carbon tax and opec s rents under a ceiling constraint we study the markov perfect nash equilibrium mpne of a game between oil importing countries who seek to maintain the atmospheric carbon concentration under a given ceiling and oil exporting countries the oil importing countries set a carbon tax and the oil exporting countries control the producer price we obtain implicit feedback rules and explicit non linear time paths of extraction carbon tax and producer price consumers are always able to reap some share of the scarcity and monopoly rents whereas producers partially pre empt the carbon tax only if the marginal damage under the ceiling is small we compare the mpne to the efficient open loop and cartel without tax equilibria

quality competition with motivated providers and sluggish demand we study incentives for quality provision in markets where providers are motivated semi altruistic prices are regulated and firms are funded by a combination of block grants and unit prices competition is based on quality and demand adjusts sluggishly health or education are sectors in which the mentioned features are the rule we show that the presence of motivated providers makes dynamic competition tougher resulting in higher steady state levels of quality in the closed loop solution than in the benchmark open loop solution if the price is sufficiently high however this result is reversed if the price is sufficiently low and below unit costs sufficiently low prices also imply that a reduction in demand sluggishness will lead to lower steady state quality prices below unit costs will nevertheless be welfare optimal if the providers are sufficiently motivated

walrasian equilibrium with gross substitutes in this paper we study the problem of efficient production and allocation of indivisible objects among a set of consumers we assume that the agents preferences depend on the bundle of objects and the quantity of money they consume furthermore we assume that preferences are quasilinear in money and that agents have a large endowment of money with indivisibilities it is well known that many familiar properties of the utility functions fail to ensure existence in their striking analysis of the matching problem kelso and crawford 5 introduce the gross substitutes gs condition which ensures the non emptiness of the core we propose two new conditions and show that with quasilinearity they are equivalent article id jeth 1999 2531 available online at http www idealibrary com on

capacity constraints and voluntary output cutback in dynamic cournot competition abstract this paper considers cournot competition in which duopolists play a quantity setting game with sticky prices and capacity constraints a feedback subgame perfect equilibrium is derived and analyzed with sufficient differentiability the paper shows the existence and the uniqueness of symmetric feedback equilibrium we show that there arises a range of constraints defined by two threshold values in which the firms outputs are below the constraint level in the steady state yet the outputs depend nontrivially on the constraint for outside observers the constraint does not seem to be binding but the constraint is binding in that a marginal change in the level of capacity constraint affects firms steady state outputs the result implies that under this constraint the firms cut back their steady state outputs voluntarily more than stipulated by the constraint we also show that the procedure to construct a constrained solution from an unconstrained solution by truncation may not always be appropriate this paper s analysis utilizes the concept of connectable points associated with the solutions to the auxiliary equation of the hamilton jacobi bellman equation since the concept of connectable points and their characterization does not directly rely upon the linear quadratic structure of this game the method can be modified and applied to other differential games with restrictions on the control space s

regional climate change policy under positive feedbacks and strategic interactions the surface albedo feedback along with heat and moisture transport from the equator to the poles is associated with polar amplification which is a well established scientific fact the present paper extends brock and xepapadeas in eur econ rev 94 263 282 2017 to a non cooperative framework with polar amplification where regions decide emissions by maximizing own welfare this can be regarded as a case of regional non cooperation regarding climate change open loop and feedback solutions are derived and compared in terms of temperature paths and welfare with the cooperative solution carbon taxes which could bridge the gap between cooperative and non cooperative emissions path are also derived finally the framework is extended to a ramsey set up in which it is shown how the regional climate model can be coupled with standard optimal growth models numerical simulations confirm the theoretical results and provide insights about the size and the direction of deviations between the cooperative and the non cooperative solutions

on the existence of a strictly strong nash equilibrium under the student optimal deferred acceptance algorithm abstract this study analyzes a preference revelation game in the student optimal deferred acceptance algorithm in a college admission problem we assume that each college s true preferences are known publicly and analyze the strategic behavior of students we demonstrate the existence of a strictly strong nash equilibrium in the preference revelation game through a simple algorithm that finds it specifically i the equilibrium outcome from our algorithm is the same matching as in the efficiency adjusted deferred acceptance algorithm and ii in a one to one matching market it coincides with the student optimal von neumann morgenstern vnm stable matching we also show that i when a strict core allocation in a housing market derived from a college admission market exists it can be supported by a strictly strong nash equilibrium and ii there exists a strictly strong nash equilibrium under the college optimal deferred acceptance algorithm if and only if the student optimal stable matching is pareto efficient for students

