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Papers by Kevin Cotter

Research paper thumbnail of State Insurance Regulation and Employers' Decisions to Self-Insure

The Journal of Risk and Insurance, 1995

Research paper thumbnail of An Information Metric of Similarity of Expectations

Although its specification in economic models with uncertainty is critical to the results obtaine... more Although its specification in economic models with uncertainty is critical to the results obtained, agents' information has not been defined in a way allowing isolation of its effects on other variables. In addition, information needs to be allowed to be optimally chosen by agents when, for example, endogenous shifts in information are a major part of the model. Both problems require a space of information with some appropriate mathematical structure depending only on the uncertainty in the model. Given a probability space, the space of information is the set of all sub- fields of events. The structure defined here is a metric derived from the topology defined to be the weakest one such that for any integrable random variable, the function mapping information to the expected value of the random variable conditional on that information is continuous. This metric is shown to be complete and separable with two additional useful properties. First, set-theoretic convergent (monotone) sequences of information converge, so martingale convergence is modelled by this metric. Second, the set of finite partitions of the state space is dense, so any information can be finitely approximated. The topology derived from this metric is more tractible than the one used by Allen (1982). A generalization of the topology is provided to handle special cases such as information consisting of state plus noise

Research paper thumbnail of Consumer Choice of Information with a Weak Topology

Research paper thumbnail of Communication Equilibria with Large State Spaces

Studies in Economic Theory, 1991

Research paper thumbnail of Convergence of Information

Research paper thumbnail of Similarity of Correlated Equilibria

Research paper thumbnail of Correlated equilibria with payoff uncertainty

Research paper thumbnail of Convergence of games with asymmetric information

Discussion Papers, 1987

Downloadable! No abstract is available for this item.

Research paper thumbnail of Communication Equilibria with Large State Spaces

Research paper thumbnail of Convergence of Games With Asymmetric Information

Research paper thumbnail of Renegotiation-Proof Tariff Agreements

Review of International Economics, 1997

The institutional features of the World Trade Organization motivate the use of renegotiation-proo... more The institutional features of the World Trade Organization motivate the use of renegotiation-proofness as an equilibrium concept in repeated tariff-setting games. This paper shows the existence of a renegotiationproof equilibrium that reduces tariffs below the noncooperative level. It is found that the one-shot Nash equilibrium cannot be used as a punishment to support such treaties. Punishments are either Pareto-efficient or one country barely accepts them. If the punishing country is hurt by the punishment then punishments will be as short as possible. If the agreement tariff levels are not Pareto-efficient then one country barely goes along with the agreement.

Research paper thumbnail of Choice of purchasing arrangements in insurance markets

Journal of Risk and Uncertainty, 1989

A simple dynamic model helps explain why risk-pooling purchasing arrangements evolved for health,... more A simple dynamic model helps explain why risk-pooling purchasing arrangements evolved for health, disability, and term life insurance but not for property, automobile, or homeowners' insurance, and why whole-life policies typify life insurance purchased on an individual basis. We show that riskpooling purchases facilitate insurance against unpredictable changes in one's risk type, but such contracts prevail in competitive equilibrium only when the loss probabilities increase with age, as they do for health, disability, and life insurance. In contrast, when the loss probability declines with age (as it does for automobile insurance), then competitive equilibrium entails separating insurance contracts.

Research paper thumbnail of Similarity of information and behavior with a pointwise convergence topology

Journal of Mathematical Economics, 1986

A topology on the space of information is defined which makes the latter a complete separable met... more A topology on the space of information is defined which makes the latter a complete separable metric space. In this metric, set-theoretic convergent sequences of information converge, and the set of finite partitions of the state space is dense. This topology is weaker than the one studied by Allen. In addition, an expected utility maximizing consumer's demand for commodities is a continuous function of his information, and this topology is the weakest one with that property.

Research paper thumbnail of Convergence of information, random variables and noise

Journal of Mathematical Economics, 1987

variables such as state-dependent prices often convey information while entering directly into a ... more variables such as state-dependent prices often convey information while entering directly into a decision environment.

