Coalitions, agreements and efficiency

If agents negotiate openly and form coalitions, can they reach efficient agreements? We address this issue within a class of coalition formation games with externalities where agents’ preferences depend solely on the coalition structure they are associated with. We derive Ray and Vohra's [Equilibrium binding agreements, J. Econ. Theory 73 (1997) 30-78] notion of equilibrium binding agreements using von Neumann and Morgenstern [Theory of Games and Economic Behavior, Princeton University Press, Princeton, 1944] abstract stable set and then extend it to allow for arbitrary coalitional deviations (as opposed to nested deviations assumed originally). We show that, while the extended notion facilitates the attainment of efficient agreements, inefficient agreements can nevertheless arise, even if utility transfers are possible.     

Defense and Welfare Under Rivalry

Two small countries facing a constant probability of war with each other import arms for consumption goods from the rest of the world. The defense good, produced by combining arms and army, is a public good. The reaction curve depicting the optimal supply of the defense good turns out to be backward-bending. Nevertheless, at least one of the reaction curves is positively sloped at the unique Nash equilibrium. Several comparative statics results are derived. For example, if one country's reaction curve is negatively sloped, military aid to the rival leads to a decline in its optimal supply of the defense good.     

社会排斥、贫困和失业

本文主要分析了社会排斥、贫困和失业三者之间的关系,提出了社会排斥概念的三个要素：(1)相对性;(2)能动性;(3)动态性。在着重讨论了社会保障收入对社会排斥的影响以及雇主在劳动力市场上的作用之后,文章认为社会保障收入是重要的,不能取消社会保障收入项目。社会排斥不仅与失业有关,而且政府政策也可能影响社会排斥,有必要检验所有政策建议对提高社会融合的作用。     

Redistribution and Small Coalitions of Friends

When side marketing trade is perfect, linear taxation of retradeable commodities is the only scheme that survives attempts to arbitrage. In this paper, I discuss tax schemes when side trading is imperfect in the sense that commodities can only be re-exchanged within coalitions no larger than two people. In the framework of a two-class economy, I identify coalitions which might have an incentive to form and provide a characterisation for the Pareto-efficient tax scheme. The tax formula has a very simple form and strongly resembles the formula for the no-side-trade case. In a numerical exercise, the constraints imposed on policy by an imperfect side trading process are found to be almost as tough as those imposed by perfect side trading.     

Collusion, Exclusion, and Inclusion in Random-Order Bargaining

This paper examines the profitability of three types of integration in a cooperative game solved by a random-order value ( e.g. the Shapley value). Collusion between players  i  and  j  is a contract merging their resources in the hands of one of them, say  i  . This contract can be represented as a combination of exclusion, which lets  i  exclude  j  's resource but not use it himself, and inclusion, which lets  i  use  j  's resource but not exclude  j  from it. This representation yields a third-difference condition on the characteristic function that determines the profitability of collusion, generalizing existing results for specific games. Namely, collusion is profitable [unprofitable] when the complementarity of the colluding players is reduced [increased] by other players.     

International Rivalry in Advancing Products

This paper explores the forces that determine the distribution of technological leadership across countries and whether technological leadership contributes to national welfare. Increased domestic resources or domestic innovation efficiency need not improve domestic technological leadership when more than one quality level of a product sells in equilibrium. If and only if a sufficient share of income is spent on high quality levels does increased domestic resources or domestic innovation efficiency improve domestic technological leadership. When discounting is slight enough, forces that improve domestic technological leadership reduce welfare by reducing the rate of innovation.     

Financial Globalization,Social Exclusion and Financial Crisis

This paper suggests one set of mechanisms that ties financial globalization processes to local dynamics of financial inclusion or exclusion. Specifically, this paper explores the worldwide reconsideration of financial firms’ strategies that has accompanied financial globalization. It is shown that the neoliberal and asymmetric‐information approaches to credit markets and financial crises in developing economies overlook these dimensions of financial globalization because of their tendency to focus on representative credit markets. Banks’ strategic shift has led to the global homogenization and stratification of financial practices—and this in turn has been a key driver of processes of financial exclusion. Financial exclusion then involves bifurcation within financial markets, so that different markets serve different portions of the household and business population. This analysis suggests a reconstruction of Minsky’s microfoundational model of the origins of financial fragility and crisis, which shifts from Minsky’s emphasis on a representative borrower–lender relationship to a situation of borrower–lender relationships in bifurcated markets.     

Technological Change, Market Rivalry, and the Evolution of the Capitalist Engine of Growth

In the early stages of Western industrialization, innovation was the domain of individuals who devoted their entrepreneurial talents to the development of a new product or process, typically setting up a new firm in order to take the innovation to the market. Today, commercial R&;D is almost exclusively carried out by corporate laboratories affiliated with manufacturing firms. The corporate R&;D lab, however, did not exist in its modern form until the late nineteenth century. The history of Western industrialization, thus, suggests that a fundamental change in the structure of incentives, and consequently in the nature and the organization of the R&;D process, occurred around the turn of the century. Three questions arise. What is the nature of this change? What economic forces caused it? What are its implications? To answer these questions, I construct a model where this change is endogenous to the evolution of the economy toward industrial maturity. The change in the locus of innovation—from R&;D undertaken by intventor-entrepreneurs, to R&;D undertaken within established firms in close proximity to the production line—results from the interaction of market structure and technological change. This interaction captures the essence of the evolution of the capitalist engine of growth and provides an economic explanation of a “stylized fact” that has received no attention in the theoretical literature. The endogenous market structure generates dynamic feedbacks that shape the growth path of the economy and determine the structural change it undergoes, including the endogenous formation of corporate R&;D labs. The evolution of market rivalry explains when and how established firms become the major locus of R&;D activity.     

