on the fixed nature of sharecropping contracts newbery and stiglitz i979 suggest four stylised facts of sharecropping which theories should attempt to explain the first is the persistence of sharecropping and its coexistence with fixed rental and wage markets under a variety of conditions over centuries of time the second is that in modern developed economies there appears to be a decline in share tenancy thirdly share tenancy is often but not alwavs associated with lower productivity than fixed rental land finally in many economies contracts involve shares of around one half for landlord and tenant this does not vary from contract to contract and does not seem to be the object of negotiation smith i776 and many subsequent authors have likened sharecropping to a tax they argue that under this type of contract tenants choose their labour supply to equate their marginal disutility of labour with their proportionate share of the marginal product instead of the full marginal product they therefore regard sharecropping as an inefficient form of land tenure however this view is difficult to reconcile with the first observation given the coexistence of fixed rent and share contracts it is reasonable to expect that if share contracts were relatively inefficient they would quickly die out this does not appear to have happened more recently it has been argued most notably by cheung i969 that if there is certainty and transactions costs are the same for all contracts then provided a share contract specifies the labour supply of the tenant it leads to the same efficient allocation of resources as a fixed rent or wage contract cheung has used this result as the basis of an explanation for coexistence he suggests that the transaction costs for share contracts are higher than for wage and fixed rent contracts however share contracts have the advantage that they allow the risk to be shared between the landlord and tenant whereas with fixed rent contracts the tenant bears all the risk and with wage contracts the landlord does given varying degrees of risk aversion among landlords and tenants it is possible that for some parties the risk sharing advantages outweigh the transaction cost disadvantages so that they will prefer share contracts whereas with others the reverse is true one problem with this argument raised by stiglitz i974 and newbery i977 is that given constant returns to scale the risk sharing properties of share contracts can be attained with mixtures of fixed rent and wage contracts if these do indeed have lower transaction costs share contracts would not then be observed

behavioral contract theory abstract this review provides a critical survey of psychology and economics behavioral economics research in contract theory first i introduce the theories of individual decision making most

scenario based forecast for the electricity demand in qatar and the role of energy efficiency improvements abstract we model the electricity consumption in the market segment that compose the qatari electricity market we link electricity consumption to gdp growth and population growth building on the estimated model we develop long range forecasts of electricity consumption from 2017 to 2030 over different scenarios for the economic drivers in addition we proxy for electricity efficiency improvements by reducing the long run elasticity of electricity consumption to gdp and population we show that electricity efficiency has a crucial role in controlling the future development of electricity consumption energy policies should consider this aspect and support both electricity efficiency improvement programs as well as a price reform

elements for the development of public policies in the residential sector of mexico based in the energy reform and the energy transition law abstract mexico has entered in an important dynamic of structural changes in the energy area proof of this it is the energy reform 2013 and the energy transition law published the last december 24th 2015 thus it is important to carry out studies of the impacts of future politics in the consumption of the population so this study estimate an energy demand system using microdata collected from 97 817 households in a national households income and expenditure survey enigh acronyms in spanish encuesta nacional de ingresos y gastos de los hogares in the 20 years period from 1994 to 2014 the magnitudes of all the fuels are smaller than one indicating that electricity lpg gasoline and public transport are normal goods while lpg is the most inelastic energy source the geographic factor shows that households in the north of mexico tend to consume more gasoline whereas in the south of the country the lowest share of lpg expenditure is reported the rigorous evaluation of energy demanded in households will help policy makers to put forward more efficient reforms

aggregate demand for electricity in south africa an analysis using the bounds testing approach to cointegration abstract electricity demand in south africa has grown at a very rapid rate over the past decade as part of reform initiatives to enhance long term sustainability of the country s electricity industry south africa s authorities have in recent years sought to develop an electricity pricing framework that is cost reflective and forms the cornerstone of demand management schemes meant to foster changes in consumption behaviour and enhance efficiency in resource use the effects of any pricing policy on aggregate electricity consumption will depend on a useful understanding of the factors that influence electricity demand and the magnitude to which electricity demand responds to changes in such factors in this context this paper applies the bounds testing approach to cointegration within an autoregressive distributed lag framework to examine the aggregate demand for electricity in south africa during the period 1960 2007 the results indicate that in the long run income is the main determinant of electricity demand with electricity prices having an insignificant effect on aggregate electricity demand future pricing policies will need to ensure that electricity prices are cost reflective and enhance efficiency of electricity supply and use

