Disagreement points in trade negotiations

This paper analyzes trade negotiations between two large countries in the framework of an alternating-offer bargaining model with endogenous interim disagreement actions. Despite of the flexibility in disagreement tariff selection, the countries would keep the status quo tariffs in disagreement periods as far as the country which benefits from keeping the status quo tariffs compensates for the other country’s foregone gains from deviating in disagreement actions. Each equilibrium outcome converges to a corresponding Nash bargaining solution whose disagreement point reflects the status quo tariff rates as well as the threat of raising the tariff to the Nash tariff rate.     

International Trade and Income Inequality*

We propose a simple theory that shows a mechanism through which international trade entails wage and job polarization. We consider two countries in which individuals with different abilities work either as knowledge workers, who develop differentiated products, or as production workers, who engage in production. In equilibrium, ex ante symmetric firms attract knowledge workers with different abilities, and this creates firm heterogeneity in product quality. Market integration disproportionately benefits firms that produce high-quality products. This winner-take-all trend of product markets causes a war for talents, which exacerbates income inequality within the countries and leads to labor-market polarization.     

The impact of anti-vascular endothelial growth factor agents on visual impairment/blindness prevention in patients with diabetic macular edema and on associated patient and caregiver burden in Japan

Aims: To estimate the impact of anti-vascular endothelial growth factor (VEGF) agents on visual impairment and blindness avoided in patients with diabetic macular edema (DME) and on associated patient and caregiver productivity loss in Japan.

Methods: This study compared the impact of current care (estimated at 53.8% utilization of anti-VEGF agents using current data) with that of hypothetical care (characterized by a higher utilization of anti-VEGF agents [80.0%], as estimated by an expert panel) of DME patients. A population-based Markov model (two-eye approach) simulated visual acuity (Early Treatment Diabetic Retinopathy Study [ETDRS] letters) transitions over 5 years with DME treatments (intravitreal aflibercept, ranibizumab, and triamcinolone acetonide, and grid/focal laser) in patients with DME. Patient and caregiver productivity loss was determined using the human capital method.

Results: In total, 570,000 DME patients were included in the model over 5 years. Increased utilization of anti-VEGF agents resulted in 6,659 fewer cases of severe visual impairment (SVI; 26–35 ETDRS letters) or blindness (0–25 ETDRS letters) compared with the current care approach (26,023 vs 32,682 cases; 20.38% reduction) over this period. Increased utilization of anti-VEGF agents also contributed to productivity loss savings of ¥12.58 billion (US $115.64 million) (i.e., 17.01%) at the end of year 5. The total overall saving over 5 years was ¥45.83 billion (US $421.27 million) (13.45%).

Limitations: Few Japanese data were available, and assumptions were made for some inputs. Vision changes dependent on the function of both eyes were not studied. Only intravitreal (not sub-Tenon’s) injections of triamcinolone were considered in this model. Direct costs were not considered.

Conclusions: Increased utilization of anti-VEGF agents can reduce SVI and legal blindness in patients with DME in Japan. This would also be associated with substantial savings in patient and caregiver productivity loss.     

Global dynamics in repeated games with additively separable payoffs

This paper studies the global dynamics of a class of infinitely repeated two-player games in which the action space of each player is an interval, and the one-shot payoff of each player is additively separable in actions. We define an immediately reactive equilibrium (IRE) as a pure-strategy subgame perfect equilibrium such that each player's action is a stationary function of the opponent's last action. We completely characterize IREs and their dynamics in terms of certain indifference curves. Our results are used to show that in a prisoners' dilemma game with mixed strategies, gradual cooperation occurs when the players are sufficiently patient, and that in a certain duopoly game, kinked demand curves emerge naturally.     

安徽凤阳赵庄模式与苏南模式的比较研究及启示

本文从区域经济发展的角度探讨了凤阳赵庄模式与苏南模式的异同。“凤阳赵庄模式”和“苏南模式”都是较成功的经济发展模式，相同点在于适应了当时当地经济发展条件，都有一个好的带头人，成功的关键都在于进行制度创新，都在进行模式的演进和变迁。不同之处在于区位环境和历史传统不同，经济的发展途径和产生的文化背景不同。由此得出的启示是：工业反哺农业是当前促进农村经济发展的动力源；地区经济发展无固定模式；农业集约化经营是我国农业今后发展的方向。     

How enterprise strategies are related to innovation and productivity change: an empirical study of Japanese manufacturing firms

This study analyzes the total factor productivity of 1067 Japanese manufacturing firms. In production estimation, we employ the directional distance function and Luenberger productivity indicator. Research and development strategy survey data are used to analyze the determinant factors related to improvements in innovation and productivity. Our results indicate that increasing technology and knowledge through a ‘black box’ process is related to an increase in productivity. Furthermore, the protection and management of production knowledge and expertise is a valid method of increasing global technical change.     

Tariffs versus quotas in the presence of imperfect competition and cross‐border externalities

Abstract.  We consider trade policies intended to affect the production of a foreign monopolist that generates negative externalities. We derive the optimal tariff and optimal import quota and examine which policy measure should be used to maximize domestic welfare. We find that if the domestic government does not have full information on the foreign firm's production method and if cross‐border externalities exist, import quotas are in some cases preferable to tariffs. Otherwise, however, tariffs are preferable to quotas. JEL Classification: F13, F18