The efficiency of training and hiring with intrafirm bargaining

This paper demonstrates that firms hire and train workers efficiently in a matching and intrafirm bargaining economy when the Hosios condition holds and returns to scale are constant. This conclusion stands in contrast to the prevailing view that training costs are a source of inefficiency in imperfect labor markets. The efficiency of the competitive economy relies on the ability of large firms to take into account the negative impact of the training rate on the wages negotiated inside the firm through intrafirm bargaining: untrained workers accept a wage reduction in compensation for potential training that is accessible only following employment. This intrafirm bargaining process solves efficiency problems associated with training costs that would otherwise lead to inefficient hiring and training decisions. This conclusion holds true for both specific and general human capital.     

Accounting for change in public sector industrial relations: the erosion of national bargaining in further education in England and Wales

The recent transformation of industrial relations in further education in England and Wales is examined, in particular the role of the national ‘Silver Book’ dispute over lecturers’ conditions of service in causing the erosion of national bargaining in the sector. The experience of further education points to the limits of the strategic choice approach as a device for explaining change in public sector industrial relations and to the importance of supplementing it with a perspective that emphasises the role of power.     

The role of the list price in housing markets: Theory and an econometric model

Houses are routinely sold at prices below, but rarely sold at prices above, their list prices. List prices appear to be price ceilings that preclude the possibility of sales at higher prices. This paper presents a theory of sellers' behaviour that explains why there are list prices in housing markets and why list prices are distinct from sellers' reservation prices. The theory forms the basis of an econometric model that has been estimated using data from the Baltimore, MD, area. The estimated model predicts sale and reservation prices conditional on list prices. The predictions of sale prices are considerably more accurate than those obtained from a standard hedonic price regression. The estimated model also explains why sellers may not be willing to reduce their list prices even after their houses have remained unsold for long periods of time.     

The cost of strikes in the Spanish mining sector: modelling an undesirable input with a distance function

In some contexts, firms have to deal with certain elements or factors that affect the production outcome but which are non-market in nature and therefore do not have a price. In this paper we propose a new use of a production economics tool, the input distance function, to empirically measure the effects of these factors. Although we suggest a general use of this methodology, it has been developed in the context of measuring the effects of labor disputes in a particular declining industry, that of Spanish coal mining. We have estimated an equation system comprising an input distance function and cost share equations to calculate the cost generated by strikes.

The influence of seller learning and time constraints on sequential bargaining in an artificial perishable goods market

This paper investigates the formation of prices in a perishable goods market where agents bargain repeatedly through pair-wise interactions. After extensive field observations, we chose to focus on two aspects that seem important to actors of this market: the passage of time and update in judgement when gathering information. The main feature of the market is that a seller bargaining with a buyer has incomplete information about buyer's willingness to pay and is not sure how her trading partner will evaluate an offer or compare it with other options. On the other hand, buyers have limited time to look for goods and cannot meet all possible sellers before making a decision. Hence agents cannot calculate the best price to offer but receive information through limited interactions, and use this information to choose their actions.An agent-based model was built to represent a framework that mimics the observed market institution and where agent's possible behaviors and learning was made as consistent as possible with gathered data. Simulations were run, first for sensitivity analysis concerning main parameters, then to test the dependance of agents’ learning to (a) the time buyers can spend on the market and (b) the frequency of update in learning by sellers. To validate the model, features produced by the simulated market are compared to the stylized facts gathered for negotiation about four goods. We reproduce the main features of the data on the dynamics of offers, transaction prices and agents’ behavior during the bargaining phases.     

Corporate merger and collective bargaining in the UK

Corporate merger since the war has transformed the private sector of the economy in Britain. This has had significant effects on collective bargaining arrangements and outcomes. In this article the authors review these effects and consider their implications for trade union organisation.     

Reject and renegotiate: The Shapley value in multilateral bargaining

This paper investigates three distinctive and intuitive renegotiation bargaining protocols that all yield the Shapley value as the unique subgame perfect equilibrium outcome. These protocols, built on the multi-bidding procedure of Pérez-Castrillo and Wettstein (2001), allow more freedom in multilateral bargaining where rejected players can further negotiate and form coalitions. The self-duality of the Shapley value plays a key role in the second and third results. Moreover, these renegotiation protocols allow an actual play along the equilibrium path to restore the Shapley value in case of a ‘mistake’ made before.     

The no-arbitrage condition and financial markets with heterogeneous information

This paper examines the role of the no-arbitrage condition in financial markets with heterogeneous expectations. We consider a single-period, state-contingent claims model, withM risky securities andS states. There exist two types of heterogeneously informed investors, where the information heterogeneity is defined with respect to either the security payoff matrix, the state probability vector, or state partitions. When the information heterogeneity is defined with respect to either the security payoff matrix or state partitions, the no-arbitrage condition imposes a constraint on the dispersion of information between informed and uninformed investors. Further, the no-arbitrage condition is useful in ascertaining the patterns of heterogeneity among investors that are consistent with equilibrium. However, when the information heterogeneity is defined with respect to state probabilities, the role of the no-arbitrage condition is severely restricted. Finally, the no-arbitrage condition may have important implications for the (necessary and sufficient) conditions for the existence of an equilibrium price vector in financial markets with heterogeneous expectations.     

