The exact law of large numbers for independent random matching

This paper provides a mathematical foundation for independent random matching of a large population, as widely used in the economics literature. We consider both static and dynamic systems with random mutation, partial matching arising from search, and type changes induced by matching. Under independence assumptions at each randomization step, we show that there is an almost-sure constant cross-sectional distribution of types in a large population, and moreover that the multi-period cross-sectional distribution of types is deterministic and evolves according to the transition matrices of the type process of a given agent. We also show the existence of a joint agent-probability space, and randomized mutation, partial matching and match-induced type-changing functions that satisfy appropriate independence conditions, where the agent space is an extension of the classical Lebesgue unit interval.     

The exact law of large numbers via Fubini extension and characterization of insurable risks

A Fubini extension is formally introduced as a probability space that extends the usual product probability space and retains the Fubini property. Simple measure-theoretic methods are applied to this framework to obtain various versions of the exact law of large numbers and their converses for a continuum of random variables or stochastic processes. A model for a large economy with individual risks is developed; and insurable risks are characterized by essential pairwise independence. The usual continuum product based on the Kolmogorov construction together with the Lebesgue measure as well as the usual finitely additive measure-theoretic framework is shown further to be not suitable for modeling individual risks. Measurable processes with essentially pairwise independent random variables that have any given variety of distributions exist in a rich product probability space that can also be constructed by extending the usual continuum product.     

Evaluating the technical efficiency of large US law firms

We conduct a performance evaluation in terms of technical efficiency of large law firms based on a unique sample of 163 large law firms in the USA in 1994. To estimate technical efficiency for individual firms, we use the stochastic frontier production function with composed errors where output (measured in terms of revenue) is a function of various labour and human capital inputs. Based on the sample, the average level of technical efficiency in the production of legal service in large US law firms is estimated at 82.20%. More than 87% of the firms attained 75% or higher level of technical efficiency. The estimation results also indicate that the number of lawyers, the number of paralegals, and the number of associates per partner, have a positive and statistically significant effect on the production of legal service.     

Engel's law, Petty's law, and agglomeration

This paper presents a model of structural change and agglomeration. A decline in transportation costs, by enhancing consumers’ purchasing power, leads to Engel's law of the demand shift from agricultural to non-agricultural goods. At the same time, the decline in transportation costs, by enlarging the extent of the market for non-agricultural goods, induces Petty's law of the labor reallocation from agriculture to non-agricultural activities. These structural transformations weaken dispersion forces given by farmers tied to the land, whereas they strengthen agglomeration forces generated by footloose non-agricultural workers. Thus, a substantial decline in transportation costs gives rise to agglomeration of non-agricultural activities.     

The law of small numbers: investigating the benefits of restricted auctions for public procurement

A commonly accepted view in the academic literature is that dispensing with competition may only be beneficial when tendering complex contracts. However, restricted auctions are frequently used among EU member states to procure small contracts. In this article, we investigate this paradox. Using an original data set of 180 contracts used by a local public buyer of social housing between 2006 and 2009, we show that limiting competition may enable economies to be made on transaction costs while the most efficient bidders still come forward, and that abuses such as corruption or favouritism do not result. To our knowledge, this article is the first to shed light on the advantages of using restricted auctions when tendering small simple contracts.     

Rackets, regulation, and the rule of law

Governments that levy predatory regulation and provide few weaklegal institutions draw businesses into the unofficial economyand compel them to hire private protection organizations. Basedon a survey of shopkeepers in three cities in Russia, we findthat retail shops face very high levels of predatory regulationand have frequent contacts with private protection rackets.In addition, we show that higher levels of regulation are associatedwith weaker legal institutions and a higher probability of contactwith a private protection organization. We also find that shopkeepersview private protection organizations primarily as a substitutefor state-provided police protection and state-provided courts.These results emphasize the importance of public sector reformas a component of economic transition.     

The law of large districts: How district magnitude affects the quality of political representation

It is well established that individual parliamentary representatives are less likely to decide according to the preferences of their constituency when the number of representatives per district, i.e. district magnitude, increases. However, we propose that for majority decisions of district representatives the opposite holds due to the existence of a law of large numbers in political representation. The academic literature has so far focused on the behavior of individual politicians but disregarded systematic aggregation effects. We provide a theoretical discussion and offer empirical evidence for the validity of a law of large numbers in political representation: As district magnitude increases, the quality of political representation by the majority of representatives increases, too.     