Research paper thumbnail of Similarity of games with incomplete information

Journal of Mathematical Economics, 1991

The relationship between payoff information and Bayesian-Nash equilibria is studied. A partition ... more The relationship between payoff information and Bayesian-Nash equilibria is studied. A partition model is used to separate information from the underlying distribution of payoffs. Any partition model is shown to be strategically equivalent to a type model, yielding an analogue of Milgrom and Weber's condition of absolutely continuous information. For games satisfying this condition, the Bayesian-Nash equilibrium correspondence is shown to be upperhemicontinuous with respect to the Boylan, but not the pointwise convergence, metric of information, and is also upperhemicontinuous with respect to increasing sequences of information fields. The latter result justifies the use of finite player types as an approximation of general games.

Research paper thumbnail of Correlated equilibrium in games with type-dependent strategies

Journal of Economic Theory, 1991

Research paper thumbnail of Non-concave dynamic programming

Economics Letters, 2006

... Images Images, Journal/Book title, Volume, Issue, Page, Search tips. ... the return function ... more ... Images Images, Journal/Book title, Volume, Issue, Page, Search tips. ... the return function is F(x, y) = (y − c)q(yp f /x) where c denotes a constant marginal cost of production. ... Under the assumption of a concave demand function (∂ 2 q / ∂p c2 ≤ 0), we can show that F 12 > 0; thus G ...

Research paper thumbnail of Type correlated equilibria for games with payoff uncertainty

Economic Theory, 1994

Aumann's notion of correlated equilibrium is extended to games with payoff uncertainty. A type co... more Aumann's notion of correlated equilibrium is extended to games with payoff uncertainty. A type correlated equilibrium is a correlated equilibrium for Harsanyi's game in player-types. An equivalent definition is a probability distribution over types and actions which is consistent with the prior distribution over types, such that when each player observes its type and action, the observed action is optimal and no further information about other players' types is obtained. Any such equilibrium can be implemented by a type-independent correlation device when players' observations may be type-dependent. The type correlated equilibrium correspondence is shown to be upperhemicontinuous with respect to player information.

Research paper thumbnail of State Insurance Regulation and Employers' Decisions to Self-Insure

The Journal of Risk and Insurance, 1995

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, a... more JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

Research paper thumbnail of State Insurance Regulation and Employers' Decisions to Self-Insure

The Journal of Risk and Insurance, 1995

Research paper thumbnail of An Information Metric of Similarity of Expectations

Although its specification in economic models with uncertainty is critical to the results obtaine... more Although its specification in economic models with uncertainty is critical to the results obtained, agents' information has not been defined in a way allowing isolation of its effects on other variables. In addition, information needs to be allowed to be optimally chosen by agents when, for example, endogenous shifts in information are a major part of the model. Both problems require a space of information with some appropriate mathematical structure depending only on the uncertainty in the model. Given a probability space, the space of information is the set of all sub- fields of events. The structure defined here is a metric derived from the topology defined to be the weakest one such that for any integrable random variable, the function mapping information to the expected value of the random variable conditional on that information is continuous. This metric is shown to be complete and separable with two additional useful properties. First, set-theoretic convergent (monotone) sequences of information converge, so martingale convergence is modelled by this metric. Second, the set of finite partitions of the state space is dense, so any information can be finitely approximated. The topology derived from this metric is more tractible than the one used by Allen (1982). A generalization of the topology is provided to handle special cases such as information consisting of state plus noise

Research paper thumbnail of Consumer Choice of Information with a Weak Topology

Research paper thumbnail of Communication Equilibria with Large State Spaces

Studies in Economic Theory, 1991

Research paper thumbnail of Convergence of Information

Research paper thumbnail of Similarity of Correlated Equilibria

Research paper thumbnail of Correlated equilibria with payoff uncertainty

Research paper thumbnail of Convergence of games with asymmetric information

Discussion Papers, 1987

Downloadable! No abstract is available for this item.

