Political exchange and the voting franchise: universal democracy as an emergent process

The expansion of democracy presents a puzzle for a rational choice theory of politics: why would those in power choose to dilute their power by expanding the voting franchise? In this article I introduce a new path of democratization, through mutually-beneficial political exchange aimed at securing collective-consumption goods. This political exchange path will produce a more constrained state than other paths to democracy, due to the subjective preferences of the two groups and the possibility of revoking the franchise. I briefly apply the democratization framework to the United State prior to the Civil War.     

Innovation and imitation as an interactive process

This article deals with the problem of the coexistence of innovators and imitators in a competitive market. The study proposes a model of innovation and diffusion of productive knowledge as an interactive process between innovators and imitators under conditions of dynamic uncertainty. The process can be modelled as a Stackelberg game, where the innovator acts as a leader in choosing whether to share knowledge or set up private protection and the imitator as a follower in choosing when becoming active. Under these conditions, activation thresholds are derived for both innovators and imitators. If protection policies are effective, the imitator can be trapped into an inaction region by the innovator. Thus, there will be two regimes without and with diffusion, according to whether the inaction region is enacted or not. Under these conditions, discovery and diffusion appear to be dynamic complements, as a higher speed of activation of innovating firms is favoured by a higher level of imitation and a higher speed of activation of imitating firms is favoured by a higher level of discoveries. In order to explore some of the quantitative implications of these results, the paper also proposes an application of the model to four European countries.     

The creative class, its preferences, and unbalanced growth in an urban economy

We theoretically analyze unbalanced growth in an urban economy arising from the preferences of the creative class concerning the relative desirability of agricultural, manufacturing, and service goods. We study two cases. In the first case, the production functions for the three categories of goods are identical. Our analysis leads to four results. First, we compute the equilibrium physical to creative capital ratios and the relationships between the neutral productivity shifters and the output prices. Second, we show that agricultural and services consumption are a constant multiple of manufacturing consumption. Third, we note that under certain conditions, an equilibrium in which all sectors of our urban economy grow at a constant rate does not exist. Fourth, we show that a constant growth path (CGP) equilibrium exists in which, across the three sectors, the pattern of consumption changes and there is a reallocation of creative capital. In the second case, the production functions for the three categories of goods are dissimilar. In this more realistic setting, we study generalizations of the previously described four results.     

以创意城市建设推进城市转型更新的路径机理探析--以杭州市为例

城市转型更新是城市化进程新阶段面临的重要趋势和实践难题。建设创意城市已成为国内外许多城市保持和激发城市活力,实现城市转型更新与可持续发展的重要策略。杭州市结合自身实际,探索形成集创意战略、创意产业、创意空间、创意展会、创意管理、创意政策于一体的创意决策族,以实践方式来解析城市发展中“人与物”、“文化与产业”、“工业化与城市化”、“创意产业与创意城市”等多重矛盾关系,成为城市转型更新的成功案例。探析其路径与机理,对起步中的中国创意城市建设及城市转型更新,可提供诸多启示与对策借鉴作用。     

Learning,non-equilibrium beliefs,and non-pecuniary payoffs in an experimental game

Summary. We present a parametric learning model of players' dynamic and possibly out-of-equilibrium beliefs about other players' preferences that also incorporates random utility (noise). We estimate the model using the data from the four-country ultimatum game experiments of Roth et al. (1991). We find evidence that in the US and in Israel, the estimated beliefs of proposers are stationary and out-of-equilibrium, that in Slovenia, they are in equilibrium, and that in Japan, they are out-of-equilibrium, change from period to period and move away from equilibrium over time. In Japan and in the US, the estimated proposers' beliefs are further away from the uniform prior than the estimated equilibrium beliefs. The results seem to provide support for a non-pecuniary payoff explanation in all countries. Received: May 16, 2000; revised version: December 15, 2001 RID="*" ID="*" We thank Alvin Roth for providing us with the data sets of Roth, Prasnikar, Okuno-Fujiwara, and Zamir (1991). We are very grateful to Vincent Crawford, Joel Sobel, and an anonymous referee for all their comments and feedback. We are also grateful to J?rg Borrmann, Bruno Broseta, Jimmy Chan, Liran Einav, Bernd Engelmann, Drew Fudenberg, Oscar Jorda, Muriel Niederle, Pedro Pereira, Georg Weizs?cker, and audiences at the California Institute of Technology, Harvard University, Universidade Nova de Lisboa, University of Nevada, Las Vegas, and at the European Summer Meetings of the Econometric Society in Lausanne for their comments. Costa-Gomes was affiliated with the Harvard Business School during part of his work on this project. The usual disclaimer applies. Correspondence to:M.A. Costa-Gomes and K.G. Zauner     

