Creating low skilled jobs by subsidizing market-contracted household work

The paper analyses the determinants of household work contracted in the German shadow economy. The German socio-economic household panel, which enumerates casual domestic employment, is used to estimate the demand for such household work. The regressors include regional wage rates, household income and several control variables for household composition. It is found that the demand for household work in the shadow economy is very income elastic. This suggests that targeted wage subsidies, linked to household work agencies, would be very effective in raising the legal demand for domestic help. A wage subsidy of 50% of wage costs could thus establish up to 500?000 new jobs for previously unemployed or non-working low skilled workers. The net fiscal costs of such a scheme are about 6.200 Euro per full-time job. In addition, society benefits from more law enforcement and from a raised female labour supply, especially by highly qualified mothers.     

File Sharing,Network Architecture,and Copyright Enforcement: An Overview

This paper provides an overview of Internet file sharing networks and explores the relationship between technological, economic, and legal aspects of file sharing. I chronicle the evolution of content sharing technology since the 1990s and examine the role of network architecture in a copyright holder's choice of enforcement strategy. I also describe how users and developers of file sharing networks have responded to various enforcement tactics. The target audience of this survey consists of economists and legal scholars interested in the technology and economics of file sharing networks and the enforcement of intellectual property rights on these networks. Copyright © 2013 John Wiley & Sons, Ltd.     

ACTIVITY CHOICES OF INTERNALLY DISPLACED PERSONS AND RETURNEES: QUANTITATIVE SURVEY EVIDENCE FROM POST‐WAR NORTHERN UGANDA

We investigate post‐war economic activity choices of displaced and just‐returned individuals. In particular, the effect of living in an internally displaced persons camp on the choice of economic activities is analysed. Because individuals relocating away from camps may be different from those staying in them, a recursive bivariate probit procedure is used to control for selection on unobservables. The empirical procedure also relies on merging survey data with the micro‐level dataset on conflict events. This allows us to incorporate conflict in the framework, but also to use a bivariate probit procedure to control for endogeneity (selection of households out of camps). This work contributes to literature on household labour allocation and economics of conflict. Results show that residing in a camp has varied effects on the choice of economic activities. Individuals in camps may be more inclined than those who choose to return home, to engage in certain economic activities. One of the key lessons that could be drawn from this paper is that internally displaced persons may possess important livelihood skills that post‐conflict development interventions need to take advantage of, in order to fast‐track recovery.     

(No) Foundations of dominant-strategy mechanisms: a comment on Chung and Ely (2007)

This comment revisits Chung and Ely (Rev Econ Stud 74:447–476, 2007) in which robustly optimal auctions where investigated. Chung and Ely used a maxmin approach to define robust optimality. Chung and Ely provided conditions under which dominant strategy auctions are robustly optimal in their sense. This comment proposes a refinement of Chung and Ely’s criterion and shows that, with this refined criterion, dominant strategy auctions are not optimal if there are at least three bidders. According to the refinement the auctioneer should not choose dominated auctions, that is, auctions for which there exist other mechanisms that never generate lower expected revenue, and sometimes higher expected revenue. We construct such a dominating mechanism for dominant strategy auctions. The construction exploits the possibility of side bets when beliefs are not derived from common priors. Chung and Ely (Rev Econ Stud 74:447–476, 2007) admitted such beliefs.     

Efficient compromising

Two agents must select one of three alternatives. Their ordinal rankings are commonly known and diametrically opposed. Efficiency requires choosing the alternative the agents rank second whenever the weighted sum of their von Neumann Morgenstern utilities is higher than under either agent's favorite alternative. The agents' utilities of the middle-ranked alternative are i.i.d., privately observed random variables. In our setup, which is closely related to a public goods problem where agents face liquidity constraints but no participation constraints, decision rules that truthfully elicit utilities and implement efficient decisions do not exist. We provide analytical and numerical results on second-best rules.     

Hayek's Geldtheoretische Untersuchungen: New insights from a 1925–29 typescript

German Ferdinand Tönnies (1855?-?1936) and American Thorstein Veblen (1857?-?1929) are influential figures in the history of the social sciences, whose intellectual relationship has been ignored. However, there are important and illuminating similarities and differences in their critiques of Karl Marx (1818?-?83), as well as in the transition from community to modernity in Western culture and society. This article begins with their account of the nature of the Western community in the Middle Ages and its passage to modernity via the Enlightenment and the Industrial Revolution. It culminates with their critiques of Marx and his and their mutual efforts to construct an ersatz community to replace the one that was lost.