internet advertising and the generalized second price auction selling billions of dollars worth of keywords we investigate the generalized second price gsp auction a new mechanism used by search engines to sell online advertising although gsp looks similar to the vickrey clarke groves vcg mechanism its properties are very different unlike the vcg mechanism gsp generally does not have an equilibrium in dominant strategies and truth telling is not an equilibrium of gsp to analyze the properties of gsp we describe the generalized english auction that corresponds to gsp and show that it has a unique equilibrium this is an ex post equilibrium with the same payoffs to all players as the dominant strategy equilibrium of vcg

second best taxation for a polluting monopoly with abatement investment abstract this paper characterizes the optimal tax rule to regulate a polluting monopoly when the firm has the possibility of investing in an abatement technology and the environmental damages are caused by a stock pollutant the optimal policy is given by the stagewise feedback stackelberg equilibrium of a dynamic policy game between a regulator and a monopolist the regulator playing as the leader chooses an emission tax to maximize net social welfare and the monopolist acting as the follower selects the output and the investment in abatement technology to maximize profits we find that the optimal tax has two components the first component is negative and equal to the gap between the marginal revenue and the price caused by the firm market power the second component is given by the difference between the social and private shadow prices of the pollution stock considering a linear quadratic model we show that if marginal environmental damages are constant the difference between social and private shadow prices is positive and the optimal policy consists of taxing emissions at a constant rate if the marginal damages are large enough however if the marginal environmental damages are increasing the numerical exercises carried out show that this difference is negative at the steady state and the optimal policy gives the firm a subsidy when approaching the steady state regardless of the importance of the environmental damages this result is explained by the negative effect that abatement technology accumulation has on the tax finally it can be pointed out that although both models yield different predictions about the sign of the optimal policy the dynamics is globally stable for both cases

international pollution control cooperative versus noncooperative strategies abstract international pollution control involving two neighboring countries is modeled as a simple two player dynamic game each country produces a good that is consumed by domestic households production of each consumption good results in emissions of pollutants households in each country derive utility from the consumption of the domestically produced good but incur costs through the total stock of pollution stock externality in this setting we characterize cooperative as well as noncooperative pollution control strategies of the governments of the two countries that maximize the discounted stream of net benefits of a representative consumer it turns out that when the governments are restricted to use linear strategies noncooperative behavior results in overall losses for both countries if on the contrary governments use nonlinear markov perfect strategies and the discount rate is small enough a pareto efficient steady state pollution stock can be supported as a differentiable subgame perfect equilibrium thus the emergence of first best solutions cooperative outcomes does not require any institutional arrangements threats retaliation etc but can be brought about through the use of nonlinear markov perfect equilibrium strategies

a dynamic model of conflict and appropriation abstract this paper presents an extension of a static model of economic conflict analyzed by hirshleifer 1991 1995 and skaperdas 1992 to an infinite horizon differential game our aim is to highlight the strategic role of appropriation among a smaller group of agents in an intertemporal context the model yields the conclusion that there exists a unique linear nonlinear markov perfect equilibrium strategy even when strategies are defined over the entire state space we demonstrate that partial cooperation can be seen as a long run response to conflict moreover a decrease in the effectiveness of appropriation the depreciation rate of a common pool stock the rate of time preferences or an increase in the degree of noise improves the degree of partial cooperation and thus welfare in an anarchic society

nonlinear strategies in dynamic duopolistic competition with sticky prices abstract we discuss nonlinear strategies in an infinite horizon duopoly game with sticky prices where firms maximize their discounted sum of profit we construct a stationary feedback equilibrium without guessing value functions and feedback strategies that solve the hamilton jacobi equation for this purpose we study the auxiliary equation that is derived from the hamilton jacobi equation we show that the domain of the state space plays an crucial role in characterizing feedback equilibria and discuss several implications of this observation in particular we find that when the upper bound of the state space is not very high previously unknown feedback equilibria emerge

