Equilibrium Tariff Schedules In Commercial Policy Games Under Uncertainty

Abstract A partial two country equilibrium model is built in which two different exogenous random shocks may occur. the governments simultaneously choose tariff functions relating their specific tariff to the level of an observable variable (volume of trade or international price). In the case of a “volume of trade shock” the Nash equilibria of this game are more protectionist the larger the possible trade swings and autarky is always an equilibrium outcome. In the case of a “terms of trade shock”, constant tariffs, at their Nash equilibrium in specific tariff levels are the only sensible equilibrium outcome.     

Access to financing,rents, and organization of the firm

This paper provides a theory for the choice of an organizational structure by the headquarters of a unitary structure concerned about overload. The headquarters can avoid overload by delegating operational decisions to divisions, i.e., moving the firm to a multidivisional structure. We show that, under moral hazard, these divisions receive rents for incentive purposes, and that the multidivisional structure is able to invest more. Thus, there is a trade-off between increasing investment and paying rents. We also show that this trade-off applies to situations where firms consider engaging in acquisitions and joint ventures, or where entrepreneurs consider resorting to venture capitalists.     

Scientist and public responses to BSE‐related risk: A comparative study

Social studies of risk repeatedly have found substantial divergences in the way that experts/scientists and members of the general public appraise risks associated with health and environmental hazards. However, empirical evidence for these differences remains controversial. A recent review of literature suggests in particular that divergences between experts and lay people may potentially result from confounding socio‐demographic factors. The purpose of the present article is to investigate and to compare how medical scientists and members of the general population reacted to BSE (“mad cow disease”) in France. A sample of 401 scientists belonging to the French Institute of Health and Medical Research (INSERM) and a representative sample of 902 French citizens were asked about their cognitive, affective and behavioural responses to BSE. Results show that non‐scientists tended to express much more concern about BSE‐related risk than scientists, even when socio‐demographic variables were controlled. However, (1) no significant differences were found between these two groups concerning subjective epidemiological predictions, and (2) scientists manifested greater avoidance of beef or beef by‐products avoidance following the BSE epidemic than lay respondents did. The implications of these paradoxical results are discussed.     

Bargaining over an uncertain outcome:¶the role of beliefs

We study the Nash bargaining solution of a problem in which two agents bargain over an uncertain outcome. Under the assumptions of risk neutrality and of constant absolute risk aversion, we study the way that the solution varies, ex ante, when we vary the beliefs of one agent. Changing an agent's beliefs in a way that makes them “more distant” from the other agent's beliefs makes the second agent better off. Received: 10 May 2001 / Accepted: 22 August 2001     

Public Trading and Private Incentives

This article studies the link between public trading and theactivity of a firm's large shareholder who can affect firm value.Public trading results in the formation of a stock price thatis informative about the large shareholder's activity. Thisincreases the latter's incentives to engage in value-increasingactivities. Indeed, if he has to liquidate part of his stakebefore the effect of his activity is publicly observed, a moreinformative price rewards him for his activity. Implicationsare derived for the decision to go public, capital structure,and security design.