Publications
While payoff-based learning models are almost exclusively devised for finite action games, where players can test every action, it is harder to design such learning processes for continuous games. We construct a stochastic learning rule, designed for games with continuous action sets, which requires no sophistication from the players and is simple to implement: players update their actions according to variations in own payoff between current and previous action. We then analyze its behavior in several classes of continuous games and show that convergence to a stable Nash equilibrium is guaranteed in all games with strategic complements as well as in concave games, while convergence to Nash equilibrium occurs in all locally ordinal potential games as soon as Nash equilibria are isolated.
We investigate how asymmetric information on final demand affects strategic interaction between a downstream monopolist and a set of upstream monopolists, who independently produce complementary inputs. We study an intrinsic private common agency game in which each supplieriindependently proposes a pricing schedule contract to the assembler, specifying the supplier's payment as a function of the assembler's purchase of inputi. We provide a necessary and sufficient equilibrium condition. A lot of equilibria satisfy this condition but there is a unique Pareto-undominated Nash equilibrium from the suppliers' point of view. In this equilibrium, there are unavoidable efficiency losses due to excessively low sales of the good. However, suppliers may be able to limit these distortions by implicitly coordinating on an equilibrium with a rigid (positive) output in bad demand circumstances.
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Cet article propose une discussion méthodologique à partir d’une évaluation économique des impacts sur la mortalité de l’exposition chronique aux particules fines en France continentale. Il prend comme point de départ l’évaluation quantitative d’impact sanitaire (EQIS), réalisée par Santé publique France en 2016, de 5 scénarios de réduction des concentrations par deux méthodes de mesure de la mortalité (nombre de décès prématurés évités et nombre total d’années de vie gagnées). Après une justification des valeurs monétaires utilisées – 3 millions € pour la valeur d’évitement d’un décès et 80 000 € pour celle d’une année de vie gagnée – nous les appliquons aux données sanitaires, et obtenons des résultats comparables aux études contemporaines. En particulier, dans un scénario sans pollution anthropique, l’EQIS de 2016 estime à 48 283 les décès prématurés évités, que nous évaluons à 144,85 milliards €2008. Nous questionnons ensuite les méthodes et pratiques, en commençant par identifier les sources de divergence avec la précédente étude française menée en 1998-99, dont l’évaluation était 5 fois moindre en dépit d’émissions particulaires plus élevées. Puis, nous discutons le choix des valeurs monétaires et les conditions d’utilisation de ces résultats dans la décision publique. Au final, nous apportons un argument supplémentaire sur la nécessité de réduire l’exposition des populations à la pollution de l’air ambiant en France.
This paper provides an empirical assessment of the effect of income inequality on credit dynamics in 12 advanced economies over the period 1948–2015. We use foreign Communist influence as an instrument to identify exogenous variation in inequality and estimate the dynamic effect of a top income shock on credit over GDP. The results suggest that the evolution of top incomes has persistent effects on credit expansion, especially for mortgage and business loans.
This paper analyzes the link between asset bubbles, endogenous labor and capital. First, we explicitly and theoretically derive the conditions to have a crowding-in effect of the bubble, i.e. higher levels of capital and labor. Second, the utility function we consider shows that this result does not require an arbitrarily high elasticity of intertemporal substitution in consumption.
The COVID-19 pandemic has caused an unprecedented shock in all areas of human activity. Although the pandemic is not over and a wide range of its impacts has not yet unfolded, governments are required to act promptly to diminish its negative consequences. This brief discloses several keystones of the short- and medium-run policy strategy to let the governments of the Southern Mediterranean countries[1] build back better (WRI, OECD, 2020) after the coronavirus crisis, keeping current environmental challenges in sight.
Immigrants are disproportionately employed in agriculture and construction, sectors with relatively high injury rates. What pushes immigrants to accept riskier and more strenuous work conditions? We propose a circular model and show that differences in average work conditions borne by natives and immigrants are driven by both preferences and unearned income. Using French data we find that, in line with the model’s predictions, (i) rigid wages are associated with a larger immigrant-native gap in work conditions; (ii) high unearned income individuals benefit on average from better work conditions; (iii) for immigrants and natives with high unearned income, differences in demographic characteristics explain part of the immigrant-native gap in work conditions. In contrast, the gap largely persists among low unearned income people even once we have imposed identical demographic composition among them. This suggests that there must be other factors that influence preferences over work conditions and that are missing in our empirical analysis.
We consider a contracting relationship where the agent's effort induces monetary costs, and limits on the agent's resource restrict his capability to exert effort. We show that the principal finds it best to offer a sharing contract while providing the agent with an up-front financial transfer only when the monetary cost is neither too low nor too high. Thus, unlike in the limited liability literature, the principal might find it optimal to fund the agent. Moreover, both incentives and the amount of funding are nonmonotonic functions of the monetary cost. These results suggest that an increase in the interest rate may affect the form of contracts differently, depending on the initial level of the former. Using the analysis, we provide and discuss several predictions and policy implications.
This paper investigates the impact of informal microfinance groups (self-help groups, or SHGs) on children’s education and work in rural India. In 2002, 24 eligible villages were randomly selected for opening SHGs, and 12 others were randomly selected as a control group. Households were surveyed three times over a 5-year period, allowing for the study of medium-term outcomes. We find a robust and strong increase in secondary school enrollment rates over time, with intention-to-treat estimates of about 40%. This effect stems from a quicker grade progression, leading to lower dropout rates between primary and secondary school. Contrary to usual presumptions, we find no decrease in overall child labor (but a reorientation toward part-time domestic work) and no direct role of credit. By contrast, we show that social interactions within SHGs are very important.