sustainable management of renewable resources an experimental investigation in continuous time abstractthis study addresses one of the most basic questions in renewable resource management the ability of economic agents to exploit a renewable resource in an efficient and sustainable manner in a laboratory experiment subjects are presented with renewable resource extraction problems where optimal management will lead to a stable steady state a test of sustainability of the extraction practices shows that extraction behaviour results in steady states only 56 of the time the mode of the steady state distribution coincides with the optimal steady state extraction the trade off between accruing a higher payoff in the present and sustaining the resource for future exploitation leads to suboptimal behaviours such as initial overextraction of the resource compared to the optimal extraction policy costly downward adjustment of the extraction later in time and settling down for lower long run resource and extraction the suboptimal behaviours lead to 17 loss in efficiency on average in terms of th

a binary conflict ascending price bicap mechanism for the decentralized allocation of the right to use railroad tracks the questions posed for study are motivated by controversies over how sweden might change from a centralized system of railroad management to a decentralized system the central rail administration banverket will retain ownership and maintenance responsibility of the tracks but will sell access to the tracks to private firms the questions are about the mechanism that might accomplish this task parties to the controversy have claimed that the technical aspects of networks will as a matter of principle preclude the operation of any decentralized method this paper explores the properties of a mechanism developed as a challenge to that claim the mechanism is examined in the context of a testbed experimental environment that contains many potential problem causing elements in the tests performed the mechanism operated to efficiently allocate access to the network and it did so for behavioral reasons that are understandable in terms of theory the paper closes with suggestions for further study of environments that might present additional challenges to a mechanism

adverse selection in health insurance markets evidence from state small group health insurance reforms abstract the past decade witnessed major changes in state laws governing the sale of health insurance to small employers states took measures to restrict insurers ability to distinguish between high and low risk customers because of concern about the low rate of coverage among workers in small firms the high prices in the small group market and the absence of federal health reform using both individual level and employer level data i test predictions about the effect of reforms on the employer provided health insurance market i estimate these effects for small firms and their workers using large firms and their workers in the same states as well as large and small firms and their workers in non reform states as comparison groups i find the reforms decreased the rate of employer coverage on average for workers in small firms by less than two percentage points within small firms low expenditure individuals experienced a larger decline in the rate of coverage through their employer while the coverage rate of high expenditure individuals rose slightly in some specifications there is also evidence that comprehensive reforms increased premiums slightly for small employers and that most of this increase was passed on to workers through higher employee contributions

the impossibility of extending random dictatorship to weak preferences random dictatorship has been characterized as the only social decision scheme that satisfies efficiency and strategyproofness when individual preferences are strict we show that no extension of random dictatorship to weak preferences satisfies these properties even when significantly weakening the required degree of strategyproofness

a field study on matching with network externalities we study the effects of network externalities within a protocol for matching faculty to offices in a new building using web and survey data on faculty s attributes and choices we identify the different layers of the social network institutional affiliation coauthorships and friendships we quantify the effects of network externalities on choices and outcomes disentangle the layers of the networks and quantify their relative influence finally we assess the protocol used from a welfare perspective our study suggests the importance and feasibility of accounting for network externalities in assignment problems and evaluates techniques that can be employed to this end jel c78 c93 d62 d85 z13

the welfare effects of coordinated assignment evidence from the new york city high school match abstract coordinated single offer school assignment systems are a popular education reform we show that uncoordinated offers in nyc s school assignment mechanism generated mismatches one third of

