Economics of Missing Markets, Information and Games

One of Britain's foremost economists led this collective effort by many other distinguished economists to extend the important Walrasian General Equilibrium Model which is at the core of modern economic analysis. The model is acknowledged as having left many important questions unanswered. This book provides answers that are of considerable relevance to our view of a decentralized economy. In particular it tackles the question of imperfect information and its effects on markets and economic agents' behaviour. The book raises general issues about incomplete markets; discusses some outstanding problems in game theory; discusses information and decision making; focuses on contracts, and on dynamics and intertemporal economics using overlapping generation models; and explores the relationship between micro and macro economics.Table of ContentIntroduction; PART I. Kreps: Out-of-equilibrium beliefs and out-of-equilibrium behaviour; Brandenberger, Dekel: The role of common knowledge assumptions in game theory; Sabourian: Repeated Games: A survey; Hahn: Information Dynamics; PART II. Dasgupta: The economics of parallel research; Doyle: Strategy variables and theories of industrial organization; Canning: Bargaining theory; PART III. Newbery: Missing Markets: Consequences and remedies; Bray: Rational expectations, information, and asset markets; Machina: Decision-making in the presence of risk; PART IV. Anderlini: Theoretical modelling of banks and bank runs; Masking, Riley: Optimal multi-unit auctions; Worrall: Labour contract theory; PART V. Kehoe: Intertemporal general equilibrium models; Burnel: Sunspots; Kelsey: An introduction to nonlinear dynamics and its application to economics; PART VI. Thomas: Some micro and macro implications of inventories; Modica: Business cycles in equilibrium: An example; Makowski: Keynes's liquidity preference theory: A suggested re-interpretation