human fallibility and economic organization doctrines concerning what is a good way to organize a society have influenced human societies more deeply than any other set of doctrines specifically beliefs that one way of organizing production and exchange is better than others have inspired a number of socioeconomic experiments leading to modern capitalist and socialist societies with far reaching implications yet surprisingly the central doctrines though a source of continuing ideological debate have been the subject of only limited scientific enquiry the major proposition the so called langelerner taylor theorem asserting the equivalence between competitive capitalist economies and decentralized socialist economies which make use of the price system made a point in stressing that the issue of the ownership of the means of production might not be central in the comparison of economic systems the theorem however was based on models both of capitalism and of market socialism in which the most important differences between the two systems were suppressed this paper describes a research program attempting to delineate some of the critical differences among alternative forms of economic organization we contend that central to an understanding of these differences is an understanding of differences in the organization of decision making of who gathers what information how it gets communicated and to whom and how decisions get made both concerning what actions to take and who should fill decision making positions this view should be contrasted with the traditional economic paradigm in which decision making plays no role the manager for instance simply looks up in a book of blueprints what the appropriate technique of production is for the given set of factor prices in the conventional paradigm moreover mistakes are never made either in gathering or transmitting information or in making decisions and indeed there are no costs associated with these activities by contrast the view we take here is that to err is human and that different organizational systems differ not only in what kinds of errors individuals make in them but also in how the systems aggregate errors as a result organizations differ systematically in the kinds of errors they make and thus in their overall economic performance organizations also differ in the costs associated with information collection with information communication and processing and with decision making indeed as we discuss below perfect decision making can be achieved by arranging enough decision makers in an appropriate manner no matter how fallible the decision makers are provided their decisions are not purely random or worse what prevents perfect decision making is the cost we refer to the specification of the structure of information gathering communication and decision making as an organization s architecture the objective of our research program has been to construct stylized models of an economic organization within which the consequences of alternative organizational architectures can be examined using these models not only can we compare the performance of particular organizational forms but we can also ask given a particular set of objectives and circumstances what is the optimal structure within tdiscussants david kreps stanford university paul milgrom yale university

interlinked credit and farm intensification evidence from kenya abstract this paper addresses the potential for interlinked credit input output marketing arrangements for particular cash crops to promote food crop intensification using panel survey data from kenya we estimate a household fixed effects model of fertiliser use per hectare of food crops using an instrumental variables approach for addressing the endogeneity of participation in interlinked credit arrangements results indicate that households engaging in interlinked marketing programs for selected cash crops applied considerably greater fertiliser on other crops primarily cereals not directly purchased by the cash crop trading firm these findings suggest that in addition to the direct stimulus that interlinked cash crop marketing arrangements can have on small farmer incomes these institutional arrangements may provide spill over benefits for the productivity of farmers other activities such as food cropping

optimal democratic mechanisms for taxation and public good provision abstract we study the interdependence of optimal tax and expenditure policies an optimal policy requires that information on preferences is made available we first study this problem from a general mechanism design perspective and show that efficiency is possible only if the individuals who decide on public good provision face an own incentive scheme that differs from the tax system we then study democratic mechanisms with the property that tax payers vote over public goods under such a mechanism efficiency cannot be reached and welfare from public good provision declines as the inequality between rich and poor individuals increases

endogenous competence and a limit to the condorcet jury theorem the seminal contribution known as the condorcet jury theorem observes that under a specific set of conditions an increase in the size of a group tasked with making a binary decision guilty or innocent say leads to an improvement in the group s ability to make the correct choice an assumption that is not properly appreciated in the relevant literature is that the competency of the group members is assumed to be exogenous in numerous applications members of the group make investments to improve the accuracy of their decision making e g pre meeting efforts we consider the collective action problem that arises we show that if individual competence is endogenous then increases in the group size encourages free riding this trades off with the value of information aggregation thus the value of the larger group size is muted extensions illustrate that if committee members are allowed to exit not participate the equilibrium committee size is reduced additionally supermajority voting rules encourage investments and consequently individual competence

the wage effects of residential location and commuting constraints on employed married women it has been argued that greater spatial constraints are imposed on the job searches of women workers and that these greater constraints account for some of the gender wage gap all researchers agree that women commute shorter distances to work than men in addition some researchers have argued from indirect evidence that two earner households give greater weight to husbands job opportunities when choosing a residential location in this paper we use data on two earner households from the 1980 public use microdata sample pums of the us census for the detroit and philadelphia smsas to quantify the effects of residential location and of gender differences in commuting behaviour on the gender gap in wages first we find that within white households wives encounter relatively greater spatial variation in wages than their husbands but that there is less of a gender difference among black households second we analyse the simultaneous effects of commuting and residential constraints on wages we find for

