Pollution in strategic multilateral exchange: Taxing emissions or trading on permit markets?

We introduce polluting emissions in a sequential noncooperative oligopoly model of bilateral exchange. In one sector, a leader and a follower use polluting technologies which create negative externalities on the payoffs of strategic traders who belong to the other sector. By modeling emissions as a negative externality, we show that the leader pollutes more (less) than the follower when strategies are substitutes (complements). Then, we consider the implementation of public policies to control the levels of emissions, namely, two taxation mechanisms and a permit market. We study the effects of these public policies. Moreover, we determine the conditions under which these public policies can implement a Pareto-improving allocation.     

Gender-Equalizing Family Policies and Mothers' Entry into Paid Work: Recent Evidence From Norway

Universal parental leaves with job protection and earnings compensation increase women's labor market attachment, but very long leaves may have negative consequences at both individual and societal levels. Using panel data from the period 1996–2010, we study whether it is possible to offset the potential negative effects on women's labor supply of long parental leaves by policies targeted especially at fathers, and policies making formal daycare cheaper and more easily available. Norway is used as example, since all recent extensions in the parental leave scheme have been reserved for fathers and at the same time the daycare sector has expanded rapidly. We find that Norwegian mothers did enter work faster after childbirth in the late 2000s than a decade earlier. The latest initiatives may thus have contributed to a shortening of women's career interruptions and a more equal division of paid and unpaid work among parents.     

Minimax regret and strategic uncertainty

This paper introduces a new solution concept, a minimax regret equilibrium, which allows for the possibility that players are uncertain about the rationality and conjectures of their opponents. We provide several applications of our concept. In particular, we consider price-setting environments and show that optimal pricing policy follows a non-degenerate distribution. The induced price dispersion is consistent with experimental and empirical observations (Baye and Morgan (2004) [4]).     

On hierarchical competition in oligopoly

In this paper, we consider a hierarchical oligopoly model, in which firms compete on quantities of an homogeneous product. We provide a proof and an interpretation that under the three necessary and sufficient conditions of linear aggregate demand, constant and identical marginal costs, the strategy of leaders at any stage depends neither on the number of leaders who play after nor on the number of remaining stages. So, all firms behave as Cournotian oligopolists on the residual demand. We show that these three assumptions are not only sufficient but also necessary. Any departure from any of these assumptions rules out this property.     

Unemployment equilibrium and economic policy in mixed markets

This paper features a simple static Cournot-Nash model of an exchange economy with two productive sectors at flexible prices and wages. The traders in the atomless sector are price-takers, while the atoms behave strategically. We focus on the consequences of strategic interactions on the market outcome. Firstly, strategic interactions create underemployment on the labor market. Secondly, when the number of atoms increases without limit, the CWE coincides with the competitive equilibrium. Thirdly, we compare the welfare reached by traders at both equilibria. Fourthly, we consider the implementation of a tax levied on strategic supplies. Finally, we compare the approach retained with the monopolistic competition framework.     

Corporate leverage and the terms of employment: evidence from French small businesses before and during the global crisis

Despite the particular importance of corporate leverage and human capital for small businesses, little is surprisingly known about the relationship between these two factors for this category of firms. Accordingly, this article tries to fill this gap by investigating the relationship between leverage and human capital examined through the investment in employee-related expenditure. The analysis focuses on a sample of French listed small businesses before and during the recent global crisis. The empirical findings show that leverage serves as a monitoring mechanism of corporate managers prone to over or underinvest in employee-related expenditure to obtain private benefits. Due notably to the availability of debt, this monitoring is more effective before the crisis period, especially for low growth firms. Overall, these results provide support to the theory that leverage has a disciplining role. Simultaneously, they lead to moderate the strength of this role according to the global crisis. Thus, they should provide useful insights for academics, regulators, managers and credit institutions.     

Accounting and accountants as essential elements in the development of central administration during the inter-war period: management ideology and technology at Alais, Froges et Camargue (AFC-Pechiney)

Alais, Froges et Camargue (AFC or Pechiney) came into being following mergers within the French aluminium industry during and immediately following the First World War. The new management had to cope with a rapidly expanded, diversified and geographically dispersed business enterprise. During the inter-war period AFC's directors created a strong administrative and functional organization to unify and standardize the use of management tools and the operation of the financial information system. The accounting department, closely linked to the Chief Executive Officer from 1921, was to be the main focus of the new organization. The ideology of rationalization, typical of the inter-war period, was clearly to be found at Pechiney's headquarters, reflected in the systematization of management, the training of clerks and mechanization.     

Can Risk-Based Theories Explain the Value Premium?

This paper shows that some of the most prominent risk-basedtheories offered as explanation for the value premium are atodds with data. The models proposed by Fama and French (1993),Lettau and Ludvingson (2001), Campbell and Vuolteenaho (2004),and Yogo (2006) can capture the cross-section of returns ofportfolios sorted on book-to-market ratio and size, but notof portfolios sorted on book-to-market ratio and institutionalownership. These models generate economically large pricingerrors in all the institutional ownership quintiles and eachstatistical test indicates that these pricing errors are significant.More generally, these results show that a minor alteration ofthe test assets can lead to a dramatically different answerregarding the validity of a given asset pricing model.     

A Review of Heinrich von Stackelberg's Book: ‘Market Structure and Equilibrium’

In this note, we review the recent translation in English by Bazin et al. of Stackelberg's book ‘Marktform und Gleichgewicht’ (1934).