Tax implementability of fair allocations

This paper examines the tax implementability of allocations based on fairness as no-envy (or envy-freeness) and its alternatives, by a tax schedule that depends on labor supply and gross income ((y,l)-implementability). A relevant incentive constraint is perishability of abilities, where agents can exert a lower ability level than they actually possess. We first show that in any economy, every envy-free allocation is (y,l)-implementable. On the other hand, whereas we already know that no-envy may be incompatible with first-best Pareto efficiency, the alternative equity concepts which circumvent this first-best equity-efficiency trade-off meet the obstacle of tax implementability even when labor supply is observable. We also clarify necessary and sufficient domain restrictions under which the egalitarian equivalent allocations satisfy the (y,l)-implementability condition.Received: 15 November 2002, Accepted: 7 July 2004, JEL Classification: D63, D78, H21Yukihiro Nishimura: A preliminary version of this paper was presented at the 35th Annual Meeting of the Canadian Economics Association (McGill University, Montreal, Quebec, Canada) and the Sixth International Conference of Society of Social Choice and Welfare (California Institute of Technology, Pasadena, USA). The author acknowledges Koichi Tadenuma, Francois Maniquet, Shinji Yamashige, Kotaro Suzumura, Paul Makdissi, Robin Boadway, Georg Tillmann, Stefan Dodds, the Associate Editor and anonymous referees for helpful comments. The usual disclaimer follows. Financial support from the Department of Economics and the School of Graduate Studies of Queens University, the Yokohama Academic Foundation and the Grant-in-Aid for Young Scientists (B) from the Ministery of Education, Culture, Sports, Science and Technology is gratefully acknowledged.     

No-envy,solidarity, and strategy-proofness in the queueing problem

Given a group of agents, the queueing problem is concerned with finding the order to serve agents and the monetary transfers they should receive. In this paper, we characterize interesting subfamilies of the VCG mechanisms by investigating the implications of either no-envy or solidarity requirements. First, we present a characterization of the strategy-proofand envy-freemechanisms. Next, we present characterizations of VCG mechanisms satisfying one of two different formulations of cost monotonicity or population monotonicity. Finally, we show that among the envy-free and strategy-proof mechanisms, the only ones that satisfy one of two formulations of cost monotonicity or population monotonicity are extensions of the pivotal or the reward-based pivotal mechanisms.     

会计公允概念的多维视角分析

会计信息具有外部性,而会计本身却背负原罪的困惑,为了解决这种矛盾,会计从法律引入了公允概念。虽然公允概念当前并没有被大多数国家列入会计基本原则,但是公允概念由于符合社会利益的要求已经深入人心,并被会计信息使用者作为对会计人员提供会计信息活动的最基本要求。在人们的观念中,大都认为公允要求是单一维度的,即仅从会计确认计量、人员角度来要求,本文通过分析认为公允概念具有多维性,并对这种多维度的要求进行了阐述,说明当前为保持会计信息的公允应该如何去做。     

Resource-envy-free and efficient allocations: A new solution for production economies with dedicated factors

I consider the problem of determining an equitable and efficient allocation of resources in production economies with factors which must be dedicated to production and cannot be consumed directly. First, I show that in such economies envy-free and efficient allocations exist under standard assumptions. However, I argue this notion of fairness is unsuitable for the present context. I then introduce a new notion of fairness, which I call resource-envy-freeness. First, I associate with each consumption bundle its resource footprint consisting of the vector of factors used to produce it. I then show that preferences over consumption bundles can be extended to preferences over factor bundles. An allocation is resource-envy-free if no agent prefers another agent’s resource footprint to its own. The analysis of resource-envy-free allocations in production is exactly analogous to the analysis of envy-free allocations in exchange. I establish that resource-envy-free and efficient allocations exist under standard assumptions, and I demonstrate that such allocations are intuitively appealing.     

Differentiable strategy-proof mechanisms for private and public goods in domains that are not necessarily large or quasi-linear

In this paper, we develop a differentiable approach to deal with incentives in a, possibly small, subset of a general domain of preferences in economies with one public and one private good. We show that, for two agents, there is no mechanism which is efficient, strategy-proof and where consumption of both goods is positive for all agents. For the case of two or more agents the same result occurs when nondictatorship is replaced by Individual Rationality. We are very grateful to Atila Abdulkadiroglu, Carmen Beviá, Xavier Calsamiglia, Marco Celentani, Bernardo Moreno, Antonio Romero-Medina, William Thomson, Walter Trockel, an associate editor, three anonymous referees and participants at seminars at Universities of Alicante, Autónoma de Barcelona and Rochester and the Spanish Economic Association meeting in Sevilla for very helpful comments and suggestions.     

