Self-enforced collusion through comparative cheap talk in simultaneous auctions with entry

Campbell (J Econ Theory 82:425–450, 1998) develops a self-enforced collusion mechanism in simultaneous auctions based on complete comparative cheap talk and endogenous entry, with two bidders. His result is difficult to generalize to an arbitrary number of bidders, since the entry-decision stage of the game is characterized by strategic substitutes. This paper analyzes more-than-two-bidder, symmetric-prior cases. Two results are proved: (1) as the number of objects grows large, a full comparative cheap talk equilibrium exists and it yields asymptotically fully efficient collusion; and (2) there is always a partial comparative cheap talk equilibrium. All these results are supported by intuitive equilibria at the entry-decision stage (J Econ Theory 130:205–219, 2006; Math Soc Sci 2008, forthcoming). Numerical examples suggest that full comparative cheap talk equilibria are not uncommon even with few objects.     

ENDOGENOUS ADAPTIVE DYNAMICS IN PASINETTI MODEL OF STRUCTURAL CHANGE

This paper formalizes in a very stylized way localized learning of consumers and of producers within Pasinetti model of structural change. In this way, we are able to endogenize technological and consumption dynamics with bounded rational firms and consumers. We show that the theoretical framework here provided is able to deal with process innovation and with product innovation as well. Finally, we point out that our model can easily and consistently incorporate a variety of firms, and therefore it provides a bridge between evolutionary theory and the theory of structural change.     

Ranking participants in tournaments by means of rating functions

In this paper we bring a novel approach to the theory of tournament rankings. We combine two different theories that are widely used to establish rankings of populations after a given tournament. First, we use the statistical approach of paired comparison analysis to define the performance of a player in a natural way. Then, we determine a ranking (and rating) of the players in the given tournament. Finally, we show, among other properties, that the new ranking method is the unique one satisfying a natural consistency requirement.     

Do Business Cycles Cast Long Shadows? Short-Run Persistence and Economic Growth

Thisarticle explores the links between cyclical fluctuations andlong-run growth in the context of an endogenous growth modelwith aggregate demand externalities. In this model, aggregatedemand and growth rates are positively correlated. In the presenceof exogenous cyclical shocks, the model is able to generate persistentfluctuations through the effects that business cycles have onaggregate demand, profits and technological progress. Persistencebecomes a measure of the response to business cycles of growth-relatedvariables. Empirical evidence from a large sample of countriessuggests that there is indeed a correlation between how persistentfluctuations are and the long-term growth rates of GDP.     

Second-order Locally Consistent Equilibrium: An Extension*

This note shows the existence of a second-order locally consistent equilibrium in the game analysed in 1988 by Bonanno, under assumptions which are weaker and empirically more satisfactory than usual. An example of application to oligopoly theory is also provided.     

A Two-Sector Model of Endogenous Growth with Leisure

This paper analyses the equilibrium dynamics of an endogenous growth model with physical and human capital in which leisure enters the utility function. The inclusion of leisure introduces a potential source of non-convexities in our optimization problem and leads to the possible existence of multiple balanced growth paths. This multiplicity of optimal stationary solutions is linked to the assumption that education has no effect on the quality of leisure, and hence a relatively more educated economy may choose to grow faster, and devote more time to income-directed activities. To characterize the set of optimal solutions in our non-concave optimization framework we develop a new method of analysis that should be of interest in related applications.     

Analyzing the determinants of firm's absorptive capacity: beyond R&D

This article proposes a new model for analyzing the determinants of absorptive capacity in companies. We suggest that absorptive capacity is determined not only by research and development activities, but also by a set of internal factors, which we group into three basic categories: organizational knowledge, formalization, and social integration mechanisms. In addition, we suggest that these factors may influence all components of the firm's absorptive capacity, and that the influence can be positive or negative depending on the applicability of the knowledge being absorbed. This paper thus advances the understanding of absorptive capacity by exploring a largely ignored aspect in the literature: the role of knowledge attributes. We show how the model can be operationalized and empirically tested and provide preliminary evidence supporting most of the propositions in the analytical model.     

Collective Decisional Skill and Decisive Voting Games - Some Results

The paper discusses various representations of collective decisional skill which are useful in the evaluation of decision structures. The recursion formulas we give here and the use of the concepts of majority deficiency as well as majority and unanimity games present expedient approaches in analyzing collective competence. Using the simple majority system as benchmark, applications to certain hierarchic decision structures are presented. The resulting inequalities dealing with collective decisional skills of hierarchic systems are an improvement of previous published results.     

Revenue Recycling and the Welfare Effects of Road Pricing

This paper explores the interactions between taxes on work-related traffic congestion and pre-existing distortionary taxes in the labor market. A congestion tax raises the overall costs of commuting to work and discourages labor force participation. The resulting welfare loss in the labor market can easily exceed the Pigouvian welfare gain from internalizing the congestion externality. However, if congestion tax revenues are used to reduce labor taxes, the net impact on labor supply is positive, and this can raise the overall welfare gain from the congestion tax by around 100 percent. Nonetheless the optimal congestion tax still equals the Pigouvian tax.
JEL classification R 41; H 21; H 23