Technology policy making as a social an political process: liberalizing india's software policy

This paper investigates the policy-making process i n a high-technology Indian industry—software—that epitomizes the liberalizing, export-oriented India of the 1980s. Although policy making is a political process, with different groups in both state and industry lobbying for different measures, there are, nevertheless, dominant forces. Within industry, the very large companies have favoured limited liberalization of policy. Within the state, Finance Ministry bureaucrats do not oppose liberalization per se, but their interests are such that they have tended to oppose most liberalization measures. Overlain on this static picture is a dynamic one, in which the balance of power between the various coalitions of interest groups has changed over time. After the early 1980s) liberalization came to be part of the political agenda through the rise to power of policy makers committed to this ideology. However, other interest groups gained in strength and by early 1987 the liberalization process had become piecemeal and in many areas was prevented from progressing further, From this it can be seen that in order to understand the making of a technology policy and its consequent impact, one mustjrst understand the underlying social and political forces that constrain and determine these processes.     

Laboratory Federalism: The Open Method of Coordination (OMC) as an Evolutionary Learning Process

In view of the concept of laboratory federalism, the Open Method of Coordination (OMC), adopted by the EU as a mode of governance, can be interpreted as an imitative learning dynamics of the type considered in evolutionary game theory. Its iterative design and focus on good practice are captured by the behavioral rule “imitate the best.” In a redistribution game with utilitarian governments and mobile welfare recipients, we compare the outcomes of imitative behavior (long‐run evolutionary equilibria) and decentralized best‐response behavior (Nash equilibria). The learning dynamics leads to coordination on a strict subset of Nash equilibria, favoring policy choices that can be sustained by a simple majority of Member States.     

Coalition formation as a dynamic process

We study coalition formation as an ongoing, dynamic process, with payoffs generated as coalitions form, disintegrate, or regroup. A process of coalition formation (PCF) is an equilibrium if a coalitional move to some other state can be “justified” by the expectation of higher future value, compared to inaction. This future value, in turn, is endogenous: it depends on coalitional movements at each node. We study existence of equilibrium PCFs. We connect deterministic equilibrium PCFs with unique absorbing state to the core, and equilibrium PCFs with multiple absorbing states to the largest consistent set. In addition, we study cyclical as well as stochastic equilibrium PCFs.     

Optimal patent length and breadth in an economy with creative destruction and non-diversifiable risk

In this paper, I examine the optimal patent shape in an economy in which R&D firms innovate and imitate, households face non-diversifiable risk and there is externality in production and R&D. With non-diversifiable risk, a household’s consumption and investment decisions are interlinked. This economy contains industries of two kinds: monopoly industries with an innovator only, and duopoly industries with an innovator and an imitator. I define patent length as the expected time in which an innovation is imitated, and patent breadth as the innovator’s profit share in an industry after a successful imitation. The government can control patent length by the requirements for accepting a substitute for a patented good, and patent breadth by imposing compulsory licensing and royalties for the patentee after a successful imitation. I show that the stronger the externality in production relative to R&D is, the slower the optimal growth rate, the larger the optimal proportion of duopoly industries, and the longer and narrower the optimal patent.     

Learning rational expectations in an asset market

Will traders in a risky asset market learn Muthian expectations when they initially lack the necessary information? If some traders learn from their observations, will market dynamics depend only on “fundamentals,” as implied by the Efficient Market Hypothesis? This paper shows that at any finite point in time the answer to these questions is “no”. The context is a constant absolute risk aversion model with two kinds of traders and asymmetric information. The market converges asymptotically to a rational expectations equilibrium where prices depend only on fundamentals and the market is efficient.     

Learning under supervision: an experimental study

In many market environments, for example in investment banking, salesforce management and others, workers and supervisors work closely as a team. Workers are paid a fixed salary and supervisors determine any raises, which are typically dependent on how well the organization does. In such scenarios, a supervisor who constantly offers suggestions can create a problem—typically a worker cannot ignore his supervisor’s advice, yet if such advice is wrong and is followed, it will only decrease firm profits. We conduct a laboratory experiment to address a question critical for such settings—does the relationship between advisor and worker interfere with the learning abilities of the worker? The answer is a resounding no. In fact, subjects who have a supervisor advising them and whose advice is costly to ignore actually learn better than those with an advisor whose advice can be ignored. An even more striking result is that advisees as well as advisors in both these conditions learn better than subjects with no advisors. Our result can be attributed to the presence of advice and has direct relevance to learning in many environments.     

