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Contents Abstract Keywords 1. Introduction 2. ACE study of economic systems 3. From Walrasian equilibrium to ACE trading 3.1 Walrasian bliss in a hash-and-beans economy 3.2 Plucking out the Walrasian Auctioneer 3.3 The ACE Trading World: Outline 3.4 Defining " equilibrium " for the ACE Trading World 4. ACE modeling of procurement processes 4.1 Constructive(More)
for many helpful comments and suggestions. In addition seminar participants at Stanford, the Federal Reserve Board, the University of Illinois, the European Economic Association and the World Econometric Society Meeting deserve thanks for stimulating discussions. All remaining errors are my own. The views expressed in this paper are solely the(More)
Bill Zame, and four anonymous referees for very helpful discussions and comments. Preliminary versions of this paper were presented at Abstract We prove existence of equilibrium in a continuous-time securities market in which the securities are potentially dynamically complete: the number of securities is at least one more than the number of independent(More)
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I develop a model of an R&D race with knowledge accumulation. My model does not inherit the memorylessness property of the exponential distribution that troubles existing models of R&D races. Hence, firms' knowledge stocks are no longer irrelevant to their behavior during the R&D race, and knowledge accumulation has strategic implications. In this more(More)
Several papers on international business cycles have documented spurious welfare reversals, in that incomplete market economies can produce higher welfare than the complete market economy. This paper demonstrates how conventional linearization, as used in King, Plosser, and Rebelo (1988), can generate approximation errors that are large enough to result in(More)
Can advertising lead to a sustainable competitive advantage? To answer this question, we propose a dynamic model of advertising competition where firms repeatedly advertise, compete in the product market, and make entry as well as exit decisions. Within this dynamic framework, we study two different models of advertising: in the first model, advertising(More)