Birgitte Sloth

University of Southern Denmark | SDU · Department of Business and Economics

The profession of academic economics has been widely criticized for being excessively dependent on technical models based on unrealistic assumptions about rationality and individual behavior, and yet it remains a sparsely studied area. This volume presents a series of background readings on the profession by leading scholars in the history of econo...

The authors of the article claim that the economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions. In their view, this lack of understanding is due to a misallocation of research efforts in economics. They trace the deeper roots of this...

The fundamental failing of modern economics, or at least of its dominant mainstream project, is not that it was unable successfully to predict the recent crisis but that it is ill-equipped to illuminate much that happens in the economy at any time. The latter is an assessment that I have advanced and defended on numerous occasions (e.g., Lawson, 19...

Economists not only failed to anticipate the financial crisis; they may have contributed to it—with risk and derivatives models that, through spurious precision and untested theoretical assumptions, encouraged policy makers and market participants to see more stability and risk sharing than was actually present. Moreover, once the crisis occurred,...

The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the p...

This paper, on behalf of the UK-based Association for Heterodox Economists (AHE), argues for a reformulation of the Subject Benchmark Statement for Economics (SBSE) on pluralist principles. Pluralism – the capacity to examine critically a range of explanations for observed reality – should be the primary required outcome of economics education....

This volume is a collection of research papers that examine the possibility of reducing the negative impacts from traffic by using new information and communication technologies. The focus is on passenger transport and most papers study various aspects of road pricing as an instrument to decrease traffic.

Economic growth and globalisation create traffic growth, leading to congestion, which again increases travel times and costs. Traffic growth also increases CO2 emissions, air pollution, accidents, and noise. So, clearly there is a need to manage traffic, taking into account that there is a need for transportation; hence it cannot be restricted with...

We formulate an evolutionary learning process with trembles for static games of incomplete information. For many games, if the amount of trembling is small, play will be in accordance with the games’ (strict) Bayesian equilibria most of the time supporting the notion of Bayesian equilibrium. Often the process will select a specific equilibrium. For...

We define an evolutionary process of “economic Darwinism” for playing-the-field, symmetric games. The process captures two forces. One is “economic selection”: if current behavior leads to payoff differences, behavior yielding lowest payoff has strictly positive probability of being replaced by an arbitrary behavior. The other is “mutation”: any be...

We formulate an evolutionary learning process with trembles for static games of incomplete information. For many games, if the amount of trembling is small, play will be in accordance with the games' (strict) Bayesian equilibria most of the time supporting the notion of Bayesian equilibrium. Often the process will select a specific equilibrium. We...

We formulate an evolutionary learning process in the spirit of Young (1993a) for games of incomplete information. The process involves trembles. For many games, if the amount of trembling is small, play will be in accordance with the games' (semi- strict) Bayesian equilibria most of the time. This supports the notion of Bayesian equilibrium. Furthe...

This paper uses a two-dimensional version of a standard common consequence experiment to test the intransitivity explanation of Allais-paradox-type violations of expected utility theory. We compare the common consequence effect of two choice problems differing only with respect to whether alternatives are statistically correlated or independent. We...

We provide robust examples of symmetric two-player coordination games in normal form that reveal that equilibrium selection by the evolutionary model of Young (1993) is essentially different from equilibrium selection by the evolutionary model of Kandori, Mailath and Rob (1993).

This paper studies adaptive learning in extensive form games and provides conditions for convergence points of adaptive learning to be sequential equilibria. Precisely, we present a set of conditions on learning sequences such that an assessment is a sequential equilibrium if and only if there is a learning sequence fulfilling the conditions, which...

The Choquet integral is an integral part of recent advances in decision theory involving non-additive measures. In this article we present two new axiomatic characterizations of this functional.

We study equilibrium selection by evolutionary learning in monotone signalling games. The learning process is a development of that introduced by Young for static games extended to deal with incomplete information and sequential moves; it thus involves stochastic trembles. For vanishing trembles the process gives rise to strong selection among sequ...

We generalize the concept of Nash equilibrium in mixed strategies for strategic form games to allow for ambiguity in the players'' expectations. In contrast to other contributions, we model ambiguity by means of so-called lower probability measures or belief functions, which makes it possible to distinguish between a player''s assessment of ambigui...

This article analyzes the fictitious play process originally proposed for strategic form games by Brown (1951) and Robinson (1951). We interpret the process as a model of preplay thinking performed by players before acting in a one-shot game. This model is one of bounded rationality. We discuss how fictitious play should then be defined for extensi...

