international coordination of trade and domestic policies the past half century has seen a dramatic multilateral reduction in tariff barriers under general agreement on tariffs and trade gatt negotiations however as tariff barriers have fallen attention has shifted to the use of domestic policies as secondary trade barriers a primary concern is that as countries sign trade agreements that constrain their ability to pursue trade goals through trade policy there will be unilateral incentives for governments to distort their domestic policies as a secondary means of protection 1 increasingly international trade disputes revolve around a country s use of internal regulations as a means of restricting trade the united states has successfully challenged the system of liquor taxes in both japan and korea as discriminating against imported liquor while venezuela and brazil have challenged american standards for reformulated and conventional gasoline as trade protection masquerading as environmentalism gatt contains several articles concerning the international regulation of domestic policies but the question of how to fully incorporate domestic policies within gatt negotiations and other international trade agreements remains contentious indeed at both the ministerial meeting in 1994 at the close of the uruguay round and the recent unsuccessful ministerial conference in seattle many gatt delegates renewed demands for the relationship between trade and various domestic policies e g environmental policy labor standards or competition policy to be examined despite the importance that has recently been placed on international cooperation over domestic policies no theoretical basis exists for considering how to cooperate over both trade and domestic policies within an international agreement previous papers on negotiation over two instruments of protection e g copeland 1989 1990 thomas l hungerford 1991 have assumed asymmetric limitations on cooperation i e they assume that one of the two instruments is either nonobservable or nonnegotiable this paper extends such work by investigating cooperation over two negotiable instruments of protection under symmetric limitations on cooperation and provides insight into the design of international trade agreements that incorporate cooperation over domestic policies i adopt the view that enforcement issues are central to the understanding of international cooperation one of the challenges of international cooperation is the absence of a central authority to enforce the terms of an agreement without access to an external enforcement mechanism international agreements are viable only as long as member countries view continued cooperation to be in their own self interest i e the benefits from cooperating outweigh the potential gains from cheating 2 while the gatt department of economics university of miami p o box 248126 coral gables fl 33124 e mail ederington miami edu i would like to thank bob staiger bob baldwin wolfgang keller phillip mccalman jenny minier seminar participants at the nber conference on trade the environment and natural resources and two anonymous referees for comments on earlier versions of this paper any remaining errors are of course my own for example brian r copeland 1990 examined negotiation over one trade barrier leaving a secondary trade barrier e g nontariff barriers domestic legislation etc to be set noncooperatively he shows that trade liberalization will induce substitution toward the less efficient nonnegotiable instrument of protection due to the unilateral incentives to maintain trade protection facing countries thus within a cooperative framework the two types of barriers serve as imperfect substitutes for each other 2 as stated by kenneth w dam in his review of the gatt institution the best guarantee that a commitment of any kind will be kept particularly in an international setting where courts are of limited importance and even more important marshals and jails are nonexistent is that the parties continue to view adherence to their agreement in their mutual interest thus the gatt system unlike most legal systems is not designed to exclude self help in the form of retaliation rather retaliation subjected to established procedures and kept within prescribed bounds is made the heart of the gatt system dam 1970 pp 80 81

control rights in complex partnerships this paper develops a theory of the allocation of authority between two players who are in a complex partnership that is a partnership which produces impure public goods we show that the optimal allocation depends on technological factors the parties valuations of the goods produced and the degree of impurity of these goods when the degree of impurity is large control rights should be given to the main investor irrespective of preference considerations there are some situations in which this allocation is optimal even if the degree of impurity is very low as long as one party s investment is more important than the other party s if the parties investments are of similar importance and the degree of impurity is large shared authority is optimal with a greater share going to the low valuation party if the importance of the parties investments is similar but the degree of impurity is neither large nor small the low valuation party should receive sole authority we analyze an extension in which side payments are infeasible we check for robustness of our results in several dimensions such as allowing for multiple parties or for joint authority and apply our results to interpret a number of complex partnerships including those involving schools and child custody jel d02 o23 h41 l31

the role of multilateral institutions in international trade cooperation the world trade organization wfo lacks the power to directly enforce agreements it is therefore important to understand what role the wto can play to facilitate international cooperation and whether a multilateral institution can offer distinct advantages over a web of bilateral agreements this paper examines two potential benefits of a multilateral trade institution first verifying violations of the agreements and informing third parties thus facilitating multilateral reputation mechanisms second promoting multilateral trade negotiations rather than a web of bilateral negotiations the model suggests that a multilateral approach is particularly important when there are strong imbalances in bilateral trading relationships

tariff retaliation versus financial compensation in the enforcement of international trade agreements the authors analyze whether financial compensation is preferable to the current system of dispute settlement in the world trade organization that permits member countries to impose retaliatory tariffs in response to trade violations committed by other members they show that monetary fines are more efficient than tariffs in terms of granting compensation to injured parties when there are violations in equilibrium however fines suffer from an enforcement problem since they must be paid by the violating country if fines must ultimately be supported by the threat of retaliatory tariffs they fail to yield a more cooperative outcome than the current system the authors also consider the use of bonds as a means of settling disputes if bonds can be posted with a third party they do not have to be supported by retaliatory tariffs and can improve the negotiating position of countries that are too small to threaten tariff retaliation

