Economics and CPS Seminar mini-course: From Arrow and Nash to Non-Coasian Worldview
Date: Apr 03, 2015 5:30 pm – Apr 03, 2015 6:30 pm
April 3, 2015
From Arrow and Nash to Non-Coasian Worldview
I briefly introduce utility functions (from preferences), and then cover Nash cooperative bargaining solution. I will relate it with Arrow and Coase Theorems. Then, I will discuss Dixit and Olsen (2001) paper, which demonstrates why Coase theorem is problematic for producing large scale public goods.
Since networked CPS have many features of public goods, we will be able to understand why societal interventions (such as regulations, standards, etc.) are important tools for improving CPS resilience. Improving efficiency can be achieved by reducing information deficiencies and contractual costs. This makes mechanism design and comparative analysis of contracts and regulations useful tools for improving the CPS resilience.
Papers:
J. Nash Jr, 1950. The Bargaining Problem, Econometrica, 18- 2, 155-162.
http://www.jstor.org/stable/1907266
J. Nash Jr, 1953. Two-Person Cooperative Games, Econometrica, 21-1, 128-140.
http://www.jstor.org/stable/1906951
A. Dixit and M Olson, 2000. Does voluntary participation undermine the Coase Theorem?, Journal of Public Economics, 76-3, 309-335.
http://www.sciencedirect.com/science/article/pii/S0047272799000894
Further readings:
Joseph Farrell, 1987, Information and the Coase Theorem, The Journal of Economic Perspectives, 1 - 2, 113-129
Paul Samuelson, 1995, Some uneasiness with the Coase Theorem, Japan and the World Economy, 7 1, 1-7
Rubinstein, 1982. Perfect Equilibrium in a Bargaining Model. Econometrica 50-1, 97 - 109
Muhamet Yildiz, 2011, Nash meets Rubinstein in final-offer arbitration, Economics Letters, 110- 3, 226-230, ISSN 0165-1765
Submitted by Carolyn Winter
on
April 3, 2015
From Arrow and Nash to Non-Coasian Worldview
I briefly introduce utility functions (from preferences), and then cover Nash cooperative bargaining solution. I will relate it with Arrow and Coase Theorems. Then, I will discuss Dixit and Olsen (2001) paper, which demonstrates why Coase theorem is problematic for producing large scale public goods.
Since networked CPS have many features of public goods, we will be able to understand why societal interventions (such as regulations, standards, etc.) are important tools for improving CPS resilience. Improving efficiency can be achieved by reducing information deficiencies and contractual costs. This makes mechanism design and comparative analysis of contracts and regulations useful tools for improving the CPS resilience.
Papers:
J. Nash Jr, 1950. The Bargaining Problem, Econometrica, 18- 2, 155-162.
http://www.jstor.org/stable/1907266
J. Nash Jr, 1953. Two-Person Cooperative Games, Econometrica, 21-1, 128-140.
http://www.jstor.org/stable/1906951
A. Dixit and M Olson, 2000. Does voluntary participation undermine the Coase Theorem?, Journal of Public Economics, 76-3, 309-335.
http://www.sciencedirect.com/science/article/pii/S0047272799000894
Further readings:
Joseph Farrell, 1987, Information and the Coase Theorem, The Journal of Economic Perspectives, 1 - 2, 113-129
Paul Samuelson, 1995, Some uneasiness with the Coase Theorem, Japan and the World Economy, 7 1, 1-7
Rubinstein, 1982. Perfect Equilibrium in a Bargaining Model. Econometrica 50-1, 97 - 109
Muhamet Yildiz, 2011, Nash meets Rubinstein in final-offer arbitration, Economics Letters, 110- 3, 226-230, ISSN 0165-1765