robustly coalition proof incentive mechanisms for public good provision are voting mechanisms and vice versa we study the relation between mechanism design and voting in public good provision if incentive mechanisms must satisfy conditions of robust coalition proofness as well as robust incentive compatibility the participants contributions to public good provision can only depend on the level of the public good that is provided and that level can only depend on the population shares of people favouring one level over another for a public good that comes as a single indivisible unit the outcome depends on whether or not the share of votes in favour of provision exceeds a specified threshold with more provision levels for the public good more complicated mechanisms can be used but they still involve the counting of votes rather than any measurement of the participants willingness to pay the article thus provides a foundation for the use of voting mechanisms

information processing and jury decisionmaking abstract we develop a model to explore the information processing function that jury deliberation and its analogues perform the central question we ask is how much better could a jury possibly perform if it optimally used the collective information available to it than if it decides cases by a simple majority vote before any deliberation or information sharing occurs it is shown how the answer depends on a number of considerations including the correlation among jurors observations the jurors assessments of the relative importance of type i and type ii errors compared with society s assessment of those errors and differences in jurors abilities

commuting patterns and firm decentralization since most employed individuals must travel between home and work on a daily basis work place commuting has provided the point of departure for the monocentric model of residential location alonso 1964 mills 1972 muth 1969 one of the major behavioral assumptions of the monocentric model is that consumers prefer less commuting to more all else equal hence the model predicts that workers will take advantage of any opportunity to reduce their commutes in the monocentric situation in which all employment is located at the central business district cbd no such opportunity arises however decentralized firm location enables workers to shorten their commutes as firms have left the cbd to move into the residential area the monocentric model thus predicts that if firms have decentralized workers should have very short commutes in longrun equilibrium however significant commuting persists in the face of large scale firm decentralization such commuting leads to the belief that frictions with respect to residential and job mobility exist which prevent workers from achieving the long run equilibrium solution predicted by the monocentric model in this paper i hypothesize that individuals with greater job and residential mobility will have shorter commutes given decentralized firm location residential and job mobility are further hypothesized to be functions of socio economic and employment characteristics the results show sex income race household responsibilities and job mobility to be important in determining commuting behavior the monocentric model is based on a separation of the house and work place theoretically this separation can be measured either in terms of commuting time or distance however most tests of the monocentric model have used commuting distance hamilton 1982 blackley and follain 1987 the time vs distance issue is explicitly addressed in this paper by using both measures in the estimations the results

the optimal decision rule for fixed size committees in dichotomous choice situations the general result this paper presents a general pairwise choice framework and derives the optimal decision rule for fixed size committees the main result generalizes a number of earlier results in the subject copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

information aggregation rationality and the condorcet jury theorem the condorcet jury theorem states that majorities are more likely than any single individual to select the better of two alternatives when there exists uncertainty about which of the two alternatives is in fact preferred most extant proofs of this theorem implicitly make the behavioral assumption that individuals vote sincerely in the collective decision making a seemingly innocuous assumption given that individuals are taken to possess a common preference for selecting the better alternative however in the model analyzed here we find that sincere behavior by all individuals is not rational even when individuals have such a common preference in particular sincere voting does not constitute a nash equilibrium a satisfactory rational choice foundation for the claim that majorities invariably do better than individuals therefore has yet to be derived

does lack of access to formal credit constrain agricultural production evidence from the land tenancy market in rural india while it is commonly believed that lack of access to government subsidized formal credit underlies observed differences in farm productivity in rural india there is little empirical evidence on this issue in this paper i address this issue by examining whether households use the farm land rental market to equilibrate their access to formal credit as they are known to do in the case of other imperfectly marketable inputs this research reveals however that the advantage formal borrowers enjoy in the tenancy market does not reflect their access to formal credit per se but their greater ownership of inputs such as irrigated land

