Strategic restraint in contests

Economic policy is modelled as the outcome of a (political) game between two interest groups. The possible ex-post (realized) outcomes in the game correspond to the proposed policies. In the literature policy proposals are exogenous. We extend such games by allowing the endogenous determination of the proposed policies. In a first stage the groups decide which policy to lobby for and then, in a second stage, engage in a contest over the proposed policies. Our main result is that competition over endogenously determined policies induces strategic restraint that reduces polarization and, in turn, wasteful lobbying activities.     

State lotteries and externalities to their participants

The degree of participation in state lotteries can either increase or decrease expected returns. It is theoretically possible for unfair bets to become more than fair as participation in lotteries changes. In addition, the purchase of every combination of numbers can be more than a fair bet and such a purchase may increase the expected return to other lottery players.     

The Economic Consequences of the Obama Reelection: How Stagnation Has Vanquished Growth

The stagnation of the American economy during the past decade is attributable to faulty policies at both the macro and micro level. The efforts to organize stimulus programs and manipulation tax rates create uncertainties that offset any supposed gains from Keynesian policies. At the same time, the failure to address major structural flaws in labor, real estate, free trade and positive rights have resulted in cumulative dislocations that require a shrinkage of government across the board to facilitate any reversal of economic fortune.     

The empirical determination of technology and expectations: A simplified procedure

This paper makes three principal contributions to the growing body of empirically oriented research on dynamic factor demand systems that are based on the adjustment cost model of the firm. First, a simplified procedure is described for deriving demand and supply functions which are amenable to empirical estimation and which are consistent with intertemporal expected profit maximization and a general expectations formation process for future prices. Second, it is pointed out that estimation of a complete system of demand and supply functions permits the empirical identification of both the firm's technology and its expectations formation process. Finally, the procedure is applied to aggregate annual U.S. manufacturing data for the 1947-1977 period and the consistency of the data with the theoretical framework is investigated.     

Retail pricing and clearance sales: the multiple product case

This paper deals with the phenomenon of clearance sales of fashion type goods which have an intertemporal aspect similar to durable goods. Using the Van Praag and Bode (1992) model, the case of clearance sales in a store selling more than one commodity is analyzed. Conditions and rules of thumb are shown in which it is optimal to increase the price of one product while decreasing the price of another. A linear demand model and a numerical example are presented, showing that the price of one product decreases while the price of the other product may increase or decrease in different periods.     

Business ethics,Corporate Good Citizenship and the Corporate Social Policy Process: A view from the United States

Within the American context, the term Corporate Good Citizenship, a rather vague and somewhat dated notion, bears little relationship to the concept of Business Ethics. Whereas the latter refers to systematic reflection on the moral significance of the institutions, policies and behavior of business actors in the normal course of their business operations, the former is a subset of the broader notion of Corporate Social Responsibility and denotes, generally, discretionary, possibly altruistic, non-business relationships between business organizations and diverse community stakeholders. A newer concept, the Corporate Social Policy Process, which focuses on the institutionalization within business organizations of processes facilitating individual and organizational reflection and choice regarding the moral significance of personal and organizational action together with a consideration of the likely consequences of such action, provides analytical linkages between Business Ethics and Corporate Good Citizenship which can be useful to business scholars and operating managers alike. Specific aspects of Corporate Good Citizenship, including corporate community involvements, are examined and particular attention is paid to current trends in corporate donations, including an increasing emphasis on strategic philanthropy which explicitly mixes practical and benevolent motives in company giving policies and practices.Edwin M. Epstein is Professor of Business Administration at the University of California at Berkeley. A former chair of the Social Issues in Management Division of the Academy of Management, he has lectured and published extensively in the field of Business and Public Policy with a particular emphasis on the Social Role of the Corporation in the United States and other Advanced Industrial Societies.Bryan W. Husted, Esq., a doctoral student in the Business and Public Policy Program at the Berkeley Business School, University of California at Berkeley, rendered useful research assistance and Mary Ann Huisman for the Program in Business and Social Policy, Center For Research in Management, Berkeley Business School, University of California at Berkeley, provided helpful technical services which I gratefully acknowledge.     

Backtesting Stochastic Mortality Models

Abstract

This study sets out a backtesting framework applicable to the multiperiod-ahead forecasts from stochastic mortality models and uses it to evaluate the forecasting performance of six different stochastic mortality models applied to English & Welsh male mortality data. The models considered are the following: Lee-Carter’s 1992 one-factor model; a version of Renshaw-Haberman’s 2006 extension of the Lee-Carter model to allow for a cohort effect; the age-period-cohort model, which is a simplified version of Renshaw-Haberman; Cairns, Blake, and Dowd’s 2006 two-factor model; and two generalized versions of the last named with an added cohort effect. For the data set used herein, the results from applying this methodology suggest that the models perform adequately by most backtests and that prediction intervals that incorporate parameter uncertainty are wider than those that do not. We also find little difference between the performances of five of the models, but the remaining model shows considerable forecast instability.     

Lead Paint,Toxic Torts,and the Housing Stock: A Case Study in Risk Assessment

Numerous policymakers have accepted claims in the public health literature that the United States is in the middle of a serious epidemic of childhood lead poisoning, due primarily to lead paint in the housing stock. This article analyzes some of the most influential lead paint epidemiological studies from an economics perspective and finds evidence that the claimed effects of lead on intelligence, school success, and other outcomes may be grossly exaggerated. In addition, the main cost-benefit analysis used by policymakers to advocate lead paint abatement of the entire U.S. housing stock contains serious mathematical errors and strikingly implausible economic assumptions. A corrected model shows that the proposed national abatement policy is likely to yield no net benefit.