 | Professor of Economics, University of Wisconsin Verified email at ssc.wisc.edu Cited by 1667 |
R Shimer… - Econometrica, 2000 - Wiley Online Library
In Becker's (1973) neoclassical marriage market model, matching is positively assortaive if
types are complements: ie, match output f (x, y) is supermodular in x and y. We reprise this
famous result assuming time-intensive partner search and transferable output. We prove ...
L Smith… - Econometrica, 2000 - Wiley Online Library
This paper explores how Bayes-rational individuals learn sequentially from the discrete
actions of others. Unlike earlier informational herding papers, we admit heterogeneous
preferences. Not only may type-specific 'herds' eventually arise, but a new robust ...
D Abreu, PK Dutta… - Econometrica: Journal of the Econometric …, 1994 - JSTOR
WE ARE CONCERNED here with perfect" folk theorems" for infinitely repeated games with
complete information. Folk theorems assert that any feasible and individually rational payoff
vector of the stage game is a (subgame perfect) equilibrium payoff in the associated ...
G Moscarini… - Econometrica, 2001 - Wiley Online Library
Consider Wald's classical (1947) Bayesian formulation of sequential analysis. A given
decision maker () is uncertain about a payoff relevant state of the world, and before deciding,
can buy multiple iid informative signals at constant marginal cost. The should then ...
L Smith - Games and Economic Behavior, 1992 - Elsevier
Abstract This paper characterizes perfect folk theorems for repeated games with
overrlapping generations of finite-lived players. We prove two uniform folk theorems that
admit arbitrarily long-lived players for a given discount factor; the result for n> 2 players ...
L Smith - Journal of Political Economy, 2006 - JSTOR
Consider a heterogeneous agent matching model in which the payoff of each matched
individual is a fixed function of both partners' types. In a 1973 article, Becker showed that
assortative matching arises in a frictionless setting simply if everyone prefers higher ...
Abstract: In his theory of marriage, Becker (1973) showed that assortative matching arises
with either (i) supermodular productive interaction and transferable utility, or (ii) monotonic
production with nontransferable utility (NTU). In an exploration of the latter NTU matching ...
H Chade… - Econometrica, 2006 - Wiley Online Library
We introduce and solve a new class of “downward-recursive” static portfolio choice
problems. An individual simultaneously chooses among ranked stochastic options, and
each choice is costly. In the motivational application, just one may be exercised from those ...
R Shimer… - Advances in Macroeconomics, 2001 - degruyter.com
This paper explores the efficiency of decentralized search behavior and matching patterns in
a model with ex ante heterogeneity and a constant returns to scale search technology. We
show that a linear tax or subsidy on search intensity decentralizes the social optimum. In ...
G Moscarini,
M Ottaviani… - Economic Theory, 1998 - Springer
Summary. In the social learning model of Banerjee [1] and Bikhchandani, Hirshleifer and
Welch [2] individuals take actions sequentially after observing the history of actions taken by
the predecessors and an informative private signal. If the state of the world is changing ...
Abstract: We show that far from capturing a formally new phenomenon, informational
herding is really a special case of single-person experimentation and'bad herds' the typical
failure of complete learning. We then analyze the analogous team equilibrium, where ...
Abstract: A longstanding unresolved problem in Bayesian economics is how to value and
price information. This paper resolves both problems for the case of inexpensive information.
We build on Chernoff's (1952) asymptotic efficiency of simple hypothesis tests to produce ...
L Smith - Econometrica: Journal of the Econometric Society, 1995 - JSTOR
FOR A GIVEN n-PLAYER normal form game G, let G (3, T), be the T-fold repeated game
where the objective function is the average discounted sum of stage payoffs. For this finitely-
repeated game, the perfect folk theorem is said to hold if the set of subgame perfect ...
R Shimer… - University of Chicago and University of Michigan …, 2001 - uchicago.edu
Abstract This paper explores optimal matching policies in constant returns to scale search
economies with heterogeneous agents. We look for a policy that maximizes the present
value of output in the economy, taking the search frictions as given. Our main result is that ...
A Anderson… - Cowles Foundation Discussion Paper No. …, 2006 - papers.ssrn.com
Abstract: Consider Becker's 1973 classic matching model, with unobserved fixed types and
stochastic publicly observed output. If types are complementary, then matching is assortative
in the known Bayesian posteriors (the'reputations').
... department of economics CROSS-SECTIONAL DYNAMICS IN A TWO-SIDED MATCHING MODEL
Lones Smith 95-14 Feb. 1995 massachusetts ... 02139 Page 6. Page 7. CROSS-SECTIONAL
DYNAMICS IN A TWO-SIDED MATCHING MODEL Lones Smith 95-14 Feb. 1995 ...
