Cooperation in international environmental negotiations due to a preference for equity

This paper demonstrates that cooperation in international environmental negotiations can be explained by preferences for equity. Within a N-country prisoner’s dilemma in which agents can either cooperate or defect, in addition to the standard non-cooperative equilibrium, cooperation of a large fraction or even of all countries can establish a Nash equilibrium. In an emission game, however, where countries can choose their abatement level continuously, equity preferences cannot improve upon the standard inefficient Nash equilibrium. Finally, in a two stage game on coalition formation, the presence of equity-interested countries increases the coalition size and leads to efficiency gains. Here, even a stable agreement with full cooperation can be reached.     

Alliances and negotiations

Negotiations often occur not between individuals but among groups (companies, trade unions, political parties, etc.) each representing composite interests, whose bargaining behaviour is regulated by some collective decision mechanism. In this paper we provide a natural model of such circumstances. We formalise the notion of ‘alliance’ and show how different preference aggregation procedures within the alliance affect the bargaining outcome. In particular, we find that unanimity procedures lead to ‘more aggressive’ negotiating tactics than majority procedures.     

Global environmental problems and the strategic choice of technology

Reductions of environmentally harmful emissions are often a public good in a global context. For strategic reasons, countries may adopt a technology with high per unit cost of emission reduction, even if a technology with lower per unit cost is available at no extra cost. They thereby credibly commit themselves to not reducing emission much in the future. In a game of private voluntary provision of emission reduction, this commitment will make other countries increase their emission reductions. Also, in the case where countries cooperate in the future, such commitment gives a country a strategic advantage, because it shifts the disagreement point in a favorable direction.     

Valuations and dynamics of negotiations

This paper analyzes three‐party negotiations in the presence of externalities. We obtain a closed‐form solution for the Markov perfect equilibrium of a multilateral non‐cooperative bargaining model, yielding an equilibrium value and dynamics of negotiations that are supported by experimental studies. Players’ values are monotonically increasing (or decreasing) in the amount of negative (or positive) externalities that they impose on others. Moreover, players’ values are continuous and piecewise linear on the worth of bilateral coalitions, and are inextricably related to their negotiation strategies: the equilibrium value is the Nash bargaining solution when no bilateral coalitions form; the Shapley value when all bilateral coalitions form; or the nucleolus, when either one bilateral coalition among “natural partners” or two bilateral coalitions including a “pivotal player” form.     

Merger negotiations and ex-post regret

We consider a setting in which two potential merger partners each possess private information pertaining both to the profitability of the merged entity and to stand-alone profits, and we investigate the extent to which this private information makes ex-post regret an unavoidable phenomenon in merger negotiations. To this end, we consider ex-post incentive compatible mechanisms, which use both players' reports to determine whether or not a merger will take place and what each player will earn in each case. When the outside option of at least one player is known, the efficient merger decision can be implemented by such a mechanism under plausible budget-balance requirements. When neither outside option is known, we show that the potential for regret-free implementation is much more limited, unless the budget balance condition is relaxed to permit money-burning in the case of false reports.     

Professional versus consumer interests in regulation: the case of the US child care industry

Professional licensure benefits producers by creating entry barriers into the profession, but consumers might also gain if licensure induces producers to supply high levels of quality. Whether consumers or producers gain most form licensure can be determined by examining the effect of licensure requirements on aggregate consumption. This paper uses a cross-sectional model to estimate the relationship between variations in state licensure rules and consumption of child care services. The results suggest that professional interests, and not those of consumers, are dominant in the setting of regulatory standards for the US child care industry.     

The Asian Financial Crisis and Global Adjustments: Implications for US Agriculture

This study investigates the impact of the recent Asian financial crisis on global economic adjustment and its implication for US agriculture using a multi-country, multi-sector dynamic intertemporal general equilibrium model with endogenously modelled financial markets. The simulation results show that the crisis in Asia reduces not only US exports but also interest rates and the cost of intermediate inputs of production, stimulating US domestic economic activity in interest-sensitive sectors, and driving up demand for agriculture products. However, this stimulus of domestic demand may or may not offset the negative impact of declining exports. JEL Classification Numbers: D58, F17, F30.     

Transparency and special interests

In this paper opposing lobbies influence a politician via contributions. Society may grant access to decision relevant information. Transparency maximizes welfare if the lobbies have a similar size. Secrecy is optimal if their size is comparable, but not too similar.     