Using Writing as a Tool for Learning Economics

Suggestions are offered on how to use writing as a way of involving students as active participants in the learning process, with sample assignments included.     

人力资本、创意阶层及其区域空间分布研究

文章首先比较了人力资本与创意阶层的区别和联系,随后分析了我国创意阶层的区域空间分布特征。通过分析得出,我国创意阶层的空间分布差异显著,并且呈现与经济发展水平非一致的特性。为了深入分析创意阶层区域空间分布的原因,文章使用岭回归分析方法,并结合2003—2007年中国30个省际面板数据进行实证研究。研究结果表明,城市文化机会、公共服务能力、高等教育能力、生态设施水平、创意产出水平和高科技指标对我国创意阶层的分布具有显著的影响。最后,文章据此提出相关政策建议。     

Imitation and Belief Learning in an Oligopoly Experiment

We examine the force of three types of behavioural dynamics in quantity–setting triopoly experiments: (1) mimicking the successful firm, (2) rules based on following the exemplary firm, and (3) rules based on belief learning. Theoretically, these three types of rules lead to the competitive, the collusive, and the Cournot–Nash outcome, respectively. In the experiment we employ three information treatments, each of which is hypothesized to be conducive to the force of one of the three dynamic rules. To a large extent, the results are consistent with the hypothesized relationships between treatments, behavioural rules, and outcomes.     

Learning to trust strangers: an evolutionary perspective

What if living in a relatively trustworthy society was sufficient to blindly trust strangers? In this paper we interpret generalized trust as a learning process and analyse the trust game paradox in light of the replicator dynamics. Given that trust inevitably implies doubts about others, we assume incomplete information and study the dynamics of trust in buyer-supplier purchase transactions. Considering a world made of ??good?? and ??bad?? suppliers, we show that the trust game admits a unique evolutionarily stable strategy: buyers may trust strangers if it is not too risky to do so. Examining the situation where some players may play either as trustor or as trustee we show that this result is robust.     

Learning in Cournot Oligopoly – an Experiment

This experiment was designed to test various learning theories in the context of a Cournot oligopoly. We derive theoretical predictions for the learning theories and test these predictions by varying the information given to subjects. The results show that some subjects imitate successful behaviour if they have the necessary information, and if they imitate, markets are more competitive. Other subjects follow a best reply process. On the aggregate level we find that more information about demand and cost conditions yields less competitive behaviour, while more information about the quantities and profits of other firms yields more competitive behaviour.     

学习、制度与经济绩效

本文分析了认知、信念体系与制度之间的互动关系，并探寻了它们影响经济绩效的方式。我们认为要更深刻地理解制度的产生、其运行的特征及其对经济政治结果的影响，应该从分析认知过程开始。我们分析了个人和集体学习的性质，认为问题并不在于行为体是完全理性还是有限理性的，而在于人们是如何进行推理和做出选择的，无论这种选择和推理是个体做出的还是集体做出的。接下来我们将学习过程同制度分析联系起来，提出了一种我们可以称之为“认知制度主义”的观点。同时我们认为要充分理解路径依赖现象，应该从对认知层面的分析开始，以制度层面的分析为主干，以经济层面的分析为终结。     

Same process,different outcomes: group performance in an acquiring a company experiment

It is still an open question when groups perform better than individuals in intellective tasks. We report that in an Acquiring a Company game, what prevailed when there was disagreement among group members was the median proposal and not the best proposal. This aggregation rule explains why groups underperformed with respect to a “truth wins” benchmark and why they performed better than individuals deciding in isolation in a simple version of the task but worse in the more difficult version. Implications are drawn on when to employ groups rather than individuals in decision making.     

Consumers as Co-developers: Learning and Innovation Outside the Firm

This study describes a process in which a firm relies on an external consumer community for innovation. While it has been recognized that users may sometimes innovate, little is known about what commercial firms can do to motivate and capture such innovations and their related benefits. We contribute to strategy literature by suggesting that learning and innovation efforts from which a firm may benefit need not necessarily be located within the organization, but may well reside in the consumer environment. We also contribute to the existing theory on "user- driven innovation' by showing what firms purposively can do to generate consumer innovation efforts. An explorative case study shows that consumer innovation can be structured, motivated, and partly organized by a commercial firm that organizes the infrastructure for consumers' interactive learning in a public online domain.