Economic Theory

Group Leader: Professor Indrajit Ray

The group consists of four full time members - Jensen, Postl, Ray and Rowat - all of whom are young and have been recruited in the recent past. The group benefits from the association with the Political Economy and Economic Policy group. Dutta and Bandyopadhyay have formal affiliation, while Albornoz-Crespo has informal ties, with the group.

All four full-time members are pure (game) theorists working on varied research agenda - super-modular games (Jensen), mechanisms (Postl), communication in games (Ray) and dynamic games (Rowat). There are a lot of common research interests among the group members. Ray is involved in distinct research projects with every other member - aggregation in market games (with Jensen), cheap talk in games (with Postl) and monitoring in repeated games (with Rowat).

The group shares its research (Dutta and Rowat work on the commons problem in a repeated game set-up) and events (seminars and workshops; see below) with the Political Economy and Economic Policy group.

Current Research:

Jensen currently works on existence and comparative statics properties of certain classes of games (games with strategic substitutes, aggregative games). This includes various abstract methods used for comparative statics in a range of situations. He also works in dynamic economics (mainly, turnpike theory); he has proved a turnpike theorem in a heterogenous consumer model of endogenous growth.

Postl works on applications of mechanism design techniques to specific problems in the area of arbitration, public good provision, and incentive contracts. His work (with Borgers, Michigan) on arbitration with private information on preferences has led to an ongoing investigation into the connection between notions of ex ante incentive efficiency and “second best” in mechanism design, that can be applied to a public good problem.

Ray has been working on three broadly different issues in game theory, namely, correlation, cheap talk and revealed preference. In the first area, he has been working on issues such as sunspots (with Polemarchakis, Warwick), multiple equilibria, implementation (with Kar, Warwick and Serrano, Brown), and experiments. Ray’s second research area is cheap talk games in which he looked at issues such as mediation (with Ganguly, Belfast), and efficiency. Ray has also extensively worked on revealed preference in games, an area which he helped to pioneer with a widely cited paper.

Rowat’s principal work has been on repeated games with a commons component. In one of his recent papers, Rowat asks, in a dynamic commons game, when market access is preferable to intertemporal autarky. A companion paper analyses a continuous time version of this environment. Rowat (with Seabright, Toulouse) analyses the choices made by organisations for aid intermediaries. Rowat has also written on committees’ optimal options management strategies (with Ayres, Yale and Zakariya, Harvard). Rowat’s research on weak property rights has been supported by the ESRC’s World Economy and Finance programme, since April 2005. Currently, he is using techniques from cooperative game theory to analyse a framework that allows resource transfers by both exchange and “pillage” (with Polemarchakis, Warwick). In addition, he continues to apply his skills in differential games, having started work on the consequences of attempts to control greenhouse gas emission when only a subset of countries are under such controls.

Recent Activities:

The group organised quite a few research events in the recent past involving internationally reputed speakers.

As a key member of the Midlands Game Theory Network (along with Keele, Loughborough, Leicester and Nottingham), the group hosted two workshops in January and April 2004, in which all the group members were involved as either a speaker or a discussant along with outsiders - Gilat Levy (LSE), Bob Evans (Cambridge), Daniel Seidmann (Nottingham) and Jozsef Sakovics (Edinburgh).

The Economic Theory workshop held in April 2005 was chaired by Herakles Polemarchakis (Warwick) and all the speakers were his former students - Andres Carvajal (Warwick) Celine Rochon (Cergy) and Felix Kubler (Mannheim).

In June 2006, the group, jointly with Political Economy and Economic Policy group hosted a week-long programme - Summer in Birmingham. A group of 10 researchers from three different continents - Kalyan Chatterjee (Penn State), John Conley (Vanderbilt), Maitreesh Ghatak (LSE), Antonio Merlot (Pennsylvania), Manipushpak Mitra (Indian Statistical Institute), Herakles Polemarchakis (Warwick), Andres Rodriguez-Clare (Penn State), Hamid Sabourian (Cambridge), Christian Schultz (Copenhagen) and Tomas Sjostrom (Rutgers) - spent a few days to interact with the group members and also to present their work in three different workshops.

Outside these events, the group also (co-)hosted a series of visitors including Jurgen Eichberger (Mannheim), Joan Esteban (Barcelona), Francoise Forges (Cergy), Prasanta Pattanaik (Riverside), Myrna Wooders (Vanderbilt).

Personal Pages:

Please see the following links to each group member to find out more details on research and publications from their personal pages.

Full time members:

  • Martin Jensen
  • Peter Postl
  • Indrajit Ray
  • Colin Rowat

Affiliated members:

  • Facundo Albornoz-Crespo
  • Siddhartha Bandyopadhyay
  • Jayasri Dutta