美国全球科技创新计划的实施成效及启示

美国国务院于2011年启动了全球科技创新计划,利用创业训练营、创新创业大赛、投资者培训、孵化器项目、创新中心、在线帮助平台及学员网络等手段,开展“科技外交”,搭建与发展中国家和新兴经济体间科技交流的桥梁。本文对全球科技创新计划发起的背景和实施等进行了系统分析研究,评价了其实施成效,并从深化科技外交、全面融入全球创新网络、优化项目管理流程及科学适度宣传四个方面提出了对我国与发展中国家特别是与“一带一路”沿线国家科技合作的启示。     

Global environment and dynamic games of environmental policy in an international duopoly

This paper examines a differential game model of international pollution control in which polluting oligopolists compete in a third country market. Two alternative policy instruments (emission taxes and command-and-control regulations) are considered. A tougher emission policy in the home country enhances the foreign firm’s competitiveness because of the static “rent-shifting” effect. The foreign country also enjoys a future improvement of the global environmental quality by “free riding” on the home country’s emission reduction effort. Because of these strategic effects, the levels of environmental policy determined in the noncooperative policy game are distorted away from the socially optimal level. Moreover, the emission tax game produces a more distortionary outcome than that in the command-and-control game; it generates more pollution and lower welfare.      

Global imbalances and asymmetric returns to US foreign assets: fitting the missing pieces of the US balance of payments puzzle

The issue of whether the US earns a persistently higher return on its foreign direct investment (relative to returns to foreign-owned direct investment in the US) has received considerable attention but little closure in the ‘global imbalances’ debate. Measuring the rate of returns to US direct investment abroad and foreign direct investment in the US we find higher returns to US foreign direct investment relative to its foreign counterparts in the US. Given the evidence indicating higher returns to US direct investment overseas, we link the irresolution in the contemporary literature regarding the existence of these returns to the unsettled debate over the origin of global imbalances. Reviewing the macro-financial literature on global imbalances, we find a failure to acknowledge that the US current account deficit is, in part, the outcome of transnational production networks in a global economy under-pinned by dollar hegemony. Given the growth in US multinational supply chains, we argue that the US trade deficit is consistent with asymmetric returns to US direct investment and that the sustainability of these return differentials rests on the stability of the status quo.     

Minimum participation rules in international environmental agreements: empirical evidence from a survey among delegates in international climate negotiations

Recent contributions to the theoretical and experimental literature suggest that minimum participation rules (MPRs) are able to reduce free-riding incentives and may facilitate cooperation (or at least coordination) at the extensive margin of international environmental agreements. Based on a data set from a worldwide survey among delegates in international climate negotiations, this article assesses preferences for different MPRs for a future climate treaty among key players. The empirical findings provide evidence that small countries with low bargaining power rather opt for large minimum membership requirements while industrialized countries push forward the idea of a small carbon club of the largest emitters only. In contrast, delegates from countries in transition try to keep emission thresholds rather low which would allow a future agreement to come into force without their signature.     

美国贸易保护主义政策对全球价值链的挑战与中国应对

特朗普执政政府对全球主要经济体挑起了贸易纠纷,其背后是美国贸易保护主义的重新抬头。美国贸易保护主义政策破坏了多边贸易体系,动摇了构建全球价值链的基础;通过推高贸易成本并增加收益的不确定性,从而导致全球价值链发生结构性改变;通过影响消费市场导致全球价值链发生强制性变迁。美国贸易保护主义政策不但降低了中国在全球价值链中的参与度,还通过压制技术进步来打压中国在全球价值链中的地位,并降低了中国在全球价值链中的预期收益。美国贸易保护主义政策下中国可以通过调整中西部的产业布局,优化国内价值链分工体系;通过创新驱动来提升核心技术的研发效率,进一步拓展技术外溢渠道;积极参与国际多边贸易体系的治理,增强本国企业在全球价值链中的话语权;促使国际贸易对象的多元化,逐步替代美国在中国外贸体系中的主导地位等途径来参与全球价值链分工体系。     

Information, bilateral negotiations, and worker recruitment

This paper studies experimentally how firms choose between using a centralized market and bilateral negotiations to recruit new personnel. In the market firms interact with several workers but do not have information about workers’ behavior in the past. In the bilateral negotiations firms negotiate bilaterally with prospective workers and learn about workers’ performance in previous jobs. We show that the interaction between social preferences, the incompleteness of contracts and the existence of information about a worker’s past performance provides an explanation for firms forgoing market opportunities and bilaterally negotiating with a worker. We observe that approximately 30% of all job contracts were bilaterally negotiated when these contracts are incomplete as opposed to only 10% when contracts were complete. The surplus from trade is higher when incomplete contracts can be bilaterally negotiated, which can be attributed to the presence of information.     

