COOPERATION, COOPTATION, AND REBELLION UNDER DICTATORSHIPS

Dictatorships are not all the same: some are purely autocratic but many exhibit a full panoply of seemingly democratic institutions. To explain these differences, we develop a model in which dictators may need cooperation to generate rents and may face a threat of rebellion. Dictators have two instruments: they can make policy concessions or share rents. We conclude that when they need more cooperation dictators make more extensive policy concessions and share fewer rents. In turn, when the threat of rebellion is greater, they make larger concessions but also distribute more spoils. Assuming that policy concessions require an institutional setting of legislatures and parties, we test this prediction statistically for all dictatorships that existed between 1946 and 1996.     

Size Anomalies in U.S. Bank Stock Returns

The largest commercial bank stocks, ranked by total size of the balance sheet, have significantly lower risk‐adjusted returns than small‐ and medium‐sized bank stocks, even though large banks are significantly more levered. We uncover a size factor in the component of bank returns that is orthogonal to the standard risk factors, including small minus big, which has the right covariance with bank returns to explain the average risk‐adjusted returns. This factor measures size‐dependent exposure to bank‐specific tail risk. These findings are consistent with government guarantees that protect shareholders of large banks, but not small banks, in disaster states.     

POST‐MERGER PRODUCT REPOSITIONING*

This paper analyzes the effects of mergers between firms competing by simultaneously choosing price and location. Products combined by a merger are repositioned away from each other to reduce cannibalization, and non‐merging substitutes are, in response, repositioned between the merged products. This repositioning greatly reduces the merged firm's incentive to raise prices and thus substantially mitigates the anticompetitive effects of the merger. Computation of, and selection among, equilibria is done with a novel technique known as the stochastic response dynamic, which does not require the computation of first‐order conditions.     

Use of Food Pantries and Food Stamps in Low‐Income Households in the United States

Using the Current Population Survey data for 1999, a bivariate probit model was estimated to determine food stamp and food pantries participation for low‐income households. Household income, the level of food insecurity, household structure, and metro versus nonmetro residence affected participation decisions in both programs. Shorter application forms for food stamp benefits encouraged food stamp participation. Food Stamp Program participation and food pantry use were found to be positively correlated.