The Walras core of an economy and its limit theorem

The Walras core of an economy is the set of allocations that are attainable for the consumers when their trades are constrained to be based on some agreed price system, such that no alternative price system exists for any sub-coalition that allows all members to trade to something better. As compared with the Edgeworth core, both coalitional improvements and being a candidate allocation for the Walras core become harder. The Walras core may even contain allocations that violate the usual Pareto efficiency. Nevertheless, the competitive allocations are the same under the two theories, and the equal-treatment Walras core allocations converge under general conditions to the competitive allocations in the process of replication.     

The block metric and the law of markets

The “Law of Markets” as originally stated by Fetter and amended by Hyson and Hyson is based on the assumption that the transportation of goods is along a line segment from firm to customer. In many situations the assumption that transportation is along a block-like network of roads is a better approximation of reality. In this paper we establish the “law of markets” appropriate to the block metric. We discover that with such a metric there exist significant discontinuities in a firm's demand functions and we argue that these discontinuities have important implications for the types of competitive strategies open to firms.     

The financial sector and the future of capitalism

Financial sector innovation and development since the 1970s contributed to global prosperity, but increased the probability of bank failures. The post-2007 financial crisis was one of many crises with idiosyncratic catalysts but common underlying causes. Public policies, such as deposit insurance, with moral hazard implications increased the likelihood of crises, and cheap money exacerbated the situation by encouraging highly leveraged investments. The policy challenge is to address moral hazard without repressing the financial sector. This is not the end of capitalism, but a reminder of the difficulty in policing the financial sector which is at the heart of capitalist economies.     

Rational expectations equilibria and the ex-post core of an economy with asymmetric information

We study the relationship between the set of rational expectations equilibrium allocations and the ex-post core of exchange economies with asymmetric information.     

Theorems on the core of an economy with infinitely many commodities and consumers

It is known that the classical theorems of Grodal [Grodal, B., 1972. A second remark on the core of an atomless economy. Econometrica 40, 581–583] and Schmeidler [Schmeidler, D., 1972. A remark on the core of an atomless economy. Econometrica 40, 579–580] on the veto power of small coalitions in finite dimensional, atomless economies can be extended (with some minor modifications) to include the case of countably many commodities. This paper presents a further extension of these results to include the case of uncountably many commodities. We also extend Vind’s [Vind, K., 1972. A third remark on the core of an atomless economy. Econometrica 40, 585–586] classical theorem on the veto power of big coalitions in finite dimensional, atomless economies to include the case of an arbitrary number of commodities. In another result, we show that in the coalitional economy defined by an atomless individualistic model, core–Walras equivalence holds even if the commodity space is non-separable. The above-mentioned results are also valid for a differential information economy with a finite state space. We also extend Kannai’s [Kannai, Y., 1970. Continuity properties of the core of a market. Econometrica 38, 791–815] theorem on the continuity of the core of a finite dimensional, large economy to include the case of an arbitrary number of commodities. All of our results are applications of a lemma, that we prove here, about the set of aggregate alternatives available to a coalition. Throughout the paper, the commodity space is assumed to be an ordered Banach space which has an interior point in its positive cone.     

Modeling volatility in sector index returns with GARCH models using an iterated algorithm

Financial market participants are interested in knowing what events can alter the volatility pattern of financial assets and how unanticipated shocks determine the persistence of volatility over time. The present paper studies these issues by detecting time periods of sudden changes in volatility by using the iterated cumulated sums of squares (ICSS) algorithm. Examining five major sectors from January 1992 to August 2003, we found that accounting for volatility shifts in the standard GARCH model considerably reduces the estimated volatility persistence. Our results have important implications regarding asset pricing, risk management, and portfolio selection. (JEL G110, G120)     

The core and hedonic core: reply to Wooders (2001), with counterexamples

In response to Wooders [Journal of Mathematical Economics 36 (2001) 295], I review the contributions of Engl and Scotchmer regarding the hedonic core and monotonicity [Journal of Mathematical Economics 26 (1996) 209], show how our contributions diverge from those previously in the literature, and highlight the importance of our assumptions by giving counterexamples, particularly to related results of Wooders.     

The bargaining position of low-skilled and high-skilled workers in a globalising world

This paper extends the assessment of the impact of globalisation and technological change on the bargaining power and preferences of employees, by taking worker heterogeneity into account. In contrast with previous studies, two separate unions – representing low-skilled and high-skilled workers respectively – are considered. Using Belgian firm-level data, labour bargaining power and relative wage preference have been estimated by skill level. When these estimates are subsequently regressed on a set of potential determinants, the bargaining power of low-skilled workers appears to fall with imports and offshoring, whereas the bargaining power of high-skilled workers is only positively affected by R&D activities. In addition, a significant effect of globalisation is found on the relative preference of unions for wages over employment, indicating that the effect of globalisation on the behaviour of labour unions is more encompassing than frequently assumed.     

中国股票市场的月份效应

本文在概述其他学者研究成果的基础上,对我国股票市场的月份效应进行了检验和实证分析,结果发现我国股票市场上不存在许多其他成熟的和新兴的股票市场所共有的一月份效应,但却存在十二月份效应。本文对此进行了充分的论证,并进行了解释。