Income distribution, efficiency and rationing

This paper studies the impacts of income distribution on the efficiency of trade mechanism and rationing of agents who are priced out of trade in a dynamic search model with two-sided asymmetric information. Buyers and sellers have asymmetric information about valuations and incomes respectively. In such a frictional environment, the effects of several variants of changes in income distribution on efficiency of trading mechanism and the population of rationed buyers and sellers are elaborated.     

COMMITMENT AND COSTLY SIGNALING IN DECENTRALIZED MARKETS

I propose a search model of a decentralized market with asymmetric information in which sellers are unable to commit to asking prices announced ex ante. Relaxing the commitment assumption prevents sellers from using price posting as a signaling device to direct buyers' search. Private information about the gains from trade and inefficient entry on the demand side then contribute to market illiquidity. Endogenous sorting among costly marketing platforms can facilitate the search process by segmenting the market to alleviate information frictions. Seemingly irrelevant but incentive compatible listing fees are implementable provided that the market is not already sufficiently active.     

Revisiting the Lemons Market

This article extends the standard competitive adverse selection model by allowing for qualitatively different information structures of agents on the informed side of the market. Using the stylized framework of the market for used cars, we examine the welfare properties of equilibria under the assumption that a fraction of the sellers remains uninformed about a parameter that is relevant for their own transaction. Whether market performance increases or decreases in the number of uninformed sellers is shown to depend on (1) the potential gains from trade in the market and (2) the average quality of the sellers' information structure.     

Internet Technology and the Extensive Margin of Trade: Evidence from eBay in Emerging Economies

Online platforms such as eBay offer technologies that make it easier for firms to export. This paper dissects a new firm‐level dataset that covers sales made through eBay by sellers based in 21 emerging economies to provide a new lens through which to look at the effect of trade costs on the extensive margin of trade. Comparing eBay sellers with “offline” firm‐level data from the World Bank's Exporter Dynamics Database allows us to test whether the observed trade patterns on eBay fit with the trade‐liberalization predictions of heterogeneous‐firm models. We find that eBay firms export to more destinations, suggesting low destination‐specific fixed costs on eBay. We then show that the distribution of export destinations across eBay sellers is well approximated by a balls‐and‐bins model of frictionless trade, suggesting eBay indeed lowers fixed export costs. Finally, we compare the gravity of eBay with that of offline trade and find geographic distance, languages, and trade agreements to matter less for online trade.     

Inefficiency caused by random matching and heterogeneity

I study an economy with sellers and buyers with unit supplies and unit demands. Both parties have valuations uniformly distributed on a unit interval. I quantify the inefficiency, compared to the Walrasian markets, when the agents meet randomly. There are several causes of inefficiency that I deal with separately. First, even if there is perfect information about valuations it makes a difference whether all agents participate in the markets or whether only those who would trade in the Walrasian market participate. The same applies when there is private information about valuations.     

Eco-Labeling and Stages of Development

The paper examines the effectiveness of eco-labeling in providing a market-based solution to the under-consumption of eco-friendly products in developing and developed countries. The authors show that whether labeling is an effective device in solving the problem of asymmetric information between sellers and buyers, or whether false labeling severs the link between willingness to pay and environmental conscious production choices, depends crucially on how monitoring intensities respond endogenously to economic growth, openness to trade, and technology transfers. In particular, by accounting for endogenous policy responses to economic growth, it is shown that an inverted-U relationship exists between consumer spending on eco-unfriendly products and national income. In addition, while international trade unambiguously benefits the environment in the presence of eco-labeling with perfect enforcement, trade openness may nevertheless delay the turning point of the growth and environment relationship, when the cost of enforcement falls disproportionately on developing countries, and when environmental policies are employed to reap terms-of-trade gains.     

Sunk costs and fairness in incomplete information bargaining

We study a bilateral trading relationship in which one agent, the seller, can make a nonrecoverable investment in order to generate potential gains from trade. Afterwards, the seller makes a price offer that the buyer can either accept or reject. If agents are fairminded, sellers who are known by the buyer to have high investment costs are predicted to charge higher prices. If the investment cost is private information, low-cost sellers should price more aggressively and high-cost sellers less aggressively than under complete information, giving rise to disagreement and/or underinvestment. Our experiment support these predictions.     

