The stability of decision making in committees: The one-core

We study the stability of decision making in committees. A policy proposal introduced by a committee member is either adopted or abandoned in favor of a new proposal after deliberations. If a proposal is abandoned, it is in spite of the committee member who introduced it, who does not cooperate in any effort to defeat it. Shenoy (1980) proposes the one-core as a solution concept for this game, and shows that this solution may be empty. We provide a necessary and sufficient condition for the existence of a stable policy under the majority rule. This result highlights a trade-off between the size of a committee, the number of competing policy options, and the existence of a stable outcome. Our findings imply a tension between political stability and the existence of a large number of competing interests in democracies.     

Openness, centralized wage bargaining, and inflation

This paper develops a model of an open economy containing both sectors in which wages are market-determined and sectors with wage-setting arrangements. A portion of the latter group of sectors coordinate their wages, taking into account that their collective actions influence the equilibrium inflation outcome in an environment in which the central bank engages in discretionary monetary policymaking. Key predictions forthcoming from this model are (1) increased centralization of wage setting initially causes inflation to increase at low degrees of wage centralization but then, as wage centralization increases, results in an inflation drop-off; (2) a greater degree of centralized wage setting reduces the inflation-restraining effect of greater central bank independence; and (3) increased openness is more likely to reduce inflation in nations with less centralized wage bargaining. Analysis of data for seventeen nations for the period 1970–1999 provides generally robust empirical support for all three of these predictions.     

A Spatial Theory of Positive and Negative Campaigning

In order to explore the content of electoral campaigns, this paper makes two modifications to Hotelling's model of spatial competition. First, we assume that agents inherit initial locations and engage in costly relocation. Second, an agent's relocation is affected by her rival's actions. We investigate how a candidate allocates resources between positive campaigning—which influences voters' perceptions of her own ideology—and negative campaigning—which influences her opponent's perceived ideology. Our theory predicts that the candidate who is perceived as having less attractive personal attributes runs a relatively more negative campaign. The theory's implications are illustrated for the 1988 presidential election.Journal of Economic LiteratureClassification Numbers: C7, H0.     

DIFFÉRENCE DE SATISFACTION DANS L'EMPLOI ENTRE SECTEURS À BUT LUCRATIF ET À BUT NON LUCRATIF: LE RÔLE JOUÉ PAR LES CARACTÉRISTIQUES D'EMPLOI

RÉSUMÉ ** :  Cet article cherche à estimer, pour un échantillon issu de sept pays européens, le différentiel de satisfaction dans l'emploi entre les secteurs à but non lucratif et à but lucratif, et à en examiner les causes. La richesse des données utilisées permet, contrairement aux études antérieures, de prendre en compte les différences de caractéristiques d'emploi entre les deux secteurs. Les résultats obtenus révèlent que la plus grande satisfaction dans l'emploi des salariés du secteur à but non lucratif résulte principalement de caractéristiques mesurant l'autonomie et l'intérêt de l'emploi et d'une plus grande satisfaction vis-à-vis de leur autonomie et de la nature du travail qu'ils effectuent, éléments susceptibles de contribuer au développement de la motivation intrinsèque des salariés.     

Practical steps to controlling medical costs

There are no silver bullets to control medical costs. And some costs are beyond plan sponsors' control. But plan sponsors can reduce the annual medical trend by taking control of the high-cost drivers of medical expenses while, at the same time, improving employees' perception of the medical plan. Patient care management, disease management and health status improvement support (with member involvement) are key.     

Probability models and robust policy rules

We consider Sims's (2008) argument that robust policy making requires that policy models be treated as “probability models”. In a welfare-based setting, we estimate by Bayesian methods a number of variants of a New Keynesian macroeconomic model and use both the model odds and posterior densities to design robust interest rate rules consisting of an inflation-forecast-based rule and a wage-targeting one. Each are shown to have distinct robustness qualities and distinct implications for the probability-models approach. To ensure feasible policy, we further impose that rules are stable, determinate and lower-bound compatible. Our results have important implications for the design, evaluation and analysis of the probability models approach to robust monetary policy making.     

Internationalization and environmentally-related organizational learning among Chinese manufacturers

Globalization has caused Chinese manufacturers to develop quickly while simultaneously meeting green barriers to export products. Whether internationalization has led to improved environmental management practices among Chinese manufacturers is also a related question. Using survey data collected from 377 Chinese manufacturers in four industrial sectors, we find that international institutional pressures positively relate to domestic environmentalism of Chinese manufacturers and their adoption of environmentally-related organizational learning practices. Environmental learning is a viable method for Chinese manufacturers to ease their environmental burdens by replicating environmental management practices of their foreign counterparts. On the policy side, the Chinese government should follow other developed countries efforts to deploy environmental regulations and policies, further motivating environmental awareness and responses in the manufacturing industry.     

The role of hospital heterogeneity in measuring marginal returns to medical care: a reply to Barreca, Guldi, Lindo, and Waddell

In Almond et al. (2010), we describe how marginal returns to medical care can be estimated by comparing patients on either side of diagnostic thresholds. Our application examines at-risk newborns near the very low birth weight threshold at 1500 g. We estimate large discontinuities in medical care and mortality at this threshold, with effects concentrated at “low-quality” hospitals. Although our preferred estimates retain newborns near the threshold, when they are excluded the estimated marginal returns decline, although they remain large. In low-quality hospitals, our estimates are similar in magnitude regardless of whether these newborns are included or excluded.     

A note on an anniversary

ASSA Paper. ASA Session on Schumpeter