The determinants of employers’ use of temporary contracts in the frictional labor market

This paper focuses on the following two primary reasons that employers use temporary contracts: to flexibly adjust employment and to screen workers. A search-matching framework is used to not only address employers’ endogenous choices in using temporary contracts, but also numerically identify the situations in which these contracts are likely to be used as a screening tool for permanent positions. This numerical exercise demonstrates that reducing employment protections in permanent jobs, reducing benefits for unemployed workers and raising the conversion probability from temporary to permanent employment will increase the relative proportion of employers who use temporary contracts as a screening device.     

Theoretical and experimental investigations of the performance of keyword auction mechanisms

Two keyword auction mechanisms, the Generalized Second‐Price auction (GSP) and the Vickrey‐Clarke‐Groves mechanism (VCG), were compared theoretically and experimentally. The former is widely used in practice; the latter is not, but it has a dominant strategy equilibrium where all participants bid their true values. In the theoretical investigation, by applying the “locally envy‐free Nash equilibrium” to the VCG, we found that the allocations are efficient and that upper and lower bounds of the auctioneer's revenue coincide in the two mechanisms. A laboratory experiment, in which the revenues and efficiencies were similar in both mechanisms, supported this result.     

Jobs with different wage determination mechanisms, social efficiency and unemployment

The purpose of this paper is to construct a theoretical framework for the labor market, which is composed of a variety of jobs with different wage determination mechanisms. We identify an equilibrium in which some firms post a wage and others bargain with workers. This paper shows that the proportion of firms adopting wage bargaining in a decentralized equilibrium is below the socially optimal level. We identify policies to increase this proportion and to improve social efficiency. Furthermore, we examine the impact of those policies on unemployment. The results of this study will determine the direction of employment policy on the labor market with various employment styles.     

Comparing supply‐side specifications in models of global agriculture and the food system

This article compares the theoretical and functional specification of production in partial equilibrium (PE) and computable general equilibrium (CGE) models of the global agricultural and food system included in the AgMIP model comparison study. The two model families differ in their scope—partial versus economy‐wide—and in how they represent technology and the behavior of supply and demand in markets. The CGE models are “deep” structural models in that they explicitly solve the maximization problem of consumers and producers, assuming utility maximization and profit maximization with production/cost functions that include all factor inputs. The PE models divide into two groups on the supply side: (1) “shallow” structural models, which essentially specify area/yield supply functions with no explicit maximization behavior, and (2) “deep” structural models that provide a detailed activity‐analysis specification of technology and explicit optimizing behavior by producers. While the models vary in their specifications of technology, both within and between the PE and CGE families, we consider two stylized theoretical models to compare the behavior of crop yields and supply functions in CGE models with their behavior in shallow structural PE models. We find that the theoretical responsiveness of supply to changes in prices can be similar, depending on parameter choices that define the behavior of implicit supply functions over the domain of applicability defined by the common scenarios used in the AgMIP comparisons. In practice, however, the applied models are more complex and differ in their empirical sensitivity to variations in specification—comparability of results given parameter choices is an empirical question. To illustrate the issues, sensitivity analysis is done with one global CGE model, MAGNET, to indicate how the results vary with different specification of technical change, and how they compare with the results from PE models.