Strategic managerial delegation and cross-border mergers

The purpose of this paper is to clarify the relationship between the market structure in equilibrium and the most preferred structure with respect to each country’s social welfare and/or total social welfare, when all existing firms can freely merge with each other in an international oligopoly under the segmented market assumption in three cases: the case wherein all the firms are entrepreneurial and the cases wherein they use two different types of managerial delegation contracts. We focus our attention on the coincidence/non-coincidence between the equilibrium market structure (EMS) and the most socially preferred structure with respect to each country’s social welfare and/or total social welfare, as each firm’s production efficiency varies. When each firm’s production efficiency is relatively low, in all the three cases, the EMS coincides with the most socially preferred structure with respect to each country’s social welfare and total social welfare in a large area of the physical trade cost. On the other hand, when each firm’s production efficiency is relatively high, in the cases wherein they use the two different types of managerial delegation contracts, there exists an area of each firm’s production efficiency such that the EMS does not coincide with the most socially preferred structure with respect to each country’s social welfare and total social welfare. Therefore, as each firm’s organizational structure proceeds from entrepreneurial to managerial delegation, a more active merger policy is needed with respect to each country’s social welfare and total social welfare.     

Social welfare orderings for ratio-scale measurable utilities

Summary. This article characterizes all of the continuous social welfare orderings which satisfy the Weak (resp. Strong) Pareto principle when utilities are ratio-scale measurable. With Weak Pareto, on both the nonnegative and positive orthants the social welfare ordering must be representable by a weakly increasing Cobb-Douglas social welfare function while on the whole Euclidean space the social welfare ordering must be strongly dictatorial. With Strong Pareto, on the positive orthant the social welfare ordering must be representable by a strictly increasing Cobb-Douglas social welfare function but on the other two domains an impossibility theorem is obtained. Received: July 31, 1995; revised version August 7, 1996     

Welfare implications of net social security wealth

Real net social wealth (NSSW), the real present value of social security benefits received minus social security taxes paid, is frequently used as a direct proxy measure for the impact of a social security system on generation welfare. The present paper establishes to the contrary, for a class of overlapping generation economies, that NSSW can be simultaneously negatively correlated with welfare for every agent in every generation. More generally, the paper determines the extent to which social security is needed in these economies to ensure social optimality, and investigates the proper subset of economies for which NSSW and generation welfare exhibit positive correlation.     

Income Disparity, Inequity Aversion and the Design of the Healthcare System

An ex post social welfare function is used to evaluate alternative healthcare systems. If a society is averse to inequality and there is some income disparity, social welfare under private healthcare insurance is sometimes higher and sometimes lower than social welfare under public healthcare. However, a third system—public healthcare with the option to purchase supplemental healthcare insurance—is always socially preferred to private healthcare insurance. Moreover, it is either socially preferred to public healthcare or equivalent to it.     

西方社会福利的三种分析框架

阐述了三种用于分析西方社会福利的架构,并结合实例进行了分析。在现代社会福利发展日趋复杂的情况下,可灵活使用此三种分析框架,有助于较深入了解各国社会福利的本质,使得各类福利服务之间的区别更加明晰。     

Salience and social choice

The axioms of expected utility and discounted utility theory have been tested extensively. In contrast, the axioms of social welfare functions have only been tested in a few questionnaire studies involving choices between hypothetical income distributions. In a controlled experiment with 100 subjects placed in the role of social planners, we test five fundamental properties of social welfare functions to determine the efficacy of traditional social choice models in predicting social planner allocations when presented with choice sets designed to test the axioms of the theory. We find that three properties of the standard social welfare functions tested are systematically violated, producing an Allais paradox, a common ratio effect, and a framing effect in social choice. We find support for scale invariance and a preference for tail-increasing transfers. Our experiment also enables us to test a model of salience-based social choice which predicts the systematic deviations and highlights the close relationship between these anomalies and the classical paradoxes for risk and time.

     

Welfare effects of competitive lobbying efforts in international oligopoly markets

Conventionally, rent-seeking activities have been considered to deteriorate social welfare and to distort resource allocation. This paper examines whether rent-seeking behavior can improve social welfare by focusing on the welfare effects of firms’ competitive lobbying efforts when governments can impose market entry regulation against foreign firms. We demonstrate that competitive lobbying efforts can improve social welfare when such lobbying efforts are directed to reduce market entry barriers. In addition, social welfare can be maximized when the government shows the maximum sensitivity to the foreign firm's political contributions while maintaining competitive market structure. Moreover, it is shown that the dominant strategy for a domestic firm is to allocate more resources to R&D sectors while it is optimal for foreign firms is to exert more efforts in lobbying to reduce the market entry barriers when a government makes political economic approach in market entry regulations.     

