Should civil servants be restricted in wage bargaining? A mixed-duopoly approach

Should civil servants (employees in the public sector) be allowed to bargain collectively? To answer this question, we construct a model of unionized mixed duopoly and examine the regulatory framework of public institutions, especially focusing on a wage regulation imposed on the public firm. The wage regulation turns out to yield critical welfare implications as it gives rise to two opposing strategic effects: the wage regulation intensifies downstream-market competition while it loosens upstream-market competition. The overall welfare effect is ambiguous, depending crucially on the degree of product differentiation between the firms. We also show that, in contrast to the popular belief, granting the right to bargain collectively to civil servants would not necessarily help them because they tend to demand excessively high wages when they are allowed to bargain collectively. Finally, we briefly discuss a new perspective on the role of profit motives in public institutions when the wages are determined endogenously.     

Incentives in academics: Collaboration under weak complementarities

This paper considers a contracting relationship with multiple agents in a repeated setting under voluntary team formation. In each period, an opportunity to collaborate arrives stochastically but whether this opportunity has arrived is the agents' private information. The principal thus cannot simply tell them when to collaborate; she must instead guide them through incentives. The optimal contract in the repeated setting can drastically be different from that in the static setting and is often characterized as high-powered team incentives complemented with inefficiently low-powered individual incentives, which endogenously raise the cost of shirking. We then argue that low-powered incentives offered for non-collaborative works, as often observed in our profession, can be seen as an important part of optimal incentive schemes in an attempt to endogenously raise the cost of shirking. The mechanism presented here also has implications for internal team competition (team competition within firms) which has become increasingly popular these days.     

Exchange Rate Instability： Japan＇s Micro-Macro Experiences and Implications for China

Since 1985, the yen‐dollar exchange rates repeatedly fluctuated and climbed to a level that could not be justified by economic fundamentals. The impacts on the Japanese economy were serious and far‐reaching. Since 21 July 2005, China has been moving toward a more flexible exchange rate regime. Keeping RMB exchange rates basically stable and providing Chinese industries with means to hedge exchange rate risks are essential for China's sound economic development. Edited by Zhinan Zhang     

Signaling and strategically delayed promotion

The paper highlights a link between signaling behavior and strategically delayed promotion. It is argued that the presence of a signaling device has a critical impact on the pace of promotion. In an equilibrium with signaling behavior, the labor market is more segmented and the pace of promotion is faster; in the other with no signaling behavior, the labor market is less segmented and the pace of promotion is slower. We argue that the former situation corresponds to the US economy while the latter corresponds to the Japanese economy.     

Necessary and sufficient conditions for transitivity in voting theory

In this paper we provide necessary and sufficient conditions for transitivity of the social preferences given by two types of social decision processes. We consider transitivity of the dominance relation of a proper simple game and that of the social preference given by the simple majority decision rule.     

Inductive game theory: A basic scenario

The aim of this paper is to present the new theory called “inductive game theory”. A paper, published by one of the present authors with A. Matsui, discussed some part of inductive game theory in a specific game. Here, we present a more entire picture of the theory moving from the individual raw experiences, through the inductive derivation of a view, to the implications for future behavior. Our developments generate an experiential foundation for game theory and for Nash equilibrium.     

Promoting green buildings: Do Chinese consumers care about green building enhancements?

This paper explores sustainability‐related choices about buildings by analysing how consumers rated the relative importance of various attributes of conventional and green buildings. It also analyses how consumers judge environmental and health‐oriented improvements in green buildings. Unlike previous studies, this research applied conjoint analysis to explore the green building market at the consumer's level by regarding green buildings as nondurable green products and services. We used a survey to gather consumer preferences about several green building hotel models which partly applied green energy, modern wood structures and improved indoor environmental quality (IEQ). In total, 341 consumers participated the survey in two of China's largest cities: Beijing and Shanghai. The results revealed that green energy was the most preferred attribute of green buildings, exerting an even stronger overall effect on consumer choice than price. Afterwards, we identified distinct consumer segments and determined the background characteristics of each segment based on the similarities in the preferences for each attribute. The largest consumer segment, consisting of younger consumers, ranked green energy as the most important criterion. However, an improved indoor environmental quality was generally not highly ranked, and individuals in the consumer segment, which included more older and female consumers, were more likely to reject modern wood structures. The results also revealed that higher‐income individuals were most concerned with price, and consumers with higher levels of education were willing to pay more to support green buildings.     

Inductive Game Theory: Discrimination and Prejudices

This paper proposes a new theory, which we call inductive game theory . In this theory, the individual player does not have a priori knowledge of the structure of the game that he plays repeatedly. Instead, he accumulates experiences induced by occasional random trials in the repeated play. A stationary state is required to be stable against intentional deviations based on the player's experiences, and then it turns out to be a Nash equilibrium. The main part of the paper is the consideration of possible individual views of the society based on individual experiences. This view is defined to be a model of the society which the player builds from his experiences. Coherency with these experiences and a condition called rationalization are required for a model. As concrete objects of the theory, this paper analyzes the phenomena of discrimination and prejudice. The development of the new theory is undertaken by contrasting its observational and behavioral aspects with mental and judgmental aspects. The relationship between discrimination and prejudice will emerge in this dichotomous consideration.     

Housing markets with indivisibilities

A model of a rental housing market in which houses are treated as indivisible commodities is presented. A recursive equation that determines a competitive equilibrium is provided, and it is argued that this competitive equilibrium is representative of the set of all competitive equilibria. Using this representative equilibrium, several propositions on comparative statics are considered that have to do with how the competitive rents change when certain parameters of the model change.