We present a decentralization result which is useful for practical and theoretical work with sequential equilibrium, perfect Bayesian equilibrium, and related equilibrium concepts for extensive form games. A weak consistency condition is sufficient to obtain an analogy to the well known One-Stage-Deviation Principle for subgame perfect equilibrium....

A stochastic learning process for signaling games with two types, two signals, and two responses gives rise to equilibrium selection which is in remarkable accordance with the selection obtained by the intuitive criterion.

The aim of this paper is to present the new theory called “inductive game theory”. A paper, published by one of the present authors with A. Matsui, discussed some part of inductive game theory in a specific game. Here, we will give a more developed discourse of the theory. The paper is written to show one entire picture of the theory: From individu...

L'int�r�t de l'approche par les jeux globaux ("global games'') est pr�cis�ment d'ancrer les anticipations sur des variables exog�nes r�elles. On peut ainsi garder l'aspect auto-r�alisateur des anticipations mais en restaurant l'unicit� de l'�quilibre et donc un meilleur pouvoir pr�dictif du mod�le. Nous illustrons ces m�canismes sur deux exemples....

This paper presents a learning process which is a generalization of the method of fictitious play of Brown. If the learning process converges, the convergence point is a Nash equilibrium. We study 2 × 2 games. Here the process always converges. The relation between the initial prior, the weight assigned to this prior, and the equilibrium selected i...

An uncertain and not just risky situation may be modeled using so-called belief functions assigning lower probabilities to subsets of outcomes. In this article we extend the von Neumann-Morgenstern expected utility theory from probability measures to belief functions. We use this theory to characterize uncertainty neutrality and different degrees o...

Rubinstein and Wolinsky (1990) study a market with one seller, two buyers, and voluntary matching. Both the competitive outcomep c and the bilateral bargaining outcomep b are possible in subgame perfect equilibrium. We consider two variations. First, if there is a cost larger thanp c −p c to the seller of changing partner,p c is the unique out...

We study two alternative definitions of the bargaining set in large (atomless) economies; the local bargaining by MasColell (1989) and the global bargaining set by Vind (1992) We alter these definitions to limit the size of the permitted size of the involved coalitions. It turns out that the local bargaining set becomes very large, whereas the glob...

Capacities (monotone, non-additive set functions) have been suggested to describe situations of uncertainty. We examine the question of how to define the product of two independent capacities. In particular, for the product of two belief functions (totally monotone capacities), there is a unique minimal product belief function. This is characterize...

We consider the problem of modeling voting situations, seeking models and equilibrium concepts which are easier to incorporate in large sequential decision games than the models and solution concepts used by the "theory of voting." It is demonstrated that one can avoid using very refined solution concepts (such as sophisticated outcomes), if voting...

The so-called Allais Paradox (Allais (1953)) has been interpreted as a violation of the independence axiom of Savage (1954). Considering the standard experiments performed this inference is questionable. Rather the paradoxical behavior represents evidence against the expected utility hypothesis as a whole. If the independence axiom is to be tested,...

In this paper we present a decentralization result which is useful for practical and theoretical work with the concept of sequential equilibrium and related concepts of perfect Bayesian equilibrium. A weak consistency condition which is sufficient to obtain an analogy to the well-known One-Deviation Principle for subgame perfect equilibrium is give...

An uncertain and not just risky situation may be modeled using so-called belief functions assigning lower probabilities to events, that is, to sets of possible outcomes. In this paper we introduce an axiom of consistency by which we extend the von Neumann-Morgenstern expected utility theory to belief functions. We use this theory to characterize un...

We report new results on a slightly generalized version of the classical learning process for games proposed by Brown (1951), and further analyzed by Robinson (1951), Miyasawa (1961) and Shapley (1964). the learning process rests on an exogenous prior distribution over strategies - a mixed strategy combination - and an initial weight, a number w e...

The paper considers a very simple collective decision problem: The partition of a pie of size 1 among n agents. This is a social choice problem of maximal conflict with possibilities to compromise. It is thus a case which is 'unsolvable' by social choice theory, a case where the core of majority voting is empty. We consider a specific sequential de...

The paper considers the problem of modelling voting situations, seeking models and equilibrium concepts which are easier to incorporate in large sequential decision games than the models and solution concepts suggested by the "theory of voting". The paper demonstrates that one can avoid using very refined solution concepts (such as sophisticated ou...