Sidgwick and Edgeworth on indeterminacy in the labour market

Commentators have underlined Sidgwick's influence on Edgeworth's thinking and more particularly on New and Old Methods of Ethics (1877). But have failed to notice that Sidgwick remained a major reference in Mathematical Psychics (1881). Therefore, the purpose of this paper is to show that, in this book, Edgeworth wanted to refine upon the problem of wages addressed by Sidgwick in 1879. The thesis of the paper is that Sidgwick and Edgeworth's disagreement as to the role of open competition in the resolution of indeterminacy in the labour market stems from two different notions of competition. This latter can be seen as a differentiation process, as in Sidgwick's, or as a replication mechanism, as in Edgeworth's.     

Double moral hazard and renegotiation

We examine renegotiation in a double moral hazard model with an ex ante budget balancing constraint when both the principal and the agent are allowed to make a renegotiation offer even though the principal proposes an initial contract. Under a belief restriction, any perfect-Bayesian equilibrium leads to an allocation that is superior to the second-best allocation of the standard double moral hazard model without renegotiation. The result of this paper gives some reasons for the existence of intermediary organizations such as holding companies, law houses, consulting firms, investment banks or venture capital. The result can also provide the rationalization for a fund set up by a group of firms of the industry in which their product is legally required to be recyclable.     

An experimental analysis of moral self-regulation

This article examines the validity of the moral self-regulation hypothesis in a laboratory setting. The experiment is comprised of a public good game preceded or followed by a matrix task. The data show that the recall of an immoral action (cheating in the matrix task) motivates the individual to do morally right thing (contributing to group account) and the recall of a moral action (contributing to group account) motivates the individual to act out self-interest (cheating in the matrix task). Both moral licensing and moral cleansing hypotheses are confirmed by the results of the experiment. Additionally, the findings indicate that the subjects who had been given a chance to cheat ‘at first’ allocated more funds to the group account; and the subjects who had been given a chance to voluntarily contribute ‘at first’ cheated more in the matrix task.     

Environmental accidents under moral hazard and limited firm liability

We study optimal government policy when firms' operations involve a risk of a large environmental accident, firms do not have sufficient assets to cover such costs, and the risk is affected by firms' efforts which are unobservable to outsiders. When firms' profits and government revenues have equal weights in the social welfare function, a first best can be implemented and requires that the firm be subsidized heavily when operating with no accident, and all its assets confiscated in the event of an accident. With a lower weight on firm profits the solution is always second best, with lower subsidies to the firm, and a firm effort lower than at the first-best solution. When firm investments affect both the required accident-preventing effort for given risk and the work effort required for a given output, the first best never involves specific investment subsidies, while a second-best solution generally always does.The paper is part of the research project Environmental policy under asymmetric information', at the SNF Centre for research in economics and business administration, Department of Economics, University of Oslo. I thank, without implicating, Mikael Hoel, Jean-Charles Rochet, Jean Tirole, and two anonymous referees for helpful comments on a preliminary version.     

Repeated moral hazard with persistence

Summary. This paper considers the optimal contract when the current (hidden) action of an agent has a persistent effect on the future outcome. The optimal contract in a two-effort choice, two-period setting is characterized analytically and numerically. In particular, we show that persistence tends to make compensation less responsive to the first-period outcome. At the extreme, there are cases where the agent is perfectly insured against the first-period outcome: the agent obtains the same utility regardless of the first-period outcome. The model is extended to three periods. We also present a computational method to characterize an N-period model with two-period persistence.Received: 9 December 2003, Revised: 13 February 2004, JEL Classification Numbers: D82, J31, J65. Correspondence to: Ayegül ahinWe are grateful to an anonymous referee, Jack Barron, Mark Bils, Hugo Hopenhayn, Per Krusell, Lance Lochner, Steve Williamson, and seminar participants at Concordia University, Purdue University, the applied theory meetings at University of Rochester, the Conference of the Society for the Advancement of Economic Theory 2003, the Rochester Wegmans Conference 2002, and the Society for Economic Dynamics Meetings 2003 for their comments and suggestions. We also wish to thank Vera Brencic, Nancy Marmon, and Roxanne Stanoprud for excellent research assistance.     

