Birgit Grodal

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We consider a firm acting strategically on behalf of its shareholders. The price normalization problem arising in general equilibrium models of imperfect competition can be overcome by using the concept of real wealth maximization. This concept is based on shareholders' aggregate demand and does not involve any utility comparisons. We explore the efficiency(More)
The literature on supermodular optimization and games is surveyed from the perspective of potential users in economics. This methodology provides a new approach for comparative statics based only on critical assumptions, and allows a general analysis of games with strategic complementarities. The results are presented in a simplified yet rigourous manner,(More)
We consider economies with incomplete markets, production, and a given distribution of initial endowments. The main purpose of the paper is to present a robust example of an economy with only one firm and one good per state in which no production decision entails a constrained efficient outcome. In particular, the unique Drèze equilibrium is dominated by(More)
¤ We thank Robert Anderson for tutelage and Kenneth Arrow and Joe Ostroy for helpful arguments.ees and the editor for many comments that improved both the content and the exposition. Abstract This paper de¯nes a general equilibrium model with exchange and club formation. Agents trade multiple private goods widely in the market, can belong to several clubs,(More)
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* Earlier versions of this paper circulated under the title " A Model of Firm Formation and Skills Acquisition. " We thank seminar audiences at Zame) for financial support. We have discussed this work with many helpful people, including Abstract This paper provides an extension of general equilibrium theory that incorporates the actions of individuals both(More)
By taking sets of utility functions as primitive, we define an ordering over assumptions on utility functions that gauges their measurement requirements. Cardinal and ordinal assumptions constitute two levels of measurability, but other assumptions lie between these extremes. We apply the ordering to explanations of why preferences should be convex. The(More)
This study proves various global stability results for unbounded optimal growth models. The main theorem states that any optimal path converges into the neighborhood of a balanced growth path if future utility is sufficiently weakly discounted. The assumptions allow for non-smooth technologies, joint production, and production in independent sectors. Hence,(More)