Component efficient solutions in line-graph games with applications

Recently, applications of cooperative game theory to economic allocation problems have gained popularity. We investigate a class of cooperative games that generalizes some economic applications with a similar structure. These are the so-called line-graph games being cooperative TU-games in which the players are linearly ordered. Examples of situations that can be modeled like this are sequencing situations and water distribution problems. We define four properties with respect to deleting edges that each selects a unique component efficient solution on the class of line-graph games. We interpret these solutions and properties in terms of dividend distributions, and apply them to economic situations. This research has been done while the third author was visiting Tinbergen Institute at the Free University, Amsterdam. The research is part of the Research Programme “Strategic and Cooperative Decision Making” at the Department of Econometrics. Financial support from the Netherlands Organization for Scientific Research (NWO) in the framework of the Russian-Dutch programme for scientific cooperation, is gratefully acknowledged. The third author also appreciates partial financial support from the Russian Leading Scientific Schools Fund (grant 80.2003.6) and Russian Humanitarian Scientific Fund (grant 02-02-00189a). We thank three anonymous referees for their valuable comments.     

Foreign direct investment, competition and industrial development in the host country

This paper analyses the impact of foreign direct investment (FDI) on the development of local firms. We focus on two likely effects of FDI: A competition effect which deters entry of domestic firms and positive market externalities which foster the development of local industry. Using a simple theoretical model to illustrate how these forces work we show that the number of domestic firms follows a u-shaped curve, where the competition effect first dominates but is gradually outweighed by positive externalities. Evidence for Ireland tends to support this result. Specifically, applying semi-parametric regression techniques on plant level panel data for the manufacturing sector we find that while the competition effect may have initially deterred local firms’ entry, this initial effect has been outpaced by positive externalities making the overall impact of FDI largely positive for the domestic industry.     

Temporary Liaisons: The Commitment of ‘Temps’ Towards Their Agencies*

abstract The majority of research on organizational commitment has focused on commitment in traditional, ongoing and open‐ended relationships. The commitment of employees in non‐standard work arrangements such as temporary employment has been subject to much less theoretical and empirical investigation. In this study, we examine the affective and continuance commitment of temporary workers towards their agency and its determinants. We distinguish two groups of determinants: the process by which the temporary worker chose a particular agency and the support provided by the agency. The findings can be summarized as follows: (1) affective commitment among temps is generally higher than their continuance commitment; (2) having more alternative agencies to choose from (i.e., volition) does not enhance the commitment of temporary workers; (3) a public choice for a particular agency raises both types of commitment, whereas the perceived agency dependence created by the choice increases continuance, but not affective commitment; and (4) both types of commitment are positively influenced by agency supportiveness, reflected in the way the agency deals with problems, the career support it provides, and the way it keeps in close contact with its temporary workers. Finally, the results suggest that factors raising affective commitment may ‘spill over’ to increase continuance commitment.     

Popularising Delphi method

The article reports on a methodical part of a combined substantive and methodical investigation experimenting with a new type of Policy Delphi method. The common problem defined for both parts was the question whether Delphi method could be transformed in an instrument of controlling technological change by employees. The question was answered positively by the participating (bank) employees, all union members engaged with an automatisation project, themselves. Self rating scales, an evaluation questionnaire and numerous data collected about the research process showed that the most relevant social categories of participants managed to serve as “experts” according to the high levels of cognition, effort, involvement and self-confidence required in a Delphi research project. Participants with low job level, women and non-trained union members joined in very well. The special steps required to broaden a successful participation of all categories, particular methods and techniques of information transmitting questioning and reporting, did not violate the quality of scientifically valid information gathering. So the result was a practical and scientific instrument.     

Municipal welfare functions

In this paper the concept of a municipal welfare function is defined. It reflects the evaluation by local authorities of several levels of local expenditures. On the basis of an extensive survey among all Dutch municipal authorities these functions are estimated for about 550 Dutch municipalities with respect to total expenditures and differentiated with respect to several portfolios, like public works, education, etc. The variation of the estimated municipal welfare parameters is explained by objectively measurable municipal characteristics like the number of the inhabitants, age distribution of inhabitants and houses, number of unemployed, regional situation.     

Evolution of harvesting strategies: replicator and resource dynamics

Abstract. Economic theories of managing renewable resources, such as fisheries and forestry, traditionally assume that individual harvesters are perfectly rational and thus able to compute the harvesting strategy that maximizes their discounted profits. The current paper presents an alternative approach based on bounded rationality and evolutionary mechanisms. It is assumed that individual harvesters face a choice between two harvesting strategies. The evolution of the distribution of strategies in the population is modeled through a replicator dynamics equation. The latter captures the idea that strategies yielding above average profits are demanded more than strategies yielding below average profits, so that the first type ends up accounting for a larger part in the population. From a mathematical perspective, the combination of resource and evolutionary processes leads to complex dynamics. The paper presents the existence and stability conditions for each steady-state of the system and analyzes dynamic paths to the equilibrium. In addition, effects of changes in prices are analyzed. A main result of the paper is that under certain conditions both strategies can survive in the long-run. Correspondence to: J. Noailly     

Retrospective questions: data quality,task difficulty,and the use of a checklist

Data from a national panel study with waves in 1987 and 1991 (N=1257), present evidence of the low accuracy of responses to retrospective questions, concerning both attitudes and behaviour. Applying a split ballot design, it is investigated whether using a checklist improves the response accuracy for a retrospective question about one single event: how respondents (N=363) did obtain the job they had four years ago. Furthermore interaction effects of ‘task difficulty’ are examined. The response accuracy indeed increases by using a checklist; however, this increase is not statistically significant. The expected increase of the checklist effect with higher ‘task difficulty’ appears for longer recall intervals, but not for more frequent changes of jobs. It turned out that for male respondents all the predicted effects are indeed clearly present. But for female respondents the checklist appeared to have no effect, irrespective of the task difficulty. A tentative explanation for this unexpected gender effect is suggested by pointing at indications that the male and female respondents differed in the way they obtained their job.     

Recovering Hicksian Consumer Surplus within a Collective Model: Hausman's Method for the Household

The purpose of this paper is to describe the implications of the collective model of household behavior for the methods used to estimate the economic value of non-marketed environmental resources. After demonstrating how the separability restrictions inherent in the collective model allow individual preference and household income allocation choices to be distinguished, the paper demonstrates how the framework can be used to recover Hicksian consumer surplus. An algebraic example is used to illustrate how the framework can be used in valuing environmental resources.