Context matters to explain field experiments: Results from Colombian and Thai fishing villages

During the last decade, field experiments regarding the study of common pool resource governance have been performed that replicated earlier findings of laboratory experiments. One of the questions is how the decisions made by participants in rural communities are influenced by their experience. This paper presents the results of field experiments in Colombia and Thailand on fishery resources. Context information is derived from the communities via in-depth interviews, surveys and role playing exercises. The use of different methodological tools allowed to link decisions in field experiments with contextual variables for two fishery villages. Explanation of core variables in social dilemmas is given, the degree of cooperation levels, preferred rules, rule compliance and enforcement. Main findings include: i) fishermen made decisions in the field experiments that reflected their own experience and context, ii) agreements for rule crafting are possible only under specific conditions that guarantees livelihoods and sustainability, iii) the broader context determines cooperation levels at a local level, iv) inequalities in the sanctioning of rule breakers decrease the possibilities of reaching cooperation agreements, and v) high levels of trust among local fishermen is not a sufficient condition for resource sustainability, when trust in external rule makers and enforcers is low.     

An econometric analysis of U.S. vital wheat gluten imports

In light of the wheat wet milling industry's development in the E.C. and of the prominent role U.S imports play in the international market for wheat gluten, this paper discusses the international market for wheat gluten, an important component of processed grain products. An econometric analysis of the U.S. import demand for wheat gluten is undertaken. The price of flour, income, and the U.S. value of wheat protein are found to be important determinants of wheat gluten imports.     

The optimal capital structure of the firm with stable Lévy assets returns

This article builds a new structural default model under the assumption that a firm’s assets return follows a dynamics displaying jumps of both signs. In essence, we expand the work of Hilberink and Rogers (itself an extension of the Leland and Toft framework), which deals only with negative jumps. In contrast, we make use of stable Lévy processes, and we compute the values of the firm, debt and equity under this assumption. Theoretical credit spreads can also be obtained in our framework. They prove to be consistent with the empirical credit spreads observed in financial markets.      

Lobbying under political uncertainty

This paper considers a model of lobbying described as a common agency game; it departs from the current literature by assuming that the special interest groups are not a priori organized or unorganized and that the type of the politician is not common knowledge. We characterize equilibria when the choice set of the politician consists of two policies; we discuss the conditions leading to efficiency and the characteristics of the groups explaining their relative success in the process of influence. We also offer some results for the general case, including disjoint necessary and sufficient conditions for the equilibria to be efficient.     

Electoral competition under imperfect information

Summary. This paper considers electoral competition between two office-motivated parties and one voter, in the presence of two alternative policies and under imperfect information. The theory of refinements of Nash equilibrium predicts the outcome of this three-player game: both parties faithfully use their information and try to find the best policy for the voter. We discuss the meaning of this model for Politics and prove that the same result holds for any number of voters, provided that parties are expected plurality maximizers and that voters satisfy a version of the sincere voting assumption adapted to this strategic setting.Received: 12 December 2001, Revised: 16 June 2003JEL Classification Numbers: C72, D72, D82.Correspondence to: Jean-François LaslierThanks to Gabrielle Demange, Françoise Forges, Roger Guesnerie, Jean-Fran çois Mertens, Thomas Palfrey, Sylvain Sorin and other participants in workshops and conferences in Caen, Paris, Caltech and Yale. Thanks also to two anonymous referees and to Paul Heidues and Johan Lagerlöf for their comments. This work was originated when K. Van der Straeten was at THEMA (Université de Cergy-Pontoise) and DELTA.     

Rent Extraction by an Unregulated Essential Facility

This paper shows that consumers may benefit when a regulator chooses not to regulate a final product in an industry characterized by an unregulated essential facility sold through non-linear tariffs. Two main reasons drive this result. First, the regulator maximizes social welfare and values the final good production more than the producer itself. Second, the regulator has access to an extra source of financing with the public funds. Therefore, the essential facility seller can ask more of the regulator than of the final good producer.     

Correlated equilibrium and sunspot equilibrium

Summary We show by an example that the sunspot equilibria of a competitive economy are not equivalent to the correlated equilibria if sunspots generate transfers between (extrinsic) states of nature (through a contingent commodities market). Nevertheless, we prove that the sunspot equilibrium allocations of a standard overlapping generations economy coincide with the (strategic form) correlated equilibrium allocations of a natural market game mimicking the economy.     

Centralised order books versus hybrid order books: A paired comparison of trading costs on NSC (Euronext Paris) and SETS (London Stock Exchange)

This article compares the cost of trading large capitalisation equities on the hybrid order-driven segment of the London Stock Exchange and the centralised electronic order book of Euronext. Using samples of stocks matched according to economic sector, free float capitalisation, and trading volume, our study shows that transaction costs are lower on the centralised order book than on the hybrid order book. The presence of dealers outside the electronic order book favours the frequency of large trades, but is associated with higher execution costs for all other trades and higher adverse selection and inventory costs inside the order book.     

Welfare egalitarianism in non-rival environments

We study equity in economies where a set of agents commonly own a technology producing a non-rival good from their private contributions. A social ordering function associates to each economy a complete ranking of the allocations. We build social ordering functions satisfying the properties that individual welfare levels below the stand-alone lower bound (respectively, above the unanimity upper bound) should be increased (respectively, reduced). Combining either property with efficiency and robustness properties with respect to changes in the set of agents, we obtain a kind of welfare egalitarianism based on a constructed numerical representation of individual preferences.