sequential aggregation of verifiable information we introduce the notion of verifiable information into a model of sequential debate among experts who are motivated by career concerns we show that self censorship may hamper the eciency of information agg regation as experts withhold evidence contradicting the conventional wisdom in this case silence is telling and undermines the prevailing view over time if this view is incorrect as a result withholding arguments about the correct state of the world is only a temporary phenomenon and the probability of the correct state of the world being revealed always converges to one as the group of experts becomes large for small groups a simple mechanism the principal can use to improve decisionmaking is to appoint a devil s advocate

centralization versus decentralization as a risk return trade off abstract this paper characterizes the choice between centralization and decentralization as a risk return trade off and examines it in a model that integrates ideas from committee decision making and portfolio theories centralization by pooling expertise rarely yields erroneous decisions however when it fails the consequences are global in contrast in a decentralized system erroneous decisions are more frequent but their consequences are locally confined we assess the relative desirability of de centralization in various scenarios with independent versus interdependent risks we further discuss the robustness of the model and the relevance of our results for policymaking

information is important to condorcet jurors group decision making is very significant in a broad variety of settings this paper deals with committees that make binary decisions and addresses the question of whether informative decisions can be assumed within this framework we show that when using the optimal decision rule informative decision making is a nash equilibrium thus we justify the assumption of informative decision making and provide support for the relevance of assumptions such as independent decision making when using the optimal decision rule

smallholders institutional services and commercial transformation in ethiopia this article examines the role of institutional services of credit input supply and extension in the overall commercial transformation process of smallholder agriculture in ethiopia survey data collected in 2006 from 309 sample households in three districts of ethiopia are used for the analyses tobit regression models are used to measure the effect of access to services on the intensity of inputs use for fertilizer and agrochemicals a probit model is used to measure these effects on the adoption of improved seeds intensity of use of seeds is analyzed using an ordinary least squares model logarithmic cobb douglass functions are estimated to analyze the effect of access to services on crop productivity heckman s two stage estimation is used to examine determinants of household market participation and the extents of participation results show that access to institutional support services plays a significant role in enhancing smallholder productivity and market orientation our results imply that expanding and strengthening the institutional services is critical for the intensification and market orientation of smallholder agriculture in ethiopia in particular appropriate incentives and regulatory systems are urgently needed to encourage the involvement of the private sector in the provision of agricultural services

how institutions mediate the impact of cash cropping on food crop intensification an application to cotton in sub saharan africa summary it is widely agreed that smallholder led agricultural growth would contribute most to improved food security and reduced poverty yet how to achieve broader and more sustainable access by smallholder farmers to productivity enhancing inputs for food crop production remains a largely unsolved riddle in light of the great institutional diversity across cotton sectors in sub saharan africa this study investigates whether cotton can be used to spur the intensification of smallholder food production first a conceptual framework linking cotton institutional structures to food crop intensification is developed then predictions from the conceptual framework are compared with empirical evidence from different countries

the consequences of endogenizing information for the performance of a sequential decision procedure we analyse the implications of endogenizing information collection and reputational concerns for the performance of a sequential decision structure in this model two agents decide in a sequence whether to implement a public project the cost of gathering information is private we derive two results first endogenizing information replaces the herding problem with a free rider problem second endogenizing information aggravates the distortionary effect of reputational concerns

the condorcet jury theorem free speech and correlated votes one of the more optimistic if obscure propositions about democracy is condorcet s jury theorem cjt the theorem establishes that under certain conditions a majority of a group with limited information about a pair of alternatives is more likely to choose the better alternative than any one member of the group the theorem thus provides a mathematical basis for majority rule voting and potentially gives an important clue to our understanding of the strength of democratic government yet cjt makes two overly restrictive assumptions it assumes that individuals vote independently and that they share a common goal clearly the assumptions preclude any application of the theorem to democratic politics not surprisingly black 1963 163 ruled that the theorem offers truly an unpromising start recently interest in the theorem was revived by miller 1986 who permits voters to have conflicting goals and by grofman and feld 1988 who link it with rousseau s general will miller 1986 and grofman and feld 1988 however retain the assumption of independence in this paper i generalize cjt for correlated votes and offer an analytical basis for free speech moreover i apply the generalized theorem to organization theory who should a chief executive choose as advisers the main results of the paper are summarized for large groups condorcet s result would hold under fairly general conditions for small groups the conditions are severe finally under reasonable assumptions p the probability that a majority selects the

interlinked markets and the cash crop food crop debate in land abundant tropical agriculture the purpose of this article is to illustrate how such institutions do arise in the african context under certain preconditions it is argued that the lack of a land market due largely to a non capitalist conception of property rights over land 3 along with other conditions to be examined below leads to the failure of labor and private sector credit markets in response indigenous institutions have evolved to cope with the market failures

