On the equilibrium concept for overlapping generations organizations
A necessary feature for equilibrium is that beliefs about the behavior of other agents are rational. We argue that in stationary OLG environments this implies that any future generation in the same situation as the initial generation must do as well as the initial generation did in that situation. We conclude that the existing equilibrium concepts in the literature do not satisfy this condition. We then propose an alternative equilibrium concept, organizational equilibrium, that satisfies this condition. We show that equilibrium exists, it is unique, and it improves over autarky without achieving optimality. Moreover, the equilibrium can be readily found by solving a maximization program.
(This abstract was borrowed from another version of this item.)
|Date of creation:||2000|
|Date of revision:|
|Publication status:||Published in Federal Reserve Bank of Minneapolis Staff Report 282|
|Contact details of provider:|| Postal: |
Phone: (612) 204-5000
Web page: http://minneapolisfed.org/
More information through EDIRC
|Order Information:|| Web: http://www.minneapolisfed.org/pubs/ Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hendricks, Ken & Judd, Ken & Kovenock, Dan, 1980. "A note on the core of the overlapping generations model," Economics Letters, Elsevier, vol. 6(2), pages 95-97.
- Becker, Robert A & Chakrabarti, Subir K, 1995. "The Recursive Core," Econometrica, Econometric Society, vol. 63(2), pages 401-23, March.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Geir B. Asheim, 1995.
"Individual and Collective Time-Consistency,"
1128, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Asheim, G.B., 1996. "Individual and Collective Time-Consistency," Memorandum 20/1996, Oslo University, Department of Economics.
- Asheim, G.B., 1991. "Individual and Collective Time Consistency," Papers 9169, Tilburg - Center for Economic Research.
- Asheim, G., 1991. "Individual and Collective Time Consistency," Discussion Paper 1991-69, Tilburg University, Center for Economic Research.
- Michele Boldrin & Aldo Rustichini, 2000. "Political Equilibria with Social Security," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(1), pages 41-78, January.
- Shell, Karl, 1971. "Notes on the Economics of Infinity," Journal of Political Economy, University of Chicago Press, vol. 79(5), pages 1002-11, Sept.-Oct.
- Kocherlakota, Narayana R., 1996. "Reconsideration-Proofness: A Refinement for Infinite Horizon Time Inconsistency," Games and Economic Behavior, Elsevier, vol. 15(1), pages 33-54, July.
- Esteban, J., 1986. "A characterization of the core in overlapping-generations economies," Journal of Economic Theory, Elsevier, vol. 39(2), pages 439-456, August.
- Esteban, J. & Engineer, M. & Sakovics, J., 1992.
"Costly Transfer Institutions and the Core in an Overlapping Generations Models,"
UFAE and IAE Working Papers
181.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Engineer, Merwan & Esteban, Joan & Sakovics, Jozsef, 1997. "Costly transfer institutions and the core in an overlapping generations model," Journal of Economic Behavior & Organization, Elsevier, vol. 32(2), pages 287-300, February.
- Chari, V V & Hopenhayn, Hugo, 1991. "Vintage Human Capital, Growth, and the Diffusion of New Technology," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1142-65, December.
When requesting a correction, please mention this item's handle: RePEc:fip:fedmwp:602. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Janelle Ruswick)
If references are entirely missing, you can add them using this form.