Cheng-Zhong Qin

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We test a two-stage compensation mechanism for promoting cooperation in Prisoner's Dilemma games. Players first simultaneously choose binding non-negative amounts to pay their counterparts for cooperating, and then play the induced game knowing these amounts. In our games, all payment pairs consistent with mutual cooperation in subgame-perfect equilibrium(More)
We analyze sunspot-equilibrium prices in nonconvex economies with perfect markets and a continuous sunspot variable. Our primary result is that every sunspot equilibrium allocation can be supported by prices that, when adjusted for probabilities, are constant across states. This result extends to the case of a finite number of equally probable states under(More)
A model of coalition government formation is presented in which inefficient, non-minimal winning coalitions can form in Nash equilibrium. Predictions for five games are presented and tested experimentally. The experimental data support potential maximization as a refinement of Nash equilibrium. In particular, the data support the prediction that non-minimal(More)
Every abstract type of a belief-closed type space corresponds to an infinite belief hierarchy. But only finite order of beliefs is necessary for most applications. As we demonstrate, many important insights from recent development in the theory of Bayesian games with higher-order uncertainty involve belief hierarchies of order 2. We start with(More)
This paper considers a credit mechanism for selecting a unique competitive equilibrium (CE). It is shown that in general there exists a " price-normalizing " bundle, with which the enlargement of the general-equilibrium structure to allow for default subject to appropriate penalties results in a construction of a simple credit mechanism for a credit using(More)
  • Zachary Grossman, Jonathan Pincus, Perry Shapiro, Nic Tideman, Glen Weyl, Scott Kominers +4 others
  • 2010
Land can be inefficiently allocated when attempts to assemble separately-owned pieces of land into large parcels are frustrated by holdout landowners. The existing land-assembly institution of eminent domain can be used neither to gauge efficiency nor to determine how to compensate displaced owners adequately. We take a mechanism-design approach to the(More)
This paper considers a model of endogenous bilateral cross-holdings. A notion of pairwise stability is applied to analyze firms' incentives for cross-holdings. Under certain conditions and Cournot competition on the output market, it is shown that monopoly is the only outcome of pairwise stable cross-holdings when there are two firms; a wide range of(More)
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