Coordination and discrimination in contracting with externalities: divide and conquer?

The paper studies bilateral contracting between N agents and one principal, whose trade with each agent generates externalities on other agents. It examines the effects of prohibiting the principal from (i) coordinating agents on her preferred equilibrium, and (ii) making different contracts available to different agents. These effects depend on whether an agent is more or less eager to trade when others trade more. The prohibitions reduce the aggregate trade in the former case, and have little or no effect in the latter case. The inefficiencies under different contracting regimes are linked to the sign of the relevant externalities, and are shown to be typically reduced by both prohibitions.     

Application of work center control rules in a job shop environment

Work center control rules, defined as a combination of job dispatch rules and short-term work center capacity adjustments, are analyzed using queueing theory. Promising rules are evaluated with a job shop simulation model. Simulations comparing work center control rules to the critical ratio rule for job dispatching indicate that work center control can increase performance to customer due date while simultaneously reducing average work in process inventory. The work center control rules are easily implemented by shops currently using input/output control and daily dispatch lists.     

ITU Plenipotentiary Conference and beyond : A case for serious foreign policy

The ITU Plenipotentiary Conference held in Nairobi in the Fall of 1982 was a significant international instrument for the conduct of telecommunication foreign policy. Growing demand for telecommunication services and products coupled with the economic and sociocultural impact of new technologies have resulted in greater global interest in the problems, issues and technical complexities of maintaining order in global telecommunication. A major theme of this article is that ITU deliberations and decisions are all part of the growing telecommunication foreign policy agenda and that the benefits of successful diplomancy are usually worth the costs of effective and coordinated domestic and international policy development.     

The projective independence axiom

Summary A new axiom for preference orderings over lotteries, called the projective independence axiom, is formulated. Given suitable continuity and monotonicity assumptions, the axiom implies that utility is either in the weighted utility class or is quadratic in probabilities. The betweenness axiom is used to distinguish between these two classes of functions.We gratefully acknowledge the financial support of the National Science Foundation and the Social Sciences and Humanities Research Council of Canada.     

Tit for tat: Foundations of preferences for reciprocity in strategic settings

This paper assumes that in addition to conventional preferences over outcomes, players in a strategic environment have preferences over strategies. It provides conditions under which a player's preferences over strategies can be represented as a weighted average of the utility from outcomes of the individual and his opponents. The weight one player places on an opponent's utility from outcomes depends on the players’ joint behavior. In this way, the framework is rich enough to describe the behavior of individuals who repay kindness with kindness and meanness with meanness. The paper identifies restrictions that the theory places on rational behavior.     

“Trilemmas”: Characterising the Japanese Concept of “amae” with a Three-Way Forced-Ranking Technique

A ‘trilemma’ procedure is introduced for collecting ‘dominance data’ (i.e. rankings of a set of items along a scale of relevance, preference, etc.). Trilemmas are three-way forced choices where the three items comprising each trilemma are selected on the basis of a multidimensional scaling solution (MDS) for the item set, ensuring that each choice is as stark and informative as possible. A questionnaire designed on this principle is easily understood and rapidly administered. The data are convenient to record and show less fluctuation among informants than existing techniques. We demonstrate the procedure with a set of 45 short generalisations about behaviour, designed for assessing child attachment. A three-dimensional ‘map’ of these items was obtained by applying MDS to multiple sets of similarity data. The same structure emerged from English-language and Japanese translations of the items. Thirty trilemmas based on this map were used to rank the items by degree of association with the Japanese concept of amae, characterising the concept in terms of its behavioural correlates.     

Reporting Bias and Monitoring in Clean Development Mechanism Projects*

The Clean Development Mechanism (CDM) is a flexible carbon market mechanism managed by the United Nations. The program grants tradable carbon emissions credits (Certified Emission Reductions) for carbon‐reducing projects in developing countries. A project can only be admitted to the program if it is not financially profitable, and thus would not take place without the emission credits granted through the CDM. In this paper, we examine how monitoring reduces incentives of companies to bias the reported expected financial viability of potential CDM projects to gain admission to the program. We find that reported rates of return, which are a key factor for admission to the program, tend to be downwardly biased and are negatively associated with the expected benefits stemming from forecasted greenhouse gas reductions. However, monitoring from various sources mitigates some of the distorted incentives and related reporting bias. Furthermore, the monitoring effect becomes much stronger after 2008, when the CDM Executive Board implemented a series of measures to strengthen the additionality testing that provides guidance for program applications.