Masahiro Okuno-Fujiwara

The University of Tokyo | Todai · Department of Economics

In the literature of voluntarily repeated Prisoner's Dilemma, the focus is on how long-term cooperation is established, when newly matched partners cannot know the past actions of each other. In this paper we investigate how non-cooperative and cooperative players co-exist. In many incomplete information versions of a similar model, inherently non-...

Voluntarily Separable Repeated Prisoner's Dilemma (Fujiwara-Greve and Okuno-Fujiwara, 2009) has many kinds of equilibria. Focusing on monomorphic and bimorphic equilibria, we show that a bimorphic equilibrium consisting of cooperators and defectors is most efficient, under a mild payoff condition. This is a striking contrast to ordinary repeated Pr...

Voluntarily Separable Repeated Prisoner's Dilemma (Fujiwara-Greve and Okuno-Fujiwara, 2009) has many kinds of equilibria. Focusing on monomorphic and bimorphic equilibria, we show that a bimorphic equilibrium consisting of cooperators and defectors is most efficient, under a mild payoff condition. This is a striking contrast to ordinary repeated Pr...

We consider the voluntarily separable repeated Prisonerʼs Dilemma model in which players randomly meet and form pairs to repeatedly play Prisonerʼs Dilemma only by mutual agreement. While the literature has dealt with the case of no information flow across partnerships, we consider the case in which players can issue a “reference letter” to verify...

In the literature of voluntarily repeated Prisoner's Dilemma type games with no information flow, the focus is on how long-term cooperation is established. In this paper we investigate how non-cooperative and cooperative players co-exist. In many incomplete information versions of a similar model, inherently non-cooperative players are assumed to e...

We extend the voluntarily separable repeated Prisoner's Dilemma (Fujiwara-Greve and Okuno-Fujiwara, 2009) to continuous actions. We show that there is a (constrained) efficient bimorphic equilibrium which is robust under evolutionary pressure. It consists of a cooperative strategy and a myopic defection strategy so that our model provides a foundat...

Ordinary repeated games do not apply to real societies where one can cheat and escape from partners. We formulate a model of endogenous relationships that a player can unilaterally end and start with a randomly assigned new partner with no information flow. Focusing on two-person, two-action Prisoner's Dilemma, we show that the endogenous duration...

Hirofumi Uzawa is one of the giants of modern economic theory. Hiro is probably best known to the readers of Macroeconomic Dynamics ( MD ) for his seminal articles on two-sector economic growth. The two-sector technology is more general than the one-sector technology: it allows a production possibility frontier that is strictly concave to the origi...

This paper analyzes a model of coordination where two agents attempt to coordinate their actions through communication. One agent (Sender) is engaged in finding the true state of nature in a stochastic environment and the action that best fits the state. The other agent (Receiver) in turn tries to ``understand'' the Sender's message and chooses his...

We consider voluntarily separable repeated Prisoner's Dilemma in which a pair of players meet randomly and repeatedly play Prisoner's Dilemma only by mutual agreement. Fujiwara-Greve and Okuno-Fujiwara (2007) consider the case that once a partnership is dissolved there is no information flow to other partnerships. We consider the case that players...

In today's science-driven industries, such as the semiconductor industry, firms are increasingly engaged in across-firm research and development projects in the form of a research consortium or a strategic alliance. Those collaboration processes, however, have complex aspects due to the competing relationship of the firms in product markets and wil...

Unlike the ordinary repeated games, in the real world, people can run away after cheating. In this paper we construct a social game, in which players can repeat Prisoners' Dilemma only if both players agree to continue the partnership. We investigate how a social sanction prevents moral hazard in such a voluntary relationship. We have three conclus...

This paper explains the concept of product architecture in the context of increasing complexity of artifacts. We first explore the process where artifacts have gained complexity. Historically, during the development of human-artifact interaction, it was critical to effectively combine mechanical information processing of artifacts and contextual in...

In today's science-driven industries, such as the semiconductor industry, firms are increasingly engaged in across-firm research and development projects in the form of a research consortium or a strategic alliance. Those collaboration processes, however, have complex aspects due to the competing relationship of the firms in product markets and wil...