gender differences in the valuation of employer provided health insurance i introduction based on the seminal compensating wage differential work of rosen 1986 a considerable number of empirical studies have analyzed the effect of employer provided health insurance on various forms of potential job lock such as decisions to retire to change jobs to participate in the labor market and the extent of participation full time part time and to move from receiving public assistance to the workforce 1 though employer provided health insurance is the most significant source of health insurance in the united states about 65 of all sources its effects on wages have not received due attention and the empirical validity of such effects has not been established as noted by currie and madrian 1999 estimates of the wage employer provided health insurance trade off in most studies exhibit a positive sign are statistically insignificant or both the most recent research has also generated diverse results simon 2001 investigated the trade off by concentrating on displaced workers she found a positive sign for the trade off and concluded that unobserved worker effects do not cause bias and that the more important cause of the bias reflects job and the job match that is jobs are either good or bad jobs with good jobs having higher pay and higher benefits at the same time kaestner and simon 2002 examined the labor market consequences of state mandated health insurance benefits and small group health insurance reforms during the late 1990s they found no evidence of a trade off between wages and health insurance costs and suggested the possibility that increased insurance costs were passed on to workers through higher employee contributions to premiums olson 2002 concentrated on a sample of married women and accounted for the endogeneity of choice between jobs with and without health insurance but did not account for insurance cost sharing such as out of pocket premiums health care need variables or job characteristics he found a trade off of about 20 the existing literature also indicates a gender differential with respect to health care utilization and expenditure manning and mullahy 2001 and employer provided health insurance premiums jensen and morrisey 1990 in addition there is a possibility of gender discrimination due to mandated health insurance provision gruber 1994 furthermore health insurance can create labor market distortions resulting in job locks rent for some workers and pay discrimination these factors may contribute to gender differentials in earnings health insurance trade off and raise the possibility that olson s finding may overestimate the trade off for the entire labor force this study makes three substantive contributions to the literature first we isolate the effect of job characteristics insurance cost sharing as measured by out of pocket premiums and health care need variables that confound the effect of employer provided health insurance on annual earnings we do this by using the 2001 medical expenditure panel survey meps data and its recently released supplementary files second by accounting for the endogeneity of choice between jobs with and without health insurance and by utilizing possession of family coverage policy as an alternative source to own employer provided insurance we expand olson s model to separate samples of married men and married women and investigate potential differentials in valuation cost of employer provided health insurance between the genders third we estimate the effect of employer provided health insurance on the size and composition of the gender earning differentials our results show that failure to control for heterogeneity as well as for endogeneity will understate the size and the statistical significance of the tradeoff a gender trade off differential exists of about 3 5 explaining about 3 of the gender earning differentials health insurance does not contribute to the unexplained portion of the gender earning gap

what floats your boat preference revelation from lotteries over complex goods abstract we examine a type of lottery used to distribute some publicly held resource access rights the lottery provides participants with the opportunity to choose among a set of simple gambles over multi attribute goods participant choices result in an endogenous distribution of success rates over gambles that reflects tradeoffs between the relative desirability of the available goods and the probability of winning when lottery winnings are multi attribute goods lottery outcomes provide sufficient information to estimate hedonic prices marginal utility and marginal rates of substitution among attributes we develop a model for characterizing preferences from this information set we apply our model to idaho s four rivers whitewater recreation lottery which allows applicants to apply for one permit among a large set of alternative river day combinations that provide varying river and weather characteristics this lottery structure shows promise as a foundation for economic experiments for preference revelation

leviathan governments and carbon taxes costs and potential benefits abstract this paper addresses positive aspects of the global warming debate that so far has been concerned by and large with normative issues the paper considers a consumers government that appreciates tax revenues as such leviathan in addition to conventional measures of welfare i e carbon taxes serve the dual purpose of correcting for externalities here global warming or more generally a stock externality from energy use and of raising revenues this government faces either a competitive or a perfectly cartelized supply the major findings are 1 i consumers may benefit from a leviathan government that appropriates some of the monopoly rent by deterring preemption to some extent 2 ii the leviathan motive raises initial taxes and thereby lowers initial emissions but increases the long run stock externality in a play with linear strategies 3 iii there exists a continuum of equilibria in nonlinear markov strategies which are however pareto inefficient compared with the linear strategies 4 iv but in case of a binding resource constraint nonlinear strategies are the only feasible ones

indeterminacy and history dependence of strategically interacting players this paper considers a finite number of agents populating krugman s 1991 labor market the objective is to investigate whether the much emphasized indeterminate outcome is due to the assumption of uncountable many agents each of measure 0 it is shown that this result extends to n players each with strategic leverage if the social reference includes the own action this multiplicity results in an open loop setting which renders in almost all other cases a unique intertemporal nash equilibrium finally the cooperative solution exhibits non standard features the possibility of converging to the stationary inferior agricultural equilibrium and that is due to an unstable node while an unstable spiral can render the unique outcome of full industrialization

strategic disclosure of feasible options abstract the paper illustrates how people who need to make a joint decision may have an incentive to withhold information regarding the existence of pareto improving options the resulting level of inefficiency varies with the way compromises are reached when the parties have to choose among multiple options various reasonable compromise rules can be ranked unequivocally and a rule resulting in a minimal level of inefficiency is identified qualitative results extend to sequential disclosure enforcing a hard deadline for disclosure may be welfare improving in some circumstances