Equally-distributed equivalent utility,ex post egalitarianism and utilitarianism

We provide an axiomatization of expected equally-distributed equivalent-utility social welfare functions in the context of Harsanyi?s impartial observer theorem. For this family of social welfare functions, we show what additional axiom is necessary and sufficient for the observer to exhibit aversion to ex post inequality. We also relate this axiomatization to our axiomatization in a companion paper of generalized utilitarian social welfare functions. Given certain richness assumptions, the only social welfare functions that belong to both families are the utilitarian.     

大学生生态道德教育途径探析

高校作为人才培养基地,必须把生态道德教育作为德育工作的一项重要任务。高校进行生态道德教育的途径方法很多,主要方式是把学校教育、家庭教育、社会教育结合起来,培育大学生的生态道德素质,为生态文明的建设造就可持续发展的人才。     

社会主义市场经济条件下的道德建构

市场经济的行为准则是提倡买卖公平，实现利益最大化。市场行为与道德存在一定程度的冲突，只有以市场经济为基础，积极削弱与克服负面效应，才能把道德和利益之间的可能的冲突转变为和解。市场经济的道德构建必须以法制为基础、要坚持以人为本，诚信是市场经济道德构建的核心。     

Equivalence scales,horizontal equity and optimal taxation under utilitarianism

This paper analyzes the question of how differences in family size should be treated by the income tax system in order to achieve horizontal equity. Family size is incorporated into the demand system by the procedure of demographic scaling. Horizontal equity is defined as ‘equal treatment of equals’. It is shown that when lump-sum taxes are not available and the government has to rely on income taxation, then the only way to entail equal utilities for household of different size is to equate the labor supplies and the per-standard-adult consumptions of these households.     

网络交易风险语境下消费者的道德决策研究——以道德强度、道德哲学与匿名性的影响为据

研究以网络交易风险与消费者道德决策理论为铺垫,从道德议题本身（道德强度）、个人特性（道德哲学）与网络交易环境（匿名性）三个面向探讨其影响因素。通过设定网络交易的道德情境剧本与相关假设,收集450份有效样本进行实证检测分析发现：道德强度可简化为“潜在损害”与“社会压力”;道德哲学对于道德知觉、道德判断及道德意图皆产生显著影响;网络匿名性越高,则消费者的道德意图愈低。解构消费者道德决策样态及其管理意涵,以期为网络交易的和谐发展提供科学的决策路径指引。     

David Gawen Champernowne, 1912-2000: in appreciation

David Champernowne, who died in August 2000 aged 88, was notdirectly associated with the Cambridge Journal of Economics,but his major contributions belong to and serve to extend theapproach to economics which the journal wishes to preserve andadvance. This short obituary article records the journal's appreciationof his life and work.     

德育工作者思维预见力的培养探析

面对复杂多变、动态发展的社会现实和人的思想,为了取得德育工作的主动权、增强德育工作的针对性和实效性,德育工作者应培养自己的思维预见力,明确使命,增强忧患意识,加强理论修养,不断拓宽自己的知识面,加强调查研究,运用科学思维方法,科学把握事物的规律性和趋势。     

Intrahousehold moral hazard frictions and household poverty traps in rural India

We empirically study the role of assets held by women in the creation of household wealth using data from rural India. We design a streamlined model of intrahousehold project funding where moral hazard frictions between spouses and women's asset control are the main ingredients. As predicted by the model, the data show that household asset accumulation depends on women's asset control in a non-monotonic way. Results indicate no presence of multiple equilibrium poverty traps, but do show that exogenous negative shocks will trigger assets aggregation within households where both spouses are present. This resilience mechanism is, however, not found in female headed household as these households have a monotonic relationship between women's wealth control and asset creation. We thus argue that policies to support women's empowerment need to distinguish women based on their individual wealth levels and headship status to enhance household well-being in remote Indian communities.     

