

@mastersthesis {6731,
	title = {History dependence and multiple equilibria in dynamic models},
	year = {2005},
	note = {3161697},
	school = {New School University},
	type = {phdPh.{D}.},
	address = {Ann Arbor},
	abstract = {This dissertation is divided into five parts: an introductory part, the following three essays and a conclusive part. In Essay I, the dynamic investment decision problem for a firm where adjustment costs have capital size effects is investigated. This setting possibly results in multiple steady states and a discontinuous policy function. I explore the global dynamic properties of the model both through analytically the HJB technique and numerical method for the detection of the thresholds. Additionally, the implications of this model on changes of aggregate output, interest rates, and taxes are explored. Essay II studies a mechanism which can lead to a bimodality, "Twin Peaks", of a distribution that shows up in both macro and micro data. The mechanism hinges on increasing returns in the cost of growth whereby the agents with greater resources can grow more easily. While many other models assume local increasing returns in the production side, I focus on the cost, side, on internal learning effects on cost reduction, which is empirically significant. I apply the theory to industry dynamics and to the emergence of twin peaks in the firm-size distribution. The model explains the stylized facts about the life cycle of an industry. Twin peaks in the firm-size distribution emerge whenever the initial distribution is sufficiently diffuse. Essay III considers an ecological management problem where agents{\textquoteright} activities interact with the dynamics of natural resources. We propose the example of a shallow lake that is subject to pollution due to phosphorus. Low-loading preserves the resilience of the ecosystem whereas high-loading may lead to the deterioration of the ecosystem. Welfare is calculated from benefits accrue to agricultural interests from the activities that result in phosphorous loading and costs, resulting from deterioration of water quality, accrue to enjoyers on the lake. The interaction of the dynamic decision problem, maximizing welfare and the dynamics of the ecosystem, admits multiple equilibria, thresholds, and complicated global dynamics. We consider the instruments of a regulatory agency that may help to maintain and to enhance resilience by enlarging the domain of attraction of the low pollution equilibrium or make it the sole attractor.},
	keywords = {0511:Economic theory, Biomodal distribution, Economic theory, Global dynamics, History dependence, Increasing returns, Multiple equilibria, Social sciences},
	url = {http://search.proquest.com/docview/305343973?accountid=14270},
	author = {Kato, Mika}
}
