Capital taxation in a dynamic general equilibrium setting

The familiar two-factor, two-commodity incidence model is extended to a dynamic setting in which the supply of capital is variable and the government can use money or bonds to balance its budget in addition to neutral lump sum taxation. The dynamic incidence effects of a sectoral tax on capital are qualitatively similar to the static incidence effects when the government balances its budget with neutral taxes, but are qualitatively different when the government uses money or bonds. In this case, while capital bears the burden of the tax in the short run, it is able to shift it in the long run.     

Exploring the psychological foundations of ethical positions in marketing

While demographic variables may ease the exploration of marketing ethics, psychological variables may provide more insight into individual differences in making ethical judgments. This article uses path analysis to explore relationships among cognitive style as measured by the Myers-Briggs Type Indicator, Forsyth's ethical ideologies, and perceptions of moral judgments about ethical behaviors in marketing. © 1995 John Wiley & Sons, Inc.     

Entrepreneurs, Professionals, and Growth

We examine the implications for growth and development of the existence of two types of human capital: entrepreneurial and professional. Entrepreneurs accumulate human capital through a work-experience intensive process, whereas professionals human capital accumulation is education-intensive. Moreover, the return to entrepreneurship is uncertain. We show how skill-biased technological progress leads to changes in the composition of aggregate human capital; as technology improves, individuals devote less time to the accumulation of human capital through work experience and more to the accumulation of human capital through professional training. Thus, our model explains why entrepreneurs play a relatively more important role in intermediate-income countries and professionals are relatively more abundant in richer economies. It also shows that those countries that initially have too little of either entrepreneurial or professional human capital may end up in a development trap.     

Moving towards an Improved Microsimulation Model of the Australian Pharmaceutical Benefits Scheme

Finding ways of curbing government expenditure on the Pharmaceutical Benefits Scheme (PBS) while maintaining social equity and access to ‘essential’ medicines is at the centre of ongoing public debate. This article describes a microsimulation model of the PBS that simulates current and future use and costs of PBS medicines under existing and different PBS policy settings, and estimates the distributional effects of policy changes. The article outlines future developments that will extend the current model to include health outcomes. Adding health outcomes will enable the debate on PBS sustainability to be advanced beyond the prevailing cost‐containment mentality to consider not only the costs of pharmaceutical use but also the benefits that result from the use of these medicines.     

Exclusive Versus Non-exclusive Dealing in Auctions with Resale

We consider a seller who can either sell exclusively through resellers, or allow potential consumers to purchase directly from him. The consumers’ willingness to pay is private information. All transactions are in the form of second-price sealed bid auctions. We show that, if the resellers can gain access to a substantially bigger portion of the market than the seller himself, the seller obtains a higher revenue by dealing exclusively through them, i.e., by committing to not sell to any consumer. The result is due to a “winner’s curse” effect: the resellers win only if the consumers that they compete against submit lower bids, i.e., if part of their customer base has low valuations. This depresses the resellers’ willingness to pay relative to what they would be willing to pay under an exclusive resale contract. Our results do not depend on the presence of transaction costs: exclusive dealing yields strictly higher revenue even when the resellers can market the item at zero cost. We would like to thank Richard Engelbrecht-Wiggans, Michael Rothkopf and seminar participants at Iowa State University, the Midwest Mathematical Economics meetings, the Milken Institute, Rutgers University, SUNY at Stony Brook Summer Workshop on Game Theory, for helpful comments and suggestions.     

Defining quality of nursing work life

As the largest single employee component of hospitals, nurses are critical to the functioning of the organization, and improving employee productivity continues to be a common theme in the health care literature. However, any increased productivity will be transitory if achieved at the expense of the quality of nurses' work life (QNWL), since improvement in the QNWL is prerequisite to improved productivity. The conceptual components of the concept of QNWL that differentiate QNWL from the concept job satisfaction are explored.     

A theory of exploitative child labor

We develop a model in which some child labor is exploitative.Since exploited child laborers are paid less than the valueof the marginal product of labor, there is scope for policyintervention to be Pareto improving. We illustrate this by showingthat a system of inspection and fines targeted on exploitativechild labor increases the aggregate output produced by children.We also establish that such intervention secures the releaseof children from exploitative working conditions, to their benefit.The distributional implications of the intervention among employersand among children who had not been exploited depends on whethercapital is mobile internationally, and can depend on whetherthe elimination of exploitative child labor is partial or complete.