envy in mission oriented organizations according to the labor donation theory workers adhering to their firms mission are willing to donate a portion of their paid labor in this paper we study how workers fairness concerns limit the firm s ability to extract labor donation from its employees we find that in sectors where the firm s mission is important optimal contracts are such that high ability employees perceive their wage as less fair than low ability employees and they must be rewarded with an envy rent the opposite is true in sectors where the firm s mission does not play a relevant role we empirically test the predictions of the model using the german socio economic panel finding support for our theoretical results

moral hazard in risk averse teams holmstrom 1982 has shown that a non budget balancing contract induces a team of risk neutral agents to choose the first best effort levels this is not generally true when agents are risk averse furthermore a massacre contract which punishes all but one agent when the outcome is low can attain the first best over a wider range of parameters than any other budget balancing contract

limited liability and incentive contracting with ex ante action choices abstract this article examines a principal agent model of financial contracting in which a risk neutral entrepreneur agent makes an unobservable ex ante effort choice while employing the investment funds of a risk neutral investor principal the key innovation is that the investment contract is subject to statutory liability limits given these liability limits two settings are considered one in which the investor payoff function is also constrained to be monotonically nondecreasing in firm profit and another in which no such monotonic contract constraint is imposed in the former case a standard debt contract is shown to emerge and a first best effort choice is not achieved in the latter setting the optimum is characterized by a live or die payoff function and a first best effort level may or may not be realized

peer pressure and partnerships partnerships and profit sharing are often claimed to motivate workers by giving them a share of the pie but in organizations of any significant size the free rider effects would seem to choke off

why are small firms different managers views do incentives differ between large and small organizations results from a representative survey of compensation managers are used to shed light on the issues i find that i small establishments rely less on pecuniary incentives and have a significantly more hostile attitude towards incentive schemes based on competition and relative rewards ii large units are more vulnerable to mechanisms of efficiency wages effects that remain even after controlling for differences in monitoring ability iii large units are more prone to indicate that negative reciprocity is important and that their employees care about relative pay i argue that these findings fit with behavioral stories of incentives and motivation in particular those stressing group interaction effects inequity aversion and gift exchange

the demand for residential electricity in south africa abstract this paper examines the residential demand for electricity in south africa as a function of real gross domestic product per capita and the price of electricity during the period 1978 2005 we make use of the bounds testing approach to cointegration within an autoregressive distributed framework suggested by pesaran et al 2001 bounds testing approaches to the analysis of level relationships journal of applied econometrics 16 3 289 326 following the literature we use a linear double logarithmic form using income and price as independent variables in the empirical analysis in the long run we find that income is the main determinant of electricity demand while electricity price is insignificant

energy demand in ghana a disaggregated analysis this paper presents a comprehensive analysis of energy demand in ghana by estimating demand functions for key disaggregated energy components including gasoline diesel liquefied petroleum gas lpg kerosene biomass residual fuel oil rfo and electricity our results show that energy prices income urbanization and economic structure are significant demand drivers of the different energy types in ghana with varying estimated elasticities further there is evidence of high degree of inter fuel substitution in energy demand in ghana particularly from gasoline diesel and kerosene towards lpg consumption we recommend among different policy options a customization of energy price subsidization policies especially on lpg to reduce the unintended beneficiary dilemma or spillover effect of current government policy other policies such as intensification of energy conservation programs and market entry of independent power trading companies to enhance energy service delivery through competition are also discussed

optimal incentive contracts under inequity aversion we analyze the classic moral hazard problem with the additional assumption that agents are inequity averse the presence of inequity aversion alters the structure of optimal contracts when the concern for equity becomes more important there is convergence towards linear sharing rules the sufficient statistics result is violated depending on the environment contracts may be either overdetermined i e include non informative performance measures or incomplete i e neglect informative performance measures finally our model delivers a simple rationale for team based incentives implying wage compression 2010 elsevier inc