The structure of strategy-proof random social choice functions over product domains and lexicographically separable preferences

We characterize the class of dominant-strategy incentive-compatible (or strategy-proof) random social choice functions in the standard multi-dimensional voting model where voter preferences over the various dimensions (or components) are lexicographically separable. We show that these social choice functions (which we call generalized random dictatorships) are induced by probability distributions on voter sequences of length equal to the number of components. They induce a fixed probability distribution on the product set of voter peaks. The marginal probability distribution over every component is a random dictatorship. Our results generalize the classic random dictatorship result in Gibbard (1977) and the decomposability results for strategy-proof deterministic social choice functions for multi-dimensional models with separable preferences obtained in LeBreton and Sen (1999).     

Researching with whom? Stability and manipulation

This paper explores the existence of stable research teams, when the preferences of each agent depend on the set of researchers who are collaborating. We introduce a property over researchers’ preferences, called top responsiveness, guaranteeing the existence of stable research teams configurations. We also provide a stable mechanism, induced by the so-called top covering algorithm, which is strategy-proof when researchers preferences satisfy top responsiveness. Furthermore, we find that, in this framework, the top covering mechanism is the only strategy-proof mechanism that always selects stable allocations.     

An extreme point characterization of strategy-proof and unanimous probabilistic rules over binary restricted domains

We show that every strategy-proof and unanimous probabilistic rule on a binary restricted domain has binary support, and is a probabilistic mixture of strategy-proof and unanimous deterministic rules. Examples of binary restricted domains are single-dipped domains, which are of interest when considering the location of public bads. We also provide an extension to infinitely many alternatives.     

Fairness reactions to personnel selection techniques in Singapore and the United States

This study investigates reactions to personnel selection techniques from the perspectives of working adults in the United States and Singapore, and provides a comparison of the two samples. Differences in the cultural values of the two countries are used to generate hypotheses. Working adults in Singapore (N = 158) and the United States (N = 108) rated the process favourability of eleven selection procedures and then indicated the bases for their reactions on seven procedural dimensions. Implications for selection in Singapore, the United States and in international contexts are discussed.     

Efficient allocations and equilibria with short-selling and incomplete preferences

This paper reconsiders the theory of existence of efficient allocations and equilibria when consumption sets are unbounded below under the assumption that agents have incomplete preferences. Our model is motivated by an example in the theory of assets with short-selling where there is risk and ambiguity. Agents have Bewley’s incomplete preferences. As an inertia principle is assumed in markets, equilibria are individually rational. It is shown that a necessary and sufficient condition for the existence of an individually rational efficient allocation or of an equilibrium is that the relative interiors of the risk adjusted sets of probabilities intersect. The more risk averse, the more ambiguity averse the agents, the more likely is an equilibrium to exist. The paper then turns to incomplete preferences represented by a family of concave utility functions. Several definitions of efficiency and of equilibrium with inertia are considered. Sufficient conditions and necessary and sufficient conditions are given for the existence of efficient allocations and equilibria with inertia.     

Technically and cost-efficient centralized allocations in data envelopment analysis

In data envelopment analysis and with a variable returns to scale production-technology, we apply Banker's [2] approach to determine the relationship between technically and cost-efficient industry structures, featuring reallocation of outputs and a variable number of firms. The interpretation based on the most productive and optimal scale-size notions allows us to both establish an inequality relationship between the corresponding industry-efficiency measures and provide adequate information on optimal solutions. At the applicative level, we introduce an exact algorithm to solve related non-linear programming problems, thus providing the decision maker with an accurate method for computing and comparing the input and output mixes and the optimal number of units obtained in the two allocations. Empirical illustration, given with reference to the Italian local-public-transit sector and employing a multiple inputs and outputs technology, reveals striking differences with regard to the managerial and regulatory implications of the two centralized allocations.     

