INDIVIDUAL RIGHTS AND SOCIAL EVALUATION: A CONCEPTUAL FRAMEWORK

We propose a framework for the analysis of social choice andwelfare which uses the informational basis of individual preferenceorderings over the pairs of conventionally defined social alternativesand social decision-making mechanisms. In particular, we considerthe case where the decision-making mechanism is a rights-structuremodelled as game forms. We use this framework to clarify therole for individual preferences in conferring rights, in therealization of the conferred rights, and in describing the formalcontents of rights. We also explore its implications for thecontroversial issue of the consistency of social choice andSen's paradox of Paretian libertarianism.     

A Dynamic Volume–Return Relation and Investors' Positive Feedback Trading

With individual stocks, a larger increase in trading volume indicates a stronger short‐term return persistence. A reason for this short‐horizon ‘volume–return relation’ is that it can signal the existence of fundamental news, which can be gradually incorporated into stock price. In this study, we present another plausible explanation by considering investors' short‐term positive feedback trading. First, through empirical analysis, we show that the volume–return relation remains strong among stocks for which there is little fundamental news. Through a model‐based analysis, we demonstrate that positive feedback trading can cause this relation even when there is no news. Our findings raise the possibility that the short‐horizon volume–return relation is also caused by short‐term positive feedback trading.     

COMPETITION,REGULATION AND WELFARE IN THE PRESENCE OF NETWORK EXTERNALITIES*

In this paper we consider a simple model of an industry with network externalities, where a benefit to each consumer from network services depends on the size of the network. We first consider a single network and cover the cases with and without fixed cost of entry. We then turn to the two‐network industry, where the incumbent network and a new entrant network compete for the market and may differ both in their marginal costs and demand structures. In addition, we identify several situations where public policy may play a crucial role in sustaining socially advantageous network service provision.