electricity planning and implementation in sub saharan africa a systematic review abstract universal electricity access is an important development objective and the focus of a number of key global un initiatives while robust electricity planning is widely believed to be a prerequisite for effective electrification to date no comprehensive overview of electricity planning research has been undertaken on sub saharan africa the world region with the lowest access rates this paper reviews quantitative and qualitative electricity planning and related implementation research considering each of the 49 sub saharan african countries the four regional power pools and the sub continent as a whole applying a broad understanding of electricity planning and a practical limit of 20 reviewed articles per country and region 306 relevant peer reviewed journal articles are included in this review a general classification scheme is introduced that classifies the planning literature along the addressed value chain depth number of different analysed criteria and number of evaluated decision alternatives the literature is found to be strongly clustered in a few countries with less than 5 identified relevant articles in 36 of the 49 countries the total amount of articles per year is clearly increasing over time addressing technology choice operation distribution and implementation analyses although including different high level criteria in analysing electricity systems is common the literature is only starting to use formalised multi criteria decision making mcdm tools the review indicates that 63 of relevant articles favour renewable energy technologies for their given problems frequently mentioned success factors for electrification in sub saharan africa include adequate policy design sufficient finance and favourable political conditions while considerable regional and methodological literature gaps are apparent the literature in this review identifies a rich and fruitful ground for future research to fill these gaps

short run and long run elasticities of import demand for crude oil in turkey abstract the aim of this study is to attempt to estimate the short run and the long run elasticities of demand for crude oil in turkey by the recent autoregressive distributed lag ardl bounds testing approach to cointegration as a developing country turkey meets its growing demand for oil principally by foreign suppliers thus the study focuses on modelling the demand for imported crude oil using annual data covering the period 1980 2005 the bounds test results reveal that a long run cointegration relationship exists between the crude oil import and the explanatory variables nominal price and income but not in the model that includes real price in domestic currency the long run parameters are estimated through a long run static solution of the estimated ardl model and then the short run dynamics are estimated by the error correction model the estimated models pass the diagnostic tests successfully the findings reveal that the income and price elasticities of import demand for crude oil are inelastic both in the short run and in the long run

peer effects and incentives in a multi agent setting individuals often compare own performance with that of their peers these comparisons influence agents incentives and lead to a noncooperative game even if the agents have to complete independent tasks i show that depending on the interplay of the peer effects agents efforts are either strategic complements or strategic substitutes but the informativeness principle always applies i solve for the optimal monetary incentives that complement the peer effects in case of limited liability the principal may prefer to implement inefficiently large efforts although agents earn positive rents that increase in the respective agent s effort level

can group incentives alleviate moral hazard the role of pro social preferences abstract incentivizing unobservable effort in risky environments such as in insurance credit and labor markets is vital as moral hazard may otherwise cause significant welfare losses including the outright failure of markets ensuring incentive compatibility through state contingent contracts between principal and agent however is undesirable for risk averse agents we provide a theoretical intuition on how pro social preferences between agents in a joint liability group contract can ensure incentive compatibility two independent large scale behavioral experiments framed in an insurance context support the hypotheses derived from our theory in particular effort decreases when making agents payoff less state dependent but this effect is mitigated with joint liability in a group scheme where agents are additionally motivated by pro social concerns activating strategic motives slightly increases effort further particularly in non anonymous groups with high network strength the results support existing evidence on joint liability groups and further suggest that even if peer pressure to ensure effort provision is absent such group policies can improve efficiency when agents are pro social

are workers paid their marginal products status is like coase s social costs a reciprocal phenomenon given that one person s gain in status can occur only at the expense of a loss in status for others and that workers are free to choose their coworkers it follows that the competitive wage structure within a firm must be one in which individual wage differences understate individual differences in marginal products the purpose of this paper is to examine a variety of empirical evidence that relates to this proposition about the firm s internal wage structure the paper is organized as follows section i briefly summarizes the theoretical considerations that govern competitive wage determination when status matters to people and firms are viewed as voluntary associations of workers section ii then confronts the predictions of section i by examining pay and productivity schedules for a group of sales occupations for which these schedules are relatively easily observed section ii also examines the relationship between wages and productivity for a sample of university professors an occupation in which individual productivity differences are for a variety of obvious reasons relatively more difficult to measure all of the evidence examined is consistent with the hypothesis that within firms wage rates vary substantially less than do individual productivity values section iii discusses additional observations and evidence that bear on this same hypothesis it suggests that the implicit market for status may strongly influence the ways in which firms are organized to carry out the tasks they perform section iv concludes by considering the claim that egalitarian internal wage structures arise because of equity considerations it argues that the concept of equity appears very closely linked to the concept of status and suggests a strategy for assigning monetaty value to the equity considerations that so often dominate public policy decisions

