Multiple Buyers, Rent‐Defending and the Observed Social Costs of Monopoly

This paper uses analytical and experimental methods to assess the effects of fracturing the interests of agents seeking to maintain the competitive status quo in a rent‐seeking contest for a monopoly franchise. Theoretically, it is shown that while "rent‐defending" can ameliorate the social costs of rent‐seeking, these beneficial effects deteriorate quickly as the interests of those seeking to maintain the status quo become fractured. Experimental results indicate that overbidding is persistent when bidders have different sharing rules. In fact, the observed social costs of rent‐seeking often increase just when rent‐defending has the greatest predicted ameliorative effect.     

Monetary shocks, the exchange rate, and the trade balance

This paper investigates the response of the exchange rate and the trade balance to monetary policy innovations for the US economy during the period 1973:01–1993:12. The empirical findings indicate that contractionary monetary policy shocks lead to transitory appreciations of the real and the nominal exchange rate. Exchange rate appreciations that are caused by a temporary contractionary shock to monetary policy are correlated with a short-lived improvement in the trade balance which is then followed by a deterioration, giving support to the J-curve hypothesis.     

Robin L. Einhorn. American Taxation, American Slavery. Chicago, Ill.: University of Chicago Press, 2006. xii + 337 pp. ISBN 0-226-19487-6, $35.00.

Any neoconservative who rushes out to buy this book will bedisappointed. Its misleading title notwithstanding, this monographis not yet another diatribe against federal taxation, but rathera thoughtful examination of how the existence of slavery inthe young republic in the decades following the American Revolutionshaped national policies. If many Americans now trace the republic’spersistent anti-tax tendencies back to the Boston Tea Party,Robin Einhorn instead demonstrates that the origins of modernanti-government     

Risk premia in Australian interest rates

The level of and movements in interest rates and the exchange rate can have a substantial impact on the economic performance of Australia's primary industries. Whether a country and/or exchange risk premium has resulted in higher interest rates and increased volatility in the exchange rate is therefore important to these industries. There is some evidence that a small country risk premium may have emerged during the early 1990s. In line with earlier studies, however, no evidence was found of such a premium during the 1980s. A further finding is that any exchange risk premium may have declined over the last decade or so. Possible links between risk premia and Australia's foreign debt and current account deficits are also examined.     

TERMS OF TRADE AND ECONOMIC GROWTH IN NINETEENTH CENTURY BRITAIN *

International trade and economic growth have been considered intimately linked in nineteenth century Britain. Conventional estimates of Britain's gross national product, however, fail to account for changes in the terms of trade and may be misleading indicators of changes in real income. Revised figures that incorporate terms of trade changes are presented here. One finding is that conventional estimates of GNP overstate growth in real income early in the century when the terms of trade deteriorated.     

Simultaneity in the market for housing characteristics

The nature of simultaneity in the markets for housing characteristics is examined. Simultaneity is found to arise in the implicit markets for individual characteristics because of the presence of nonlinearity in the market (hedonic) price function for housing. However, this simultaneity is not the kind discussed by S. Rosen [J. Political Econ. 82, 34–55 (1974)] between firm supplies and household demands. As a result, the Rosen suggestion of identifying demand with firm supply shifters is inappropriate. Among the alternative approaches to identification, the most desirable involve use of data over two or more markets in which residence for a given household is exogenous to the choice of housing.     

Continuous measurement of self-report of emotional response

There has been substantial recent interest in measurement of emotional responses to advertising. One of the promising methods recently introduced has been the continuous measurement of specific feelings through a “warmth monitor” introduced by Aaker, Stayman, and Hagerty (1986). This article reports research extending the work of Aaker, Stayman, and Hagerty (1986) in two ways. First, it tests whether the warmth monitor method distinguishes feelings from the global reactions that are more commonly measured with continuous self-report measures. Second, it tests the extension of the method to a general emotion monitor that measures feelings other than warmth. Support is found for discrimination between feelings and overall liking and for the validity of a humor, but possibly not irritation, monitor. © 1993 John Wiley & Sons, Inc.