self enforcing trade agreements and lobbying abstract in an environment where international trade agreements must be enforced via promises of future cooperation the presence of an import competing lobby has important implications for optimal punishments when lobbies work to disrupt trade agreements a nash reversion punishment scheme must balance two conflicting objectives longer punishments help to enforce cooperation by increasing the government s costs of defecting but because the lobby prefers the punishment outcome this also incentivizes lobbying effort and with it political pressure to break the agreement thus the model generates an optimal length for nash reversion punishments and it depends directly on the political influence of the lobbies trade agreement tariffs are shown to be increasing in the political influence of the lobbies as well as their patience levels

a theory of disagreement in repeated games with bargaining this paper proposes a new approach to equilibrium selection in repeated games with transfers supposing that in each period the players bargain over how to play although the bargaining phase is cheap talk following a generalized alternating offer protocol sharp predictions arise from three axioms two axioms allow the players to meaningfully discuss whether to deviate from their plan the third embodies a theory of disagreement that play under disagreement should not vary with the manner in which bargaining broke down equilibria that satisfy these axioms exist for all discount factors and are simple to construct all equilibria generate the same welfare optimal play under agreement generally requires suboptimal play under disagreement whether patient players attain efficiency depends on both the stage game and the bargaining protocol the theory extends naturally to games with imperfect public monitoring and heterogeneous discount factors and yields new insights into classic relational contracting questions

a review of scott e page s the difference how the power of diversity creates better groups firms schools and societies this assessment of scott page s the difference princeton university press 2007 emphasizes the depth and breadth of the book s coverage and arguments and checks them against existing empirical evidence when available it argues that the book navigates artfully between being a manifesto for diversity and rigorous science writing while at the same time marketing economic science in new ways the review welcomes the book s popularization of richer aspects of everyday decision making individual and collective and its making an excellent case for the social significance of abstract economic theorizing especially about problem solving it praises the book s lively interpretations of statistical tools of decision making by means of enticing narratives the book s rhetoric urges us to move beyond accepting diversity as a matter of taste or even because of its beneficial effects on the production function and ultimately adopts its powerful logic it speculates that the book s true impact will likely come after thorough empirical research in empirical endeavors issues of definition especially of identity and of measurement and evaluation of policies that would enhance diversity would be decisive in democratic societies policies may pose new dilemmas as they benefit from public interest in overcoming the accumula tion of past disadvantages jel d23 z13

renegotiation and symmetry in repeated games abstract the paper derives a theory of renegotiation proofness in symmetric repeated games based on a notion of equal bargaining power according to consistent bargaining equilibrium a player can mount a credible objection to a continuation equilibrium in which he receives a particular expected present discounted value if there are other self enforcing agreements that never give any player such a low continuation value after any history the definition does not imply strongly symmetric solutions but under modest assumptions consistent bargaining equilibria of infinitely repeated games with perfect monitoring are strongly symmetric such solutions have an unusually elementary characterization journal of economic literature classification numbers c7 c72

evolving standards for academic publishing a q r theory this paper develops models of quality standards to examine two trends academic journals increasingly require extensive revisions of submissions and articles are becoming longer and changing in other ways papers are modeled as varying along two quality dimensions q reflects the importance of the main ideas and r other aspects of quality observed trends are regarded as increases in r quality a static equilibrium model illustrates comparative statics explanations a dynamic model in which referees with a biased view of their own work learn social norms for weighting q and r is shown to produce a long gradual evolution of social norms

meeting strangers and friends of friends how random are social networks we present a dynamic model of network formation where nodes find other nodes with whom to form links in two ways some are found uniformly at random while others are found by searching locally through the current structure of the network e g meeting friends of friends this combination of meeting processes results in a spectrum of features exhibited by large social networks including the presence of more high and low degree nodes than when links are formed independently at random having low distances between nodes in the network and having high clustering of links on a local level we fit the model to data from six networks and impute the relative ratio of random to network based meetings in link formation which turns out to vary dramatically across applications we show that as the random network based meeting ratio varies the resulting degree distributions can be ordered in the sense of stochastic dominance which allows us to infer how the formation process affects average utility in the network

entrepreneurial growth through constellations abstract the constellation is a particular type of network characterized by the presence of a leading firm able to coordinate a series of entrepreneurs who work together with the leading firm to produce and sell constellation style growth is characterized by a leading firm establishing a closely linked network of external firms all with a high degree of dependence on the leading firm typically the leading firm will maintain control of certain key matters to coordinate the group such as control of product development image and marketing strategy however it will devolve to the external firms functions such as line production and wholesale and retail distribution constellations are distinguished from other firms that rely on outside production by their willingness to grow through a specific style of external growth through these external units moving into a range of different products and to closer links with the market the constellation will also tend to have relatively informal non legal ties between members the non legal character of this tie increases the flexibility of the constellation to be coordinated efficiently and effectively by the leading firm constellations are also characterized by a high input of technological and product innovation as stimulated in a relatively shallow pyramid of power within the structure this structure allows therefore the constellation to be particularly competitive in market niches where a high component of innovation in the product is essential it also contributes to product quality and production flexibility constellation style growth therefore not only allows the firm to grow with a reduction of investment risk but adds to competitive advantage by fostering personal entrepreneuring through the use of coordinated partnerships of external firms with a leading firm the model is particularly diffused in italy where entrepreneurial firms organized in this manner have been able to assume world leadership in the high quality niches of mature market segments such as furniture and textiles however the organizational pattern should be seen as internationally relevant as a model for growth this article examines the model in an effort to explain its relevance to entrepreneurial growth and uses several case studies from modern italian business to explain how the constellation behaves in practice

