INTERTEMPORAL COURNOT AND WALRAS EQUILIBRIA: AN ILLUSTRATION*

In an intertemporal general equilibrium framework, we compare a Cournot equilibrium to the Walras equilibrium. The Cournot agents trade and invest less than the Walras agents. This generates an inefficiency that does not vanish as the number of Cournot agents tends to infinity. A larger number of strategic Cournot agents implies that the amount of trade (relative to their aggregate consumption) increases (i.e., it moves towards the Walrasian amount), but their investment (relative to the stock) decreases (i.e., it moves away from the Walrasian amount). "S'il y avait 3, 4, ...n producteurs en concurrence [...] la valeur de p, qui en résulte, diminuerait indéfiniment par l'accroissement indéfini du nombre n,”A. A. Cournot (1838, p. 63)."     

COLLEGE ADMISSIONS AND THE ROLE OF INFORMATION: AN EXPERIMENTAL STUDY*

Three well‐known matching mechanisms designed to solve the college admissions problems are analyzed in the experimental laboratory in different informational settings. We observe that when the level of information is significantly increased, the proportion of schools and teachers that submit their true preferences decreases. This affects largely the efficiency and stability of the Gale–Shapley and the Boston mechanisms. The TTC mechanism is less sensitive to information and outperforms the other two mechanisms in terms of efficiency and stability, and it is as successful as them in extracting private information.     

THE TRANSMISSION MECHANISM IN GOOD AND BAD TIMES

Does the transmission of economic policies and structural shocks vary with the state of the economy? We answer this question using a strategy based on quantile regressions, which account for endogenous regressors and state‐dependent parameters. An application to U.S. real activity and interest rate reveals pervasive asymmetries in the propagation mechanism across good and bad times. During periods when real activity is above its conditional average, the estimates of the degree of forward‐lookingness and interest rate semi‐elasticity are significantly larger (in absolute value) than the estimates associated with below‐average periods. Results are robust to alternative strategies to model state‐dependent parameters.     

SEARCH BEHAVIOR OF ASYMMETRICALLY INFORMED VOTERS: AN EXPERIMENTAL STUDY*

This paper experimentally investigates individual level search within a spatial election model. In our model the voter is required to cast a ballot for one of two candidates. However, the voter's task is made non-trivial since, even though the location of one candidate is known, the location of a second candidate is unknown. To reduce uncertainty regarding the unknown candidate's location, the voter may undertake an information search. We find that search in this environment is a function of the cost of search, the quality of information, and the voter's location on the issue space.     

A MARKET WITH FRICTIONS IN THE MATCHING PROCESS: AN EXPERIMENTAL STUDY*

We construct a laboratory market in which there is a friction in the matching between buyers and sellers. Sellers simultaneously post prices and then buyers simultaneously choose a seller. If more than one buyer chooses the same seller, the seller's single unit is randomly sold to one of them. Our results show a broad consistency with theoretical predictions, although price dispersion exists and is slow to decay. Prices also exceed the equilibrium level when there are only two sellers, and buyers' purchase probabilities are insufficiently responsive to price differences when there are two sellers.     

PRIVATE GOOD,EXTERNALITY, PUBLIC GOOD*

In two recent investigations into the economic problems of externality the authors have noted in passing that the welfare or optimality conditions in the case of a consumption externality seemed identical with the welfare conditions in the case of public goods as originally stated by Samuelson.¹ The purpose of this paper is to demonstrate that the welfare conditions for a public good are a special case of the welfare conditions for a consumption externality where a public good is defined as a good ‘which all enjoy in common in the sense that each individual's consumption of such a good leads to no subtraction from any other individual's consumption of that good’ (Samuelson [4]). Since the welfare conditions for a private good are also a special case of the welfare conditions for a consumption externality, it follows that we have a range of externality with the pure private good and the pure public good as polar cases.     

MARKET PRICE MECHANISMS AND STACKELBERG GENERAL EQUILIBRIA: AN EXAMPLE

This paper considers Stackelberg competition in a general equilibrium framework with a productive sector. The working of market power and the configurations of strategic interactions are complexified by the presence of a leader. Two market price mechanisms are studied: one is associated with the Stackelberg–Walras equilibrium and the other is linked to the Stackelberg–Cournot equilibrium. Throughout the example of a two commodity economy, several results are obtained about equilibria mergings and about welfare comparisons.     

INCOME REDISTRIBUTION AND PUBLIC GOOD PROVISION: AN EXPERIMENT

We experimentally investigate the impact of income redistribution on voluntary contributions by groups of four subjects. We compare equalizing and unequalizing redistribution. Our data are consistent with the neutrality theorem: Redistribution does not affect the amount of voluntarily provided public good at the group level. However, at the individual level, subjects tend to underadjust with respect to the Nash prediction. We also observe an insignificant adjustment asymmetry between the poor and the rich: Subjects who become poorer adjust their contribution by a larger absolute amount than subjects who become richer. Finally, poor subjects tend to overcontribute significantly more than rich subjects.     