pay reference points and police performance several theories suggest that pay raises below a reference point will reduce job performance final offer arbitration for police unions provides a unique opportunity to examine these theories as the police officers either receive their requested wage or receive a lower one in the months after new jersey police officers lose in arbitration arrest rates and average sentence length decline and crime reports rise relative to when they win these declines in performance are larger when the awarded wage is further from the police union s demand the findings support the idea that considerations of fairness disappointment and more generally reference points affect workplace behavior

you get what you pay for incentives and selection in the education system we analyse worker self selection with a special focus on teachers to explore whether worker composition is generally endogenous we analyse laboratory experimental data to provide causal evidence on particular sorting patterns our field data analysis focuses specifically on selection patterns of teachers we find that teachers are more risk averse than employees in other professions indicating that relatively risk averse individuals sort into teaching occupations under the current system using survey measures on trust and reciprocity we find that teachers trust more and are less negatively reciprocal than other employees and establish differences in personality based on the big five concept

an empirical analysis of energy demand in namibia abstract using a unique database of end user local energy data and the recently developed autoregressive distributed lag ardl bounds testing approach to cointegration we estimate the long run elasticities of the namibian energy demand function at both aggregated level and by type of energy electricity petrol and diesel for the period 1980 2002 our main results show that energy consumption responds positively to changes in gdp and negatively to changes in energy price and air temperature the differences in price elasticities across fuels uncovered by this study have significant implications for energy taxation by namibian policy makers we do not find any significant cross price elasticities between different fuel types

residential electricity demand dynamics in turkey abstract this article provides fresh empirical evidences for the income and price elasticies of the residential energy demand both in the short run and long run for turkey over the period 1968 2005 using the bounds testing procedure to cointegration the computed elasticities of income and price are consistent with the previous studies and as expected the long run elasticities are greater than the short run elasticities an augmented form of granger causality analysis is implemented among residential electricity income price and urbanization in the long run causality runs interactively through the error correction term from income price and urbanization to residential energy but the short run causality tests are inconclusive the parameter stability of the short run as well as long run coefficients in the residential energy demand function are tested the results of these tests display a stable pattern

organization design proximity and productivity responses to upward social comparison we investigate the mechanisms that shape social comparison in organizations and generate social comparison costs in particular we focus on heterogeneity in the strength and type of incentives and argue that from an efficient design perspective such variance in rewards is a double edged sword while the sorting and incentive effects that result may increase productivity the social comparison processes that arise may dampen it we posit that the mechanisms underlying these behavioral costs are shaped not only by the magnitude of reward variance but by the formal and informal design elements shaping the distance of advantaged peers in other words the more proximate socially structurally or geographically are those to whom one socially compares the larger the behavioral response empirically we use an unanticipated event during which outlets of a bank previously operating under essentially homogenous incentives were assigned to tournament groups with differing ex ante probabilities of winning a

bonus pools and the informativeness principle abstract previous work on moral hazard problems has shown that under certain conditions bonus contracts create optimal individual incentives for risk neutral workers in our paper we demonstrate that if a firm employs at least two workers it may further benefit from combining worker compensation via a bonus pool contract and relative performance evaluation such combination leads to saved rents under a wide class of luck distributions in addition if the employer is wealth constrained complementing individual bonus contracts by the possibility of pooling bonuses can increase the set of implementable effort levels all our results hold even though workers outputs are technically and stochastically independent so that in view of holmstrom s informativeness principle individual bonus contracts would be expected to dominate bonus pool contracts

revisiting the trade off between risk and incentives the shocking effect of random shocks despite its central role in the theory of incentives empirical evidence of a trade off between risk and incentives remains scarce we reexamine this trade off in a workplace lab environment and find that in line with theory principals increase fixed pay while lowering performance pay when the relationship between effort and output is noisier unexpectedly agents produce substantially more in the noisy environment than in the baseline despite weaker incentives in addition principals earnings are significantly higher in the noisy environment we show that these findings can be accounted for when agents maximize a non cara utility function or when they exhibit loss aversion data and the online appendix are available at https doi org 10 1287 mnsc 2017 2914 this paper was accepted by uri gneezy behavioral economics