who pays the high health costs of older workers evidence from prostate cancer screening mandates between 1992 and 2009 30 us states adopted laws mandating that health insurance plans cover screenings for prostate cancer because prostate cancer screenings are used almost exclusively by men over age 50 these mandates raise the cost of insuring older men relative to other groups this article uses a triple difference empirical strategy to take advantage of this quasi random natural experiment in raising the cost of employing older workers using integrated public use microdata series data from the march supplement of the current population survey i find that the increased cost of insuring older workers results in their receiving 2 8 lower hourly wages being 2 less likely to be employed and being 0 7 less likely to have employer sponsored health insurance

state mandated benefits and employer provided health insurance abstract one popular explanation for the low rate of employee health insurance coverage is the presence of numerous state regulations which mandate that group health insurance plans must include certain benefits by raising the minimum cost of providing any health insurance coverage these mandated benefits make it impossible for firms which would have desired to offer minimal health insurance at a low cost to do so i use data on insurance coverage among employees in small firms to investigate whether this problem is an important cause of employee non insurance i find that mandates have little effect on the rate of insurance coverage this finding is robust to a variety of specifications of the regulations i also find that this lack of an effect may be because mandates are not binding since most firms appear to offer these benefits even in the absence of regulation

non linear strategies in a linear quadratic differential game abstract we study non linear markov perfect equilibria in a two agent linear quadratic differential game in contrast to the literature owing to tsutsui and mino 1990 nonlinear strategies in dynamic duopolistic competition with sticky prices journal of economic theory 52 136 161 we do not associate endogenous subsets of the state space with candidate solutions instead we use the catching up optimality criterion to address the possibility of infinitely valued value functions applying sufficiency conditions for existence based on those in dockner et al 2000 differential games in economics and management science cambridge university press cambridge yields the familiar linear mpe and a condition under which a continuum of non linear mpes exists these include as their limit a previously unreported piecewise linear mpe the condition relaxes with increasing patience allowing more efficient steady states thus suggesting a folk theorem for differential games as the lower state and control bounds go to the non linear strategies are eliminated

depreciation erodes the coase conjecture if a durable good monopolist produces at constant marginal costs and the good depreciates there exists a family of strong markov perfect equilibrium smpe one member of this family entails instantaneous production of the level of stock produced in a competitive equilibrium this is consistent with the coase conjecture other smpe in the family entail steady state production at a stock level lower than in the competitive equilibrium there may be a jump to these steady states or they may be approached asymptotically monopoly profits are positive in these equilibria and the coase conjecture fails

designing random allocation mechanisms theory and applications randomization is commonplace in everyday resource allocation we generalize the theory of randomized assignment to accommodate multi unit allocations and various real world constraints such as group specific quotas controlled choice in school choice and house allocation and scheduling and curriculum constraints in course allocation we develop new mechanisms that are ex ante efficient and fair in these environments and that incorporate certain non additive substitutable preferences we also develop a utility guarantee technique that limits ex post unfairness in random allocations supplementing the ex ante fairness promoted by randomization this can be applied to multi unit assignment problems and certain two sided matching problems jel c78 d82

duopoly can be more anti competitive than monopoly abstract we prove two results on feedback equilibria under dynamic renewable resource duopoly the linear feedback output is smallest which sharply contrasts to the existing literature where it is largest moreover prices in two feedback equilibria are higher than under monopoly

costly information transmission in continuous time with implications for credit rating announcements abstract this paper formulates a continuous time information transmission model in which an altruistic sender privately observes a stochastic state variable and incurs a communication cost when she broadcasts a message we characterize the sender s optimal announcement strategy using an ordinary differential equation we prove the optimality of the sender s strategies using a martingale verification argument and show that the sender s optimal strategy involves sending discrete messages furthermore we apply the model to the timing decision of credit rating announcements and provide a framework to study various aspects of rating announcements such as the probability of rating reversals and the expected time before a rating change

why do popular mechanisms lack efficiency in random environments we consider the problem of randomly assigning n indivisible objects to n agents recent research introduced a promising mechanism the probabilistic serial that has superior e ciency properties than the most common real life mechanism random priority on the other hand mechanisms based on gale s celebrated top trading cycles method have long dominated the indivisible goods literature with the exception of the present context thanks to their outstanding e ciency features we present an equivalence

