MARKET ECONOMIES WITH AN ENDOGENOUS SOCIAL DIVISION OF LABOR

I consider a general equilibrium model of a competitive market economy in which production is conducted through an endogenous social division of labor. I represent economic decision makers as “consumer–producers,” who consume as well as produce commodities. In this approach, the emergence of a nontrivial social division of labor is guided by Increasing Returns to Specialization (IRSpec) in production. Under IRSpec, I show existence of competitive equilibria, the two fundamental theorems of welfare economics, and characterize these equilibria. Markets equilibrate through the adjustment of the social division of labor; the production technologies completely determine the equilibrium prices.     

Network potentials

A network payoff function assigns a utility to all participants within a social network. In this paper we investigate network payoff functions that admit an exact network potential or an ordinal network potential. We also investigate exact and ordinal potentials of Myerson’s non-cooperative network formation game based on consent in link formation. We show that the admittance of certain of these network and game-theoretic potentials implies the existence of pairwise stable networks and the convergence of network formation processes. Our main results extend and strengthen the current insights in the literature on game theoretic approaches to social network formation. We thank Matt Jackson and Sudipta Sarangi for extensive discussions on the subject of this paper. Part of this research was done while S. Chakrabarti was at Bonn on a post-doctoral research fellowship. We thank the Department of Economics at the University of Bonn for their hospitality and financial support. Part of this research was done at the Center for Economic Research at Tilburg University, Tilburg, the Netherlands. R. P. Gilles financially supported from the Netherlands Organization for Scientific Research (NWO), grant # 46-550, is gratefully acknowledged.     

Decentralization of Pareto optima in economies with public projects,nonessential private goods and convex costs

Summary In the theory of economies with public goods one usually considers the case in which private goods are essential, i.e., each agent receives a fixed minimum level of utility if he consumes no private goods, irrespective of the public goods consumed. This paper develops the second welfare theorem for economies with public projects and possibly inessential private goods. As a corollary we also derive conditions under which valuation equilibria exist.hank Dolf Talman and an anonymous referee for many useful remarks and annotations of a previous draft of this paper.     

Promoting innovation and competition with patent policy

Recently the role of institutions on growth, and especially the influence of Intellectual Property Rights, has been integrated into the Schumpeterian Growth Framework. In this contribution, we highlight the possibility using one patent’s characteristic, the patent height, as an instrument for promoting innovation and growth. We introduce this possibility into the Segerstrom (Am Econ Rev 80:1290–1310, 1998)/Li (Am Econ Rev 93:1009–1018, 2003) quality ladders model of growth. The Li (Am Econ Rev 93: 1009–1018, 2003) generalized model overturns Segerstrom (Am Econ Rev 80:1290–1310, 1998) policy implication in terms of the size of innovations having to be taxed or subsidized by relaxing a crucial assumption on the value of the elasticity of substitution between goods. In this paper, we point out the fact that the innovation size requirement has to be considered as a policy instrument, so that it appears extremely important to consider the case when the innovation size has been made endogenous. A patent policy using the novelty requirement as an instrument for innovation policy enables implementation of the social optimum. The consequences of this policy for market structure and economic growth are then discussed. When the level of the patent novelty requirement is initially high, a patent policy that weakens the patent height can reinforce competition and promote innovation.     

Self-Selecting Agri-environmental Policieswith an Application to the Don Watershed

We consider a model of regulation for nonpoint source water pollution through non-linear taxation/subsidization of agricultural production. Farmers are heterogenous along two dimensions, their ability to transform inputs into final production and the available area they possess. Asymmetric information and participation of farmers to the regulation scheme put constraints on the optimal policy that we characterize. We show that a positive relationship between size of land and ability may exacerbate adverse selection effects. We calibrate the model using data on a French watershed and we simulate the optimal second-best policy and characterize the allocation of the abatement effort among the producers.Authorship is equally assigned among the different authors.     

Employment protection, international specialization, and innovation

We develop a model to analyze the implications of firing costs on incentives for R&D and international specialization. The key idea is that countries with a rigid labor market will tend to produce relatively secure goods, at a late stage of their product life cycle. Consequently, their researchers tend to specialize in ‘secondary innovation’ which improves existing products, rather than ‘primary innovation’ which introduces new products. This is roughly consistent with the observed pattern of R&D in Europe versus the U.S. Employment protection does not necessarily harm the country where it prevails, but typically reduces world welfare and the world number of goods.     

TESTING CATCHING‐UP BETWEEN THE DEVELOPING COUNTRIES: “GROWTH RESISTANCE” AND SOMETIMES “GROWTH TRAGEDY”

This paper provides empirical evidence that there is no convergence between the GDP per‐capita of the developing countries since 1950. Relying upon recent econometric methodologies (non‐stationary long‐memory models, wavelet models and time‐varying factor representation models), we show that the transition paths to long‐run growth (the catch‐up dynamics) are very persistent over time and non‐stationary, thereby yielding a variety of potential steady states (conditional convergence). Our findings do not support the idea according to which the developing countries share a common factor (such as technology) that eliminates per‐capita output divergence in the very long run. Instead, we conclude that growth is an idiosyncratic phenomenon that yields different forms of transitional economic performance: growth tragedy (some countries with an initial low level of per‐capita income diverge from the richest ones), growth resistance (with many countries experiencing a low speed of growth convergence), and rapid convergence.     

From organizational values to mobilization of human resources

This study examines the relationship of perceived organizational values to employee mobilization behaviours as mediated by perceived organizational support (POS) and affective organizational commitment. Firstly, a scale comprising three types of perceived organizational values (interpersonal values, formal values, and individual well‐being‐centered values) was developed and validated using a sample of 580 employees. Secondly, the relationships among variables were examined using structural equations modeling on an independent sample of 260 employees. POS mediated the relationship between employees' perceptions that their organization values the individual well‐being of its members and their affective organizational commitment, which in turn mediated the relationship between POS and individual mobilization behaviours. The contributions of these findings to advancing scholarship and practice are discussed. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.