the evolution of price elasticity of electricity demand in south africa a kalman filter application abstract in south africa the electricity mismatch of supply and demand has been of major concern additional to past problems the 2008 electricity crisis made the solution crucial after its damaging consequences to the economy the disagreement on the need and consequences of the continuous electricity price hikes worsens the situation to contribute to the recent electricity debate this paper proposes a time varying price elasticity of demand for electricity the sensitivity of electricity consumption to price fluctuations changes throughout the years the main purpose of this study is the estimation of the price elasticity of electricity in south africa during the period 1980 2005 by employing an advanced econometric technique the kalman filter apart from the decreasing effect of electricity prices to consumption 71 8 in the 1990s and 94 5 in the 2000s in average our results conclude to an important finding the higher the prices for example in the 1980s the higher the sensitivity of consumers to price fluctuations thus further increases of the electricity prices may lead to changes in the behaviour of electricity consumers focusing their efforts on improving their efficiency levels by introducing demand side management techniques or even turning to other sources of cheaper energy

do high stakes and competition undermine fair behaviour evidence from russia abstract this paper reports the results of a series of competitive labour market experiments in which subjects have the possibility to reciprocate favours in the high stake condition subjects earned between two and three times their monthly income during the experiment in the normal stake condition the stake level was reduced by a factor of ten we observe that both in the high and the normal stake condition fairness concerns are strong enough to outweigh competitive forces and give rise to non competitive wages there is also no evidence that effort behaviour becomes generally more selfish at higher stake levels therefore our results suggest that fairness concerns may play an important role even at relatively high stake levels

estimating energy and oil demand functions a study of thirteen developing countries abstract in this paper we attempt to identify some of the factors that have determined the level and pattern of energy demand in developing countries during the 1970s and early 1980s aggregate oil and energy demanding functions are constructed for a selection of oil importing countries and oil exporting countries the results show a strong link between income and aggregate energy demand conversely the price elasticity of energy demand is low both in the short run and the long run oil demand behaviour is more complex oil products can be rationed or domestic energy production can affect oil demand nonetheless the income elasticity remains close to one in most countries and is well above one for some

estimation of residential electricity demand in hong kong under electricity charge subsidies abstract over the past decade the hong kong hk government provided electricity charges subsidies for residential accounts to alleviate the burden of inflation and later the burden of economic downturn in this study we estimate an econometric model of residential electricity demand and test the existence of a stable long run relationship for the period 1980 2016 while accounting for the relief measures set out by the hk government since 2008 empirical results suggest that there exists a long run relationship among residential electricity consumption electricity price income per capita and weather variables temperature or cooling degree days in the absence of electricity charge subsidies the demand is found to be both price and income inelastic on the other hand hk s residential electricity consumers are unresponsive to price and income changes when electricity subsidies are in place following its new carbon reduction plan hk is gradually phasing out coal for electricity generation to replace it mainly with natural gas our results suggest that new residential electricity charge subsidies can lessen the effectiveness of6 climate policies aimed at reducing electricity consumption through increases in the electricity price

features of experimentally observed bounded rationality abstract on the basis of experimental evidence reported in the literature the paper draws conclusions about the bounded rationality exhibited by human economic behaviour among the topics discussed are presentation effects caused by superficial analysis strategic reasoning and strategy construction based on reciprocity and fairness avoidance of circular concepts in step by step strategic reasoning ex post rationality and learning direction theory presence of both adaptive and analytic approaches to repeated decision tasks and the absence of quantitative expectations and optimization in typical repeated game strategies

wages profits and rent sharing the paper suggests a new test for rent sharing in the u s labor market using an unbalanced panel from the manufacturing sector it shows that a rise in a sector s profitability leads after some years to an increase in the long run level of wages in that sector the paper controls for workers characteristics for industry fixed effects and for unionism lester s range of wages is estimated for rent sharing reasons alone at approximately 24 per cent of the mean wage

workplace productivity and bonus preferences why do men with low productivity prefer individual pay this paper examines the relationship between workers productivity and preferred bonus scheme the data are from a company where agents work in teams and receive a bonus that depends on individual and team performance standard agency theory predicts that workers with productivity below the team average prefer a team bonus while high productivity agents prefer an individual bonus risk aversion may temper the taste for individual pay this model predicts the observed relationship between productivity and bonus preferences very well there is however one pattern that it cannot explain many low performers especially men prefer individual bonuses