comparing school choice mechanisms by interim and ex ante welfare recent work has highlighted welfare gains from the use of the boston mechanism over deferred acceptance da in school choice problems in particular finding that when cardinal utility is taken into account boston interim pareto dominates da in certain incomplete information environments with no school priorities we show that these previous interim results are not robust to the introduction of weak priorities however we partially restore the earlier results by showing that from an ex ante utility perspective the boston mechanism pareto dominates any strategyproof mechanism including da even allowing for arbitrary priority structures thus we suggest ex ante pareto dominance as a relevant criterion by which to compare school choice mechanisms this criterion may be of particular interest to school districts as they can be thought of as social planners whose goal is to maximize the overall ex ante welfare of the students

heterogeneity and the effect of mental health parity mandates on the labor market health insurance benefit mandates are believed to have adverse effects on the labor market but efforts to document such effects for mental health parity mandates have had limited success i show that one reason for this failure is that the association between parity mandates and labor market outcomes vary with mental distress accounting for this heterogeneity i find adverse labor market effects for non distressed individuals but favorable effects for moderately distressed individuals and individuals with a moderately distressed family member on net i conclude that the mandates are welfare increasing for moderately distressed workers and their families but may be welfare decreasing for non distressed individuals

assigning resources to budget constrained agents this article studies different methods of assigning a good to budget constrained agents schemes that assign the good randomly and allow resale may outperform the competitive market in terms of utilitarian efficiency the socially optimal mechanism involves random assignment at a discount an in kind subsidy and a cash incentive to discourage low valuation individuals from claiming the good copyright oxford university press

matching with contracts we develop a model of matching with contracts which incorporates as special cases the college admissions problem the kelso crawford labor market matching model and ascending package auctions we introduce a new law of aggregate demand for the case of discrete heterogeneous workers and show that when workers are substitutes this law is satisfied by profit maximizing firms when workers are substitutes and the law is satisfied truthful reporting is a dominant strategy for workers in a worker offering auction matching algorithm we also parameterize a large class of preferences satisfying the two conditions

where do the sick go health insurance and employment in small and large firms this research was supported by a grant from the economic research initiative on the uninsured at the university of michigan

the combinatorial assignment problem approximate competitive equilibrium from equal incomes this paper proposes a new mechanism for combinatorial assignment for example assigning schedules of courses to students based on an approximation to competitive equilibrium from equal incomes ceei in which incomes are unequal but arbitrarily close together the main technical result is an existence theorem for approximate ceei the mechanism is approximately efficient satisfies two new criteria of outcome fairness and is strategyproof in large markets its performance is explored on real data and it is compared to alternatives from theory and practice all other known mechanisms are either unfair ex post or manipulable even in large markets and most are both manipulable and unfair

matching and price competition we develop a model in which firms set impersonal salary levels before matching with workers wages fall relative to any competitive equilibrium while profits rise almost as much implying little inefficiency furthermore the best firms gain the most from the system while wages become compressed in light of our results we discuss the performance of alternative institutions and the recent antitrust case against the national resident matching program

incentives in the probabilistic serial mechanism abstract the probabilistic serial mechanism bogomolnaia and moulin 2001 9 is ordinally efficient but not strategy proof we study incentives in the probabilistic serial mechanism for large assignment problems we establish that for a fixed set of object types and an agent with a given expected utility function if there are sufficiently many copies of each object type then reporting ordinal preferences truthfully is a weakly dominant strategy for the agent regardless of the number of other agents and their preferences the non manipulability and the ordinal efficiency of the probabilistic serial mechanism support its implementation instead of random serial dictatorship in large assignment problems

evaluating assignment without transfers a market perspective all random assignments allocations without transfers can be considered as market outcomes with personalized prices and an equal income prices proportional across agents imply efficiency common prices lead to efficiency and envy freeness this market perspective also reveals a weakness of envy freeness