choosing how to choose self stable majority rules and constitutions constitutional arrangements affect the decisions made by a society we study how this effect leads to preferences of citizens over constitutions and ultimately how this has a feedback that determines which constitutions can survive in a given society constitutions are stylized here to consist of a voting rule for ordinary business and possibly a different voting rule for making changes to the constitution we define an equilibrium notion for constitutions called self stability whereby under the rules of a self stable constitution the society would not vote to change the constitution we argue that only self stable constitutions will endure we prove that self stable constitutions always exist but that most constitutions even very prominent ones may not be self stable for some societies we show that constitutions where the voting rule used to amend the constitution is the same as the voting rule used for ordinary business are dangerously simplistic and there are many societies for which no such constitution is self stable we conclude with a characterization of the set of self stable constitutions that use majority rule for ordinary business

public protests and policy making technological advances and the development of social media have made petitions public protests and other form of spontaneous activism increasingly common tools for individuals to influence decision makers to study these phenomena in this article i present a theory of petitions and public protests that explores their limits as mechanisms to aggregate information the key assumption is that valuable information is dispersed among citizens through petitions and protests citizens can signal their private information to the policy maker who can then choose to use it or not i first show that if citizens individual signals are not sufficiently precise information aggregation is impossible no matter how large is the population of informed citizens even if the conflict with the policy maker is small i then characterize the conditions on conflict and the signal structure that guarantee information aggregation when these conditions are satisfied i show that full information aggregation is possible as the population grows to infinity when they are not satisfied i show that information aggregation may still be possible if social media are available

elections with privately informed parties and voters this paper studies a situation in which parties are betterinformed than voters about the optimal policies for voters weshow that voters are able to infer the parties information byobserving their electoral positions even if parties have policypreferences which differ substantially from the median voter s unlike previous work that reach opposite conclusions we assumethat voters have some private information of their own if theinformation available to voters is biased parties attempts toinfluence voters beliefs will result in less than fullconvergence even if parties know with certainty the optimalpolicy for the median voter

on committees of experts a committee makes a decision on a project on behalf of the public members of the committee agree on the a priori value of the project and hold additional private information about its consequences they are experts who care about the value of the project and about being considered well informed before voting on the project members can exchange their private information simultaneously we show that reputational concerns make the a priori unconventional decision more attractive and lead committees to show a united front these results hold irrespective of whether information can be manipulated or not also reputational concerns induce members to manipulate information and vote strategically if their preferences differ considerably from those of the member casting the decisive vote our last result is that the optimal voting rule balances the quality of information exchange and the alignment of interests of the decisive voter with those of the public

the relationship between credit and productivity in chinese agriculture a microeconomic model of disequilibrium credit is an important element in agricultural production systems it allows producers to satisfy the cash needs induced by the production cycle which characterizes agriculture preparation planting cultivation and harvesting of the crops are typically done over a period of several months in which very little cash revenue is earned while expenditures on materials purchased inputs and consumption must be made in cash cash income is received a short time after the harvest in the absence of credit markets farmers would have to maintain cash reserves so as to facilitate production and consumption in the next cycle the availability of credit allows both greater consumption and greater purchased input use and thus increases welfare of the farmers

labour supply and commuting abstract we examine the effect of commuting distance on workers labour supply patterns distinguishing between weekly labour supply number of workdays per week and daily labour supply we account for endogeneity of distance by using employer induced changes in distance in germany distance has a slight positive effect on daily and weekly labour supply but no effect on the number of workdays the effect of distance on labour supply patterns is stronger for female workers but it is still small

bayesian learning in social networks we study the perfect bayesian equilibrium of a sequential learning model over a general social network each individual receives a signal about the underlying state of the world observes the past actions of a stochastically generated neighbourhood of individuals and chooses one of two possible actions the stochastic process generating the neighbourhoods defines the network topology we characterize pure strategy equilibria for arbitrary stochastic and deterministic social networks and characterize the conditions under which there will be asymptotic learning convergence in probability to the right action as the social network becomes large we show that when private beliefs are unbounded meaning that the implied likelihood ratios are unbounded there will be asymptotic learning as long as there is some minimal amount of expansion in observations we also characterize conditions under which there will be asymptotic learning when private beliefs are bounded

