Applied Welfare Economics with Bounded Rationality: Public Policies Toward Remote Sensing

Earlier experimental evidence indicates that some decision makers under-invest in information when it is costly. This insight is applied to the cost–benefit analysis of the provision of data obtained by satellites. In fields like agriculture, remotely sensed information of great precision can be provided to additional farmers at minimal extra costs if a service for farmers with similar information needs is set up. Here, the tendency to under-invest in information asks for creative solutions by the private sector: bankers may work together with rational producers in setting up the information service and promoting it. However, if producers financial resources are insufficient, public intervention, in the form of a free information service may be necessary.The author would like to thank an anonymous referee, Stephan von Cramon-Taubadel, Sean Flynn, Daniel Heller, and Carlos Lenz and participants of the Lisbon Conference of the International Atlantic Economic Society, particularly Asatoshi Maeshiro, for helpful comments.     

Observable restrictions of general equilibrium models with financial markets

This paper examines whether general equilibrium models of exchange economies with incomplete financial markets impose restrictions on prices of commodities and assets given the stochastic processes of dividends and aggregate endowments. We show that the assumption of time-separable expected utility implies restriction on the cross-section of asset prices as well as on spot commodity prices. However, a relaxation of the assumption of time separability will generally destroy these restriction.     

On some criteria for the formulation and testing of economic growth models

This paper presents a methodology for the formulation and testing of economic growth models. The model selected includes two production sectors with physical and human capital accumulation. These capital stocks are associated with spillover effects in the production of the physical good and in the accumulation of both factors.     

Investment in the absence of property rights; the role of incumbency advantages

In many situations the individuals who can generate some output must enter a contest for appropriating this output. This paper analyses the investment incentives of such agents and the role of incumbency advantages in the contest. Depending on the advantages, an increase in the productivity of the investment can decrease or increase the amount of investment. The results are applied to autocrats’ investment behavior and job specific investment in organizations.     

Deterministic versus stochastic mechanisms in principal-agent models

This paper shows that, contrary to what is generally believed, decreasing concavity of the agent's utility function with respect to the screening variable is not sufficient to ensure that stochastic mechanisms are suboptimal. The paper demonstrates, however, that they are suboptimal whenever the optimal deterministic mechanism exhibits no bunching. This is the case for most applications of the theory and therefore validates the literature's usual focus on deterministic mechanisms.     

General equilibrium models of monopolistic competition: A new approach

We analyze a class of ‘large group’ Chamberlinian monopolistic competition models by applying different concepts of functional separability to the same set of first-order conditions for utility maximization. We show that multiplicatively quasi-separable (MQS) functions yield ‘constant relative risk aversion’ (CRRA), and, therefore ‘constant elasticity of substitution’ (CES), functions, whereas additively quasi-separable (AQS) functions yield ‘constant absolute risk aversion’ (CARA) functions. We then show that the CARA specification sheds new light on: (i) pro-competitive effects, i.e., profit-maximizing prices are decreasing in the mass of competing firms; and (ii) a competitive limit, i.e., profit-maximizing prices converge to marginal costs when the mass of competing firms becomes arbitrarily large.     

知识表达、知识互补性、知识产权均衡

基于知识的“代数格”表达方式和知识的互补性原理 ,这篇文章讨论知识产权的博弈均衡问题。每个人都拥有“局部知识” ,显然 ,如果法律对每个人的局部知识设立产权并由政府全面加以保护的话 ,人类知识将无法获得任何发展。另一方面 ,如果法律不承认任何知识的产权且政府对任何知识产权都不加以保护的话 ,人类知识也难以获得发展的激励。这里将证明 ,N个具有局部知识的社会成员在社会整体知识构成的代数格上关于各自的“局部知识”的价格的博弈存在至少一个纳什均衡———此即该社会内部自恰的和最优的知识产权配置。由周林 ( 1 994) ,这类均衡点构成一完备格。又由MilgromandShannon( 1 994) ,博弈的每一参与者最佳对应集内的最大策略和最小策略在社会知识的代数格上 (按集合强序 )单调非减 ,这意味着当社会成员的初始知识水平有所提高时 ,由产权博弈均衡所决定的各个局部知识的知识产权价格将相应有所上升。所有上述结果都不需要通常的凸性假设 ,因此在以“知识”为核心要素的经济分析中 (包括收益递增经济学 )具有独特重要的意义     

Capital markets integration, growth and income distribution

The paper considers a two-country model of overlapping generation heterogenous economies with intergenerational transfers carried out in the form of bequest and investment in human capital. We examine in competitive equilibrium the transitory and long-run effects of capital markets integration. First, we explore how the regime of public education affects the dynamics of the integrated economy. Second, we study the effects of capital markets integration, in equilibrium, on the intragenerational income distribution in both the host and investing country.     

Decentralizing antipoverty program delivery in developing countries

We study the effects on accountability in government service delivery of decentralizing administration of an antipoverty program. While governments at both central and local levels are vulnerable to antipoor policy biases owing to political capture, centralized delivery systems are additionally prone to bureaucratic corruption, owing to problems in monitoring bureaucratic performance. Decentralizing the delivery system promotes cost-effectiveness and improves intraregional targeting at low program scales. But interregional targeting may deteriorate, as central grants to high-poverty regions shrink, owing to high capture of local governments by local elites in such regions.     

Bargaining and markets: complexity and the competitive outcome

Rubinstein and Wolinsky (Rev. Econ. Stud. 57 (1990) 63-78) consider a simple decentralised market game in which agents meet randomly or voluntarily and bargain over the terms of trade. They show that any individually rational price can be sustained as a sequential equilibrium even though the model has a unique competitive outcome. Here, I consider Rubinstein and Wolinsky's model and show that if complexity costs of implementing strategies enter players’ preferences, together with the standard payoff in the game, then every equilibrium is stationary/Markov and induces the unique competitive price. Thus, I demonstrate that aversion to complexity may provide a justification for the competitive outcome.