DISUTILITY, OPTIMAL RETIREMENT, AND PORTFOLIO SELECTION

We study the optimal retirement and consumption/investment choice of an infinitely-lived economic agent with a time-separable von Neumann–Morgenstern utility. A particular aspect of our problem is that the agent has a retirement option. Before retirement the agent receives labor income but suffers a utility loss from labor. By retiring, he avoids the utility loss but gives up labor income. We show that the agent retires optimally if his wealth exceeds a certain critical level. We also show that the agent consumes less and invests more in risky assets when he has an option to retire than he would in the absence of such an option.
An explicit solution can be provided by solving a free boundary value problem. In particular, the critical wealth level and the optimal consumption and portfolio policy are provided in explicit forms.     

Can compensation save free trade?

When the median voter loses from trade reform, liberalization is blocked. Allowing the electorate to vote for compensatory subsidies may reverse this outcome. However, the order of the agenda may matter. The winners who pay the compensation may be sufficiently powerful to block compensation if trade is first liberalized. Seeing the inevitable outcome of sequential votes, the median voter realizes he will not be compensated for his losses and opposes liberalization. In contrast, liberalization can be achieved if compensation is placed first on the agenda. Finally, there is a significant chance that the least efficient compensation scheme will be chosen.     

Dealing with Donald Trump

The logic for multilateral cooperation in trade and beyond becomes stronger, not weaker. A new governance forum will emerge, where negotiating will take place in country clubs instead of among members at the WTO.However, by breaking protocol, the US president has gained substantial bargaining power, because he puts himself in a situation in which he actually has to implement his threats if the negotiation counterparts do not confirm in order to save face on the domestic and global stages.     

Subcontracting bargaining power and the trade policy

In this paper, we consider that the split of surplus from a subcontracting deal depends on the relative bargaining powers of domestic and foreign firms. The finding shows that a domestic optimal export policy is a tax (subsidy) if the bargaining power of the domestic firm is sufficiently small (large). We also demonstrate that a domestic firm’s higher bargaining power increases (may decrease) domestic profit if the export policy is exogenous (endogenous). In the presence of an outsider option, the domestic optimal export policy will be threatened by the outsider option if the domestic firm’s bargaining power is sufficiently small, and thus a large bargaining power increases the optimal export tax. At the same time, the foreign firm may still subcontract to the domestic firm even if the domestic firm has a higher total marginal cost of the intermediate good than the outsider option.     

ALCHIAN AND DEMSETZ'S CRITIQUE OF THE COOPERATIVE FIRM THIRTY‐SEVEN YEARS AFTER

The author discusses the critique of cooperatives implied in Alchian and Demsetz's argument that efficiency is maximized when the central agent managing the firm and watching the labour force at work is the residual claimant. Entering upon a number of criticisms that Alchian and Demsetz's approach attracted over the years, he concludes that their critique does not hold, and his basic argument is that cooperative firms vesting the monitoring function in elected managers will not be less efficient than capitalistic firms in the same situation.     

Fallback Bargaining

Under fallback bargaining, bargainers begin by indicating their preference rankings over alternatives. They then fall back, in lockstep, to less and less preferred alternatives – starting with first choices, then adding second choices, and so on – until an alternative is found on which all bargainers agree. This common agreement, which becomes the outcome of the procedure, may be different if a decision rule other than unanimity is used. The outcome is always Pareto-optimal but need not be unique; if unanimity is used, it is at least middling in everybody's ranking. Fallback bargaining may not select a Condorcet alternative, or even the first choice of a majority of bargainers. However, it does maximize bargainers' minimum satisfaction. When bargainers are allowed to indicate impasse in their rankings – below which they would not descend because they prefer no agreement to any lower-level alternative – then impasse itself may become the outcome, foreclosing any agreement. The vulnerability of fallback bargaining to manipulation is analyzed in terms of both best responses and Nash equilibria. Although a bargainer can sometimes achieve a preferred outcome through an untruthful announcement, the risk of a mutually worst outcome in a Chicken-type game may well deter the bargainers from attempting to be exploitative, especially when information is incomplete. Fallback bargaining seems useful as a practicable procedure if a set of reasonable alternatives can be generated. It leapfrogs the give-and-take of conventional bargaining, which often bogs down in details, by finding a suitable settlement through the simultaneous consideration of all alternatives.     