continuous decisions by a committee median versus average mechanisms abstract a group of strategic agents with diverse private information and interdependent preferences has to take a continuous collective decision i study the design of the decision making procedure from the viewpoint of a utilitarian social planner for uniformly distributed information the implementation of the average report as decision dominates the implementation of the median report when the set of admissible reports is optimally designed this is true for any number of agents and for any degree of interdependence the result extends to a general class of distributions when the number of agents is large

cash cropping and food crop productivity synergies or trade offs the case for promoting export oriented cash crops in africa has generally been based on their direct potential contribution to agricultural productivity and small farmer incomes a relatively neglected avenue of research concerns the synergistic effects that cash cropping can have on other household activities including food production the conventional view that cash crops compete with food crops for land and labour neglects the potential for cash crop schemes to make available inputs on credit management training and other resources that can contribute to food crop productivity which might otherwise not be accessible to farmers if they did not participate in cash crop programs this article builds on previous research by hypothesising key pathways by which cash crops may affect food crop activities and empirically measuring these effects using the case of cotton in gokwe north district in zimbabwe analysis is based on instrumental variable analysis of survey data on 430 rural households in 1996 results indicate that after controlling for household assets education and locational differences households engaging intensively in cotton production obtain higher grain yields than non cotton and marginal cotton producers we also find evidence of regional spill over effects whereby commercialisation schemes induce second round investments in a particular area that provide benefits to all farmers in that region regardless of whether they engage in that commercialisation scheme the study suggests that the potential spill over benefits for food crops through participation in cash crop programs are important to consider in the development of strategies designed to intensify african food crop production

the spatial variation in unemployment and labour force participation rates of male and female workers lillydahl j h and singell l d 1985 the spatial variation in unemployment and labour force participation rates of male and female workers reg studies 19 459 469 this paper investigates the spatial patterns of male and female unemployment and labour force participation rates the theoretical underpinnings for differences in work and residential choices for males and females are reviewed census tract data from five metropolitan areas in the united states are examined we find that no significant pattern exists for overall labour market activity however when male and female unemployment and participation rates are analysed separately significant and dissimilar spatial patterns exist for each hence returns from relocating industry improving transportation investing in human capital or providing job information need to be evaluated in sex specific terms

an experimental study of jury decision rules we present experimental results on groups facing a decision problem analogous to that faced by a jury we consider three treatment variables group size three or six number of votes needed for conviction majority or unanimity and pre vote deliberation we find evidence of strategic voting under the unanimity rule a large fraction of our subjects vote for a decision analogous to conviction even when their private information indicates a state analogous to innocence this is roughly consistent with the game theoretic predictions of feddersen and pesendorfer although individual behavior is explained well by the game theoretic model there are discrepancies at the level of the group decision contrary to feddersen and pesendorfer in our experiments there are fewer outcomes analogous to incorrect convictions under unanimity rule than under majority rule in the case of no deliberation we simultaneously account for the individual and group data using quantal response equilibrium

organizational decision making quality and the severity of the free riding problem abstract this letter proposes to view organizational decision making as a pure public good the problem of voluntary participation in the provision of the public good the quality of the organization s decisions is analyzed using a stylized game of participation we are chiefly concerned with the clarification of the relationship between the severity of the free riding problem and the quality of the decisional resources available to the organization

five questions an integrated research agenda for public choice all societies political or academic must choose among alternatives these choices can be good or bad the worst choice may be looking for answers before there is consensus or at least a debate on what the real questions should be five real questions are offered here in an integrated research agenda for public choice my premis is that there is a single fundamental human problem construct or preserve institutions that make self interested individual action not inconsistent with group welfare all social science research is either a distraction or a step toward understanding at least one of five questions 1 what are preferences 2 what are feasible alternatives 3 how much does the form of implementation affect the way alternatives are valued 4 how do alternatives chosen today affect the menu of alternatives available in the future 5 what is good how would we know if some outcomes are better than others

commuting in search of jobs and residences abstract this paper introduces a model which includes residential job moving and commuting behavior when labor and housing markets are characterized by market imperfections imperfect information and moving costs we examine the consequences of these market imperfections on commuting behavior an empirical analysis of commuting behavior indicates that workers commute less if they receive more job offers

