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We adopt the notion of von Neumann-Morgenstern farsightedly stable sets to predict which matchings are possibly stable when agents are farsighted in one-to-one matching problems. We provide the characterization of von Neumann-Morgenstern farsightedly stable sets: a set of matchings is a von Neumann-Morgenstern farsight-edly stable set if and only if it is a(More)
We analyze a standard environment of adverse selection in credit markets. In our environment , entrepreneurs who are privately informed about the quality of their projects need to borrow in order to invest. Conventional wisdom says that, in this class of economies, the competitive equilibrium is typically inefficient. We show that this conventional wisdom(More)
In a setting of R&D co-opetition we study, by using an all-pay auction approach, how collaboration affects strategic decisions during a patent contest, and how the latter influences the possible collaboration network structures the firms can hope to form. The all pay auction approach allows us to 1) endogenize both network formation and R&D intensities and(More)
Different solution concepts (core, stable sets, largest consistent set, ...) can be defined using either a direct or an indirect dominance relation. Direct dominance implies indirect dominance, but not the reverse. Hence, the predicted outcomes when assuming myopic (direct) or farsighted (indirect) agents could be very different. In this paper, we(More)
Dubey and Geanakoplos [2002] have developed a theory of competitive pooling, which incorporates adverse selection and signaling into general equilibrium. By recasting the Rothschild-Stiglitz model of insurance in this framework, they find that a separating equilibrium always exists and is unique. We prove that their uniqueness result is not a consequence of(More)
Any opinions expressed here are those of the authors and not those of the Collegio Carlo Alberto. Abstract I analyze the equilibrium level of liquidity and its relevance for the allocation of credit, when the notion of liquidity is related to private information. The general equilibrium analysis yields the following main implications: firstly, it provides(More)
Any opinions expressed here are those of the authors and not those of the Collegio Carlo Alberto. Abstract Introducing heterogeneity of beliefs across different agents builds a link between wealth distribution and the equity premium. We demonstrate that an economy populated only by risk neutral agents may nonetheless display a strictly positive equity(More)