We develop a general framework to analyze endogenous relationships. To consider relationships in the modern society, neither one-shot games nor repeated games are appropriatemodelsbecausethe formationand dissolutionofa relationship is not an option. We formulate voluntarily separable repeated games, in which playersarerandomlymatchedtoplay acompone...

We often see people procrastinate what should be done immediately. This propensity seems to be especially high in Japan as bad loans problem in 1990 exemplifies. Propcrastinations in collective decision making tend to occur when there are many stakeholders. They tend to waste time while trying to avoid responsibility and shifting blame to others. I...

Baldwin and Clark (2000) brought the substantial attention to the concept of product architecture. This concept, particularly the concept of module architecture, defines a product system as a "coordination system," taking the viewpoint that a product system is an object that is used by human users or developed by human developers. In this paper, pr...

When future international agreement on global environmental control is anticipated, decisions for controlling current carbon gas emissions by improving the country's abatement capabilities are strongly affected by the likelihood of such agreements as well as their probable outcome. We construct a two-period, two-country model where the quality of t...

We develop a two-society model to analyse the interaction of societies with different conventions. After characterizing various equilibria, we apply an evolutionary approach to this world to see what happens if the two societies are integrated over time. For example, if the two societies are of similar size, the integration results in an "eclectic"...

In this paper, we establish the most possilbe general formulation of the technology governing carbon-gas emission, giving rise to global external diseconomies, and ty to explore into the strategic interactions,both domestic and international, when an individual country decides on the environmental policies. Through the comparison among emission tax...

The current state of economics as a science is critically evaluated in view of its lack of emphasis on sociological and psychological factors. In particular, I argue that humans are embedded in social structures and that they choose actions taking account of the social contexts in which they live and the social interactions to which they belong. Pr...

We analyze the performance of the Japanese Economy in the last 30 years. We do so by emphasizing the fact that an economy is a social system and people are concerned with social values and norms. We point out that the employment security, which became socially guaranteed during the aftermath of the first oil shock, and the coercion of unitarism, ra...

We analyzed the effects of the progress and propagation of information technology on economic activity and the form of economic organizations from three different viewpoints. First, drastic reduction of information production and information processing costs produced the bursts of information, the rapid change of economy activity, and the globaliza...

Altogether ten papers have been presented in this conference. Throughout the sessions, I enjoyed listening to new ideas and careful analyses presented by authors, thoughtful comments and helpful remarks made by discussants, as well as the lively floor discussions that followed.

To understand anesthesiologists' and surgeons' risk attitudes about expected years of life. Prospective study. Central operating rooms (ORs) in a university hospital. 122 anesthesiologists and surgeons. A 7-page survey questionnaire regarding the length of survival and the choice of treatments was sent to 122 physicians. Certainty equivalents and A...

Japan's rise from the ashes of defeat in the Second World War to its position now as one of the world's foremost economies has long been recognized as one of the most startling turnarounds of the 20th Century. With economic reform again at the top of the global agenda with the fall of the Soviet bloc and the continuing struggle of the developing na...

Japan's rise from the ashes of defeat in the Second World War to its position now as one of the world's foremost economies has long been recognized as one of the most startling turnarounds of the 20th Century. With economic reform again at the top of the global agenda with the fall of the Soviet bloc and the continuing struggle of the developing na...

Japan's rise from the ashes of defeat in the Second World War to its position now as one of the world's foremost economies has long been recognized as one of the most startling turnarounds of the 20th Century. With economic reform again at the top of the global agenda with the fall of the Soviet bloc and the continuing struggle of the developing na...

We define the "Developmental State Strategy" as a strategy to industrialize the country before democratization. Types of state system, developmental stages, international environments that are complementary to this strategy are identified. This strategy is quite effective in developing stage of an economic development. However, once the country suc...

The role of government in East Asian economic development has been a contentious issue. Two competing views have shaped enquiries into the source of the rapid growth of the high-performing Asian economies and attempts to derive a general lesson for other developing economies: the market-friendly view, according to which government intervenes little...

