Rent, risk, and replication: Preference adaptation in winner-take-all markets

We study the evolution of an economy where agents who are heterogeneous with respect to risk attitudes can either earn a certain income or enter a risky rent-seeking contest. We assume that agents behave rationally given their preferences, but that the population distribution of preferences evolves over time in response to material payoffs. We show that, in particular, initial distributions with full support converge to stationary states where all types are still present. Although rents are perfectly dissipated in material terms at a steady state, efficiency is greater than if everybody had been risk neutral, since risk lovers specialize in rent seeking.     

BOOK REVIEWS

THE SOCIAL ORGANISATION OF STRIKES: by Eric Batstone, Ian Boraston and Stephen Frenkel EXECUTIVE EASE AND DISEASE: by Dr. Beric Wright THE INDUSTRIAL TRIBUNALS HANDBOOK: by Bowes Egan TRADE UNIONISM UNDER COLLECTIVE BARGAINING: A Theroy based on comparisons of six countries: by H. A. Clegg INDUSTRIAL DEMOCRACY IN WESTERN EUROPE: A North American perspective PERSONNEL AND INDUSTRIAL RELATIONS: A MANAGERIAL APPROACH: J. B. Miner and M. G. Miner POLICY ISSUES IN CONTEMPORARY PERSONNEL AND INDUSTRIAL RELATIONS: M. G. Miner end J. B. Miner “PENSIONS AND INDUSTflIAL RELATIONS”: Harry Lucas     

BOOK REVIEWS & NOTES

FINANCING STRIKERS John Gennard INDUSTRY AND LABOUR: Class Struggle at Work and Monopoly Captalism Andrew L Friedman THE INEQUALITY OF PAY Henry Phelps-Brown THE PSYCHOANALYSIS OF ORGANISATIONS Robert De Board PROPHECY AND PROGRESS: THE SOCIOLOGY OF INDUSTRIAL AND POST-INDUSTRIAL SOCIETY Krishan Kumar COMMON SENSE INDUSTRIAL RELATIONS Dennis D Hunt     

Book Reviews

Book reviews in this article: GOOD INDUSTRIAL RELATIONS John Purcell BRITAIN IN DECLINE Andrew Gamble ENGLISH CULTURE AND THE DECLINE OF THE INDUSTRIAL SPIRIT, 1850–1980 Martin J. Wiener MONDRAGON—AN ECONOMIC ANALYSIS Henk Thomas and Chris Logan THE RULE OF LAW T. Corfield     

book reviews

Book reviews in this article: EXPLORING PARTICIPATION Paul Bate and lain Mangham WORKERS' PARTICIPATION IN DECISIONS WITHIN UNDERTAKINGS International Labour Office WORK PATTERNS Derek L. Bosworth and Peter J. Dawkins POWER AND POLITICS IN ORGANIZATIONS Samuel B. Bacharach and Edward J. Lawler DEMAIN, QUELS SYNDICATS? H. Landier CFDT LE RÉVE ET LA VIE J. C. Poulain     

Industrial relations law commentary

The commentary, a new feature of the IRJ, aims to keep readers informed of major developments in the law affecting industrial relations. To set the scene for forthcoming issues, Karl Mackie examines the nature of the legal role in the British industrial relations system.     

Musgrave’s vision of the public sector: the complex relationship between individual, society and state in public good theory

Richard Musgrave introduced the notion of a public good after reading an obscure publication by Lindahl in German in 1910. His great contribution to knowledge was to provide a clear and comprehensive structure for thinking about the process of achieving an “optimal” allocation of resources across public and private goods based individual preferences and the role of government in that process. A number of ambiguities and issues in Musgrave’s vision remain only partially resolved including the need to incorporate “higher laws” or community values into the allocation process.      

Improving footprint calculations of small open economies: combining local with multi-regional input–output tables

In a small, open and resource-poor economy, import and export dependency have an ever-growing impact on local policy decisions, which makes local (environmental) policy-makers increasingly depend on global data. This increases the interest in models that link local production and consumption data to global production, trade and environmental data. The recent increase in availability of global environmentally extended multi-regional input-output tables (EE-MRIO tables) provides an opportunity to link them with existing local environmentally extended input-output tables (EE-RIO tables). These combined tables make it possible (1) to analyse the links between local and global production and consumption and (2) to study global value chains, material use and environmental impacts simultaneously. However, estimations using input-output (I–O) analyses contain errors due to imperfect databases. In this article the magnitude of specification, aggregation and time errors are estimated and compared. The results show the need to combine local datasets with multi-regional ones and show that highest detailed (country and sector levels) as well as time series of I–O tables are the way forward for using I–O analyses in local policy-making. The paper provides guidance on trading off investments in model adoption and/or extension and the reliability of estimation results.     

On the impossibility of achieving no regrets in repeated games

Regret-minimizing strategies for repeated games have been receiving increasing attention in the literature. These are simple adaptive behavior rules that lead to no regrets and, if followed by all players, exhibit nice convergence properties: the average play converges to correlated equilibrium, or even to Nash equilibrium in certain classes of games. However, the no-regret property relies on a strong assumption that each player treats her opponents as unresponsive and fully ignores the opponents’ possible reactions to her actions. We show that if at least one player is slightly responsive, it is impossible to achieve no regrets, and convergence results for regret minimization with responsive opponents are unknown.