We adopt the notion of von Neumann-Morgenstern (vNM) farsightedly stable sets to determine which matchings are possibly stable when agents are farsighted in one-to-one matching problems. We provide the characterization of vNM farsightedly stable sets: a set of matchings is a vNM farsightedly stable set if and only if it is a singleton subset of the core. Thus, contrary to the vNM (myopically) stable sets (Ehlers 2007), vNM farsightedly stable sets cannot include matchings that are not in the core. Moreover, we show that our main result is robust to many-to-one matching problems with substitutable preferences: a set of matchings is a vNM farsightedly stable set if and only if it is a singleton set and its element is in the strong core.
This paper analyzes the role of retaliation in trade agreements. It shows that, in the presence of private information, retaliation can always be used to increase the welfare derived from such agreements by the participating governments. In particular, it is shown that retaliation is a necessary feature of any e¢ cient equilibrium.We argue that retaliation would not be necessary if governments could resort to international transfers or export subsidies to compensate for terms-of-trade externalities. Within the current world trading system, though, in which transfers are seldom observed whereas export subsidies are prohibited, the use of the remaining trade instruments in a retaliatory fashion might be optimal. The model is used to interpret the retaliatory use of antidumping observed in the last decades, and the proliferation of these measures relative to other trade remedies.
This article investigates how firms compete when they have the ability to set a personalized price to those consumers they can profile and a uniform price to those consumers they cannot profile; how this affects the incentives to supply data analytics to firms; and what, if any, policy recommendations can be provided.
For an-period uncapacitated lot-sizing problem with stock upper bounds, stock fixed costs, stock overload and backlogging, we present a tight extended shortest path formulation of the convex hull of solutions with O(!) variables and constraints, also giving an O(!) algorithm for the problem. This corrects and extends a formulation in [11] for the problem with just stock upper bounds.
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