 Critical Evaluation.- 4 Further Development of General Equilibrium Theory.- References.- Coordinating Thoughts on Coordination Failures.- 1 Introduction.- 2 Coordination Games.- 3 Strategic Models of Coordination Failures.- 4 Strategic Models of Coordination Failures with a Coordinating Role for Prices.- 5 General Equilibrium Models of Coordination Failures.- 6 Conclusion.- References.- Dynamic Implementation of Competitive Equilibria in Renegotiation Proof Equilibrium.- 1 Introduction.- 2 Economies over Time and Dynamic Mechanisms.- 3 Nash Implementation and Folk Theorems.- 4 Implementation in Subgame Perfect Nash Equilibrium.- 5 Implementation in Renegotiation Proof Equilibrium.- References.- On the Economics of Managing and Returns to Communications Technology.- 1 Introduction.- 2 The Model.- 3 The Path of st.- 4 The Characteristics of the Organization.- 5 Discussion.- Appendix A: The Continuous Case.- References.- Dynamic Adjustment of Supply Constrained Disequilibria to Walrasian Equilibrium.- 1 Introduction.- 2 The Model.- 3 The Equilibrating Mechanism.- 4 Connected Set of Disequilibria.- 5 The Dynamics of the Adjustment Process.- References.- A General Equilibrium of Managed Services.- 1 Introduction.- 2 The Service Opportunity Structure.- 3 The Governance Structure.- 4 An Economy with Marketable Stratified Services.- References.- Markets.- Undesired Goods in Applied Demand Analysis.- 1 Introduction.- 2 An Example.- 3 A Formalization.- 4 Possible Extensions.- References.- Animal Communication.- Still Searching for Bertrand Equilibrium.- 1 Introduction.- 2 Variations on Bertrand's Theme.- 3 Differentiation, Timing and Cooperation.- 4 Behavior.- 5 Conclusion.- References.- Environmental Policy and Bertrand Competition: a General Equilibrium Approach.- 1 Introduction.- 2 The Model.- 3 Perfect Competition, Monopoly and Cournot Oligopoly.- 4 Bertrand Oligopoly: Partial Equilibrium.- 5 Bertrand Oligopoly: General Equilibrium.- 6 Conclusion.- References.- Retiring Rich.- 1 The Usual Suspects.- 2 Everyone Pays, Claus Gains.- 3 Afterthoughts and Future Plans.- References.- Scope for Defined Contribution.- 1 Introduction.- 2 Model.- 3 Results.- 4 Discussion.- 5 Concluding Remarks.- References.- Dynamics.- On the Possibility of Economic Dynamics.- 1 An Example of Equilibrium Dynamics.- 2 Disequilibrium Dynamics.- 3 Disequilibrium Dynamics in the Theory of Growth.- 4 A Brief Digression.- 5 Summing Up.- References.- A Bifurcation in an Overlapping Generations Model.- 1 Introduction.- 2 The Model.- 3 Existence.- 4 Bifurcations.- 5 Conclusions.- References.- Heterogeneous Beliefs and Routes to Complex Dynamics in Asset Pricing Models with Price Contingent Contracts.- 1 Introduction.- 2 The Model.- 3 A Simple Example.- 4 General Comments and Discussion.- References.- Why Are There Nowadays only a Few Articles on Matrices in Economic Journals?.- 1 Introduction.- 2 Stability in an Exchange Economy.- 3 Stability in Cournot Oligopoly.- 4 Final Remarks.- References.- Learning in Networks.- 1 Introduction.- 2 Network Structure and Technological Change.- 3 Network Formation.- 4 Concluding Remarks.- References.- Imitation of Cooperation in Prisoner's Dilemma Games with Some Local Interaction.- 1 Introduction.- 2 The Models.- 3 Imitating the Best Behavior.- 4 Imitating the Best Agent.- 5 Conclusion.- References.- Bubbles and Long Range Dependence in Asset Prices Volatilities.- 1 Introduction.- 2 A Simple Theoretical Model.- 3 Simulations and Testing.- 4 Conclusion.- References.- Nonlinear Dynamics and the Stability of Competitive Equilibria.- 1 Introduction.- 2 The Tâtonnement Process.- 3 Complicated Dynamics in the Tâtonnement Process.- 4 Towards a More Realistic Adjustment Process.- 5 Concluding Remarks.- References.