网络外部性下基于投资溢出的企业合作研发博弈模型

本文建立了网络外部性环境下基于投资溢出的企业合作研发博弈模型,研究了企业合作研发策略,分析了网络外部性、兼容性以及投资溢出等对企业合作研发动机、企业利润和社会福利等的影响。研究表明,合作研发能提高企业利润和社会福利;兼容性较大或外部性较小时,提高产品外部性会增强企业合作研发意愿;提高兼容性或投资溢出则始终会增强企业合作研发意愿,提高企业利润和社会福利。因此,政府应鼓励企业生产高网络外部性和高兼容性的产品,并增强投资溢出效应,激励企业投入更多研发资源,提高企业利润和社会福利。     

Taxes versus quotas in lobbying by a polluting industry with private information on abatement costs

We present a model of lobbying by a polluting industry with private information on pollution abatement costs and compare taxes with quotas under such conditions. We also examine the effect of private information on lobbying activity and social welfare under these two instruments. It is found that private information might improve social welfare under taxes when the government has little concern for social welfare, whereas private information does not improve social welfare under quotas. Quotas are generally socially preferred when the slope of marginal abatement costs is steeper than that of marginal damage or when the government does not concern itself with social welfare. However, private information reduces the comparative disadvantage of taxes compared to quotas when the government has little concern for social welfare. Finally, the results of numerical examples suggest that quotas are employed rather than taxes if the difference in natural emission levels between high- and low-cost industries is large.     

More on phantom bidding

Summary. A phantom bidding model is analyzed for a sale auction. The following issues are addressed: the effects of phantom bidding on overall social welfare and buyers' profits. It is shown that social welfare may increase or decrease as the auctioneer switches from the fixed reserve price policy to phantom bidding. The buyers' profits will increase whenever social welfare increases. Received: November 4, 1998; revised version: February 8, 1999     

CORPORATE SOCIAL RESPONSIBILITY INVESTMENT AND SOCIAL OBJECTIVES: AN EXAMINATION ON SOCIAL WELFARE INVESTMENT OF CHINESE STATE OWNED ENTERPRISES

We apply the theory of corporate social responsibility to analyse social welfare investment undertaken by Chinese State Owned Enterprises (SOEs). We present a simple theoretical model to illustrate how the presence of social objectives in the firm's objective function changes its investment behaviour. Our theoretical model accommodates special features of Chinese SOEs, whose social welfare investment is driven by both social objectives and profit concerns. The model is then tested using a panel of Chinese enterprises during the period 1995–1999. The empirical analysis indicates that despite of the corporatization reform social welfare investment undertaken by Chinese SOEs is still inefficient due to the lack of profit concerns, suggesting that social objectives still dominate profit concerns in motivating the SOEs' social welfare investment. However, we do obtain clear-cut evidence showing that social objectives become less important as time progresses.     

非营利组织“三次分配”的社会福利效应——兼论政府对非营利组织的财政激励规制

本文运用基数效用原理和社会福利函数理论构建了非营利组织三次分配的可比较社会福利函数模型。通过在已有文献的基础上构建模型,比较了非营利组织三次分配与政府二次分配的社会福利效应。证明了非营利组织的三次分配能够提高社会福利水平,是政府二次分配功能的有效补充。同时利用广义矩估计的方法实证分析了非营利组织的发展在很大程度上依赖于政府的财力支持,由此政府有必要运用财政激励手段扶持非营利组织的发展。     

中国土地财政的社会福利效应*——基于森（Sen）的可行能力理论

本文基于森（Sen）的可行能力理论,运用模糊数学与因子分析法测度中国2004-2013年31个省份社会福利指数,并分析社会福利与土地财政关系。通过理论与实证检验研究发现：第一,沿海城市社会福利指数相对较高,且透明性担保、社会机会、经济条件、防护性保障和政治自由对社会福利指数贡献率呈递增的趋势。第二,东部沿海地区土地财政收入绝对值与相对值远超西部地区,且各地区社会福利与土地财政二者呈脱钩现象。第三,各地区社会福利指数之间存在正的空间相关性,且各省社会福利指数存在空间集聚与扩散现象。最后,利用空间动态面板模型实证检验发现,地方政府土地财政收入占比与社会福利之间呈倒U型曲线。     

The Social Norm of Tipping: Does it Improve Social Welfare?

