Debt and capital accumulation in a two-sector model with non-traded goods

The paper examines optimal debt and capital accumulation for an open economy which faces an imperfect international capital market. The major finding is that the optimal pattern of debt and capital accumulation is affected by relative factor intensities. Factor intensities determine whether substitution or complementary relationships exist between debt and capital. The relationship between the country's net wealth and its two components financial and productive are also determined by factor intensities.     

An evolutionary edge of knowing less (or: On the ‘curse’ of global information)

Consider a population of farmers who live around a lake. Each farmer engages in trade with his two adjacent neighbors. The trade is governed by a prisoner’s dilemma ‘rule of engagement.’ A farmer’s payoff is the sum of the payoffs from the two prisoner’s dilemma games played with his two neighbors. When a farmer dies, his son takes over. The son decides whether to cooperate or defect by considering the actions taken and the payoffs received by the most prosperous members of the group comprising his own father and a set of his father’s neighbors. The size of this set, which can vary, is termed the ‘span of information.’ It is shown that a larger span of information can be detrimental to the stable coexistence of cooperation and defection, and that in well-defined circumstances, a large span of information leads to an end of cooperation, whereas a small span does not. Conditions are outlined under which, when individuals’ optimization is based on the assessment of less information, the social outcome is better than when optimization is based on an assessment of, and a corresponding response to, more information.     

Migration under Asymmetric Information and Human Capital Formation

We study the migration of skilled workers, along with the skill acquisition incentives created by the prospect of migration. We trace out the dynamics of migration as foreign employers accumulate experience in deciphering the skill levels of individual migrants. It is found that migration by the relatively highly skilled is followed by return-migration from both tails of the migrant skill distribution; that the possibility of migration induces skill acquisition at home; that until the probability of discovery reaches its steady state equilibrium, migration consists of a sequence of moves characterized by a rising average skill level; and that migration of skilled workers can entail a home-country welfare gain.     

On the Economics of Refugee Flows

Although the phenomenon of refugee flows is not devoid of economic connotations, it has so far been investigated primarily by political scientists and sociologists. The analytical tools of economic inquiry have not yet been applied to this subject, although it stands to reason that such a study will contribute to our understanding of why refugee flows occur and will guide the policy response. This note illustrates how economic analysis can be brought to bear on three key aspects of refugee flows: fear, poverty, and group movement.     

A Theory of Migration as a Response to Relative Deprivation

We model migration as a response to relative deprivation. We present a specific configuration of incomes in which the process of migration in response to relative deprivation reaches a steady state. However, for the general configuration of incomes we show that it is impossible to prove the existence of a steady state. We study the social welfare implications of the two cases and show that if individuals are left to pursue their betterment, the resulting state falls short of the best social outcome. We present several implications of the model including federalism and the demand for secession.     

Beyond conjoint analysis: Advances in preference measurement

We identify gaps and propose several directions for future research in preference measurement. We structure our argument around a framework that views preference measurement as comprising three interrelated components: (1) the problem that the study is ultimately intended to address; (2) the design of the preference measurement task and the data collection approach; (3) the specification and estimation of a preference model, and the conversion into action. Conjoint analysis is only one special case within this framework. We summarize cutting edge research and identify fruitful directions for future investigations pertaining to the framework’s three components and to their integration.     

Calorie information effects on consumers' food choices: Sources of observed gender heterogeneity

A larger portion of males is overweight than is females. Females' food choices in comparison to those of males reflect the greater importance that females attribute to health and physical appearance; their more complex attitude toward risk; the greater esteem in which they hold home-cooked food; and sociological factors. This paper explores the variables that affect consumers' food choices, shedding light specifically on the choice process and analyzing whether gender affects predispositions toward foods, perceptions, choice processes, or all three. Perceptions and choice processes based on memory judgments serve only as a benchmark used to compare choices consumers make under calorie information. The results of two experiments wherein the researchers exposed subjects to two forms of calorie information on three fast food items suggest that differences in perceptions of foods' healthfulness and taste aspects account for gender differences in memory-based choices. In addition to this baseline difference in perceptions, a gender difference in reaction to calorie information in terms of consumers' behavior exists. While calorie information affected both perceptions and choice processes for females, information changed the perceptions of food only for males.