COURNOT AND BERTRAND EQUILIBRIA COMPARED: A CRITICAL REVIEW AND AN EXTENSION FROM THE OUTPUT‐STRUCTURE VIEWPOINT*

This paper compares Bertrand competition with Cournot competition. In previous studies, the welfare ranking has not been examined in any general setting. One purpose of this work is to fill this gap. In the Zanchettin model, the ranking regarding the less efficient firm's output is sensitive to the degree of asymmetry between firms, whereas the welfare ranking is not. Another goal of this study aims at dealing with this paradox. We demonstrate that the rankings regarding average price, average output and the Herfindahl index are not sensitive to the degree of asymmetry, and hence can explain the welfare ranking.     

WELFARE GAINS AND LOSSES IN SUNSPOT EQUILIBRIA*

We study a standard two period exchange economy with one nominal asset. As is well known, there is a continuum of sunspot equilibria around each efficient equilibrium. A sunspot equilibrium is inefficient but some households may gain in sunspot equilibria relative to the efficient equilibrium. We show that a household's equilibrium utility level is either locally maximized or locally minimized at the efficient equilibrium, and derive a condition which identifies whether or not a household's utility is locally minimized or maximized.     

SECTORAL AND MACROECONOMIC EFFECTS IN A TWO GOOD OPEN ECONOMY WITH AN INTERMEDIATE INPUT*

A model of an open economy, in which two goods, a tradeable and a non-tradeable, are distinguished, is constructed. There is also an intermediate input (oil) which is both produced domestically and traded, and which is used as an input in the traded sector. There are two assets, money and internationally traded bonds. In the model the effects of various changes, including an increase in the money supply, and increases in both the world price of, and the domestic output of, oil, are analysed.     

信息产品的共享及其组织方式:一个经济分析

本文通过引入一个现实案例(Napster)来讨论信息产品的共享问题。首先,我们解释了信患产品共享产生的原因;然后,我们对此进行了福利分析,并证明:如果信息产品的共享采取俱乐部这种组织方式,不仅消费者的福利水平可以得到提高,生产者同样也有向市场提供信患产品的激励,换言之,帕雷托意义上的效率改进是可能的。     

THE INTERPLAY OF INEQUALITY AND REFERENCE DEPENDENCE WITH TRUST AN EXPERIMENTAL STUDY

Using a canonical trust game, we investigate whether the inequality of endowment between trustor and trustee and the acquired versus permanent financial state affect trust and trustworthiness. We found that trust and trustworthiness are reference‐dependent and that individuals with permanent financial state receive more trust and are more trustworthy than others. In our experiment, unequal endowments do not significantly affect trust, but trustworthiness increases significantly when the trustor is poorer.     

GOVERNMENT FRAGMENTATION AND BUDGETARY POLICY IN "GOOD" AND "BAD" TIMES IN FLEMISH MUNICIPALITIES

Using a panel of budgetary data over the period 1989–1996, we analyse how political fragmentation of Flemish local governments affects their reactions in the context of a major reform of the grant system. This reform reallocated grants among municipalities and thus unavoidably created "winners" and "losers". Thus, it is possible to distinguish between political reactions in good and bad times. The presence of a balanced budget requirement implies that in bad times municipalities have to react whereas in good times the decision to react is endogenous to the government. The results are in line with the hypotheses, if not the findings, of Kontopoulos and Perotti (1999) in that we find that fragmentation is important both in good and in bad times. Coalition size – the number of political parties – plays a crucial role when the budgetary shock is endogenous (in "good times" when grants increase). In this case, we find that more-party governments spend more of the additional funds. On the other hand, cabinet size – the number of spending ministers (aldermen) – is the relevant dimension of fragmentation when the reaction is exogenous (in "bad times"). When grants are cut back, expenditures are cut back more in municipalities with fewer ministers.     

AN EXPERIMENTAL STUDY OF UNCERTAINTY IN COORDINATION GAMES

Global games and Poisson games have been proposed to address equilibrium indeterminacy in Common Knowledge Coordination games. The present study investigates in a controlled setup, using as controls Common Knowledge games, whether idiosyncratic uncertainty about economic fundamentals (Global games) or uncertainty about the number of actual players (Poisson games) may influence subjects' behavior. We find that uncertainty about the number of actual players has more influence on subjects' behavior than idiosyncratic uncertainty about economic fundamentals. Furthermore, subjects' behavior under Poisson population‐size uncertainty is closer to the respective theoretical prediction than subjects' behavior under idiosyncratic uncertainty about economic fundamentals.     

BIDDING TO GIVE: AN EXPERIMENTAL COMPARISON OF AUCTIONS FOR CHARITY*

We experimentally compare three mechanisms used to raise money for charities: first‐price winner‐pay auctions, first‐price all‐pay auctions, and lotteries. We stay close to the characteristics of most charity auctions by using an environment with incomplete information and independent private values. Our results support theoretical predictions by showing that the all‐pay format raises substantially higher revenue than the other mechanisms.     

THE FOCAL POINT IN THE TRAVELLER'S DILEMMA: AN EXPERIMENTAL STUDY

This paper provides an experimental test of the traveller's dilemma. Our investigation aims to address the research hypothesis that introducing a reference point à la Schelling (set equal to the Pareto optimal solution) might drive people away from rationality even when the size of the penalty/reward is high. Experimental findings reported in this paper provide answers to this question showing that the reference point did not encourage coordination around the Pareto optimal choice.