Cross‐border Lobbying in Preferential Trading Agreements: Implications for External Tariffs and Welfare

This paper examines the effect of cross‐border lobbying on domestic lobbying and on external tariffs in both Customs Union (CU) and Free Trade Area (FTA). We do so by developing a two‐stage game which endogenizes the tariff formation function in a political economic model of the directly unproductive rent‐seeking activities type. We find that cross‐border lobbying un‐ambiguously increases both domestic lobbying and the equilibrium common external tariffs in a CU. The same result also holds for FTA provided tariffs for the member governments are strategic complements. We also develop a specific oligopolistic model of FTA and show that tariffs are indeed strategic complements in such a model.     

Brand Equity, Consumer Learning and Choice

The aim of this paper is to explore the links between brand equity, consumer learning and consumer choice processes in general and considering two recent trends in the market place: store brands and the Internet. We first review the advances that have occurred in brand equity research in marketing in the past decade, with particular emphasis on integrating the separate streams of research emanating from cognitive psychology and information economics. Brand equity has generally been defined as the incremental utility with which a brand endows a product, compared to its non-branded counterpart. We amplify this definition: we propose that brand equity be the incremental effect of the brand on all aspects of the consumer's evaluation and choice process. We propose an agenda of research based on this amplified definition.     

Illegal immigration: a supply side analysis

"This paper analyzes the supply-side determinants of illegal immigration using a three-sector general equilibrium model of the source country. Agricultural liberalization raises illegal immigration while liberalization of the high tech sector reduces it. In contrast, capital mobility in the source country renders trade policy ineffective for controlling illegal immigration. Paradoxically, increased enforcement (by the host country) may raise source country unskilled wages, although illegal immigration falls. Finally, under capital mobility, a rise in the source country restrictions on capital inflow raises the level of illegal immigration and reduces the effectiveness of border enforcement efforts by the host country."     

Demand Aggregation and the Weak Axiom of Stochastic Revealed Preference

We address the problem of aggregating demand across a group of consumers, who are identical in terms of wealth and face identical price vectors, but vary in their chosen consumption bundles. We show that, when a stochastic demand function is constructed to aggregate a number of deterministic demand functions, satisfaction of the weak axiom of stochastic revealed preference by this stochastic demand function is weaker than the restriction that every underlying deterministic demand function satisfy Samuelson's weak axiom of revealed preference. Journal of Economic Literature Classification Number: D11.     

A general revealed preference theorem for stochastic demand behavior

Summary. We present a general revealed preference theorem concerning stochastic choice behavior by consumers. We show that, when the consumer spends her entire wealth, the Weak Axiom of Stochastic Revealed Preference due to Bandyopadhyay, Dasgupta, and Pattanaik (1999) is equivalent to a restriction on stochastic demand behavior that we call stochastic substitutability. We also show that the relationship between the Weak Axiom of Revealed Preference and Samuelson's inequality in the deterministic theory, and the main result of Bandyopadhyay, Dasgupta, and Pattanaik (1999) are both special cases of our result.Received: 10 September 2001, Revised: 4 April 2003, JEL Classification Numbers: D11. Correspondence to: Prasanta K. PattanaikOur greatest debt is to the referee of this paper, who made numerous helpful suggestions. We thank Robin Cubitt, Kunal Sengupta and seminar audiences at Jawaharlal Nehru University, Indian Statistical Institute, University of East Anglia, Universidad Carlos III, University of Essex and University of Montreal for their helpful comments. Prasanta K. Pattanaik acknowledges his intellectual debt to Salvador Barbera, Tapas Majumdar and Amartya Sen.     

Adaptive two-treatment two-period crossover design for binary treatment responses

Adaptive designs are sometimes used in a phase III clinical trial with the aim, of allocating a larger number of patients to the better treatment. In the present paper, we use some adaptive designs in a two-treatment two-period crossover design where the treatment responses are binary. We use some simple designs to choose between the possible treatment combinations AA, AB, BA or BB. The goal is to use the better treatment a larger proportion of times. We calculate the allocation proportions to the possible treatment combinations and their standard deviations. We also study related inferential problems. Related asymptotics are derived. The proposed procedure is compared with some possible competitors. Finally, we use real data to illustrate the applicability of our proposed design.     

Coalition governments in a model of parliamentary democracy

We analyse a model of coalition government in a parliamentary democracy where parties care both for ideology and perks from office, and examine how the magnitude of this tradeoff affects the nature of coalitions that form. It is shown that equilibrium coalitions can be minimal winning, minority or surplus and they may be ideologically disconnected. The types of coalitions that emerge depend upon the relative importance of rents from office and the distribution of party ideologies. Further, there is a non-monotonic relationship between ideological connectedness of coalitions and rents from office.     

Ethnic Networks and US Exports*

This paper provides new estimates of the effects of ethnic networks on US exports. In line with recent research, our dataset is a panel of exports from US states to 29 foreign countries. Our analysis departs from the literature in two ways, both of which show that previous estimates of the ethnic‐network elasticity of trade are sensitive to the restrictions imposed on the estimated models. Our first departure is to control for unobserved heterogeneity with properly specified fixed effects, which we can do because our dataset contains a time dimension absent from previous studies. Our second departure is to remove the restriction that the network effect is the same for all ethnicities. We find that ethnic‐network effects are much larger than has been estimated previously, although they are important only for a subset of countries.     

Customer share,value, and business success

Two books on strategies that are likely to shape business success in the twenty‐first century are reviewed. One is about a change in focus by marketers from pursuing a share of the market to going after a share of the customers' total spending money. The other is a collection of research articles by faculty at leading business schools on how entrepreneurial marketers might address the business challenges of the new millennium with effective strategies that create value for customers. © 2005 Wiley Periodicals, Inc.     

The role of money demand functions in one-sector growth models

This paper shows that the assumption made regarding the functional form of the demand for money has a crucial role in determining the effect of the rate of inflation on the steady-state capital intensity in a one-sector monetary growth model. It is also indicated that by introducing money into a growth model, which assumes a fixed coefficient technology production function and a homogeneous savings function, a long-run instability problem can be avoided, irrespective of the form of the money demand function.