Public Monopoly,Mixed Oligopoly and Productive Efficiency

In general, the introduction of competition into the public sector seems to lead to higher cost‐efficiency in service production. However, there are examples of substantial cost increases in some areas. In this paper, using a mixed oligopoly model, we investigate the effects of deregulation on the cost‐reducing incentives of a public firm. Our results show that a firm that is a public monopoly has greater incentive to conduct cost‐reducing investment than a public firm within mixed oligopoly market.     

Testing for negativity in a demand system: A Bayesian approach

The paper introduces Bayesian inference into a demand model. This allows us to test for the negativity condition of the substitution matrix which is difficult to handle directly in the traditional approach. To illustrate the Bayesian inference procedures, we estimate the Rotterdam model and test the demand properties using Japanese data. The empirical results show the importance of specifically considering negativity in demand analysis. First version received: September 1997/final version received: February 1998     

Partial Communication in a Voluntary‐Contribution‐Mechanism Experiment

This paper presents results of a voluntary‐contribution‐mechanism experiment with partial communication. It was found that the trend of mean investments depended on whether a communication network was connected and on how fast all subjects could share information. When each subject could communicate with two other subjects and the network was connected, the mean investment increased from 33 percent to 58 percent of the optimal investment. On the other hand, when each subject could communicate with only one other subject and the network was not connected, the mean investment decreased from 34 percent to 19 percent of the optimal investment.     

Detecting motives for cooperation in public goods experiments

This study clarifies the types of motives that are important as a source of cooperation in a linear public goods experiment. Our experimental design separates contributions into those due to confusion, one-shot motives (which includes altruism, warm-glow, inequality aversion, and conditional cooperation), and multi-round motives (which includes a strategic motive under incomplete information, a failure of backward induction, and reciprocity). The experiment reveals that multi-round motives plays an important role in driving cooperative behavior. Confusion and one-shot motives play a minor role.     

Fundamental impossibility theorems on voluntary participation in the provision of non-excludable public goods

Groves and Ledyard (Econometrica 45:783–809, 1977) constructed a mechanism attaining Pareto efficient allocations in the presence of public goods. After this path-breaking paper, many mechanisms have been proposed to attain desirable allocations with public goods. Thus, economists have thought that the free-rider problem is solved, in theory. Our view to this problem is not so optimistic. Rather, we propose fundamental impossibility theorems with public goods. In the previous mechanism design, it was implicitly assumed that every agent must participate in the mechanism that the designer provides. This approach neglects one of the basic features of public goods: non-excludability. We explicitly incorporate non-excludability and then show that it is impossible to construct a mechanism in which every agent has an incentive to participate.     

REDISTRIBUTION AND FISCAL UNCERTAINTY SHOCKS

This article studies the impact of fiscal uncertainty shocks. In micro data, noncapital holders reduce consumption persistently in response to an increase in fiscal uncertainty whereas capital holders do not. Motivated by this evidence, I introduce limited capital market participation and show that it magnifies the fall in economic activity due to a fiscal uncertainty shock and induces macroeconomic comovement. This is because the limited participation model captures individual uncertainty about redistribution. When agents are ambiguity averse, this uncertainty about redistribution has first-order effects. As a result, the model successfully matches the empirical responses of macro and household variables.     

Hoglex Demand Systems and Welfare Policy in Major Asean Developing Countries: A Bayesian Analysis Using Expenditure Unit Records

The HOGLEX demand system (Tran Van Hoa (1983, 1985)) is integrable and flexible in the sense that it is based on utility maximization and encompasses most other well-known demand systems (e.g., LINEX, AIDS) in the literature on consumer behaviour (Laitinen et al. (1983)). HOGLEX studies to date have been based on conventional OLS or MLE methods and panel aggregate income and price data, and restricted to investigating consumption patterns. The paper elaborates on three important subsets of the HOGLEX demand system and, using household expenditure unit records from two major ASEAN developing countries (i.e., Thailand and the Philippines), estimates by the Bayesian method these subsets for 20 socio-demographic cohorts, and discusses their substantial implications in social security and welfare policy analysis. We also estimate the models in the more practical case of measurement errors in total expenditure and compare the results with those without measurement errors.

     

Who gains from capital market integration? Tax competition between unionized and non‐unionized countries

The welfare effects of capital market integration are examined under a model of tax competition with two asymmetric countries. The asymmetry is expressed through the labour market: one country has a perfect labour market whereas the other country's labour market is unionized. Our results indicate that the welfare effects of capital market integration differ depending on whether governments are active or passive in attracting capital. In the absence of active governments, capital market integration benefits the country with a competitive labour market whereas it harms the unionized country. Capital market integration benefits both countries if governments are active and compete for mobile capital using taxes/subsidies.     

Capital market integration and gender inequality

This study explores the effects of globalization on gender inequality. Specifically, we describe how, in terms of capital market integration, globalization alters the gender gap in wage rates through changes in labor demand for capital‐intensive sectors. Consequently, via changes in the bargaining positions of men and women, globalization leads to opposite effects on the couple's labor supply and fertility decisions in capital‐importing and capital‐exporting countries. Moreover, by considering the properties of the industrial structures of capital‐importing and capital‐exporting countries, we show that globalization induces empirically observed declines in fertility rates throughout the world.     

Characterizing Natural Implementability: The Fair and Walrasian Correspondences

We characterize natural implementability in exchange economies when a social choice correspondence possibly recommends a Pareto efficient allocation where the common marginal rate of substitution is not determined uniquely. We find that the no-envy and efficient (or fair) correspondence cannot be implemented by any natural mechanism with a price and a quantity announcement, but can be implemented by a natural mechanism with a price and two-quantity announcement. On the other hand, the constrained Walrasian correspondence can be implemented by a natural price-quantity mechanism with budget balance. Journal of Economic Literature Classification Numbers: C72, D51, D63, D78.