labor market consequences of state health insurance regulation this study based mainly on the 1989 98 march current population surveys finds that state mandated health insurance benefits and small group health insurance reform had no statistically significant effects on labor market outcomes such as the quantity of work wages and whether an employee worked for a small or large firm the number and type of state mandated health insurance benefits were unrelated to weeks of work wages and the prevalence of private insurance coverage but positively associated with weekly work hours extensive small group health insurance reform was associated with a slight decline in the prevalence of private insurance coverage in small firms and this reform affected both full and part time employees less extensive reforms were not generally related to the prevalence of private insurance coverage overall the authors do not find strong evidence that insurance regulations affected labor market outcomes although they appear to cause a small decrease in private coverage

the strategy structure of two sided matching markets we study two sided markets in which agents are buyers and sellers or firms and workers or men and women the agents are to form partnerships which provide them with satisfaction and at the same time make monetary transfers e g salaries or dowries the core of this market game is shown to have a particularly nice structure so that precise answers can be given to questions concerning comparative statics and manipulability the idea of using walrasian equilibrium as a mechanism for making allocations with desirable properties of fairness and efficiency has been studied extensively the scheme involves having agents specify their supply and demand functions the competitive equilibria are then calculated and allocations are made accordingly in general this procedure may run into two difficulties first nonuniqueness if there are several equilibria there may be no fair way to decide which one should be implemented and second manipulability if there is only one equilibrium an informed agent may be able to influence it by suitably falsifying his demand data however as we will show here using the walrasian mechanism does work remarkably well for a certain class of important markets these are the matching markets of our title and they include markets for single items like houses where it is assumed that traders do not wish to acquire more than one item they also include labor markets in which it is desired to match workers with jobs at suitable salaries academic markets in which students are to be assigned to educational institutions marriage markets where men and women are matched through negotiating of dowries it turns out that in these markets both the problems of nonuniqueness and manipulability can be resolved in a

do multiple nash equilibria in markov strategies mitigate the tragedy of the commons abstract in a seminal paper dockner and van long 1993 international pollution control cooperative versus non cooperative strategies journal of environmental economics and management 25 13 29 argue that nonlinear strategies allow to protect the commons compared with the linear and singular strategy this paper shows that the existence of multiple equilibria depends on preference characteristics and that multiple equilibria need not foster conservation in particular if the absolute elasticity of marginal utility is decreasing then multiple equilibria aggravate the tragedy of the commons compared with the singular or saddlepoint strategy

recent developments in matching with constraints in an earlier work kamada and kojima 2015 we introduced matching with constraints a two sided matching problem in which the market is subject to feasibility constraints that paper proposed and analyzed a possible solution to this problem and discussed various real market applications of our results the present paper reorganizes some of the findings from our more recent effort based on kamada and kojima 2016a b

school choice impossibilities for affirmative action abstract this paper investigates the welfare effects of affirmative action policies in school choice we show that affirmative action policies can have perverse consequences specifically we demonstrate that there are market situations in which affirmative action policies inevitably hurt every minority student the purported beneficiaries under any stable matching mechanism furthermore we show that another famous mechanism the top trading cycles mechanism suffers from the same drawback

generalized reduced form auctions a network flow approach we develop a network flow approach for characterizing interim allocation rules that can be implemented by ex post allocations our method can be used to characterize feasible interim allocations in general multi unit auctions where agents face capacity constraints both ceilings and floors applications include a variety of settings of practical interest ranging from individual and group specific capacity constraints set aside sale partnership dissolution and government license reallocation

transboundary pollution game with potential shift in damages abstract complex systems exposed to pollution may suddenly and permanently shift to a dangerous regime this paper studies a dynamic game among countries that face the prospect of such a shift each country derives some flow utility from its own emissions which are chosen unilaterally but flow emissions by all countries increase the pollution stock in the world in addition to generating global damages such as global warming the pollution stock may trigger an irreversible and abrupt jump in global damages or catastrophe at an unknown date in the future we ask whether endogenous and exogenous threats of such a jump in damages or catastrophe mitigate the tragedy of the commons and examine their implications on welfare our analysis yields different emission responses to these threats as compared to the related literature that focuses only on the single polluter case for example when the hazard rate is exogenous and countries commit to nonlinear strategies we find that the threat of a possible jump in damages or catastrophe may induce a lower or larger emission level and initial welfare due to multiple equilibria these results are maintained when the hazard rate endogenously depends on emission decisions