Sequential negotiations with costly information acquisition

Negotiations about a merger or acquisition are often sequential and only partially disclose to bidders information about each otherʼs bids. This paper explains the seller optimality of partial disclosure in a single-item private-value auction with two bidders. Each bidder can inspect the item at a nonprohibitive cost. If a revenue-maximizing seller cannot charge bidders for the information about the otherʼs bid, then the seller optimally runs a sequential second-price auction with a reserve price and a buy-now price. The seller prefers to keep the bids confidential and, sometimes, to hide the order in which he approaches the bidders.     

Interregional negotiations and strategic delegation under government subsidy schemes

We examine the strategic delegation problem in the context of interregional negotiations under the subsidy policies of a central government. It is well known that when such negotiations are delegated to representatives, each region in a country elects its representative strategically, resulting in inefficient negotiation outcomes. This study focuses on a common subsidy policy called a cost-matching grant to examine whether an optimal grant exists that restores the efficiency of negotiation outcomes. Our results show that the central government obtains this optimal grant if the manipulability of the negotiation breakdown outcome is sufficiently weak. The strength of the manipulability is important because introducing a grant generates a new kind of manipulation of negotiation breakdown outcomes. However, when a new representative is elected after a negotiation breaks down, the new manipulability is negated. Hence, the central government always obtains the optimal cost-matching grant.     

The role of mediation in peacemaking and peacekeeping negotiations

We develop a model of bargaining that provides a rationale for the difference in the method of negotiation, depending on the nature of the conflict. We distinguish those negotiations that take place previous to a potential conflict (peacekeeping), and negotiations inside the conflict (peacemaking). In these contexts, we study the role of a mediator who tries to achieve a certain balance between the efficiency of the agreement and the equality of the final sharing. We show that the credibility of the mediator comes from her willingness to impose delays in the negotiation, even if that implies costs. We also find how the player with a “weak” bargaining position in a conflict can strategically profit from the mediator's quest for equality. Finally, we show how the capacity of the mediator to induce a higher equality in the sharing is always higher in a peacemaking situation than in a peacekeeping one.     

Positioning and negotiations: The case of pharmaceutical pricing

We study a positioning game prior to negotiations where each party invests into influential activities in order to raise voter support for their preferred bargaining outcome. The case chosen for our analysis is a bilateral monopoly where a purchaser meets a pharmaceutical firm and where the two negotiate on the price of a new and innovative medicine. We identify factors that influence on the negotiated price such as treatment effects of the new and the existing drug, production costs of the new drug, the price of the existing drug, the marginal cost of public funds and patient group size. Furthermore, it is shown that the negotiated price, depending on the characteristics of a political cost function with regard to the influential activities, is influenced by the order of moves taken by the parties. Regardless of the strategic interrelationships between the two parties, likely positioning games to be played are those where one of the two negotiating parties acts as a leader while the rival acts as a follower.     

全球气候谈判的影响因素及实施情况分析

全球气候逐步变暖督促着气候谈判的进程,而各个国家在气候谈判中又都维护着各自的利益,这使全球气候谈判步履维艰。文章分析了影响气候谈判的环境、政治和经济方面的因素,并关注了《京都议定书》的实施情况。     

The Rise of the Global Corporation and the Polarization of the Managerial Class in the US

This article seeks to understand the sharp divergence in the earnings of top managerial executives in the US since the 1980s, within the historical context of the evolution and transformation of the corporate landscape through the 20th century. In particular, as US multinational corporations expanded their reach to the global market at the end of the 20th century and offshoring increased, globally dispersed US multinational corporations began to draw a rising share of their surpluses from their overseas affiliates. The article argues that this development is key to understanding the growing disparity between the earnings of the executives at the top of the managerial hierarchy and those lower down. The disproportionate rise of top managers’ wage income reflects their claim to a larger share of globally produced surplus. Discussions of the rising earnings of the managerial elite in the US need to take this historical process into account.