Disappointment aversion equilibrium in a futures market

This article examines the effect of disappointment aversion on the equilibrium in a commodity futures market. Consider a commodity market with a producer and a speculator. We show that the equilibrium price is positively related to either agent's risk or disappointment aversion, and to the market volatility. The market trading volume is positively related to the producer's risk or disappointment aversion, but negatively related to the speculator's risk or disappointment aversion. The producer lowers his or her reference point in response to an increase in the risk aversion or disappointment aversion of either agent, and to an increase in spot price volatility. The speculator raises his or her reference point when the producer becomes more risk averse or disappointment averse, or when the spot price becomes more volatile. A more disappointment‐averse speculator will lower his or her reference point. However, a more risk‐averse speculator raises (lowers) the reference point if he or she is less (more) risk averse than the producer. Numerical examples are provided to further support the above analytical results. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:135–150, 2003     

The disappearing data source: Ameliorating relations between academics and business

Growing corporate disillusionment with survey research has put a strain on the relationship between businessmen and academicians. The situation is becoming critical, and researchers may lose access to a rich data base if ways of alleviating the friction are not found. The authors look for causes (one is the sheer bulk of questionnaires received), and suggest approaches that researchers can take to elicit the support of businessmen. If the researcher is to enjoy the cooperation of practitioners, he must be aware of several points: the executive is a valuable resource; if he participates in a study he can legitimately expect that the results will be accurately reported; and his company must somehow profit from the study.     

Negotiation protocol based on ordered weighted averaging and Fuzzy metrics

ABSTRACT

Negotiation Support Systems are used to exchange offers and to improve the negotiation process. Some methods are based on perspectives like heuristics in order to bring the negotiation protocol gradually closer to reality. These approaches can be important in real negotiation as they can help to improve skillsespecially in distributive bargaining. This paper proposes a Negotiation Support framework to provide the negotiator with recommendations on making decisions in a negotiation process. To input this idea into negotiation protocols, this paper suggests that some concepts based on OWA (Ordered Weighted Averaging) and some of its metrics (Orness, Dispersion) be included in the heuristics of a structured negotiation schedule. It is expected that the support provided will aid the negotiator to make decisions during the negotiation process, to learn from the elicitation and his own behavior the results obtained can help the negotiator improving his skills in the negotiation process.     

借贷中的私人关系嵌入问题研究

关系借贷是我国金融领域的普遍现象 ,本文采用社会嵌入性的分析框架 ,认为经济交易是嵌入于当事人的具体的社会关系之中的 ,经济交易域嵌入社会交换域或政治域放松了贷方交易域的激励约束 ,当贷方是银行代理经营者时 ,经营者与关系人形成二次嵌入关系 ,并可能与关系人合谋 ,从中谋取私利 ,关系有助于解决意会信息问题 ,并对借方的道德风险起一定的约束作用 ,但不能完全解决逆向选择和道德风险。     

International Competition and Distributive Class Conflict in an Open Economy Kaleckian Model

This paper constructs an open economy Kaleckian model in which international competition affects the bargaining process between firms and workers, and investigates the effects of such bargaining on the macroeconomy. We show that the effects of a change in the bargaining power on aggregate demand depends not only on the demand regimes but also on which agents bears more of the burden arising from the international price competition. Moreover, if the real exchange rate has a small impact on the trade balance, the economy is stable, whereas if it has a larger impact on the trade balance, the economy is unstable.     

Asset Allocation of Two‐Person Households under Different Longevity Expectations

This study examines asset allocations of near‐elderly couples when spouses have different longevity expectations. Since the risk‐adjusted return on equities increases with investment horizon, a spouse who expects longer retirement period has an incentive to hold riskier portfolio. Using data from the Health and Retirement Study, we show that portfolio riskiness increases with the subjective survival probability of the decision‐making spouse. As predicted by the bargaining model, portfolio outcomes are uncorrelated with the horizon of the spouse who has less bargaining power. Results also show that the extent expected horizon is incorporated into asset allocation depends on the decider's gender. The share of equities depends on the husband's expected horizon when he leads decision making but not on the wife's horizon when she has more power. These findings contradict the prediction that wife‐led households may hold more equities than do husband‐led households because of their longer lifespan.     

Policy choice: Theory and evidence from commitment via international trade agreements

Why do governments employ inefficient policies when more efficient ones are available for the same purpose? We address this puzzle in the context of redistribution toward special interest groups (SIGs) by focusing on a set of important policies: tariffs and non-tariff barriers (NTBs). In our policy choice model a government can gain by committing to constrain tariffs through international agreements even if this leads to the use of less efficient NTBs; commitment has political value because it improves the bargaining position of a government that is weak relative to domestic SIGs. Using detailed data we find support for several of the model's predictions including: (i) tariff commitments in trade agreements increase the likelihood and restrictiveness of NTBs but not enough to offset the original tariff reductions; (ii) tariff commitments are more likely to be adopted and more stringent when the government is weaker relative to a SIG. Thus, the results can explain the use of inefficient policies for redistribution and suggest that the bargaining motive is an important source of the political value of commitment in international agreements.     