Rewarding employee performance: line managers' values,beliefs and perspectives

This article explores managerial perceptions of the effectiveness and fairness of individual performance-related pay schemes. It draws upon findings from a two-part study of middle managers' interpretation and application of performance-related pay processes in a variety of organizational contexts. The analysis reveals that middle managers all too often do not share the principles or the stated objectives of the schemes they are required to operationalize. It concludes that the importance of managerial values and beliefs about rewarding individual contribution has been an overlooked and underestimated dimension in the design and application of individual performancerelated pay schemes (IPRP) despite the significance of the manager's role in their organizational effectiveness.     

Fairness perceptions and work attitudes revisited: roles of employee specialty,hospital level and ownership

Compensation is widely acknowledged as an important job element in the eyes of employees. Health care is a special industry in which compensation received by employees differs greatly. This study examines empirically the relationships between hospital employees' perceptions of compensation fairness and their work attitudes, taking into account the roles of employee specialty, hospital level and ownership. Using data from 2,938 employees of thirty hospitals in Taiwan, the results indicate that fairness perceptions and work attitudes differ significantly among hospital employees according to their specialties. Hospital level and ownership exert impacts on employees' fairness perceptions, although not on their work attitudes. A positive relationship is observed between fairness perceptions and work attitudes of hospital employees.     

The Hausman test and weak instruments

We consider the following problem. There is a structural equation of interest that contains an explanatory variable that theory predicts is endogenous. There are one or more instrumental variables that credibly are exogenous with regard to this structural equation, but which have limited explanatory power for the endogenous variable. Further, there is one or more potentially ‘strong’ instruments, which has much more explanatory power but which may not be exogenous. Hausman (1978) provided a test for the exogeneity of the second instrument when none of the instruments are weak. Here, we focus on how the standard Hausman test does in the presence of weak instruments using the Staiger–Stock asymptotics. It is natural to conjecture that the standard version of the Hausman test would be invalid in the weak instrument case, which we confirm. However, we provide a version of the Hausman test that is valid even in the presence of weak IV and illustrate how to implement the test in the presence of heteroskedasticity. We show that the situation we analyze occurs in several important economic examples. Our Monte Carlo experiments show that our procedure works relatively well in finite samples. We should note that our test is not consistent, although we believe that it is impossible to construct a consistent test with weak instruments.     

Weakly balanced contributions and the weighted Shapley values

We provide a concise characterization of the class of positively weighted Shapley values by three properties, two standard properties, efficiency and marginality, and a relaxation of the balanced contributions property called the weak balanced contributions property. Balanced contributions: the amount one player gains or loses when another player leaves the game equals the amount the latter player gains or loses when the former player leaves the game. Weakly balanced contributions: the direction (sign) of the change of one player’s payoff when another player leaves the game equals the direction (sign) of the change of the latter player’s payoff when the former player leaves the game. Given this characterization, the symmetric Shapley value can be “extracted”from the class of positively weighted Shapley values by either replacing the weak balanced contributions property with the standard symmetry property or by strengthening the former into the balanced contributions property.     

银行激进的短期激励机制的弊端及其改革思路

加入WTO以后,中国银行业的竞争日趋激励,各商业银行为了在竞争中立于不败之地,纷纷出台了名目繁多的激励政策。虽然这些激励政策对于银行短期业绩增长的确很有效,但这些激励机制往往过于激进、过于短期化,从长远来看,是不利于银行发展的,因此这样的激励机制必须改革。本文主要分析了银行激进的短期激励机制的表现形式、危害及其改革思路。     

The substitutes condition and the lattice structure of the set of stable allocations

In the many-to-one matching model with contracts, I show that there is no restriction on preferences weaker than substitutable preferences which guarantees that the set of stable allocations is a lattice. Thus, when contracts are not substitutes, removing agents from the economy may decrease the payoffs to existing agents on both sides of the market.     

Re-examining the link between fairness and commitment in buyer-supplier relationships

By re-examining the link between fairness and commitment in supply chain relationships, this study elaborates on the existing theory that views fairness only as an antecedent. It proposes that commitment can also precede perceived fairness, thus redefining the link between the concepts as bidirectional in buyer–supplier relationships. The study examines both the buyer and supplier perspectives. Based on interviews at 24 technology industry firms in Finland, this empirical study demonstrates that buyer commitment has a positive impact on how suppliers perceive distributive fairness in the relationship. In turn, this effect is reciprocated by the suppliers through a commitment in the form of relationship-specific investments and continuous improvements that are perceived as fair by the buyer. As a managerial implication the study emphasizes the importance of fairness evaluation to the relationship parties.