The optimum size of the labor-managed firm

Ward's [1958] main result is that an increase in the output price of the labor-managed firm (LMF) decreases its output and members. However, Ward and his followers have not addressed two important elements: the benefit of sharing a public good among LMF members and the increased coordination costs among these members. This paper incorporates these elements to derive the LMF's optimal size and suggests conditions which may alter Ward's perverse result. The example of the Israeli Kibbutzim concerning both incorporating the public goods as well as coordination costs serves as a motivation to the model developed in this paper.     

Asymptotic behavior of market shares for a stochastic growth model

Consider a market with finitely many firms, each enjoying an uncertain growth. We assume the (random) growth rates of these firms are independent and identically distributed. We show that the asymptotic probability distribution of the market shares gives each firm an equal probability of dominating the market (while all other firms are almost extinguished). In particular, these conclusions are independent of the initial market shares of the firms. We conclude that sample paths fluctuate between almost domination and almost extinction. We also demonstrate that these fluctuations may be very slow. Extensions to situations where the total demand is restricted are discussed.     

Price Discrimination by Coupons Restriction

In this paper we show how the use of a restricted number of coupons in the presence of different types of customers is an effective means of implementing a price discriminating policy. Hence, firm profits can be increased even when traditional price discrimination is forbidden.     

A simple proof for the Kleinberg-Weiss representation of the shapley value

We obtain a simple direct proof of the Kleinberg-Weiss representation of the Shapley value.     

The Effects of Criminal Experience on the Incidence of Crime

A bstract . A hypothesis has been analyzed that criminals learn by doing, that with experience criminals increase their activity so that with level outlays on police the incidence of crime may be increasing. This hypothesis is tested by statistical analysis of time series cross sectional data on crime levels, police outlays and various socioeconomic variables. The results confirm that "learning by doing"—accumulating criminal experience—increases criminal activity, that police outlays have a negative and significant effect on crime and that certain socioeconomic characteristics have a significant effect on crime.     

RENT SEEKING AND SOCIAL INVESTMENT IN TASTE CHANGE*

We study the social allocation of resources to the alteration of preferences. Such taste changes are Pareto-preferred if, according to both the original and the new taste regime, the resource allocation resulting from the taste change constitutes an improvement. According to this criterion, a degree of altruism is in general Pareto-preferred, because it reduces socially wasteful activities, such as lobbying, bargaining and other rent seeking activities designed to increase one agent's expected share of the contested rent. We present a stylized model that captures the role of education in generating altruism and thus reducing the expenditure on rent seeking.     

Interdependent utility and cooperative behavior

In this paper we broaden current models of interdependent utility functions, develop a more general and inclusive model of interdependency, and demonstrate the specific nature of the Pareto improvement achievable through cooperative behavior of all individuals with different tastes who adopt similar (or identical) consumption baskets. The resulting model helps to explain such diverse phenomena as the declining importance of the family unit as well as the trend toward a more diverse consumption pattern among communal groups such as the Israeli kibbutz.     

The Difference Between Short and Long Run Effects of Police Outlays on Crime: Policing Deters Criminals Initially, But Later They May 'Learn by Doing'

Abstract . In the long run a positive relationship of police expenditurescrime is derived in models which explain criminal behavior In the short run, however, the statistical results point to the possible deterring effect of police expenditures. A theoretical model is constructed to explain the statistical difference of the short and long run effect of police outlays on crime. As police expenditures increase, crime level diminishes. As time elapses, criminals may adjust to the new level of police effort, improve their performance and at the same level of outlays, increase their criminal activities. This phenomenon could be termed “Criminals’Learning by Doing”. It could explain why, over the long run, the level of crime is positively associated with police expenditures. The empirical analysis examines pooled cross sectional time series of 47 states over the period 1970 to 1980—a total of 517 cases.     

Crime and income inequality: An economic approach

Conclusion When a given pie is redivided in a less equalitarian manner, it is uncertain whether those already undertaking illegal activity will increase or decrease their activities, since the return to illegal activities is countered by the loss due to punishment (which is more painful to a criminal who failed) on one hand, and from the cost of the sacrifice of utility from legitimate activities on the other hand.If the absolute level of wealth remains constant but relative position declines, an incentive is generated to re-establish a person's standing by joining the crime industry. This is certainly the case at the margin for those close to the boundary of joining, i.e., those who are almost indifferent between joining or remaining within the legal framework.Assuming an individual is already participating in illegal activities, the effect of either an absolute or relative change in his level of wealth on his level of illegal activities is indeterminate. This applies both to the case where the total wealth of the society is fixed and the share of the pie going to the rich rises and the case where the total pie rose but the entire gain went only to the rich.In summary, it has been shown that an increase in wealth inequality has an indeterminate outcome both with respect to the decision of the poor on whether or not to enter the crime industry and with respect to the decision of those already participating in illegal pursuits to increase or decrease their level of activity. This conclusion is somewhat contrary to the general consensus of the literature, which appears to hold that increases in wealth inequality will tend to increase both the level of participation in the crime industry and the level of output within the industry.