A Anderson… - Review of Economic Studies, 2010 - Wiley Online Library
This paper introduces a general model of matching that includes evolving public Bayesian
reputations and stochastic production. Despite productive complementarity, assortative
matching robustly fails for high discount factors, unlike in Becker (1973). This failure holds ...
L Smith… - Ann Arbor, 2002 - papers.ssrn.com
Abstract: This paper offers a noncooperative behaviourally-founded solution of the complete
information bargaining problem where two impatient individuals wish to divide a unit pie. We
formulate the game in continuous time, with unrestricted timing and content of offers. ...
L Smith - The American Economic Review, 2000 - JSTOR
This paper investigates the Bayesian decision-theoretic foundations of the popular Wall
Street refrain that" timing is everything." I explore the purely informational motives for trade
timing: If public information is being released over time, when is a financially and ...
J Keppo, G Moscarini… - Journal of Economic Theory, 2008 - Elsevier
This paper produces a theory of value for Gaussian information with two states and two
actions, tracing the solution of the option pricing formula, but for the process of beliefs. We
derive explicit formulas for the value of information. The marginal value is convex and ...
A Park… - Ann Arbor, 2003 - papers.ssrn.com
Abstract: There are two varieties of timing games in economics: In a war of attrition, more
predecessors helps; in a pre-emption game, more predecessors hurts. In this paper, we
introduce and explore a spanning class with'rank-order payoffs' that subsumes both as ...
[CITATION] Error Persistence, and Experimental versus Observational Learning
L Smith - Foerder Institute for Economic Research Working …, 1991
A Park… - Theoretical Economics, 2008 - econtheory.org
Abstract There are two varieties of timing games in economics: wars of attrition, in which
having more predecessors helps, and pre-emption games, in which having more
predecessors hurts. This paper introduces and explores a spanning class with rank-order ...
Abstract I explore the search-constrained exchange paradigm where traders differ
stochastically in their consumption-valuations of any given good, and all goods are 'durable'.
Individuals expect to engage in repeat trade before leaving the market. Thus, any good is ...
H Chade, G Lewis… - Ann Arbor, 2006 - Citeseer
Abstract We consider the classic college admissions problem. Unlike Gale and Shapley
(1962), we realistically assume that (i) students' college application choices are nontrivial
because applications are costly, and (ii) college rankings of students are noisy and thus ...
A Anderson… - 2001 - papers.ssrn.com
Abstract: Consider Becker's (1973) classic static matching model, with output a stochastic
function of unobserved types. Assume symmetric incomplete information about types, and
thus commonly observed Bayesian posteriors. Matching is then assortative in these ...
H Chade, G Lewis… - 2009 - papers.ssrn.com
Abstract: We develop the first Bayesian model of decentralized college admissions, with
heterogeneous students, costly portfolio applications, and noisy college evaluations.
Students face a nontrivial portfolio choice, and colleges choose admissions standards that ...
J Keppo,
L Smith… - Review of Economic Studies, 2008 - Wiley Online Library
The timing of elections is flexible in many countries. We study this optimization by first
creating a Bayesian learning model of a mean-reverting political support process. We then
explore optimal electoral timing, modelling it as a renewable American option with ...
K Malinova… - 2005 - mendeley.com
Abstract We propose a tractable new informational framework for large economies with
informationally heterogeneous individuals, and then apply it to analyze rational expectations
equilibria. Our framework subsumes both public and conditionally independent private ...
E Quercioli… - Unpublished manuscript, 2009 - papers.ssrn.com
Abstract: This paper develops a new tractable strategic theory of counterfeiting as a
competition between good and bad guys. There is free entry of bad guys, who choose
whether and what note to counterfeit, and what quality to produce. Good guys select a ...
L Smith - Mathematical Social Sciences, 1999 - Elsevier
This paper studies a job search model. Wage offers arrive in a Poisson fashion from a
known distribution. Absent the option to quit, or in a stationary world, it is well-known that the
reservation wage for an impatient worker is the flow return on the assetbeing unemployed' ...
H Chade, G Lewis… - Social Science Research Network …, 2011 - aida.wss.yale.edu
Abstract We develop the first Bayesian model of decentralized college admissions, with
heterogeneous students, costly portfolio applications, and uncertainty about student
calibers. Students face a nontrivial portfolio choice, and colleges choose admissions ...
K Malinova… - Ann Arbor, 2002 - artsci.wustl.edu
Abstract This paper studies dynamic rational expectations equilibria with heterogeneously
informed risk averse traders. It is well-known that an infinite regress 'forecasting the
forecasts' problem arises unless one assumes that:(i) informed traders are infinite in ...
H Chade, P Prokopovych… - Journal of Economic Theory, 2008 - Elsevier
We study infinitely repeated games with perfect monitoring, where players have β–δ
preferences. We compute the continuation payoff set using recursive techniques and then
characterize equilibrium payoffs. We then explore the cost of the present-time bias, ...