rent sharing and wages evidence from company and establishment panels a central question in labor economics and macroeconomics is whether the textbook competitive model provides an adequate representation of the labor market using longitudinal data on companies and establishments this article suggests that it may not as predicted by rent sharing models of the labor market changes in profitability are shown to feed through into long run changes in wages these are not temporary wage effects and are not driven by the unionized workplaces in the data the article s estimates imply that for rent sharing reasons alone lester s range of wages is approximately 16

worker characteristics and wage differentials evidence from a gift exchange experiment there is ample empirical evidence indicating that a substantial fraction of the population exhibits social preferences recent work also shows that social preferences influence the effectiveness of incentives in labor relations hence when making contracting decisions employers should take into account that workers are heterogenous with respect to both their productivity and their social preferences this paper presents causal evidence that they do in a real effort experiment we elicit measures of workers productivity and trustworthiness and make this information available to potential employers our data show that employers pay significant wage premia for both traits firms make highest profits with trustworthy workers in particular with highly productive and trustworthy workers we also document differences in the strength of gift exchange across worker types in particular output and profit levels of trustworthy workers are less dispersed than those of not trustworthy workers jel code c910 j410 d860

relative standing comparisons risk taking and safety regulations abstract we study the question of how relative standing comparisons or status seeking influence risk taking when utility is separable in consumption and status the following results apply with non systematic risks more concern for status leads to more less risk taking when in a sense made precise in the paper the utility function is less more concave in status than in pure consumption with systematic risk risk taking always increases with the concern for status however status seeking always implies socially excessive risk taking thus suggesting a role for public regulation of risky choices

justifying the first order approach to principal agent problems it is of interest to know when the incentive compatibility conditio n in principal agent problems can be replaced by the condition that the agent s expected utility be stationary in effort the mirrlees rogerson conditions do not work if the principal can observe more than one observable statistic also the mirrlees rogerson assumption that the distribution function of output is convex in the agent s action is unsatisfactory even in the context of the basi c model it is too restrictive the paper presents a suite of conditio ns that are applicable to the multistatistic case and replaces the objectionable convex distribution function assumption copyright 1988 by the econometric society

explaining gift exchange the limits of good intentions this paper explores the limitations of intention based social preferences as an explanation of gift exchange between a firm and a worker in a framework with one self interested and one reciprocal player gift giving never arises in equilibrium instead any equilibrium in a large class of multistage games must involve mutually unkind behavior of both players besides gift exchange this class of games also includes moral hazard models and the rotten kid framework even though equilibrium behavior may appear positively reciprocal in some of these games the self interested player never benefits from reciprocity we discuss the relation of these results to the theoretical and empirical literature on gift exchange in employment relations

profit related pay prose discovered this paper estimates that in 1984 43 percent of british private sector establishments had some form of profit related pay regression results do not show that these establishments had statistically significant better financial performance cross ta bulations do not suggest that the establishments with income sharing schemes had noticeably greater employment growth or better industrial relations copyright 1988 by royal economic society

the interaction of explicit and implicit contracts a signaling approach abstract we analyze the interaction of explicit and implicit contracts in a model with selfish and fair principals fair principals are willing to honor implicit agreements selfish principals are not we investigate a separating equilibrium in which principals reveal their type through the contract offer to the agent explicit and implicit contracts are shown to be substitutes since the agent learns the principal s type a selfish principal must rely on explicit incentives a fair principal by contrast can effectively induce implicit incentives and does not need to use explicit incentives we also find a strategic complementarity between explicit and implicit incentives

double sided moral hazard and the nature of share contracts contractual arrangements involving revenue profit sharing are often based on fairly simple often linear rules in addition in many contexts these contracts are not finely adjusted to the particular circumstances of individual agents or markets nor do they vary over time to the extent current theories based on optimal contracting suggest they should we develop a simple model of such revenue or profit sharing arrangements based on double sided moral hazard and show that this model can account for many of these stylized facts more specifically the model shows that linear contracts can be optimal and that benefits from customizing terms can in some cases be quite limited if not zero

