The Blocking Lemma for a many-to-one matching model

The Blocking Lemma identifies a particular blocking pair for each non-stable and individually rational matching that is preferred by some agents of one side of the market to their optimal stable matching. Its interest lies in the fact that it has been an instrumental result to prove key results on matching. For instance, the fact that in the college admissions problem the workers-optimal stable mechanism is group strategy-proof for the workers and the strong stability theorem in the marriage model follow directly from the Blocking Lemma. However, it is known that the Blocking Lemma and its consequences do not hold in the general many-to-one matching model in which firms have substitutable preference relations. We show that the Blocking Lemma holds for the many-to-one matching model in which firms’ preference relations are, in addition to substitutable, quota q-separable. We also show that the Blocking Lemma holds on a subset of substitutable preference profiles if and only if the workers-optimal stable mechanism is group strategy-proof for the workers on this subset of profiles.     

On measuring skewness and kurtosis

The paper considers some properties of measures of asymmetry and peakedness of one dimensional distributions. It points to some misconceptions of the first and the second Pearson coefficients, the measures of asymetry and shape, that frequently occur in introductory textbooks. Also it presents different ways for obtaining the estimated values for the coefficients of skewness and kurtosis and statistical tests which include them.     

Intergenerational Altruism and the Environment

We construct an overlapping generations model of pollution externality in which individuals are altruistically linked to their offspring as in Barro (1974). It is shown that steady-state consumption may be a decreasing function of the intergenerational degree of altruism. Despite individuals' altruism, the competitive equilibrium is not optimal. We thus study the social optimum and show that it can be decentralized.
JEL classification: D 62; D 64; D 91     

Income measurement and comparisons

The purpose of this paper is to provide a way for better measuring a country's global income when official statistics fail to account for the existence of a thriving underground, or black economy. Another purpose of this research is to discuss adequate ways to perform international comparisons of income, and income per head, and to correct for depreciation. Besides the general interest of this problem, there are two more specific reasons behind this work. First, the allocation of development funds by international agencies (for example, the structural funds in the European monetary system) are conditioned on this measure. Second, the measurement of unemployment may be totally distorted by failing to account for the hidden economy. This paper has benefitted from comments by the participants at the Forty-Seventh International Atlantic Economic Conference, Vienna, Austria, March 16–23, 1999, and especially Michael Pickhardt. Financial support is acknowledged from the Dirección General de Ciencia y Tecnología, under project SEC 98-1112, and the Junta Castilla y León, under project SA 29/99. Comments by the participants at the 1997 Applied Econometrics Association conference on public deficits are also acknowledged. The authors are solely responsible for any remaining errors.     

Mail survey abroad with an alternative web survey

The large decline in cooperation in surveys experienced in the first decade of the twenty first century has placed representative surveys in a veritable quagmire, although numerous researchers have shown that the decline in the total nonresponse has been much higher in administered surveys (face-to-face and telephone) than in self-administered (mail and web surveys). The move from the “traditional” mail survey to the internet survey has brought important changes, but, at the same time, new challenges have arisen related to the lower coverage and the reduced visibility, the need for certain skills to fill out a questionnaire, changes in response rates, etc. This is a self-administered survey that informs the addressees by mail that they have been selected to participate in a research survey to which they can respond either by using the paper questionnaire (in the letter there is a prepaid envelope), by means of a web questionnaire (accessing a link and using a password), or by telephone (the respondent provided a contact time telephone number via a prepaid envelope or by calling an answering machine). The respondents themselves, therefore, choose the mode of response. An analysis of the responses achieved by each modality shows that the majority of the questionnaires were received by ordinary mail (83.6 %), 359 by internet (14.4 %), and 51 were answered by telephone (2.0 %).     

Forward induction and entry deterrence: an experiment

The Dixit (Econ J 90:95–106, 1980) hypothesis that incumbents use investment in capacity to deter potential entrants has found little empirical support. Bagwell and Ramey (J Econ 27:660–680, 1996) propose a model where, in the unique game-theoretic prediction based on forward induction or iterated elimination of weakly-dominated strategies, the incumbent does not have the strategic advantage. We conduct an experiment with games inspired by these models. In the Dixit-style game, the incumbent monopolizes the market most of the time even without the investment in capacity. In our Bagwell-and-Ramey-style game, the incumbent also tends to keep the market, in contrast to the predictions of an entrant advantage. Nevertheless, we find strong evidence that forward induction affects the behavior of most participants. The results of our games suggest that players perceive that the first mover has an advantage without having to pre-commit capacity. In our Bagwell–Ramey game, evolution and learning do not drive out this perception. We back these claims with data analysis and a theoretical framework for dynamics. Financial support by the Spanish Ministerio de Ciencia and Tecnología (SEC2002-01352 and SEJ2006-11665-C02-01) and the Barcelona Economic Program of CREA and excellent research assistance by David Rodríguez are gratefully acknowledged. The authors thank Aurora García Gallego and Armin Schmutzler for helpful comments.     

An Integrated Model of the Adoption and Extent of E-Commerce in Firms

This work aims to explain firms’ decisions to adopt Internet-based e-commerce, and the extent to which the adopters subsequently implement e-commerce to commercialize their products and services. We examine various types of factors previously considered by the literature (competitive environment, organizational characteristics, strategic orientation, innovative capacity, managers’ characteristics, IT equipment possessed and the use made of it). The analytical model developed here on the basis of a sample of 2,038 firms suggests that the factors influencing the adoption decision are different from those that eventually influence the results of firms’ commercial operations on the Internet. Likewise, we discuss the contribution of each type of determinant and the implications.      

Public pensions and growth

This paper investigates the relationship between the size of an unfunded public pension system and economic growth in an overlapping generation economy, in which altruistic parents finance the education of their children and leave bequests. Unlike the existing literature, we model intergenerational altruism by assuming that children's income during adulthood is an argument of parental utility. Unfunded public pensions can promote growth when families face liquidity constraints preventing them from investing optimally in the education of their children. We consider two alternative ways of financing a public pension system, either by levying social contributions in a lump-sum manner or in proportion to labour income. We find that there is no case for unfunded public pensions in economies where bequests are operative. By contrast, there exists a growth-maximising size of the public pension system in economies where bequests are not operative and individuals are sufficiently patient.     

Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games

In experiments with two-person sequential games we analyze whether responses to favorable and unfavorable actions depend on the elicitation procedure. In our hot treatment the second player responds to the first player's observed action while in our cold treatment we follow the strategy method and have the second player decide on a contingent action for each and every possible first player move, without first observing this move. Our analysis centers on the degree to which subjects deviate from the maximization of their pecuniary rewards, as a response to others' actions. Our results show no difference in behavior between the two treatments. We also find evidence of the stability of subjects' preferences with respect to their behavior over time and to the consistency of their choices as first and second mover.