global warming with green and brown consumers in this paper i investigate how much green polluters mitigate the familiar dynamic tragedy of the commons global warming green consumers feel penalized pain for any consumption in excess of the social optimum this can arise for example from kant s categorical moral imperative interplays among and between green and brown consumers are investigated as differential games green preferences the heterogeneity of consumers and the irreversibility of emissions lead to discontinuous strategies associated with these are a number of non trivial and even puzzling features e g the possibility of another green paradox

dynamic demand and noncompetitive intertemporal output adjustments abstract this paper integrates dynamics on the demand and on the supply side which are characteristic for many goods in particular fuels due to costly adjustments furthermore firms often pursue a quantity strategy and decide on output adjustments additional capacities etc instead of fixing prices e g opec moved from posting prices to adjusting output in 1986 this paper provides a corresponding framework surprisingly ignored in the literature and derives intertemporal market equilibria cooperative and noncooperative in open loop and in markov strategies the equilibrium in markov strategies is different mostly opposite to the much discussed sticky price models the qualitative properties are non trivial and some of them are even surprising e g increased demand sluggishness can raise supply

existence and properties of equilibria for a dynamic game on productive assets abstract we consider a model in which two agents share access to the same stock of a productive asset and study the implications of non cooperative consumption behavior over time under standard assumptions on the production function we construct infinitely many nash equilibria all of which consist of stationary markovian strategies these equilibria result in overconsumption so that the uniquely determined long run asset stock is too low as compared to the cooperative solution however in the limit as the discount rate becomes sufficiently small the stead states generated by the markovian nash equilibria converge to the efficient steady state journal of economic literatureclassification numbers c73 o41 q22

how to control controlled school choice we characterize choice rules for schools that regard students as substitutes while expressing preferences for a diverse student body the stable or fair assignment of students to schools requires the latter to regard the former as substitutes such a requirement is in conflict with the reality of schools preferences for diversity we show that the conflict can be useful in the sense that certain unique rules emerge from imposing both considerations we also provide welfare comparisons for students when different choice rules are employed

stable marriages and search frictions stable matchings are the primary solution concept for two sided matching markets with nontransferable utility we investigate the strategic foundations of stability in a decentralized matching market towards this end we embed the standard marriage markets in a search model with random meetings we study the limit of steady state equilibria as exogenous frictions vanish the main result is that convergence of equilibrium matchings to stable matchings is guaranteed if and only if there is a unique stable matching in the underlying marriage market whenever there are multiple stable matchings sequences of equilibrium matchings converging to unstable inefficient matchings can be constructed thus vanishing frictions do not guarantee the stability and efficiency of decentralized marriage markets

equilibria and indivisibilities gross substitutes and complements this paper examines an exchange economy with heterogeneous indivisible objects that can be substitutable or complementary we show that a competitive equilibrium exists in such economies provided that all the objects can be partitioned into two groups and from the viewpoint of each agent objects in the same group are substitutes and objects across the two groups are complements this condition generalizes the well known kelso crawford gross substitutes condition and is called gross substitutes and complements we also provide practical and typical examples from which substitutes and complements are both jointly observed

a leaky bucket in the real world estimating inequality aversion using survey data existing evidence of inequality aversion relies on data from class room experiments where subjects face hypothetical questions this paper estimates the magnitude of inequality aversion using representative survey data with questions related to the real economy situations the respondents face the results reveal that inequality aversion can be measured in a meaningful way using survey data but the magnitudes of the estimates depend dramatically on how inequality aversion is measured no matter how measured the revealed inequality aversion predicts opinions on a wide range of questions related to the welfare state such as the level of taxation tax progressivity and the structure of unemployment benefits

why environmentalists resist trade liberalization we build a two country differential game model of polluting oligopoly to consider the effects of trade liberalization as in static models the opening of trade promotes competition but expands global pollution characterizing open loop and feedback strategies we derive a sufficient condition for losses from trade this losses from trade proposition could provide a rationale for persistent resistance to globalization by environmentalists

bidding for army career specialties improving the rotc branching mechanism motivated by the low retention rates of us military academy and reserve officer training corps graduates the army recently introduced incentives programs in which cadets could bid 3 years of additional service obligation to obtain higher priority for their desired branches the full potential of this incentives program is not utilized because of the rotc s deficient matching mechanism i propose a design that eliminates these shortcomings and mitigates several policy problems the army has identified in contrast to the rotc mechanism my design utilizes market principles more extensively and it is a hybrid between a market mechanism and a priority based allocation mechanism