D Abreu, PK Dutta… - 1993 - dspace.mit.edu
... of economics THE FOLK THEOREM FOR REPEATED GAMES Dilip Abreu, Prajit K. Dutta, Lones
Smith 93-19 (92-25 Rev.) massachusetts institute of ... Page 7. THE FOLK THEOREM FOR
REPEATED GAMES Dilip Abreu, Prajit K. Dutta, Lones Smith Nov. 93 93-19 (92-15 Rev.) ...
L Smith - Economics Letters, 1997 - Elsevier
This paper investigates time-consistent vNM preferences under uncertainty where the
strategies are stopping times, and sooner is preferred to later. I show that in addition to
Strotz's [Strotz, R., 1956. Myopia and Inconsistency in Dynamic Utility Maximization, ...
H Chade, G Lewis… - 2006 Meeting Papers, 2006 - ideas.repec.org
We consider a college admissions problem with uncertainty. We realistically assume that (i)
students' college application choices are nontrivial because applications are costly,(ii)
college rankings of students are noisy and thus uncertain at the time of application, and (iii ...
[CITATION] Couterfeit Money
E Quercioli… - 2007 - mimeo
K Malinova… - Ann Arbor, 2006 - individual.utoronto.ca
Abstract We propose a tractable new informational framework for large economies with
informationally heterogeneous individuals, and then apply it to analyze rational expectations
equilibria. Our framework subsumes both public and conditionally independent private ...
[CITATION] Re-thinking bargaining theory
L Smith - 1997 - Technical report, MIT Department of …
K BOGNÊR… - DISCUSSION PAPERS, 2004 - econ.core.hu
Abstract We analyze time-costly decision-making in committees by privately informed
individuals, such as juries, panels, boards, etc. In the spirit of the Coase Conjecture, we
show that the decision is ‚almost instantaneous “when individuals entertain identical ...
J Cherry… - Ann Arbor, 2009 - papers.ssrn.com
Abstract: We bound from the outside the set of sequential equilibrium payoffs in repeated
games of private monitoring. Our approach treats private histories as endogenous
correlation devices. To do this, we develop a tractable new solution concept for standard ...
[CITATION] Marriage Market with Frictions
L Smith - Journal of Political Economy, 2007
... department of economics OPTIMAL JOB SEARCH IN A CHANGING WORLD Lones Smith
95-3 Jan. 1995 massachusetts ... 02139 Page 6. Page 7. OPTIMAL JOB SEARCH IN A CHANGING
WORLD Lones Smith 95-3 Jan. 1995 MASSACHUSETTS INSTITUTE OF TECHNOLOGY ...
Abstract: I develop a simple new model of strategic trade with endogenous timing,
generalizing Glosten and Milgrom (1985): A competitive market maker faces in risk neutral
traders with unit demands or supplies. It is private information whether any given trader is ...
Abstract: We prove that the recently proposed informational herding models are but special
cases of a standard single person experimentation model with myopia. We then re-interpret
the incorrect herding outcome as a familiar failure of complete learning in a optimal ...
GR Lanyon… - Papers, 1999 - ideas.repec.org
We explore the age-value and age-quantity productivity proles of fty-three great Western
artists whose work has been auctioned in the last decade. In terms of the average value of
their paintings, we nd that artists have three distinct phases to their careers: a steep incline ...
Abstract We explore a model of costly dynamic deliberation in which two partially informed
jurors with common interests aggregate their information by coarse binary communication to
arrive at a common verdict. The model yields three key predictions on equilibrium ...
[CITATION] Working Paper (Universitat Tel Aviv. Foerder Institute for Economic Research); 1991
C Fershtman, J Zhou,
O Shy, MI Kamien, E Muller… - 1991 - Tel Aviv University
Abstract: Given standard, transparent assumptions, this paper questions the Wall Street
adage that" timing is everything." I show that for an Arrow security, a" small" risk-neutral
trader with private information that is conditionally independent of the public information is ...
LA Smith, A Peter, JC Jamison - 1998 - dspace.mit.edu
... This was to be my first introduction to what became my chosen field: game theory. In my
graduate career, I have learned the most, and received the largest amount of valuable
advice (both general and specific), from my advisor, Lones Smith. ...
[CITATION] Informational Herding and Optimal Experimentation
A Anderson… - Ann Arbor - economics.uwo.ca
Abstract This paper develops a simple unified model of dynamic pure moral hazard rents in
dynamic games and finance. We assume that an impatient individual has a unique
competitive informational edge that would vanish were his actions perfectly observed. We ...
