Competition Among Universities and the Emergence of the Élite Institution

We consider an environment where two education institutions compete by selecting the proportion of their funding devoted to teaching and research and the criteria for admission for their students, and where students choose whether and where to attend university. We study the relationship between the cost incurred by students for attending a university located away from their home town and the equilibrium configuration that emerges in the game played by the universities. Symmetric equilibria, where universities choose the same admission standard, only exist when the mobility cost is high; when the mobility cost is very low, there is no pure strategy equilibrium. For intermediate values of the mobility cost, only asymmetric equilibria may exist; the final section of the paper provides an example where asymmetric equilibria do indeed exist for a plausible and robust set of parameters.     

A note on measuring political participation in comparative research

This article presents an application of Prezeworski and Teune's so-called “identity-equivalence method” to a large set of indicators of political participation. By relaxing commonly held assumptions about necessary distinctions among types of participation, it is found that the distinction between “conventional” and “unconventional” modes of participation is unnecessary, while the distinction between “government” and “nongovernment” has some merit. The findings also lend further support to the claims of Prezeworski and Teune that the identity-equivalence method is preferable to the identical indicator method.     

Trading and Pricing in Upstairs and Downstairs Stock Markets

We provide empirical evidence on the economic benefits of negotiatingtrades in the upstairs trading room of brokerage firms relativeto the downstairs market. Using Helsinki Stock Exchange data,we find that upstairs trades tend to have lower informationcontent and lower price impacts than downstairs trades. Thisis consistent with the hypotheses that the upstairs market isbetter at pricing uninformed liquidity trades and that upstairsbrokers can give better prices to their customers if they knowthe unexpressed demands of other customers. We find that theseeconomic benefits depend on price discovery occurring in thedownstairs market.     

Folgerungen einer Rationierung in der gesetzlichen Krankenversicherung für die private Krankenversicherung und ökonomische Grenzen für die private Krankenversicherung

The compulsory health insurance fund in Germany is under huge cost pressure. The reasons are the demographic development and the proceeding medical-technical progress, which keep raising the expenses instead of reducing them. Seeing that financial means are getting scarce, there are multifaceted appendages of rationing the medical supply. New market potential arises, however, for the economy of private health insurance for which one can develop and offer answers. The contribution scetches which economic boarders the private health insurance needs to adhere to.     

Technological and financial approaches to risk management in agriculture: an integrated approach*

In the present paper, risk‐management problems where farmers manage risk both through production decisions and through the use of market‐based and informal risk‐management mechanisms are considered. It is shown that many of these problems share a common structure, and that a unified and informative treatment of a broad spectrum of risk‐management tools is possible within a cost‐minimisation framework, under minimal conditions on their objective functions. Fundamental results are derived that apply regardless of the producer's preference towards risks, using only the no‐arbitrage condition that agricultural producers never forego any opportunity to lower costs without lowering returns.     

Regime Shifts in Asian Equity and Real Estate Markets

This paper applies a new statistical technology for identifying regime shifts to analyze recent data on real estate and equity markets in eight developing Far Eastern countries in the 1992–1998 time period. We find that regime shifts in volatility occur in the summer of 1997; however, most of the regime shifts in returns occur in the spring of 1998. While the clustering of regime breaks does not seem to follow any obvious pattern, the country's exposure to trade and firm leverage are important. An analysis of Granger causality suggests that, in most cases, equity returns cause real estate returns but the converse is not true. We also find two-way causality in volatility, suggesting that a common factor drives volatility in these markets. Finally, we provide evidence that the regime shifts generally imply higher relative risk for real estate securities after the estimated breaks.     

Länger leben — Siechtum und Pflege ohne Grenzen?

At present, our society and its social security system are not prepared to cope with the challenges resulting from the continuous increase of life expectancy. The traditional concept of disease has to be modified for serving the special needs of the elderly. The optimistic compression of disease theory is an intriguing model, but lacks prove by available data. The anti-aging boom diverts the focus from the social and financial burden that will be unevitably caused by long-term care in the future. If there will not be an — up to now unforeseeable — breakthrough in research, particularly dementia will have an enormous impact on social cost which is often underestimated.     

Efficient Liability Rules: Complete Characterization

Received May, 18, 2000; revised version received March, 19, 2001     

Considering Aquacultural Externality in Coastal Land Allocation Decisions in India

Commercial aquaculture in India has come under attack for having caused negative agricultural and environmental impacts. This paper formulates an interactive model of non-renewable and renewable resources to characterize land allocations between aquaculture and agriculture in ecologically and economically sustainable fashion. Through an empirical application, various economic and policy circumstances that affect the optimal land allocation mix are evaluated. The aquaculture industry must address two economic effects: off-site negative effects on renewable food and other coastal resources, and on-site self-pollution of shrimp ponds. Current regulatory and land-use policies are inadequate to address these effects.