浅论网络时代中学思想道德教育的变化

2004年,中共中央、国务院颁发了《关于进一步加强和改进未成年人思想道德建设的若干意见》,对网络传播条件下的中学生思想道德教育给予了高度关注。因此,用正确、积极、健康的思想文化占领网络阵地,加强对中学生的网络道德教育,已成为中学思想政治教育工作中重要而又紧迫的任务。在网络飞速发展的时代,中学思想道德教育必须紧随形势变化的需要适时调整,必须采取积极措施,让网络在中学生思想道德教育中发挥积极的作用.     

Mobilizing moral boundaries: the politics of derivatives reform in the US

This paper explains the reform of derivatives markets in the US by stressing the influence of moral distinctions on financial market regulation. The results show that business and consumer groups outside finance activate boundaries between legitimate risk management and illegitimate speculative practices. This categorical distinction delegitimised certain practices within the financial industry and affected both the relative power of interest groups and the political agenda. First, the mobilisation of moral boundaries strengthened the position of legitimate groups and weakened that of the financial industry in negotiations. This forced the latter to alter its lobbying strategies. Second, by highlighting inappropriate speculative practices, groups outside the financial sector changed policy-makers’ perception of problems. Policy-makers adopted a position which is congruent with broader moral understandings. The study is based on data from Congressional hearings, interviews, media articles, letters and interest group publications. The process tracing analysis advances our understanding of the social mechanisms linking moral perceptions and institutional change in financial markets.     

A concern about low relative income, and the alignment of utilitarianism with egalitarianism

A utilitarian social planner who maximizes social welfare assigns the available income to those who are most efficient in converting income into utility. However, when individuals are concerned about their income falling behind the incomes of others, the optimal income distribution under utilitarianism is equality of incomes.     

International bailouts, moral hazard and conditionality

The large international bailouts of the 1990s have been criticized for generating moral hazard at the expense of the global taxpayer. We argue that this criticism is misleading because international bailouts create no, or very few, costs to the international community. Instead, the problem is to ensure that bailouts are not used to facilitate bad domestic policies, thus creating moral hazard at the expense of domestic taxpayers. This may require a shift towards ex ante conditionality, in the sense that the availability and size of official crisis lending need to be conditional on government policies before the crisis.     

Debt, collateral, and renegotiation under moral hazard

This paper demonstrates that renegotiation will increase initial collateral requirements in debt contracts under moral hazard. Hence, it confirms Smith and Warner's conjecture that severity of contractual covenants and ease of renegotiating debt contracts are positively related, in case where the covenant provision is collateral.     

Unemployment insurance, moral hazard, and economic growth

It is important but difficult to distinguish between desirable and undesirable effects of unemployment insurance (UI) that are observationally equivalent when designing optimal UI schemes. For example, a UI-induced rise in the wage rate caused by workers taking more time to match their skills with job vacancies is desirable. However, another view of the same observation is that UI causes permanently higher involuntary unemployment by raising the reservation wage. This paper avoids this problem by regarding the trade-off between the UI replacement rates and unemployment as an intermediate relationship that matters only as far as it impacts economic growth. An empirical analysis of UI replacement rates, unemployment rates, and growth rates using annual panel data finds UI replacement rates are associated with higher unemployment. However, no significant relationship is found between UI-related unemployment and the real growth rate of gross domestic product.An earlier version of this paper was presented at the Fiftieth International Atlantic Economic Conference, October 15–18, 2000, Charleston, South Carolina. Financial support from the Scottish Economic Society and the University of Stirling is gratefully acknowledged. The Organization for Economic Cooperation and Development generously provided access to their database on benefit entitlements and gross replacement rates. The authors are grateful to an anonymous referee for constructive comments.