A weak bargaining set for contract choice problems

In this paper, we consider the problem of choosing a set of multi-party contracts, where each coalition of agents has a non-empty finite set of feasible contracts to choose from. We call such problems, contract choice problems. The main result in this paper states that every contract choice problem has a non-empty weak bargaining set. The need for such a solution concept which is considerably weaker than the core arises, since it is well-known that even for very simple contract choice problems, the core may be empty. We also show by means of an example that an analog of the bargaining set due to Mas-Colell [Mas-Colell, A., 1989. An equivalence theorem for a bargaining set. Journal of Mathematical Economics 18, 129–139], as well as the natural analog of the bargaining set due to Aumann and Mashler [Aumann, R., Maschler, M., 1964. The bargaining set for cooperative games. In: Dresher, M., Shapley, L., Tucker, A. (Eds.), Advances in Game Theory. Princeton University Press, Princeton, NJ] may be empty for contract choice problems.     

Gender Bias in Education: the Role of Inter-household Externality, Dowry and other Social Institutions

We analyze gender bias in school enrollment by developing a two‐period model where women become part of extended families of their in‐laws. Each family decides how many sons and daughters are sent to school and thus become skilled. Gender bias occurs due to failure of the families to internalize inter‐household externalities. “Groom‐specific” dowry worsens the situation. Under “bride‐specific” dowry, bias exists if and only if the skill premium in the labor market is bigger than that in the marriage market. A specific discriminatory “food‐for‐education” policy is shown to reduce bias, but increase total enrollment.     

Smoking Behavior of Older Adults: A Panel Data Analysis Using HRS

Using longitudinal data from Health and Retirement Surveys over 1992–2010, this paper analyzes decisions by older American to continue smoking and the number of cigarettes to consume using two-part hurdle models with correlated effects. We build on the existing literature by incorporating a myriad of factors including cigarette prices, health shocks and smoke-free laws in one econometric framework. Our estimates indicate that higher cigarette prices play an important role in both reducing participation and the intensity of consumption even for this adult population. In addition, health shocks, as measured by newly diagnosed diseases, raise the probability of quitting, highlighting the ‘curative’ aspects of cessation. However, we find very little effect of health on smoking intensity if an older adult does not quit after a health shock. Per capita cigarette consumption in the US declined by over 64% during the period. We show that increased cigarette prices and health shocks together contribute almost equally to explain nearly 86% of the decline, with little that can be attributed to smoking bans and anti-smoking sentiment.

     

Reforms of Environmental Policies in the Presence of Cross‐border Pollution and Public–Private Clean‐up*

We construct a two‐country model where pollution from production is transmitted across borders. Pollution abatement is undertaken by both private producers and the public sector. We characterize Nash optimal levels of the policy instruments in the two countries: emission taxes and funds allocated for public abatement activities. We examine the implications of a number of multilateral policy reforms. One of our findings is that the magnitude of the beneficial effect of a reform depends on the scope of the reform; if it is restricted to a subset of policy instruments, then the efficacy of environmental policy reform can be greatly undermined.     

Opportunity fairness and equal income Lindahl equilibrium

In this paper we propose a concept or opportunity fairness for economies in which there are public goods and establish its equivalence with the concept of an equal income Lindahl equilibrium.     

Will the new competitive landscape cause your firm's decline? It depends on your mindset

A view of the new competitive landscape shows globalization, rapid technological change, and hypercompetition as conduits leading to either organizational decline or organizational growth. In this article we explain how managers can use four mindsets to convert potential threats posed by these environmental challenges into pathways of prosperity, instead of pathways of decline. A global mindset, or the ability to view the world using a broad perspective, converts globalization threats into growth opportunities by thinking beyond geographic boundaries, valuing integration across borders, and appreciating regional and cultural diversity. An innovation mindset, meaning a mental framework that fosters development and implementation of new ideas, transforms rapid technological change threats into opportunities by valuing constant generation of new ideas and business models, realizing sources of new ideas, and stressing next practices rather than best practices. A virtual mindset, or the ability of managers to hand over their firms’ activities to external providers, turns hypercompetition into prospects for growth by facilitating flexibility and responsiveness. Finally, a collaboration mindset, meaning a willingness to engage in business partnerships, converts all three challenges into opportunities by allowing firms to form successful partnerships that can lead to synergy by combining business complementarities.     

The impact of management capability on the resource-performance linkage: Examining Indian outsourcing providers

The increase in offshore outsourcing of information technology-enabled business processes has renewed scholarly attention to better understand the dynamics of service provider firms. In this study, we examine how offshore outsourcing service providers’ internal and relational resources and capabilities jointly predict their economic performance. Analysis of data collected from a sample of 105 Indian service providers suggest that rent generation from firm-specific, idiosyncratic resources is positively moderated by the level of management capability possessed by such firms. Theoretical and managerial implications of the findings are discussed and avenues of future research are offered.     

Matching public support for private product-innovating R&D: a theoretical analysis

This paper develops a theoretical model of product innovation where research and development (R&D) effort by a monopolist firm is endogenous and its outcome uncertain. The government attempts to aid such efforts with a matching grant. We consider different scenarios depending on whether two parties act simultaneously, act sequentially, or take part in a dynamic cooperative game with a trigger strategy. We also consider cases (i) when the products are exported, (ii) when the firm lobbies for R&D subsidy, and (iii) when the firm is foreign owned. We characterize situations when government intervention increases the chances of product innovation and when it does not.     

Environmental protection without loss of international competitiveness

We develop a two‐country Cournot oligopoly model with product differentiation across countries and production‐generated pollution. The abatement of pollution by the firms in response to emission taxes is endogenous, and the number of firms can be fixed or there may be free entry and exit of firms in both countries. We propose particular unilateral and multilateral piecemeal policy reforms of emission taxes and production subsidies such that domestic industries will not suffer any loss of international competitiveness (defined in terms of either market share or profits), emission levels will be lower, and welfare could be higher in both countries.