Skip to main content
6 votes
Accepted

Using Roy's Lemma and Walras' Law to show that

You are right, in this case, we use Roy's Identity: $$ x_{l}(p, w)=-\frac{\frac{\partial v(p, w)}{\partial p_{l}}}{\frac{\partial v(p, w)}{\partial w}} $$ Since we want to show this for $w=1$, we need ...
Lorenzo Castagno's user avatar
1 vote
Accepted

"Repeated games have the additional property that every history gives rise to an identical continuation game."

Is it somehow suggesting that history does not matter? It is suggesting that history may not matter. They are just saying that if, in a given round $t$, all players are willing to take the preceeding ...
Giskard's user avatar
  • 29.4k
1 vote
Accepted

Individual invest on each asset

The individual will invest the whole $\\\$ 10,000$, which makes sense, since in the worst case scenario he still gets a positive return. He has to decide which fraction $\alpha$ to invest in asset $A$ ...
Lorenzo Castagno's user avatar
1 vote

Axioms Underpinning Game Theory

I'd suggest to have a look at http://brandlf.com/publications/nash/ and the references therein.
VARulle's user avatar
  • 7,044
1 vote

Resolve Hold-Up Problems in Joint Investment

I add an answer to complement Michael Greinecker's. Unlike his answer, I consider a renegotiation design problem, whereby the two parties sign a contract prior to making investments which determines ...
Joseph Basford's user avatar

Only top scored, non community-wiki answers of a minimum length are eligible