EconPapers    
Economics at your fingertips  
 

Small Deviations from Maximizing Behavior in a Simple Dynamic Model

Asher Wolinsky

The Quarterly Journal of Economics, 1994, vol. 109, issue 2, 443-464

Abstract: The motivating intuition is that the presence of nonmaximizing agents induces maximizing agents to take advantage of them, and that this might magnify the effect of small deviations from maximizing behavior. This intuition is explored using a simple dynamic model. With an inflexible entry process, small deviations from maximizing behavior may have a substantial impact on the allocation of gains from trade. With a flexible entry process, the effect is dampened by adjustments in entry. Yet these deviations result in a first-order efficiency loss, in contrast to the second-order loss that one would expect from looking at standard static models.

Date: 1994
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.2307/2118469 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Small Deviations from Maximizing Behavior in a Simple Dynamic Model (1993) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:qjecon:v:109:y:1994:i:2:p:443-464.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva

More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2025-03-19
Handle: RePEc:oup:qjecon:v:109:y:1994:i:2:p:443-464.