Can health insurance coverage explain the generic competition paradox?

In the context of a three-stage model with consumers differing in their health insurance coverage, the paper shows that there exist conditions under which the price of brand-name drugs increases following the entry of generic drugs.     

How efficient is maize production among smallholder farmers in Zimbabwe? A comparison of semiparametric and parametric frontier efficiency analyses

The controversial Fast Track Land Reform Programme in Zimbabwe that redistributes commercially-owned farmland to smallholder households has caused concerns about the efficiency of agricultural production in the country. In this paper, we estimate the efficiency of resource use among smallholder farmers in Zimbabwe when producing maize, the staple crop in the country. Using both a semiparametric model and a fully parametric stochastic frontier model, we find significant production shortfalls for smallholder maize production. While labor, capital, and land all significantly affect the total output, the estimated mean efficiency score for farms with less than 10 hectares of land (A1) appears to be under 0.75, and for the entire sample (A1 and A2) it ranges between 0.595 and 0.772. There clearly exists a great potential for maize farmers to improve the technical efficiency and increase the total output. Gender and age of the household head, access to extension services, and activities of other crops significantly affect the technical efficiency of smallholder maize production in Zimbabwe. We also find that all farms operate under increasing returns to scale and that the technical efficiency score tends to increase with the level of output.     

Classic rational bubbles and representativeness

The aim of this work is to describe a model of representative bubbles with infinitely lived agents that is accessible to a general audience. In particular, we shall compare this formalization of behavioral bubble dynamics with the classic rational one. The key role of the transversality condition for rational models will be clear, and we will discuss the necessity of its fulfillment when agents are not rational and arbitrageurs are faced with limited arbitrage possibilities. We shall analyze in detail what kind of nonrationality is taken into account and how it triggers bubbly dynamics. It will be plain that representative bubbles can explain the presence of bubbles even when rational models are not able to detect them.     

Publisher Correction: Classic rational bubbles and representativeness

Decisions in Economics and Finance - In the original publication, the copyright holder was incorrectly published as ‘Springer-Verlag Italia S.r.l., part of Springer Nature’ instead of...     

Identification of Slowdowns and Accelerations for the Euro Area Economy*

Business cycle analyses have proved to be helpful to practitioners in assessing current economic conditions and anticipating upcoming fluctuations. In this article, we focus on the acceleration cycle in the euro area, namely the peaks and troughs of the growth rate which delimit the slowdown and acceleration phases of the economy. Our aim is twofold: first, we put forward a reference turning point chronology of this cycle on a monthly basis, based on gross domestic product and industrial production indices. We consider both euro area aggregate level and country‐specific cycles for the six main countries of the zone. Second, we come up with a new turning point indicator, based on business surveys carefully watched by central banks and short‐term analysts, to follow in real‐time the fluctuations of the acceleration cycle.     

Trust,ability‐to‐pay,and charitable giving

In the literature on privately provided public goods, altruism has been motivated by what contributions can accomplish (public goods philanthropy), by the pleasure of giving (warm‐glow philanthropy), or by the desire to personally make a difference (impact philanthropy). Underlying these motives is the idea that individuals trust that their donations reach their goal. We revisit these models but allow for distrust in the institutional structures involved. An important result we derive is that trust considerations determine whether crowding out is less or more than complete, and we thus open up possibilities in terms of the extent of crowding out not currently available. We also model socially motivated philanthropy when income‐heterogeneous donors take trust and ability‐to‐pay into account. With ability‐to‐pay in social motivation, an important result we obtain is that low‐income donors may contribute more than high‐income donors (in both absolute and percentage‐of‐income terms), giving a potential theoretical foundation to the frequently observed “U‐shaped” pattern of giving.     

A cooperative study of one-commodity market games

A competitive model is attached to a particular market where several agents trade a same commodity. We focus on the stability of the price systems and define a solution concept, akin to the core, proving an existence result. The author wishes to thank the Editor and an anonymous referee for useful comments and remarks.