spill over effects of supply side changes in a two country economy with capital accumulation abstract using a two country dynamic optimization model with capital accumulation we explore the effect of such supply side changes as a rise in productivity and a reduction in the corporate tax rate on the equilibrium path and the welfare of two countries the welfare effect consists of a tax distortion term and a wealth term those supply side changes in the creditor country increase its welfare but unambiguously decrease the debtor country s welfare as capital moves from the debtor country to the creditor country

nonlinear causality between crude oil price and exchange rate a comparative study of china and india a failed replication negative type 1 and type 2 evidence published in this journal by bal and rath 2015 purports a bidirectional nonlinear causality between oil price and india s exchange rate and for china unidirectional nonlinear causality running from exchange rate to oil price their entire testing protocol and ensuing results rest upon claims that all the variables contain a unit root we raise several critical issues and revisit the order of integration of the series as well as their cointegration and granger causality properties through a pure replication and a reanalysis contrary to bal and rath 2015 when we repeat their estimated model with their specification of the ng and perron 2001 unit root test on their data we find that their oil price series rol is level stationary negative replication type 1 a result which makes all their subsequent results biased and misleading our reanalysis confirms that rol is i 0 linearly as well as nonlinearly we also find that the basic bivariate model proposed by bal and rath 2015 fails to produce statistically robust and stable cointegrating patterns nonlinear causality tests confirm the absence of any nonlinear causality for both countries negative replication type 2

inequality aversion and externalities abstract we conduct a general analysis of the effects of inequality aversion on decisions by homogeneous players in static and dynamic games we distinguish between direct and indirect effects of inequality aversion direct effects are present when a player changes his action to affect disutility caused by inequality indirect effects occur when the own action is changed to affect other players actions we provide necessary and sufficient conditions for the occurrence of either effect moreover we examine the direction of the effects whereas indirect effects induce players to internalize externalities they impose on others direct effects act in the opposite direction

relative performance or team evaluation optimal contracts for other regarding agents this paper derives optimal incentive contracts for agents with other regarding preferences it offers a behavioral explanation for the empirically observed lack of relative performance evaluation we analyze a principal multi agent model and assume that agents are inequity averse or status seeking we show that team contracts can be optimal even if the agents performance measures are positively correlated such that relative performance evaluation would be optimal with purely self interested agents and even though relative performance evaluation provides additional incentives to provide effort if agents have other regarding preferences furthermore optimal incentive contracts for other regarding agents can be low powered as compared to contracts for purely self interested agents

estimating the demand for gasoline in developing countries senegal abstract this paper estimates the aggregate demand for gasoline in senegal from 1970 to 2008 the long term and short term elasticities of demand with respect to gasoline prices and income are of paramount interest in this study in senegal rising food prices unemployment and shortage of electric supply are always associated with the spiking cost of world oil prices to understand the external shocks of world oil price and demand for gasoline in senegal this study tested a log linear model against the linear model of the demand for oil function with lagged dependent variables as an explanatory variable here the linear specification of the demand for oil is rejected in this study in favor of the log linear the natural log transformation is typical when using high frequency data and significantly reduces skewness and kurtosis generally in this study i found that short run elasticity is smaller than long run elasticity and gasoline demand is inelastic with respect to both price and income for both the short and long runs in senegal this is why researcher like moosa posits that this assertion can be rationalised on the grounds that oil is such an important commodity that does not have close substitutes at least for its uses 1998 p 3

estimates of the demand for energy using cross country consumption data using cross country consumption data we estimate a system of demand equations in a piecewise manner to investigate whether price and expenditure elasticities for energy differ between broad groups of countries the empirical results reject the assumption of constant parameters across regimes of poor and rich countries the derived elasticities suggest that the own price elasticity for energy is higher in poor than in rich countries we find no evidence for the commonly held view that expenditure elasticities for energy decline with income

shocks effects of macroeconomic variables on natural gas consumption in nigeria structural var with sign restrictions abstract this paper has examined the transmission of shocks from macroeconomic variables namely money supply inflation exchange rate and real gdp onto natural gas consumption using structural var svar model with sign restrictions the results revealed that both in the short run and long run natural gas consumption responds significantly to the shocks emanating from money supply and real gdp while its response to inflation shock is significant only in the short run but exchange rate shock is not significant however money supply has contributed greater proportion of the shocks followed by the real gdp inflation and exchange rate in the ordering of the variance decomposition the paper recommends that nigerian authorities adjust the monetary policy tools towards regulating the money supply and checking the inflation rate to ensure increased demand for natural gas and sustained economic growth on the response of natural gas consumption to the shock in the exchange rate since the shock is positive though insignificant it implies that depreciation of the exchange rate can discourage the demand for foreign exchange imports and boost the local production which would reciprocally lead to more natural gas consumption and improved growth in the country