The role of frames,numbers and risk in the frequency of cooperation

We report on a simple experiment that addresses three factors in the frequency of cooperation: (1) framing, (2) the number of players and (3) the perceived risk of cooperating. We work with a (two-player) Prisoner’s Dilemma and with a three-player, two-strategy Public Good Game. We also consider a payoff schedule isomorphic with the latter but in a nonsocial setup. These themes have been separately studied by a large number of experimental papers, using diverse methodologies. Our experiment targets them in a common, clear-cut framework that minimizes confusion. We find three strong effects (a) framing; (b) the number of players (there is less cooperation in the three-person games than in the two-person ones); (c) the neutralization of risk (about 50% of participants cooperate when risk is neutralized). Both (a) and (c) go in the expected direction, but, in all three cases, the strength of the effect is surprising. Cooperators appear to be more motivated by efficiency or by Kantian reasoning than by altruism.     

拆迁补偿的情、理、法

从中国拆迁补偿的现状出发,探讨在推进拆迁补偿的过程中,构建合情、合理、合法三者兼顾的制度环境,以及贯彻这一行为的必要性。     

论商法的私法本质

商法在本质上是私法,与民法一起构成完整的私法体承。笔者从公法、私法的区别入手,阐明商法的私法本质,并从商法的公法化趋势阐明,现代商法虽然具有了某些公法性质,但这并不改变商法的私法本质。     

MBO融资的法律、制度障碍及风险分析

MBO运作为我国企业重组提供了新的思路,中国证监会颁布的《上市公司收购管理办法》也第一次确立了上市公司MBO的合法地位,但在2003年3月财政部叫停管理层收购工作。MBO运作中由于制度障碍和法律监管上的漏洞所造成的风险再次引起人们的关注。     

MBO融资的法律、制度障碍及风险分析

MBO运作为我国企业重组提供了新的思路,中国证监会颁布的《上市公司收购管理办法》也第一次确立了上市公司MBO的合法地位,但在2003年3月财政部叫停管理层收购工作。MBO运作中由于制度障碍和法律监管上的漏洞所造成的风险再次引起人们的关注。     

Public spending, voracity, and Wagner's law in developing countries

An examination of the short- and long-term relation between government spending and output in 51 developing countries reveals evidence consistent with cyclical ratcheting and voracity reflected in a tendency for government spending to increase over time. The main components of government spending are procyclical in some 40% of countries. Output and government spending are cointegrated for at least one of the spending aggregates in 70% of countries, implying a long-term relationship between government spending and output consistent with Wagner's law. In contrast, prior studies have found only weak support for Wagner's law for developing countries, although somewhat stronger support for industrial countries.     

Constitutional craftsmanship and the rule of law

Is “rule of law” anything more than a fictional allusion? After all, “law” is an abstract noun, and abstract nouns can’t rule. Only people can rule. The conceptual framework of constitutional political economy invokes a central distinction between choosing rules and playing within those rules. Claims on behalf of a rule of law require a sharp distinction between the enforcement of agreed-upon rules and arbitrary changes in those rules. This paper explores whether there are constitutional arrangements under which it could reasonably be claimed that governance reflects a deep level operation of a rule of law despite the surface level recognition that it is men who rule. With the exercise of rulership being a social process and not a matter of individual action, the network pattern through which rules are enforced takes on particular significance. In particular, polycentric architectures are generally more consistent with rule of law than monocentric architectures.     

A note on the fundamental theorem of exact aggregation

If individual i's demands for a commodity are a function of prices, p, income M_i and a vector of attributes A_i, then aggregate demand is

This paper derives the necessary and sufficient conditions of f_i, F and a system of functions g_k(M₁,…,M_N,A₁,…,A_N) symmetric in the M's and A's such that F can be written in the form F(p, g, (M₁,…,M_n,A₁,…,A_N),…, g_n(M₁,…,M_n,A₁,… ,A_n)) for all values of its arguments.