an empirical analysis of the commute to work patterns of males and females in two earner households the purpose of this paper is to empirically investigate the proposition that residential decisions are made with reference to the male head of household s job location disadvantaging females in the labor market a sample of approximately 50 000 adults in two earner households in urban areas distributed across the united states is selected from public use microdata from the 1980 census and used to estimate a simultaneous model to explain commute to work behavior of men and women the model is estimated separately for households that did and did not change residences in the past year the impacts of the new residences on the commute times of both male and female workers holding other variables constant are compared we conclude that residential selection does favor males relative to females although there is evidence that this advantage is eliminated as the ratio of female to male earnings in the same household narrows

information aggregation in polls we study information transmission via polling a policymaker polls constitu ents who differ in their information and ideology to determine policy full rev elation is an equilibrium in a poll with a small sample but not with a large one in large polls full information aggregation can arise in an equilibrium where constituents endogenously sort themselves into centrists who respond truth fully and extremists who do not we find polling statistics that ignore strate gic behavior yield biased estimators and mischaracterize the polvs margin of error we construct estimators that account for strategic behavior finally we compare polls and elections jel c42 d83

can politicians police themselves natural experimental evidence from brazil s audit courts to enhance government accountability reformers have advocated strengthening institutions of horizontal accountability particularly auditing institutions that can punish lawbreaking elected offi

investment criteria in single and multi member economic organizations this paper compares the determination of investment criteriain single and multi member organizations individualdecisional skills are assumed to be endogenous variables thatdepend on the investment criteria our main result specifiesthe condition that determines the relationship between theinvestment criteria in single and multi member organizations given the size of the multi member organization the decisionrule it applies and the function relating the individual sdecisional skills to the investment criterion theimplications of our main result are developed for specialorganizations such as hierarchies and polyarchies ouranalysis implies that the criteria in a multi memberorganization may be stricter than the criteria set in asingle member organization even though in the former case theorganization may worsen the average decision making ability ofits members the analysis can be applied not only in singleand multi member decision making settings but also in somecontexts of centralized and decentralized decisions this isillustrated in the case of decisions by editors ofprofessional journals regarding the acceptance or rejection ofsubmitted papers

skill value and remuneration in committees abstract relatively modest difference in individual decisional skills may warrant substantial inequality in personal remunerations this implies that the return on investment in decisional skills may be very high these claims are illustrated applying the uncertain dichotomous choice setting while clarifying the complex relationship between the individual skills the individual optimal decisional weights and the skill dependent values i e the individual probabilities to be pivotal

the swing voter s curse the authors analyze two candidate elections in which some voters are uncertain about the realization of a state variable that affects the utility of all voters they demonstrate the existence of a swing voter s curse less informed indifferent voters strictly prefer to abstain rather than vote for either candidate even when voting is costless the swing voter s curse leads to the equilibrium result that a substantial fraction of the electorate will abstain even though all abstainers strictly prefer voting for one candidate over voting for another copyright 1996 by american economic association

commuting and labour supply revisited according to theory road pricing may reduce welfare when labour supply is negatively distorted by an income tax this effect particularly occurs when commuting costs reduce labour supply we examine the hypothesis that commuting costs reduce labour supply in the short run in particular we estimate the effect of commuting time on labour supply in the uk we account for endogeneity of commuting time by employing exogenous changes in commuting time resulting from firm relocations and changes in infrastructure our results cast doubt on the idea that increases in commuting cost reduce labour supply at least in the short run more precisely we find that females labour supply reacts positively to or is unaffected by increases in commuting time whereas males labour supply is unaffected

government loan guarantees and the credit decision making structure governments can alleviate the problem of banks denying credit to high risk borrowers and excluding weaker sectors from borrowing by introducing state guaranteed loan programs the main contribution of this paper is the elucidation of the importance of the bank s credit decision making structure in ensuring overall effectiveness of loan guarantees in particular the government can use the guarantee as an instrument for credit inducement and for affecting the bank s decision making system i e its degree of centralization bias towards approval of loans and reliance on objective loan specific information

do two earner households base their choice of residential location on both incomes this article focuses on the role of individual incomes in the residential location decisions of two earner households conventional studies often treat households as a black box and describe them by a single utility function the article raises the question is the household utility paradigm an adequate framework for understanding the location decisions of two earner households it tests an implication of the household utility paradigm the income pooling hypothesis for location decisions the results provide evidence for rejecting the hypothesis among childless families but fail to provide evidence for rejecting it when children are present the results raise the need to address intrahousehold dynamics in modelling location decisions