The role of government in East Asian economic development has been a contentious issue. Two competing views have shaped enquiries into the source of the rapid growth of the high-performing Asian economies and attempts to derive a general lesson for other developing economies: the market-friendly view, according to which government intervenes little...

When future international agreement for global environmental control is anticipated, decisions for controlling current carbon gas emissions by improving the country's abatement capabilities are strongly affected by the likelihood of and the likely outcome of such agreements. We construct a two period two country model were the quality of the atmosp...

We use the framework of random matching games and develop a two society model to analyze the interaction of societies with different social norms. Each agent repeatedly faces two different coordination games. A social norm of a society is a mode of behavior --strategy--which is adopted by a majority of agents in the society. There are many equilibr...

In this paper we shall provide a theoretical overview of what we are the main sources of their evolution and what are the chief implications of focusing around institutions and economic systems. For the former, we identify innovation, adaptation for environmental changes, international interactions and coordination as main sources. For the latter,...

In this paper, we shall provide a theoretical overview of what are the chief implications of fucusing institutions and economic systems, what are the main sources of their evolution, how are their evolutionary paths affected by various economic factors. In the latter half, we shall provide a brief historical account of evolution of an actual econom...

We use the framework of random matching games and develop a two society model to analyze the interaction of societies with different social norms. Each agent repeatedly faces two different coordination games. A social norm of a society is a mode of behavior - strategy - which is adopted by a majority of agents in the society. There are many equilib...

This paper presents an alternative solution, called “face-to-face” competition, to the hold-up problem of relation-specific investments in the world of incomplete contracts. By inherent multiplicity of equilibria and incentive-compatible equilibrium selection, a tournament among multiple agents is endogenously created in the structure of face-to-fa...

Nash equilibrium has been tremendously useful in understanding economic problems in which strategic behavior is important. The theoretical foundations of the solution concept often include the assumption that the game to be played is common knowledge, an unrealistic assumption in games with many players. We introduce the concept of norm equilibrium...

The economic system of contemporary Japan is often referred to as the "Japanese-style" system. This is because, whether consciously or unconsciously, many people consider the economic system in Japan to be different from that in Western Europe and, in particular, from that in the United States.

This paper explains two points that are regarded as important when examining the Japanese economic system: First, that most of the systems and mechanisms which have been established with stability in a given society are not formed by necessity. Second, the kind of economic mechanism that emerges in a society is greatly dependent upon other mechanis...

Recently, Mankiw-Whinston (1986) and Suzumura-Kiyono (1987) have shown that socially excessive firm entry occurs in unregulated oligopoly. This paper extends this "excess entry" results by looking into strategic aspects of cost-reducing R&D investment that creates incentives towards socially excessive investments. In the first stage, firms decide w...

There are many economic problems which, when modelled as games of incomplete information, give rise to many sequential equilibria, severely limiting the usefulness of the model. There has recently been a large literature devoted to "refining" the set of equilibria in order to reduce this multiplicity by restricting the set of admissible disequilibr...

At an academic session on Firm Organization, Banri Asanuma and Hideshi Itoh presented two very stimulating papers. Asanuma, who is an expert on subcontracting systems of the Japanese automobile industry, having focused on various aspects of supplier—assembler relationships, extended his expertise to assembler—distributor relationships. This paper i...

Several conceptual points are made concerning communication in games of asymmetric information. Equilibrium refinements of Sender-Receiver cheap-talk games that are based on the concept of a putative equilibrium, and which rely on the presence of a rich language with literal meanings, are discussed. Three nested criteria are proposed: strong announ...