[CITATION] A Theory of Diseases, Counterfeit Money, and Other Contagious Matching Games
E Quercioli, M Bocconi… - 2005
H Herrera… - 2005 - en.scientificcommons.org
Abstract Rational Traders Frenzies Helios Herrera ITAM Mexico Lones Smith Economics
Department Michigan original version June this version May Abstract develop simple new
model strategic trade with endogenous timing generalizing competitive market maker ...
A Park… - 2010 - homes.chass.utoronto.ca
Abstract We develop a unified and tractable theory of sudden mass movements using a
continuum agent timing game. We assume that an underlying payoff-relevant fundamental
“ripens”, peaks at an optimal “harvest time”, and then “rots”. These payoffs are multiplied ...
L Smith… - 2005 Meeting Papers, 2005 - en.scientificcommons.org
Abstract Endogenous Herding and The Gold Rush Timing Models with Both Explosive and
Timed Entry Andreas Park University Toronto Lones Smith University Michigan This Version
December Abstract There vast collection scenarios where people have time decision ...
Abstract: We explore the age-value and age-quantity productivity profiles of 53 great
Western artists whose work has been auctioned in the last decade. In terms of the average
value of their paintings, we find that artists have three distinct phases to their careers: a ...
A Anderson… - 2009 - georgetown.edu
Does the Minimax Theorem predict play in professional sports? Yes, but a re- cent literature has
also found deviations from “rational” play in tennis, baseball, and football. We explain these failures
by modeling players engaged in a dynamic conflict. We introduce and explicitly solve a ...
In the social learning model of Banerjee [1] and Bikhchandani, Hirshleifer and Welch [2] individuals
take actions sequentially after observing the history of actions taken by the predecessors and
an informative private signal. If the state of the world is changing stochastically over time ...
D Abreu… - 1992 - lev1101.dklevine.com
1. Introduction We are concerned here with" folk theorems" for repeated games with
complete information. Such theorems establish that in the limit with little or no discounting
any feasible and individually rational payoff of the stage game is an equilibrium payoff of ...
GML Smith - 1998 - dido.wss.yale.edu
Abstract The paper revisits Wald's (1947) sequential experimentation paradigm, now
assuming that an impatient decision maker can run variable-size experiments each period at
some increasing and strictly convex cost before finally choosing an irreversible action. We ...
L Smith… - The New Palgrave Dictionary of Economics, 2011 - econ.ku.dk
Abstract Observational learning occurs when privately-informed individuals sequentially
choose among finitely many actions, after seeing predecessors' choices. We summarize the
general theory of this paradigm: Belief convergence forces action convergence, ...
A Anderson… - 2009 - cireq.umontreal.ca
Abstract Aumann, Maschler, Stearns (1968) posited a strictly zero sum world with two
infinitely patient parties, observed actions, and opposite actions preferred in the two states.
One player is informed about the state, and the other is uninformed. They showed that ...
[CITATION] Notes On: Dynamic Rational Expectations Equilibrium with Private Information: How Not to Forecast the Forecasts of Others
K Malinova… - Ann Arbor
L Smith - Working papers, 1996 - ideas.repec.org
In the social learning model of Banerjee and Bikhchandani, Hirshleiger and Welch,
individuals take action sequentially after observing the history of actions taken by the
predecessors and an informative private signal. If the state of the world is changing ...
Abstract We explore a model of costly dynamic deliberation in which two partiallyinformed
jurors with common interests try to arrive at a common binary verdict by coarse binary
communication. They can only communicate their information through a dynamic voting ...
G Parker,
L Smith… - 2010 - idei.fr
Abstract A large and growing portion of the economy transpires within software platforms.
These environments are bounded high growth economies that embed many novel features:
the platform owner sets rules for participation; R&D occurs rapidly, with generations of ...
[CITATION] Timing Models with Both Explosive and Timed Entry: Endogenous Herding and The Rush Hour
A Park…
P Prokopovych… - Ann Arbor, 2004 - repec.org
Abstract This paper investigates discounted infinitely repeated games with observable
actions extended with an extensive form correlation device. Such games model situations of
repeated interaction of many players who choose their individual actions conditional on ...
Abstract: I illustrate the convergence to Rubinstein? s (1982) bargaining outcome of the
solutions of the finite-horizon truncations of that game. The depiction is new, and hopefully
instructive, and has the flavour of international trade diagrams.
[CITATION] Endogenous Herding and The Gold Rush: Timing Models with Both Explosive and Timed Entry
A Park…
An academic directory and search engine.
[CITATION] Advanced Game Theory
L Smith - Economic Journal, 2001
We analyze time-costly decision-making in committees by privately informed individuals, such
as juries, panels, boards, etc. In the spirit of the Coase Conjecture, we show that the decision
is "almost instantaneous" when individuals entertain identical objectives. Delay can only ...
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