Research paper thumbnail of Communication Equilibria with Large State Spaces

Research paper thumbnail of Convergence of Games With Asymmetric Information

Research paper thumbnail of Renegotiation-Proof Tariff Agreements

Review of International Economics, 1997

The institutional features of the World Trade Organization motivate the use of renegotiation-proo... more The institutional features of the World Trade Organization motivate the use of renegotiation-proofness as an equilibrium concept in repeated tariff-setting games. This paper shows the existence of a renegotiationproof equilibrium that reduces tariffs below the noncooperative level. It is found that the one-shot Nash equilibrium cannot be used as a punishment to support such treaties. Punishments are either Pareto-efficient or one country barely accepts them. If the punishing country is hurt by the punishment then punishments will be as short as possible. If the agreement tariff levels are not Pareto-efficient then one country barely goes along with the agreement.

Research paper thumbnail of Choice of purchasing arrangements in insurance markets

Journal of Risk and Uncertainty, 1989

A simple dynamic model helps explain why risk-pooling purchasing arrangements evolved for health,... more A simple dynamic model helps explain why risk-pooling purchasing arrangements evolved for health, disability, and term life insurance but not for property, automobile, or homeowners' insurance, and why whole-life policies typify life insurance purchased on an individual basis. We show that riskpooling purchases facilitate insurance against unpredictable changes in one's risk type, but such contracts prevail in competitive equilibrium only when the loss probabilities increase with age, as they do for health, disability, and life insurance. In contrast, when the loss probability declines with age (as it does for automobile insurance), then competitive equilibrium entails separating insurance contracts.

Research paper thumbnail of Similarity of information and behavior with a pointwise convergence topology

Journal of Mathematical Economics, 1986

A topology on the space of information is defined which makes the latter a complete separable met... more A topology on the space of information is defined which makes the latter a complete separable metric space. In this metric, set-theoretic convergent sequences of information converge, and the set of finite partitions of the state space is dense. This topology is weaker than the one studied by Allen. In addition, an expected utility maximizing consumer's demand for commodities is a continuous function of his information, and this topology is the weakest one with that property.

Research paper thumbnail of Convergence of information, random variables and noise

Journal of Mathematical Economics, 1987

variables such as state-dependent prices often convey information while entering directly into a ... more variables such as state-dependent prices often convey information while entering directly into a decision environment.

Research paper thumbnail of Similarity of games with incomplete information

Journal of Mathematical Economics, 1991

The relationship between payoff information and Bayesian-Nash equilibria is studied. A partition ... more The relationship between payoff information and Bayesian-Nash equilibria is studied. A partition model is used to separate information from the underlying distribution of payoffs. Any partition model is shown to be strategically equivalent to a type model, yielding an analogue of Milgrom and Weber's condition of absolutely continuous information. For games satisfying this condition, the Bayesian-Nash equilibrium correspondence is shown to be upperhemicontinuous with respect to the Boylan, but not the pointwise convergence, metric of information, and is also upperhemicontinuous with respect to increasing sequences of information fields. The latter result justifies the use of finite player types as an approximation of general games.

Research paper thumbnail of Correlated equilibrium in games with type-dependent strategies

Journal of Economic Theory, 1991

Research paper thumbnail of Non-concave dynamic programming

Economics Letters, 2006

... Images Images, Journal/Book title, Volume, Issue, Page, Search tips. ... the return function ... more ... Images Images, Journal/Book title, Volume, Issue, Page, Search tips. ... the return function is F(x, y) = (y − c)q(yp f /x) where c denotes a constant marginal cost of production. ... Under the assumption of a concave demand function (∂ 2 q / ∂p c2 ≤ 0), we can show that F 12 > 0; thus G ...

Research paper thumbnail of Type correlated equilibria for games with payoff uncertainty

Economic Theory, 1994

Aumann's notion of correlated equilibrium is extended to games with payoff uncertainty. A type co... more Aumann's notion of correlated equilibrium is extended to games with payoff uncertainty. A type correlated equilibrium is a correlated equilibrium for Harsanyi's game in player-types. An equivalent definition is a probability distribution over types and actions which is consistent with the prior distribution over types, such that when each player observes its type and action, the observed action is optimal and no further information about other players' types is obtained. Any such equilibrium can be implemented by a type-independent correlation device when players' observations may be type-dependent. The type correlated equilibrium correspondence is shown to be upperhemicontinuous with respect to player information.

Research paper thumbnail of State Insurance Regulation and Employers' Decisions to Self-Insure

The Journal of Risk and Insurance, 1995

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, a... more JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.