Unionization and International Market Share Rivalry: A Paradox

Two exporting firms (domestic and foreign) are considered which are symmetric in all respects except that one is unionized while the other faces a competitive labor market. Under free trade the unionized firm has the lower market share. Paradoxically, in the policy equilibrium, the unionized firm has the larger market share. Consequently, the nation hosting the unionized firm has the higher welfare level.     

An Enforcement-Coalition Model: Fishermen and Authorities Forming Coalitions

The paper sets up a four-stage enforcement model of fish quotas. The purpose of the paper is to show how the level of enforcement set by the authorities affects the way fishermen form coalitions. We show that a high level of control effort yields less co-operation among fishermen, while in the case of low control effort, coalitions are somewhat self-enforcing. The paper further discusses how the optimal enforcement level changes when the coalition formation among authorities changes: centralised, partly centralised and decentralised authorities. We show that decentralised authorities set a lower level of control effort compared to the centralised authorities. The theoretical results are illustrated by simulations of the Baltic Sea cod fishery.The authors acknowledge valuable comments and suggestions from Frank Jensen and Niels Vestergaard.     

Endogenous Formation of Coalitions in Noncooperative Games

In this paper we extend the definitions of coalition-proof Nash equilibrium and communication-proof equilibrium to situations of partial communication. Then we use the model of endogenous formation of coalitions of Aumann and Myerson to find that one of these situations in which the corresponding equilibrium exists will be endogenously determined by the players in the game.Journal of Economic LiteratureClassification Numbers: C70, C72.     

论社会排斥

“社会排斥”目前已经成为西方社会政策的研究重点。本文考察了社会排斥与贫困、能力剥夺之间的关系，论述了能力剥夺的关系特征，并指出“社会排斥”兼具建构性和工具性两种特征。最后，文章分析了“社会排斥”的多样性，讨论了不平等与关系贫困、劳动力市场上的排斥、信贷市场上的排斥、与性别相关的排斥与不平等、医疗保健、食品市场与贫困等问题。     

R&D Spillovers and Location Choice under Cournot Rivalry

A model of location choice by Cournot oligopolists is presented, under the assumption that R&D spillovers depend on the distance between firms. It is shown that a variety of patterns emerge. Agglomeration is optimal under certain assumptions. Geographical dispersion in a two-dimensional plane is another possible outcome.     

International R&D Rivalry and Industrial Strategy without Government Commitment

We examine optimal industrial and trade policies in a series of dynamic oligopoly games in which a home and a foreign firm compete in R&D and output. Alternative assumptions about the timing of moves and the ability of agents to commit intertemporally are considered. We show that the home export subsidy, R&D subsidy and welfarc are higher when government commitment is credible than in the dynamically consistent equilibrium without commitment. Commitment thus yields welfare gains (though they are small) but so does unanticipated reneging, whereas reneging which is anticipated by firms yields the lowest welfare of all.     

战略性经营者激励选择与国际市场份额竞争

本文首先用具有线性需求和规模收益不变生产技术的Cournot双头模型来刻画国际市场份额竞争。指出 ,如果参与国际竞争的本国企业是所有权与经营权分离的企业 ,那么 ,无论竞争对手是否是所有权与经营权分离的企业 ,本国企业所有者总是有积极性操纵经营者的激励 ,特别的 ,在只有本国企业作出单边激励选择的情况下 ,这种操纵可以使本国企业生产Stackelberg领先者产量成为可以置信的承诺。它在这里所起到的作用是与出口补贴在战略性贸易政策分析中所起到的作用相一致的。如果考虑到从过去的GATT到现在的WTO都规定政府不得以任何形式参与国际竞争 ,这个结论就更有趣了。因为无须政府帮助 ,本国企业所有者凭借自身的力量就能实现有利于本国企业的竞争结果。这种民间对政府的替代是有意义的。在双边激励选择的情况下 ,两国企业陷入了“囚徒困境”。本国企业只有诉诸于本国政府对国际市场的干预 ,才能重新获得Stackelberg领先者的地位 ;但与对它的传统理解相比 ,这种地位已然弱化。最后 ,我们还证明 ,根据相当一般的条件 ,所有者决定的最优经营者激励只与竞争类型 (数量竞争还是价格竞争 )有关 ,而与企业的产品类型 (替代品还是互补品 )无关。     

Exclusion by cognitive limitation

We show a model where exclusion can be the only outcome because of some cognitive limitation.     

Strategic Rivalry With Spillovers Within Segmented Versus Integrated Markets

We consider a two-stage game with firms investing in R&D in the first stage while competing [a] la Cournot in the second stage. The firms are located in two countries, which are either segmented or integrated. R&D spillovers occur between firms located in the same country as well as between firms located in different countries.

We first examine the consequences of market integration on the impact of national and international R&D spillovers on innovative efforts, effective R&D, profits and total welfare. Comparing the resulting equilibrium levels, we subsequently conclude that market integration always leads to higher R&D investments and output if international R&D spillovers are limited, while the welfare consequences are ambiguous. Finally, we also analyze the welfare maximization problem of a ‘constrained social planner who can only decide on the level of R&D spillovers.