Giorgio Rodano

Fondamenti teorici dell'ipotesi di razionalità: il ruolo dell'esperienza

The goal of this paper is to discuss whether maximizing behaviour in consumption can emerge as the long-period outcome of a dynamic process within which consumers follow non-maximizing rules-ofthumb. To discuss this problem we have built two simple dynamic models based on hypotheses and utility functions fully coherent with those of the traditional approach. Both models describe the behaviour of a single consumer who does not know how much the commodities she/he buys fit her/his preferences. These models dynamics depicts a progressive modification of behaviour induced by accumulation of consumption experience. The first model is built under the hypothesis that the consumer is endowed with given preferences but does not fully know how much the bought commodities fit them. It is by repeating the acts of purchasing and consuming that she/he acquires a better fit with her/his preferences. Within this model the difference between the utility ex ante conjectured and the utility ex post realized triggers the dynamics. In this first model the convergence to the maximizing behaviour is possible but it is not a general long-period outcome of the dynamic process. In the second model we assume that consumption not only allows the consumer to better fit her/his preferences, but also induces an endogenous change in these preferences due to the accumulation of consumption experience. In this second model the conditions which allow the maximizing behaviour to emerge are less likely to occur than in the first model.

Lead, Follow or Cooperate? Sequential versus Collusive Payoffs in Symmetric Duopoly Games

In many strategic settings comparing the payoffs obtained by players under full cooperation to those obtainable at a sequential (Stackelberg) equilibrium can be crucial to determine the outcome of the game. This happens, for instance, in repeated games in which players can break cooperation by acting sequentially, as well as in merger games in which firms are allowed to sequence their actions. Despite the relevance of these and other applications, no full-fledged comparisons between collusive and sequential payoffs have been performed so far. In this paper we show that even in symmetric duopoly games the ranking of cooperative and sequential payoffs can be extremely variable, particularly when the usual linear demand assumption is relaxed. Not surprisingly, the degree of strategic complementarity and substitutability of players’ actions (and, hence, the slope of their best replies) appears decisive to determine the ranking of collusive and sequential payoffs. Some applications to endogenous timing are discussed.

Reflections on Sraffa's Legacy in Economics: A review essay

Abstract This paper reviews Heinz D. Kurzs edited collection of Critical Essays on Piero Sraffas Legacy in Economics. Besides providing an evaluation of the various contributions to the volume, the paper discusses some broad issues such as the notion of ‘price’ emerging from Sraffas Production of Commodities, the role of demand in Sraffas theory, the classical approach to political economy, the Hayek–Keynes–Sraffa debate and the capital controversy.