Rational Partisan Theory with fiscal policy and an independent central bank

The empirical evidence testing the validity of the rational partisan theory (RPT) has been mixed. In this article, we argue that the inclusion of other macroeconomic policies and the presence of an independent central bank can partly contribute to explain this inconclusiveness. This article expands Alesina s (1987) RPT model to include an extra policy and an independent central bank. With these extensions, the implications of RPT are altered signi ficantly. In particular, when the central bank is more concerned about output than public spending (an assumption made by many papers in this literature), then the direct relationship between in flation and output derived in Alesina (1987) never holds. Keywords: central bank, conservativeness, political uncertainty. JEL Classi fication: E58, E63.

Concomitant calcium entry blockade and inhibition of the renin-angiotensin system: a rational and effective means for treating hypertension

Pharmacological treatment of hypertension is effective in preventing cardiovascular and renal complications. Calcium antagonists (CAs) and blockers of the renin-angiotensin system [angiotensin-converting enzyme (ACE) inhibitors and angiotensin II antagonists (ARBs)] are widely used today to initiate antihypertensive treatment but, when given as monotherapy, do not suffice in most patients to normalise blood pressure (BP). Combining a CA and either an ACE-inhibitor or an ARB considerably increases the antihypertensive efficacy, but not at the expense of a deterioration of tolerability. Several fixed-dose combinations are available (CA + ACE-inhibitors: amlodipine + benazepril, felodipine + ramipril, verapamil + trandolapril; CA + ARB: amlodipine + valsartan). They are expected not only to improve BP control, but also to facilitate long-term adherence with antihypertensive therapy, thereby providing maximal protection against the cardiovascular and renal damage caused by high BP.

Quotient spaces of boundedly rational types

By identifying types whose low-order beliefs up to level li about the state of nature coincide, weobtain quotient type spaces that are typically smaller than the original ones, preserve basic topologicalproperties, and allow standard equilibrium analysis even under bounded reasoning. Our Bayesian Nash(li; l-i)-equilibria capture players inability to distinguish types belonging to the same equivalence class.The case with uncertainty about the vector of levels (li; l-i) is also analyzed. Two examples illustratethe constructions.

Are self-regarding subjects more rational?

Through an experiment, we investigate how the level of rationality relatesto concerns for equality and efficiency. Subjects perform dictator games anda guessing game. More rational subjects are not more frequently of the selfregardingtype. When performing a comparison within the same degree of rationality,self-regarding subjects show more strategic sophistication than othersubjects.

Boundedly rational credit cycles

We propose an evolutionary model of a credit market. We show that theeconomy exhibits credit cycles. The model predicts dynamics which are consistent with some evidence about the Great Depression. Real shocks triggerepisodes of credit--crunch which are observed in the process of adjustmenttowards the post shock equilibrium.

Effect of Emotion and Personality on Deviation from Purely Rational Decision-Making

Human decision-making has consistently demonstrated deviation from "pure" rationality. Emotions are a primary driver of human actions and the current study investigates how perceived emotions and personality traits may affect decision-making during the Ultimatum Game (UG). We manipulated emotions by showing images with emotional connotation while participants decided how to split money with a second player. Event-related potentials (ERPs) from scalp electrodes were recorded during the whole decision-making process. We observed significant differences in the activity of central and frontal areas when participants offered money with respect to when they accepted or rejected an offer. We found that participants were more likely to offer a higher amount of money when making their decision in association with negative emotions. Furthermore, participants were more likely to accept offers when making their decision in association with positive emotions. Honest, conscientious, and introverted participants were more likely to accept offers. Our results suggest that factors others than a rational strategy may predict economic decision-making in the UG.

Rational reasoning or adaptive behavior? Evidence from two-person beauty contest games

Many experiments have shown that human subjects do not necessarily behave in line with game theoretic assumptions and solution concepts. The reasons for this non-conformity are multiple. In this paper we study the argument whether a deviation from game theory is because subjects are rational, but doubt that others are rational as well, compared to the argument that subjects, in general, are boundedly rational themselves. To distinguish these two hypotheses, we study behavior in repeated 2-person and many-person Beauty-Contest-Games which are strategically different from one another. We analyze four different treatments and observe that convergence toward equilibrium is driven by learning through the information about the other player s choice and adaptation rather than self-initiated rational reasoning.

Constraints and non-existence of rational expectations equilibria

In this article we show that in the presence of trading constraints, such as short sale constraints, the standard definition of a Rational Expectations Equilibrium allows for equilibrium prices that reveal information unknown to any active trader in the market. We propose a new definition of the Rational Expectations Equilibrium that incorporates a stronger measurability condition than measurability with respect to the join of the information sets of the agents and give an example of non-existence of equilibrium. The example is robust to perturbations on the data of the economy and the introduction of new assets.

Monetary policy and rational asset price bubbles

I examine the impact of alternative monetary policy rules on arational asset price bubble, through the lens of an overlapping generations model with nominal rigidities. A systematic increase in interestrates in response to a growing bubble is shown to enhance the fluctuations in the latter, through its positive effect on bubble growth. Theoptimal monetary policy seeks to strike a balance between stabilization of the bubble and stabilization of aggregate demand. The paper'smain findings call into question the theoretical foundations of the casefor "leaning against the wind" monetary policies.

Rational design of indoleamine 2,3-dioxygenase inhibitors.

Indoleamine 2,3-dioxygenase (IDO) is an important therapeutic target for the treatment of diseases such as cancer that involve pathological immune escape. We have used the evolutionary docking algorithm EADock to design new inhibitors of this enzyme. First, we investigated the modes of binding of all known IDO inhibitors. On the basis of the observed docked conformations, we developed a pharmacophore model, which was then used to devise new compounds to be tested for IDO inhibition. We also used a fragment-based approach to design and to optimize small organic molecule inhibitors. Both approaches yielded several new low-molecular weight inhibitor scaffolds, the most active being of nanomolar potency in an enzymatic assay. Cellular assays confirmed the potential biological relevance of four different scaffolds.