Trade,growth and income redistribution: A case study of India

The concern of this exercise is with the effectiveness of trade policies and their assessment in achieving economic growth and income equality. A link between growth and equality is provided through employment. If there is substantial increase in employment, the inequality of income distribution is likely to be reduced. Thus, trade by bringing about higher levels of production and employment may reduce income inequality. We have applied a closed input-output model to the Indian data to estimate the interrelationships between trade, growth and income redistribution. It has been found that employment opportunities could be raised substantially through redistribution as well as through export promotion in developing countries such as India, if capital and foreign exchange constraints are not binding. Import substitution, however, does not turn out to be as effective a strategy to achieve these goals.     

Changes in the Income Distribution of the Dutch Elderly between 1989 and 2020: a Dynamic Microsimulation

This paper analyzes the income distribution of the Dutch elderly using a microsimulation model. Microsimulation models allow for detailed estimates of the income distribution. Our model deviates from traditional models by explicitly considering the persistency and heteroskedasticity of real income shocks. In this way, modeling all underlying processes influencing household income becomes less necessary, which can improve the trade‐off between refinement and tractability of microsimulation models. We show the results of three model specifications with different levels of refinement. The results are in line and indicate that between 2008 and 2020, the highest predicted annual growth among the elderly is for median‐income households (about 1.2 percent). High‐income households have a somewhat lower predicted growth (about 1.0 percent) and low‐income households only have a predicted annual growth of 0.5 percent. Inequality therefore seems to increase in the lower part of the distribution, while it will probably decline in the upper part of the distribution.     

Turnover Externalities with Marketplace Trading

This article considers equilibrium decentralized trade when there is a marketplace where buyers and sellers meet costlessly. Since buyers have idiosyncratic match payoffs for each seller's good, some buyers, rather than trade with the current stock of sellers, wait for new sellers to enter the marketplace to obtain a good they like. A turnover externality exists where all traders are better off with higher entry rates of new traders. Furthermore, this turnover externality supports multiple Pareto-rankable equilibria. This provides new insights into similar results obtained in the random-matching literature.     

Risk and Household Grain Management in Developing Countries

A dynamic model is presented of a household's joint production, storage, and trade decisions when facing transaction costs and risk in prices and yields. Grain management decisions balance the goals of maximising profits and reducing consumption price risk. Model solutions calibrated to Chinese data show that grain's consumption role makes it an attractive form of precautionary saving even when households have access to credit, the joint nature of production and savings decisions limits the income loss associated with risk-coping, and the desire to store grain can explain why subsistence households are frequently net purchasers but rarely net sellers of grain.     

Information and the persistence of private-order contract enforcement institutions: An experimental analysis

We study an experimental market in which some sellers are prone to moral hazard, and in which a private-order contract enforcement institution exists that can mediate trade and prevent sellers from reneging on their contractual obligations. Using the institution to resolve the moral-hazard problem is costly. We demonstrate that in this market, the utilization of the private-order contract enforcement institution may make public and private market signals uninformative and inhibit learning. We study whether this potential information externality can limit adaptation away from the private-order institution when it is efficient to do so. Consistent with theory, we find inefficient persistence when the institution is used, but by contrast, efficient adaptation in other situations. Providing information to individuals who are using the private-order institution allows them to partially adapt.     

Institutionalism and New Trade Theory: Rethinking Comparative Advantage and Trade Policy

Gomory and Baumol (2000), and Samuelson (2004) have raised concerns about international trade’s future impact on U.S. national income. The focus is how globalization may affect the size and distribution across countries of gains from trade. Though their analysis is developed using a pure trade theoretical framework, it has strands in common with institutionalist thinking. Their findings spotlight the need for a new U.S. trade policy agenda aimed at maximizing the U.S. share of gains from trade, and complementing conventional Keynesian open economy macroeconomic analysis.     

