Do Voluntary Biotechnology Labels Matter to the Consumer? Evidence from the Fluid Milk Market

This article examines the effects on the demand of voluntary labeling for the use of genetically modified growth hormone for retail fluid milk using supermarket scanner data. Retail fluid milk tracks one of the first biotechnology products approved, is fairly standardized and ubiquitous, and allows for cross-sectional differentiation between labeled and unlabeled products and between conventional and organic brands. The results indicate that voluntary labeling increases the demand for recombinant bovine growth hormone free milk. In addition, the estimated effects of labeling appear to have increased over time.     

Strategic union delegation and strike activity

Abstract.  We develop a model of wage determination with private information, in which the union has the option to delegate the wage bargaining to either surplus‐maximizing delegates or to wage‐maximizing delegates (such as senior union members). We show that the wage outcome in case of surplus‐maximizing delegates is not necessarily smaller than the wage outcome in case of wage‐maximizing delegates, even when the wage bargaining with private information is close to one with complete information. However, if it is commonly known that the union is stronger than the firm and the demand is sufficiently elastic, then delegating to wage‐maximizing delegates definitely increases the wage at equilibrium. The maximum delay in reaching an agreement is greater whenever the union chooses wage‐maximizing delegates instead of surplus‐maximizing delegates and remains finite even when the period length shrinks to zero. JEL classification: C70, C71, C72, C78     

Partial Market Liberalization and the Efficiency of Policy Reform: The Case of the European Dairy Sector

This article analyzes the efficiency of partial market liberalization and policy reform with an application to the European dairy sector. In a second best world, partial moves toward market liberalization are not always efficiency improving. We develop a general equilibrium model to investigate the efficiency implications of discrete changes in government policy. The analysis covers price and quantity instruments used in both domestic and trade policy. We derive simple conditions under which partial market liberalization is efficiency improving. We apply the approach to agricultural policy reform in the European dairy sector and identify market liberalization scenarios that are "not" efficiency improving.     

Delayed agreements and nonexpected utility

The unexplained occurrence of inefficient delays in reaching agreement is known in the economics literature as the “Hicks paradox.” This paper describes a strategic situation in which players may play a simultaneous move game either before or after a move of Nature. The structure is such that if the players were expected utility maximizers, they would be indifferent over the order of play. However, if at least one of the players is a nonexpected utility maximizer, for example, if player one has preferences over lotteries which exhibit betweenness and fanning out, such a player may strictly prefer to wait before playing the game. If both players exhibit fanning out and betweenness, then there exist games in which both prefer to delay agreement.