In an experiment comparing two-person bargaining and multiperson markets in Israel, Japan, the United States, and Yugoslavia, market outcomes converged to equilibrium everywhere, with no payoff-relevant differences between countries. Bargaining outcomes were everywhere different from equilibrium predictions (both in agreements and in the substantia...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

We analyze the problem in which agents have non-public information and are to play an asymmetric information game. The agents may reveal some or all of their information to other agents prior to playing this game. Revelation is via exogenously specified certifiable statements. The equilibria resulting from various revelation strategies are used to...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

In this paper, we argue that social/corporate norms play an important role in achieving higher productivity and better economic welfare. We define “social norm” to be a standard of behavior suggested by a social custom, i.e., a customary choice of actions in each social situation. We reinterpret the well-known Nash equilibrium as a “norm equilibriu...

[eng] Transportation costs and monopoly location in presence of regional disparities. . This article aims at analysing the impact of the level of transportation costs on the location choice of a monopolist. We consider two asymmetric regions. The heterogeneity of space lies in both regional incomes and population sizes: the first region is endowed...

This volume presents the proceedings of an international conference held in 1986, a year in which the policy frictions between Japan and the United States were particularly heated. The issues discussed herein are of broader interest than the crises reported in the daily press. The conference programme and discussions attempt to put these crises in...

In this paper, we attempt to give an economic explanation for differences in institutional framework between Japan and Western countries. We propose that the differences may be created because economies sometimes have multiple equilibria, each of which is characterized by a different institutional norm. Thus, differences in institutional framework...

We consider a stationary overlapping generations economy, and prove that an optimal steady state exists. We show that if a government intervention is needed in order to implement the optimal steady state as a competitive equilibrium, it is necessary only in a finite number of periods. If the interest rate associated with the optimal steady state eq...

Consider a stationary consumption–loan economy with fixed amount of fiat money. We show that although the economy is stationary if the number of goods and the number of ‘types’ of consumers are larger than one, there might be no Pareto optimal stationary competitive equilibrium.

This paper treats the consumption-loan model with fiat money. The question of existence of monetary equilibria in these economies is the topic of our study. We introduce a new concept of Approximately Monetary Equilibrium. We show that it is not true that whenever there is no Pareto-efficient non-monetary equilibrium then there is a monetary one. H...

Samuelson (1958) shows that in a certain type of infinite horizon economy, a competitive equilibrium may not be Pareto efficient. He also shows that creation of a monetary asset may restore efficiency of the equilibrium. In this paper, we will investigate this class of economies more fully, focusing upon the relationship between Pareto efficiency a...

Perhaps the single most enduring theme in economics is that of the social desirability of the competitive mechanism. In its modern form, this theme occurs as the two basic theorems of welfare economics (see, in particular, Arrow). Our central concern in this paper is with the validity of the first of these two theorems—that every competitive equili...

Perhaps the single most enduring theme in economics is that of the social desirability of the competitive mechanism. In its modern form, this theme occurs as the two basic theorems of welfare economics (see, in particular, Arrow). Our central concern in this paper is with the validity of the first of these two theorems—that every competitive equili...

Many argue that the intrinsic uselessness of fiat money makes ``coordination'' an essential part of monetary theory: consumers could all equally well coordinate on believing that fiat money has no value. The coordination view suggests, however, that many transactions patterns are in fact possible as economic outcomes. Indeed, we do seem to observe...

In Fujiwara-Greve and Okuno-Fujiwara (2009), an evolutionary stability concept was defined by allowing mutations of any strategy. However, in human societies, not all strategies are likely to be tried out when a player considers what happens in the future. In this paper we introduce the "shared belief" of potential continuation strategies, generate...

When future international agreement for global environmental control is antic- ipated, decisions for controlling current carbon gas emissions by improving the country's abatement capabilities are strongly aected by the likelihood of and the likely outcome of such agreements. We construct a two-period two-country model where the quality of the atmos...

We introduce a new model of voluntarily repeated games where the length of repetition is endogenously determined. We consider a large society of homogeneous players, in which players are randomly matched in each period to play prisoner's dilemma as well as to choose whether to play the game again with the same partner. When newly matched, players h...

We develop a general framework to analyze endogenous relationships. To con- sider relationships in the modern society, neither one-shot games nor repeated games are appropriate models because the formation and dissolution of a relationship is not an option. We formulate voluntarily separable repeated games, in which players are randomly matched to...