Remain silent and ye shall suffer: seller exploitation of reticent buyers in an experimental reputation system

By providing incentives for sellers to act in a trustworthy manner, reputation mechanisms can mitigate moral-hazard problems when particular buyers and sellers interact infrequently. However, these mechanisms rely on buyers sharing their private information about sellers, and thus may suffer from too little feedback when provision is costly. We experimentally compare a standard feedback mechanism to one in which sellers can inspect a buyer’s feedback-provision history, thus providing incentives to share private information even when costly. We find fairly high trust and trustworthiness in all markets, with buyers providing costly feedback, especially negative, sufficient to induce trustworthiness. However, feedback-provision histories did not improve outcomes, and at least weakly decreased trustworthiness with experienced participants, as this information enabled sellers to discriminate and ship less frequently to buyers lacking a reputation for information sharing.     

城乡转换、经济开放与收入分配的变动趋势--理论假说与双二元动态框架

居民收入分配的变动趋势要受到城乡转换和经济开放的双重约束,而已有研究局限在发展经济学和国际贸易学两个不同的分析框架中,由此影响到其现实解释能力。文章结合二元经济和国际贸易价值增值理论,提出了两个理论假说,并在此基础上构建了一个包含三条劳动力转移路线的四部门、双二元动态分析框架,新分析框架将可以更全面地解释双重约束下居民收入分配的实际变动趋势,并具有更强的现实兼容性,从而丰富和发展了Kuznets“倒U”假说。     

SIZE DISTRIBUTION OF WORKERS' HOUSEIIOLD INCOME AND MACROECONOMIC ACTIVITIES IN JAPAN: 1963–88

An attempt is made to examine empirically the relationship between the size distribution of workers' household incomes and the variables expressing macroeconomic activities. As a preliminary implementation, the income shares are first estimated by decile groups and several subdivided top income groups. Applying Blinder and Esaki's regression approach to the estimated data, the ratio of job offers to applicants, inflation rate, and the terms of trade arc found to significantly affect the distribution. Of these variables, the terms of trade should be taken into account to ascertain precisely the income distribution in Japan where foreign trade heavily affects economic conditions.     

Communication of preferences in contests for contracts

This paper models a contest where several sellers compete for a contract with a single buyer. There are several styles of possible designs with a subset of them preferred by the buyer. We examine what happens when the buyer communicates information about his preferences. If the sellers are unable to change their style, then there is no effect on the welfare of the sellers. If the sellers are able to make adjustments, extra information may either boost or damage the sellers?? profits. While the chance that there will be a proposal of a style preferred by the buyer cannot decrease, the buyer??s surplus may increase or decrease.     

Good Jobs,Bad Jobs and Redistribution*

We analyse the question of optimal taxation in a dual economy, when the policy‐maker is concerned about the distribution of labour income. Income inequality is caused by the presence of sunk capital investments, which creates a “good jobs” sector due to the capture of quasi‐rents by trade unions. With strong unions and high planner preference for income equality, the optimal policy is a combination of investment subsidies and progressive income taxation. If unions are weaker, the policy‐maker may instead choose to tax investment.     

Surplus Extraction and Competition

A competitive economy is studied in which sellers offer alternative direct mechanisms to buyers who have correlated private information about their valuations. In contrast to the monopoly case where sellers charge entry fees and extract all buyers' surplus, it is shown that in the unique symmetric equilibrium with competition, sellers hold second price auctions with reserve prices set equal to their cost. Most important, it is a best reply for sellers not to charge entry fees of the kind normally used to extract surplus, even though it is feasible for them to do so.     

数字服务贸易与国家创新能力：基于收入差距的中介效应研究

作为一种新的贸易形态与商业模式,数字服务贸易在推动国家创新发展中的作用愈发显现。本文基于2011-2019年全球66个国家的面板数据,就数字服务贸易对国家创新能力的影响作用进行了实证研究,探讨收入差距在二者之间可能发挥的作用,并基于不同经济发展水平的国家样本展开了异质性分析。结果表明：数字服务贸易对国家创新能力的提升具有显著的正向影响;收入差距在二者之间发挥部分中介作用;高收入国家发展数字服务贸易对国家创新能力的显著提升作用更强,而中等收入国家受限于经济发展所处阶段,一定的收入差距可以阶段性地提升国家创新能力。为此,包括我国在内的中等收入国家需要在既定发展条件下,通过改革收入分配制度,推动数字服务贸易与收入差距协调发展,进而共同促进国家创新能力的提升。