Some economists believe that social norms are created to improve welfare where the market fails. I show that tipping is such a norm, using a model in which a waiter chooses service quality and then a customer chooses the tip. The customer’s utility depends on the social norm about tipping and feelings such as embarrassment and fairness. The equilibrium depends on the exact social norm: higher sensitivity of tips to service quality (according to the norm) yields higher service quality and social welfare. Surprisingly, high tips for low quality may also increase service quality and social welfare.     

土地政策调整对经济发展和社会福利的影响

构建了一个土地对社会福利影响的分析模型,并用天津市的数据进行检验。研究结果表明：（1）政府对于土地供应量的控制减少了均衡资本量;（2）严格的土地政策会使单位资本产生的福利量减少;（3）土地政策的适时调整能使经济发展沿着社会福利最大化的路径发展。因此,土地政策的制定应该以社会需求为导向,并通过适时调整以实现社会福利最大化。     

THE POLITICAL ECONOMY OF PUBLIC‐PRIVATE PARTNERSHIPS AND ANALYSIS OF THEIR SOCIAL VALUE*

ABSTRACT: This article applies political economy theory to public‐private partnerships (PPPs). First, we propose that social welfare is the appropriate normative evaluation criterion to evaluate the social value of PPPs. Second, we specify the goals of PPP participants, including private‐sector partners and governments. Third, we review the observed outcomes of PPPs and analyze them from both a political economy perspective and a social welfare perspective. Fourth, based on a comparison of the actual outcomes of PPPs to normatively desirable social welfare outcomes, we propose some ‘rules for governments’ concerning the design of government PPP institutions and the management of PPPs. We argue that if governments were to adopt these rules there would be fewer PPPs in total, they would be more like traditional government contracts and there would be a greater likelihood of improved social welfare. However, political economy theory also explains why implementation of any reform will be difficult.     

Information design,externalities, and government interventions

We consider a model of Bayesian persuasion with spillovers. A sender provides information to persuade a receiver to take an action with external effects. We consider how government interventions, including corrective subsidy and tax, affect social welfare. In addition to internalizing externalities, government interventions affect social welfare through an informational channel. Subsidies to the sender's preferred action incentivize the sender to reveal less information, but taxes on the sender's preferred action incentivize the sender to reveal more information. Because of such an informational effect, the optimal subsidy and tax may be different from the size of the externalities. In some cases, social welfare is maximized with no government intervention.     

Partial privatization in mixed duopoly with price and quality competition

We analyze price and quality competition in a mixed duopoly in which a profit-maximizing private firm competes against a state-owned public firm. We first show that the welfare-maximizing public firm provides a lower quality product than the private firm when they are equally efficient. In order to maximize social welfare, government manipulates the objective of the public firm that is given by a convex combination of profits and social welfare. It is demonstrated that an optimal incentive of the public firm is welfare maximization under the absence of quality competition, but it is neither welfare maximization nor profit maximization under the presence of quality competition. The result supports a completely mixed objective between welfare and profit maximizations or partial privatization of the public firm.      

河北省建立农村社会保障制度成本效益分析

在现代化进程中，农村社会保障始终处于整个社会保障体系的边缘，农民长期游离于社会保障网络之外。改革的实践和理论都未能突破城市和农村两个独立的圈子，这造成了农村社会保障制度建设严重滞后的状况。建立农村社会保障制度必然要付出巨大的成本，包括推行成本和社会保障费用支出成本。但建立农村社会保障制度带来的社会效益也是非常明显，是难以用数据来衡量的。     

Interdependent welfare functions and optimal income distribution

The relationship between income distribution and social welfare is empirically analyzed, while explicitly allowing for the interdependence of individual welfare functions. The social welfare function is taken to be an additive function of individual welfare functions of income (WFIs). On the basis of Dutch data it is found that under certain conditions (such as absence of effects of income redistribution on productivity) an equal distribution of incomes is suboptimal. The interdependence of WFIs appears to have a pronounced effect on policy conclusions concerning the desirability of income redistribution vis-à-vis economic growth.