friends or foes optimal incentives for reciprocal agents abstract widely used performance based contracts put positive or negative externalities on co workers these externalities have been proven to shape an organization s working climate especially when workers exhibit social preferences however it is a priori unclear whether a more friendly or a more competitive working environment should be encouraged in this paper we develop a theoretical model in which a self interested principal has to motivate a set of agents to work hard agents are symmetric potentially risk averse and exhibit reciprocity concerns towards each other we show that the principal reduces the cost of achieving high effort provision by designing a psychological gift exchange game thereby replacing monetary with psychological incentives we find that the optimal incentive scheme depends on the interplay between the agents attitudes towards risks and their preferences for reciprocity in particular the optimal scheme implements i a relative performance compensation scheme which induces an exchange of unkindness if agents are relatively little risk averse and ii a joint performance compensation scheme which induces an exchange of kindness if agents are sufficiently risk averse our findings can explain some puzzling empirical results

aggregation and linearity in the provision of intertemporal incentives we consider the problem of providing incentives over time for an agent with constant absolute risk aversion the optimal compensation scheme is found to be a linear function of a vector of n accounts which count the number of times that each of the n kinds of observable events occurs the number n is independent of the number of time periods so the accounts may entail substantial aggregation in a continuous time version of the problem the agent controls the drift rate of a vector of accounts that is subject to frequent small random fluctuations the solution is as if the problem were the static one in which the agent controls only the mean of a multivariate normal distribution and the principal is constrained to use a linear compensation rule if the principal can observe only coarser linear aggregates such as revenues costs or profits the optimal compensation scheme is then a linear function of those aggregates the combination of exponential utility normal distributions and linear compensation schemes makes computations and comparative statics easy to do as we illustrate we interpret our linearity results as deriving in part from the richness of the agent s strategy space which makes it possible for the agent to undermine and exploit complicated nonlinear functions of the accounting aggregates

incentives for procrastinators we examine how principals should design incentives to induce time inconsistent procrastinating agents to complete tasks efficiently delay is costly to the principal but the agent faces stochastic costs of completing the task and efficiency requires waiting when costs are high if the principal knows the task cost distribution she can always achieve first best efficiency if the agent has private information the principal can induce first best efficiency for time consistent agents but often cannot for procrastinators we show that second best optimal incentives for procrastinators typically involve an increasing punishment for delay as time passes

the theory of moral hazard and unobservable behaviour part i principal agent models are studied in which outcomes conditional on the agent s action are uncertain and the agent s behaviour therefore unobservable for a model with bounded agent s utility conditions are given under which the first best equilibrium can be approximated arbitrarily closely by contracts relating payment to observable outcomes for general models it is shown that the solution may not always be obtained by using the agent s first order conditions as constraint general conditions of lagrangean type are given for problems in which contracts are finite dimensional 1 the moral hazard situation

bargaining and inequity aversion on the efficiency of the double auction abstract in a bargaining setting with asymmetrically informed inequity averse parties a fully efficient mechanism i e the double auction exists if and only if compassion is strong less compassionate parties do not trade in the double auction in the limit of strong envy

nonlinear pricing under inequity aversion abstract we consider a monopoly which practices nonlinear pricing where buyers may have inequity averse preferences each buyer has a valuation for the good drawn from a distribution the monopoly knows the distribution but not the realizations we introduce the possibility that any buyer can be inequity averse fair types or not neutral types in addition to different demand types fair types get a disutility from inequity captured through a utility function in the spirit of the one introduced by fehr and schmidt 1999 we characterize the optimal nonlinear pricing and show that the degree of suboptimality increases and the monopoly profit decreases as the degree of the inequity aversion increases we also show that some or all of the neutral types with low demand are strictly better off when there are inequity averse types in the environment

envy in the workplace envy affects the optimal employment contract offered to employees with different productivity the employees envy towards colleagues distorts the effort exerted by the less productive employees however this distortion is mitigated when employees are also envious towards their boss