Ergodic chaos for non‐expansive economic models**

Ergodic chaos is one of the most important concepts in the theory of nonlinear economics. Due to the lack of appropriate sufficient conditions, its reach has not been fully understood. In this paper a sufficient condition for ergodic chaos that covers non‐expansive dynamical systems is examined. By analyzing an endogenous growth model as an example, we discuss the breadth of models in which ergodic chaos can emerge.     

Corruption,market quality,and entry deterrence in emerging economies

In many emerging economies incumbent firms often use dubious means to deter entry of other firms. We analyze this scenario in a three‐stage game of entry deterrence. The incumbent has incomplete information about the entrant's costs but can increase this cost by resorting to unfair means (e.g. bribing a politician who harms the entrant). We completely characterize the optimal bribe and show that this depends on the “fairness index” and the “differentiation” parameter. We also show that zero bribes need not maximize welfare and market quality. Our results seem to be compatible with anecdotal evidence from emerging economies such as India.     

HOME EQUITY IN RETIREMENT

Retired homeowners dissave more slowly than renters, which suggests that homeownership affects retirees' saving decisions. We investigate empirically and theoretically the life-cycle patterns of homeownership, housing, and nonhousing assets in retirement. Using an estimated structural model of saving and housing decisions, we find first that homeowners dissave slowly because they prefer to stay in their house as long as possible but cannot easily borrow against it. Second, the 1996–2006 housing boom significantly increased homeowners' assets. These channels are quantitatively significant; without considering homeownership, retirees' net worth would be 28%–44% lower, depending on age.     

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.     

Managers’ exploration activities and individual unlearning: the mediating role of learning orientation and reflection

Abstract

The main goal of this study was to investigate the effects of managers’ exploration activities on learning orientation, reflection, and unlearning of team members. A questionnaire survey was conducted among 115 employees in 23 teams from a Japanese pharmaceutical company. The results of multi-level analyses suggest that managers’ exploration activities had a direct influence on team members’ learning orientations, which subsequently had a positive influence on their unlearning, with and without the mediation of reflection. These findings suggest that a subordinate’s unlearning is driven by managers’ activities through motivational and cognitive processes. The theoretical and practical implications of the findings are discussed.     

Modeling Methods for Discrete Choice Analysis

This paper introduces new forms, sampling and estimation approaches fordiscrete choice models. The new models include behavioral specifications oflatent class choice models, multinomial probit, hybrid logit, andnon-parametric methods. Recent contributions also include new specializedchoice based sample designs that permit greater efficiency in datacollection. Finally, the paper describes recent developments in the use ofsimulation methods for model estimation. These developments are designed toallow the applications of discrete choice models to a wider variety ofdiscrete choice problems.     

International trade and capital accumulation in an overlapping generations model with a public intermediate good

We investigate the effects of a public intermediate good on trade patterns, capital accumulation, and the gains from trade in a two‐country, three‐sector overlapping generations model. A public intermediate good affects not only the productivity of private production but capital accumulation; thus, the results differ from those obtained in previous studies. First, opening to trade may accelerate capital accumulation in the higher‐savings country. Additionally, the country producing a public intermediate good more (which is labor‐intensive) may be the importer of the investment good (which is the most capital‐intensive). Finally, the lower‐savings country may have lower steady‐state welfare under trade.     

Effects of international sharing of pollution abatement burdens on income inequality among countries

Improvements in environmental quality will boost output production and hence economic growth. However, although environmental abatement equally benefits all economies in the world, it is shown that, if the private productive resources are not yet accumulated sufficiently in low income economies, income inequality among economies can be widened in the short term not only under equal burden sharing of pollution abatement but even under income-proportional burden sharing. When the marginal productivity is diminishing, the negative effect of the burden is large relative to the positive effect of the improved environment in economies in which resources are not accumulated sufficiently.     

On the consumption insurance effects of long-term care insurance in Japan: Evidence from micro-level household data

Using micro-level household data in the 2001 Comprehensive Survey of the Living Conditions of the People on Health and Welfare compiled by the Japanese Ministry of Health, Labor and Welfare, this paper examines how having a household member in need of long-term nursing care can result in welfare losses measured in terms of consumption. In so doing, this study evaluates the role of the public long-term care insurance scheme implemented in Japan in April 2000. The results indicate that when households include a disabled family member, household consumption net of long-term care costs do not decrease as much as before the introduction of long-term care insurance. Further, when compared with the surveys conducted in 1998, the adverse effects on consumption net of long-term care costs have become much weaker. These findings suggest that the introduction of social insurance in 2000 helped Japanese households to reduce the welfare losses associated with a disabled family member.