# 2002

1. Chatterji, S.,** "The convergence of least squares learning in stochastic temporary equilibrium models,"**

*Economic Theory*

**20**(2002): 837-847.

**Resumen:**

This paper provides conditions for the almost sure convergence of the least squares learning rule in a stochastic temporary equilibrium model, where regressions are performed on the past values of the endogenous state variable. In contrast to earlier studies (Evans and Honkapohja (1998) and Marcet and Sargent (1989)), which were local analyses, the dynamics are studied from a global viewpoint, which allows one to obtain an almost sure convergence result without employing projection facilities.

2.Garratt, R., y Keister, T., *"A Characterization of Robust Sunspot Equilibria," **Journal of Economic Theory***107** (2002): 136-144.

**Resumen:**

In nonconvex environments, a sunspot equilibrium can sometimes be destroyed by the introduction of new extrinsic information. We provide a simple test for determining whether or not a particular equilibrium survives, or is robust to, all possible refinements of the state space. We use this test to provide a characterization of the set of robust sunspot-equilibrium allocations of a given economy: it is equivalent to the set of equilibrium allocations of the associated lottery economy.

3**. **Garratt, R., Keister, T., Qin,** **C., y Shell, K., *"Equilibrium Prices when the Sunspot Variable is Continuous," Journal of Economic Theory***107 **(2002): 11-38.

**Resumen:**

We analyze sunspot-equilibrium prices in nonconvex economies with perfect markets and a continuous sunspot variable. Our primary result is that every sunspot equilibrium allocation can be supported by prices that, when adjusted for probabilities, are constant across states. This result extends to the case of a finite number of equally probable states under weak nonsatiation conditions, but does not extend to general discrete state spaces. We use our primary result to establish the equivalence of the set of sunspot equilibrium allocations based on a continuous sunspot variable and the set of lottery equilibrium allocations.

4. Lobato, I., Nankervis, J., y Savin, N.E.,** ***"Testing for Zero Autocorrelation in the Presence of Statistical Dependence,"** Econometric Theory***18 **(2002): 730-743.

**Resumen:**

The problem addressed in this paper is to test the null hypothesis that a time series process is uncorrelated up to lag K in the presence of statistical dependence. We propose an extension of the Box-Pierce Q test that is asymptotically distributed as chi-square when the null is true for a very general class of dependent processes that includes non-martingale difference sequences. The test is based on a consistent estimator of the asymptotic covariance matrix of the sample autocorrelations under the null. The finite sample performance of this extension is investigated in a Monte Carlo study.

5. Martinelli, C.,** "Simple Plurality versus Plurality Runoff with Privately Informed Voters,"**

*Social Choice and Welfare*

**19**(2002): 901-919.

**Resumen:**

This paper compares two voting methods commonly used in presidential elections: simple plurality voting and plurality runoff. In a situation in which a group of voters have common interests but do not agree on which candidate to support due to private information, information aggregation requires them to split their support between their favorite candidates. However, if a group of voters split their support between their favorite candidates, they increase the probability that the winner of the election is not one of them. In a model with three candidates, due to this tension between information aggregation and the need for coordination, plurality runoff leads to higher expected utility for the majority than simple plurality voting if the information held by voters about the candidates is not very accurate.

6. Martinelli, C.,** "Convergence Results for Unanimous Voting,"**

*Journal of Economic Theory*

**105**(2002): 278-297.

**Resumen:**

This paper derives a necessary condition for unanimous voting to converge to the perfect information outcome when voters are only imperfectly informed about the alternatives. Under some continuity assumptions, the condition turns out to be necessary and sufficient for the existence of a sequence of equilibria that exhibits convergence to the perfect information outcome. The requirement is equivalent to that found by Milgrom (1979) to be necessary and sufficient for convergence of the price to the true value of an object in a single-prize auction. An example illustrates that convergence to the "right" decision may be reasonably fast for small electorates. However, if voters have common preferences, unanimity is not the optimal voting rule. Unanimity rule makes sense in the example only as a way to make sure that the viewpoint of a minority is respected.

7. Martinelli, C., y Matsui, A., *"Policy Reversals and Electoral Competition with Privately Informed Parties,"** Journal of Public Economic Theory***4** (2002): 39-61.

**Resumen:**

We develop a spatial model of competition between two policy-motivated parties. Parties know a state of the world which determines which policies are desirable for voters, while voters do not. The announced positions of the parties serve as signals to the voters concerning the parties' private information. In all separating equilibria, when the left-wing party attains power, the policies it implements are to the right of the policies implemented by the right-wing party when it attains power. The intuition behind this result is that when right-wing policies become more attractive, the left party moves toward the right in order to be assured of winning, while the right-wing party stays put in a radical stance.

8. Sadka, J., y Sinha, T., *"Is NAFTA the Trojan horse of the US Insurance Industry?,"** International Insurance Law Journal *(2002): 285-308.

**Resumen:**

As the financial services provisions of the North American Free Trade Agreement come into full play with the end of Mexico’s six-year transition period, commercial and legal conflicts will severely test the strength of NAFTA commitments against federal regulation and state laws. The resulting frictions could significantly reduce economic benefits in North American financial service markets. This paper pinpoints several potential international disputes and predicts their outcomes, based on an analysis of the treaty provisions, relevant international commercial law, the agreement’s position in each nation’s hierarchy of laws, and the federal and state regulatory structure of each financial market. For example, entering into the US as a financial holding company, authorized to provide banking, insurance, and securities services, requires compliance with community reinvestment standards that may violate chapter 11 free transfer provisions. Ordinary commercial disputes between financial service companies are greatly complicated by regulations such as the "secreto bancario" in Mexico and "pre-answer security" in the US. The situation is exacerbated by federal/state sharing of regulatory power in Canada and the US, along with NAFTA implementation laws that absolve state governments of treaty obligations. We predict that conflicts in the banking and insurance industries will lead to revision of the recent Gramm-Leach Bliley Act, an upsurge in federal insurance regulation, and serious pressure to harmonize financial sector regulation across countries.