WAGE‐RISE CONTRACT AND QUANTITY COMPETITION WITH PROFIT‐MAXIMIZING AND LABOUR‐MANAGED FIRMS

This paper examines the behaviours of a profit‐maximizing firm and a labour‐managed profit‐per‐worker‐maximizing firm in a two‐stage quantity‐setting model with a wage‐rise contract as a strategic commitment. The paper then shows that there exists a unique equilibrium that coincides with the Stackelberg solution where the profit‐maximizing firm is the leader and the labour‐managed firm is the follower.     

Incentives and the Sorting of Altruistic Agents into Street‐Level Bureaucracies*

Many street‐level bureaucrats have the dual task of helping some clients, while sanctioning others. We develop a model of a street‐level bureaucracy, and we study the implications of its personnel policy on the self‐selection and allocation decisions of agents who differ in altruism towards clients. When bureaucrats are paid flat wages, they do not sanction, and the most altruistic types sort into bureaucracy. Pay‐for‐performance induces some bureaucrats to sanction, but it necessitates an increase in compensation, which can result in sorting from the top and bottom of the altruism distribution. We also explain why street‐level bureaucrats often experience an overload of clients.     

Industry dynamics: Foundations for models with an infinite number of firms

This paper explores the connection between three important threads of economic research offering different approaches to studying the dynamics of an industry with heterogeneous firms. Finite models of the form pioneered by Ericson and Pakes (1995) capture the dynamics of a finite number of heterogeneous firms as they compete in an industry, and are typically analyzed using the concept of Markov perfect equilibrium (MPE). Infinite models of the form pioneered by Hopenhayn (1992), on the other hand, consider an infinite number of infinitesimal firms, and are typically analyzed using the concept of stationary equilibrium (SE). A third approach uses oblivious equilibrium (OE), which maintains the simplifying benefits of an infinite model but within the more realistic setting of a finite model. The paper relates these three approaches. The main result of the paper provides conditions under which SE of infinite models approximate MPE of finite models arbitrarily well in asymptotically large markets. Our conditions require that the distribution of firm states in SE obeys a certain “light-tail” condition. In a second set of results, we show that the set of OE of a finite model approaches the set of SE of the infinite model in large markets under a similar light-tail condition.     

从债法视角论倒签提单行为的法律性质

作为国际贸易实践中极为普遍的运输单据欺诈之一,倒签提单行为法律性质的认定在审判实践中往往引起诸多争议。倒签提单行为衍生自国际贸易合同和海上货物运输合同,其本身不能脱离合同而独立存在,因此从债法角度分析倒签提单的法律性质将更为清晰。倒签提单行为的通常情形是违约行为,构成特例侵权行为;倒签提单的行为人在整体上应当承担违约责任,在特例中才能构成违约责任和侵权责任的竞合。     

Institutions and concentration

In a new dataset of 1.3 million firms from over 100 countries, I establish a number of regularities in cross-country differences in economic concentration. Concentration of sales and employment is substantially higher in smaller countries and in less-developed countries; these two factors alone explain roughly half the cross-country variation in concentration. Nevertheless, a number of institutional factors offer additional explanatory power for concentration. Concentration is higher in countries with higher entry costs for new firms, in countries with weaker antitrust policy, in countries with less financial development, in countries with weaker rule of law, and in countries with more burdensome regulation. Weak institutions are associated with higher concentration especially in industries that do not have naturally high levels of concentration. In addition, the relationships between institutions and concentration are more pronounced in nontradable and investment-intensive industries, suggesting that natural barriers to competition facilitate the monopolization of sectors especially when institutions are weak.     

Maximum likelihood estimation of search costs

In a recent paper Hong and Shum [2006. Using price distributions to estimate search costs. Rand Journal of Economics 37, 257-275] present a structural method to estimate search cost distributions. We extend their approach to the case of oligopoly and present a new maximum likelihood method to estimate search costs. We apply our method to a data set of online prices for different computer memory chips. The estimates suggest that the consumer population can be roughly split into two groups which either have quite high or quite low search costs. Search frictions confer a significant amount of market power to the firms: Despite more than 20 firms operating in each of the markets, we estimate price-cost margins to be around 25%. The paper also illustrates how the structural method can be employed to simulate the effects of the introduction of a sales tax.     

Critical factors in computing externalities for electricity resources

The New York State Environmental Externalities Cost Study and computerized externality model (EXMOD) are used to examine the specification of methods design and application factors in the computation of electricity externalities. We report the sensitivity of externality estimates with alternative specifications for 15 different factors in the analysis, including the selection of facility type, site, and operating characteristics; air emission assumptions and air modeling procedures; dose-response assumptions; economic valuation assumptions; and other modeling procedures and assumptions. Many of the factors that most influence externality computations can be well specified in the analysis, such as the facility type, age, characteristics, emission rates, whether there is SO₂ trading, and the inclusion of long range impacts. Most significant among the factors for which there remains significant scientific uncertainty are the selection and application of air dispersion models, selection of air pollution thresholds for health impacts, reduced life span risks associated with ozone exposure and with long-term exposure to PM₁₀, values for CO₂ damages, and the value to be applied to increased risks of reduced life span for individuals age 65 or older.     

MAINTAINING MARKET POSITION: TEAM PERFORMANCE,REVENUE AND WAGE EXPENDITURE IN THE ENGLISH PREMIER LEAGUE

This paper investigates the relationship between playing success and commercial success in team sports. Utilizing a data set relating to the English Premier League that combines both financial measures and indicators of playing skills and performances, our empirical analysis is based on three behavioural equations. Our analysis indicates that on‐field success can be directly related to players’ skills and abilities and that revenue is positively related to on‐field success. Wage expenditure is also shown to systematically reflect player skills and performances. One interpretation of this evidence is that investment in players’ skills and ability buys on‐field success, with richer teams becoming ever richer and able to maintain or even build upon success by spending more on players than less successful clubs. To the extent that richer clubs are successful in their objective there is a causal link between revenue earned and competitive imbalance via investments in players. The implications of this tendency within a league are discussed in our conclusion, which also considers the potentially wider implications of our study as they relate to the evolution of firm size and issues of market share.     

A form of government organization from the perspective of transaction cost economics

Taking the approach of the superfirm, we characterize government organization through six different features. First, citizens are viewed as sovereign owners of a superfirm; elected officials are employees of the sovereign citizens. Second, in analogy to the economic principle of the division of labor and specialization, a division of labor between five independent branches of government is advocated: the legislative, the budgetary, the executive, the law enforcement, and the judiciary branch. Third, we do not suggest a mechanism of checks and balances between government branches but deal with the threat of tyranny using the principle of separation of decision control and decision management developed by Eugene Fama and Michael Jensen. Fourth, with election as a decision control device, we demarcate the constituency of the budgetary branch by age groups to provide an explicit control mechanism for intertemporal and intergenerational trades. Fifth, to strengthen sovereign citizens' decision control, the powers to recall elected chief public servants, to declare emergency and war, to sign into international treaties, and to amend the constitution are vested with a national assembly. Sixth, there is no head of state.