王宇:这个市场有点乱

<正>11月3日,中国住房和城乡建设部、财政部、人民银行、银监会四部委3日再次发出通知,全面叫停第三套住房公积金贷款,并将第二套住房公积金个人住房贷款首付提至五成。这是我国楼市调控政策的最新消息。对大多数人来说,这不过是众多新闻中最     

RISK-AVERSION BEHAVIOR IN CONSUMPTION/INVESTMENT PROBLEMS1

In this paper, we study the risk-aversion behavior of an agent in the dynamic framework of consumption/investment decision making that allows the possibility of bankruptcy. Agent's consumption utility is assumed to be represented by a strictly increasing, strictly concave, continuously differentiable function in the general case and by a HARA-type function in the special case treated in the paper. Coefficients of absolute and relative risk aversion are defined to be the well-known curvature measures associated with the derived utility of wealth obtained as the value function of the agent's optimization problem. Through an analysis of these coefficients, we show how the change in agent's risk aversion as his wealth changes depends on his consumption utility and the other problem parameters, including the payment at bankruptcy. Moreover, in the HARA case, we can conclude that the agent's relative risk aversion is nondecreasing with wealth, while his absolute risk aversion is decreasing with wealth only if he is sufficiently wealthy. At lower wealth levels, however, the agent's absolute risk aversion may increase with wealth in some cases.     

A Bargaining Model of Friendly and Hostile Takeovers

A bargaining model is developed that characterizes the conditions under which a takeover will either be friendly, hostile, or unsuccessful when the target management can tilt the selling procedure toward a white knight. The conditions considered mainly involve private control benefits, toehold size, and breakup fees. Also established by the model are the conditions for an efficient takeover. The proposed framework of strong management influence on takeover outcome, an alternative modeling of hostility and the adoption of a negotiation procedure, rather than an auction setup with strong shareholder influence as in most of the existing literature, delivers new insights into the US market of corporate control, which are consistent with the available evidence.     

Ethics, Deception and Labor Negotiation

There has been widespread emphasis on the importance of trust amongst parties to the employment relationship, associated with a call for increased "integrative bargaining". Trust is bound up with ethical action, but there has been some debate about the ethics of deception in bargaining. Because it is possible for cooperative bargainers to be exploited, some writers contend that deceptive behavior is ethical and established practice. There are several problems about that view. It is questionable how clear and uniform such a practice has been. An appearance of deceptive bluffing can often be explained as exchange of genuine concessions. Recent trends have seen increased devolution of bargaining from professionals to non-professionals, which dilutes any shared understandings there have been in the past, while practices that do exist may not be freely or voluntarily accepted and the existence of such practices is not enough to compensate for inequalities of power and skill. It is questionable to what extent bluffing and deception are necessary for self-defense. There other techniques available by which parties can guard themselves against exploitation.     

供应链成员企业投资RFID技术的激励机制：共享收入与谈判批发价的比较

许多已有研究发现供应链成员投资RFID技术的动机是一致的，它们假定投资前后的批发价能以相同方式制定。然而，供应链成员在投资前可能已达成固定的批发价。考虑包含一个制造商(她)和一个零售商(他)的供应链系统，成员可采用如分享销售收入(RS)、重新谈判批发价格(WR)、二者并用(B)的激励机制。结果发现在WR和B下，当制造商的谈判权力中等且标签成本较小时，投资RFID能实现双赢，但两家企业的投资动机不总是完全一致；当初始批发价足够高时，若制造商的谈判权力足够强，制造商和零售商对WR的偏好都高于N，对B的偏好都高于RS；当初始批发价较低时，若制造商的谈判权力中等，双方对RS的偏好都高于WR。若制造商的谈判权力较强，供应链系统在B下的收益比WR下的高；若制造商的谈判权力中等或较弱，供应链系统在B或WR下的收益都比N和RS下的高。     

通道费:大零售商挖掘市场效率的一种机制设计

本文运用数值例子和一般化博弈模型对1个生产商、1个大零售商和n个小零售商的市场进行了考察,给出了大零售商对生产商拥有讨价还价力量、生产商对小零售商拥有讨价还价力量时的市场均衡。结论为:(1)在大零售商使用包含通道费在内的"三部费"合约的市场均衡中,上下游可以实现纵向一体化利润。与生产商对下游完全拥有市场力量的情形相比,消费者剩余不会降低,市场价格不会上升,生产商获得的利润也不会减少。(2)大零售商的利润来自于消除上下游市场外部性,以及对市场效率改进的边际贡献。通道费可以视作是大零售商通过挖掘市场效率而获利的一种机制设计。(3)从政策角度看,用单一禁止通道费来提高市场效率和社会福利的目标往往难以实现。与其简单地取消进场费,还不如把政策的着力点放在支持小零售商、改善零售市场结构效率上。     

The bargaining relationship between foreign mnes and host governments in latin america

The relationship between international firms and national governments can usefully be understood in terms of bargaining theory. This article develops an explicit model of the bargaining relationship, using the level of regulation as a measure of bargaining power. The model is tested with data from a survey of multinational enterprise subsidiaries in seven Latin American countries. The evidence supports hypotheses that (1) firms are less regulated when they are technology-intensive, when they operate larger scale affiliates, and when they export more from the local affiliate; and (2) firms are more regulated when they operate in larger countries and when they have a larger local market share. These findings demonstrate the importance of the government—business relationship as a multidimensional process and offer support for the explicit framework employed here.