Price Dispersion in Mortgage Markets

Using transaction‐level data on Canadian mortgage contracts, we document an increase in the average discount negotiated off the posted price and in rate dispersion. Our aim is to identify the beneficiaries of discounting and to test whether dispersion is caused by price discrimination. The standard explanation for dispersion in credit markets is risk‐based pricing. Our contracts are guaranteed by government‐backed insurance, so risk cannot be the main factor. We find that lenders set prices that reflect consumer bargaining leverage, not just costs. The presence of dispersion implies a lack of competition, but our results show this to be consumer specific.     

Efficiency of Nonpoint Source Pollution Instruments: An Experimental Study

In nonpoint source pollution problems, the regulator does not observe each polluters individual emission, which prevents him from using the conventional policy instruments. Therefore, new instruments have been designed to regulate this type of pollution. In an experiment, we compare the efficiency of some of these instruments: an input-based tax, an ambient tax/subsidy, an ambient tax, and a group fine. We assume that polluters themselves are affected by environmental damages. A control session without any regulation is also carried out in order to study the status quo situation. Our experimental data show that the input tax and the ambient tax are very efficient and reliable, and the group fine is fairly efficient and reliable. These instruments improve social welfare with respect to the status quo. On the contrary, the ambient tax/subsidy decreases social welfare with respect to the status quo, and its effect is very unreliable.     

Screening risk-averse agents under moral hazard: single-crossing and the CARA case

Principal-agent models of moral hazard have been developed under the assumption that the principal knows the agent's risk-aversion. This paper extends the moral hazard model to the case when the agent's risk-aversion is his private information, so that the model also exhibits adverse selection. We characterize the optimal menu of contracts; while its detailed properties depend on the setting, we show that some of them must hold for all environments. In particular, the power of incentives always decreases with risk-aversion. We also characterize the relationship between the outside option and the optimal contracts. We then apply our results to testing for asymmetric information in insurance markets.The authors thank P.A. Chiappori, D. de Mezza, R. Myerson, C. Prendergast, the late S. Rosen, D. Webb and an anonymous referee for helpful discussions or comments, as well as seminar participants in Berkeley, Chicago, Montré al, Northwestern, Rome, Stanford and Wisconsin. Bruno Jullien gratefully acknowledges financial support from the Fédération Francaise des Sociétés d'Assurance; Bernard Salanié thanks the University of Chicago for its hospitality.     

A Study of Mutual Insurance for Bank Deposits

This article displays a study on the mutual insurance of bank deposits. A system where deposits are first insured by a consortium then by the Government is envisaged. We wish to compute the fair premia due to both the consortium and the Government. Various types of covenants aiming at making banks reduce their risks are detailed. These provisions can be, as is the case in Chapter 11, of a Parisian type. This means that surveillance is based on the path followed by the assets or the leverage. We compare these various types of covenants and conclude on the proposal for new regulatory provisions. JEL Classification No: G13, G21     

The origins and functioning of the private wildfowling lease system in a major Mediterranean wetland: the Camargue (Rhone river delta, southern France)

All over the world, the demand for high-quality hunting areas has been growing in recent decades and this trend is expected to continue in the future. In the Camargue (southern France), where there are large wintering populations of ducks, the leasing of privately owned estates for wildfowling is becoming an alternative economic activity that can supplement and even exceed the income from other uses of farmland. In this region, several habitats of conservation concern, including Mediterranean seasonally flooded marshes, are managed for this purpose. However, data on wetland management for shooting and on the status of private shooting clubs in relation to local farming, are scarce. We investigated the characteristics of 42 private wildfowling clubs in the Rhone river delta. Aerial surveys were used to collect the data on land use on these sites. In addition, interviews and questionnaires allowed us to identify habitat management practices undertaken by landowners and hunting managers. We describe the origins and functioning of the private wildfowling club system. A multifactorial analysis and an ascending hierarchical classification distinguished three types of club. We evaluated leasing costs and incomes in the Camargue, their determinants, and some consequences of the leasing system on rural development and the conservation of wetlands.     

Group Decision and Negotiation in Strategy Making

For a large number of organisations effective delivery of strategy depends upon the psychological and emotional commitment of the Top Management Team (TMT) thus involving group negotiation and decision making. Computer based group support promoting open debate and developing commitment is therefore important and illustrated through examples from the presenter's large number of strategic interventions.     

The Impact of Sickness Absenteeism on Firm Productivity: New Evidence from Belgian Matched Employer–Employee Panel Data

Using rich longitudinal matched employer–employee data for Belgium, we provide a first investigation of the impact of sickness absenteeism on firms’ productivity. To do so, we estimate a production function augmented with a firm-level measure of sickness absenteeism that we constructed from worker-level information on nonworked hours due to illness or injury. We deal with the endogeneity of inputs and sickness absenteeism by applying a modified version of the semiparametric control function method developed by Ackerberg, Caves, and Fraser (2015), which explicitly takes firm fixed unobserved heterogeneity into account. Our main finding is that, in general, sickness absenteeism substantially dampens firms’ productivity. However, further analyses show that the impact varies according to several workforce and firm characteristics. Sickness absenteeism is more detrimental to firm productivity when absent workers are high tenure or blue collar. Moreover, it is especially harmful to industrial, capital-intensive, and small enterprises. These findings are consistent with the idea that sickness absenteeism is more problematic when absent workers have in-depth firm-/task-specific knowledge, when the employees’ work is highly interconnected (e.g., along the assembly line), and when firms face more organizational limitations in substituting absent workers.     

Optimal Income Taxation and Job Choice

In this paper, we study optimal income taxation when different job types exist for workers of different skills. Each job type has some feasible range of incomes from which workers choose by varying labor supply. Workers are more productive than others in the jobs that suit them best. The model combines features of the classic optimal tax literature with labor variability along the intensive margin, with the extensive‐margin approach where workers make discrete job choices and/or participation decisions. We find that first‐best maximin utility can be achieved in the second‐best, and marginal tax rates below the top can be negative or zero.