Representative consumer's risk aversion and efficient risk-sharing rules

We study the representative consumer's risk attitude and efficient risk-sharing rules in a single-period, single-good economy in which consumers have homogeneous probabilistic beliefs but heterogeneous risk attitudes. We prove that if all consumers have convex absolute risk tolerance, so must the representative consumer. We also identify a relationship between the curvature of an individual consumer's individual risk sharing rule and his absolute cautiousness, the first derivative of absolute risk-tolerance. Furthermore, we discuss some consequences of these results and refinements of these results for the class of HARA utility functions.     

Heterogeneous Risk Preferences,Discount Rates and Land Contract Choice in Ethiopia

This paper analyses the role of risk and rate of time preference in the choice of land contracts. The analysis builds on the risk‐sharing and imperfect market explanations of contract choice. Unique data from Ethiopia, which contain land contract information and experimental risk and rate of time preference measures on matched landlord–tenant partners, are employed in the empirical analysis. The results show that landlord and tenant time preferences are significant determinants of contract choice. For landlords (but not tenants), risk preference is also significant, indicating the importance of financial constraints and production risk in the determination of contract choice. The results are of particular relevance to land market policy in Ethiopia, where production is risk‐prone, financial markets are imperfect, and where there is a major need for the development of vibrant land rental markets.     

Geography, insolation, and vitamin D in nineteenth century US African-American and white statures

Using a new source of nineteenth century US state prison records I contrast the biological living conditions of comparable African-Americans and whites. Although blacks and whites today in the US reach similar terminal statures, nineteenth century African-American statures were consistently shorter than those of whites. Greater insolation (vitamin D production) is shown to be associated with taller black and white statures and a considerable share of the stature difference between US blacks and whites was attributable to insolation and vitamin D production. Black statures increased during the antebellum period, while white statures declined. Black and white statures both decreased after the Civil War. Farmers were taller than workers in other occupations, and an alternative explanation for stature variation by social class is considered.     

THE SOUTH AFRICAN AGGREGATE PRODUCTION FUNCTION: ESTIMATION OF THE CONSTANT ELASTICITY OF SUBSTITUTION FUNCTION

This paper assesses the validity of the constant elasticity of substitution (CES) and the Cobb-Douglas (CD) production functions in modelling the aggregate production function and computing the total factor productivity (TFP) in South Africa for the period 1970-2006. The CES function is estimated with Nerlove's two-step procedure using the autoregressive distributed lag (ARDL) cointegration and the Kalman filter estimation techniques, while the CD production function is estimated using the Kalman filter technique. The results of the forecast performance of the two model specifications show that the CD specification outperforms the CES for the period 1970-2006, although the CD specification may be too restrictive.     

Destruction and settlement norms as determinants of conflict: An evolutionary perspective

This paper studies conflict in a simple bargaining framework using an evolutionary game-theoretic approach. Our findings suggest that a player does not always regard the winning probability as an acceptable settlement rule. He accepts a division according to winning probability when the destruction caused to him in conflict is more than a threshold, which in turn depends on cost of conflict to the opponent and the size of the population. Further, our analysis shows that the norms with positive weight to disagreement payoff are effective against conflict, and incentivize peace. Contrary to the findings of extant studies carried out in finite population evolutionary game setting, the settlement possibility set is identical under both ESS and Nash equilibrium in our model with settlement norms.     

Risk aversion,prudence and temperance: An experiment in gain and loss

We characterize the individual's attitude towards risk, prudence and temperance in the gain and loss domains. We analyze the links between the three features of preferences for a given domain and between domains for each feature of preferences. Consequently, the reflection effect, the mixed risk aversion and the risk apportionment, are key concepts of our study. We also display some determinants for risk aversion, prudence and temperance in each domain. To do this, we conducted a lab experiment with students eliciting risk aversion, prudence and temperance in the two domains, and collected information about each subject's characteristics.     

ON THE PRICE EFFECTS OF HORIZONTAL MERGERS: A THEORETICAL INTERPRETATION

Horizontal mergers are usually under the scrutiny of antitrust authorities due to their potential undesirable effects on prices and consumer surplus. Ex‐post evidence, however, suggests that these effects do not always take place and even relevant mergers may end up having negligible price effects. The analysis of mergers in the context of non‐localized spatial competition may offer a further interpretation to the ones proposed in the literature: in this framework both positive and zero price effects are possible outcomes of the merger activity.     

基于公司不进行正式研发投资的简要探讨

本文我们研究了正式的研发投资的频率。用实物期权和基于知识的观点去解释一个公司的知识资源是怎么影响该公司用于确定技术选择的研发投资频率。详细的说,我们得出一个公司若没有内部知识资源,很可能就总不投资研发;若有内外部知识资源,公司有时投资研发;但有内部知识资源而没有外部知识资源时,公司很可能总是投资研发。     

The Impact of School Lunches on Primary School Enrollment: Evidence from India's Midday Meal Scheme

At the end of 2001, the Indian Supreme Court issued a directive ordering states to institute school lunches – known locally as “midday meals” – in government primary schools. In this paper we provide a large‐scale assessment of the enrollment effects of India's midday meal scheme, which offers warm lunches, free of cost, to 120 million primary school children across India, and is the largest school feeding program in the world. To isolate the causal effect of the policy, we make use of its staggered implementation across Indian states in government but not private schools. Using a panel dataset of more than 420,000 schools observed annually from 2002 to 2004, we find that midday meals result in substantial increases in primary school enrollment, driven by early primary school responses to the program. Our results are robust to a wide range of specification tests.     

Entry deterrence and innovation in durable-goods monopoly

This paper investigates the efficiency of innovation investments in a durable-goods monopoly when a potential entrant threatens to innovate as well. We show that the durability of the good endows the monopolist with the power to discourage rival innovation since current sales alter the demand for a new generation of the good. The equilibrium is therefore determined not only by the incentive for intertemporal price discrimination in durable-goods monopoly, but also by the incumbent's concern for maintaining the technological leadership. We demonstrate that entry deterrence followed by no innovation always implies underinvestment in innovation.