a theory of managed trade this paper proposes a theory that predicts low levels of protection during periods of normal trade volume coupled with episodes of special protection when trade volumes surge this dynamic pattern of protection emerges from a model in which countries choose levels of protection in a repeated game facing volatile trade swings high trade volume leads to a greater incentive to defect unilaterally from cooperative tariff levels therefore as the volume of trade expands the level of protection must rise in a cooperative equilibrium to mitigate the rising trade volume and hold the incentive to defect in check copyright 1990 by american economic association

a theory of buyer seller networks this paper introduces a new model of exchange networks rather than markets of buyers and sellers it begins with the empirically motivated premise that a buyer and seller must have a relationship a link to exchange goods networks buyers sellers and the pattern of links connecting them are common exchange environments this paper develops a methodology to study network structures and explains why agents may form networks in a model that captures characteristics of a variety of industries the paper shows that buyers and sellers acting strategically in their own self interests can form the network structures that maximize overall welfare

learning from neighbours when payoffs from different actions are unknown agents use their own past experience as well as the experience of their neighbours to guide their decision making in this paper we develop a general framework to study the relationship between the structure of these neighbourhoods and the process of social learning we show that in a connected society local learning ensures that all agents obtain the same payoffs in the long run thus if actions have different payoffs then all agents choose the same action and social conformism obtains we develop conditions on the distribution of prior beliefs the structure of neighbourhoods and the informativeness of actions under which this action is optimal in particular we identify a property of neighbourhood structures local independencewhich greatly facilitates social learning simulations of the model generate spatial and temporal patterns of adoption that are consistent with empirical work

rules of thumb for social learning this paper studies agents who consider the experiences of their neighbors in deciding which of two technologies to use we analyze two learning environments one in which the same technology is optimal for all players and another in which each technology is better for some of them in both environments players use exogenously specified rules of thumb that ignore historical data but may incorporate a tendency to use the more popular technology in some cases these naive rules can lead to fairly efficient decisions in the long run but adjustment can be slow when a superior technology is first introduced

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

getting closer or drifting apart advances in communication and transportation technologies have the potential to bring people closer together and create a global village however they also allow heterogenous agents to segregate along special interests which gives rise to communities fragmented by type rather than geography we show that lower communication costs should always decrease separation between individual agents even as group based separation increases each measure of separation is pertinent for distinct types of social interaction a group based measure captures the diversity of group preferences that can have an impact on the provision of public goods an individual measure correlates with the speed of information transmission through the social network that afiects for example learning about job opportunities and new technologies we test the model by looking at coauthoring between academic economists before and during the rise of the internet in the 1990s

people i know job search and social networks we assess the strength of information spillovers relating unemployment duration of workers displaced by firm closures to their former colleagues current employment status displaced specific networks are recovered from a 20 year panel of matched employer employee data spillovers are identified by comparing performances of codisplaced workers a one standard deviation increase in the network employment rate reduces unemployment duration by about 8 the effect is magnified if contacts recently searched for a job and if their current employer is spatially and technologically closer to the displaced worker stronger ties and lower competition for information favor reemployment several indirect tests exclude other interaction mechanisms

economics an emerging small world we study the evolution of social distance among economists over the period 1970 2000 while the number of economists has more than doubled the distance between them which was already small has declined significantly the key to understanding the short average distances is the observation that economics is spanned by a collection of interlinked stars a star is an economist who writes with many other economists most of whom have few coauthors and generally do not write with each other

constellations of firms and new ventures abstract firm growth is typically described as from the inside out an integrated process of resource capture supplementing the traditional view of growth from within this article focuses on how small firms come into being and grow resorting to cooperative relationships with external organizations through such a process new firms come into being without notable direct investments and grow without significant employment increases the emerging organizational design stresses the importance of constellations constellational structures suggest that organizations do not survive as isolated and self sufficient entities rather they are strongly tied to supportive quasi infrastructural collectives firms grow through various and changing interorganizational relationships we suggest that a growth path of firm disintegration is positively associated with flexibility cost reductions and more favorable competitive position that the success of this path in different industries and countries makes a venturing without investing process more than a small is beautiful fad we find regularities in growth patterns at the beginning an unplanned constellation of firms each geared to solving short term contingent problems planned interfirm linkages and partnerships geared to greater effectiveness arise in more advanced stages in this manner the competitive position of the constellation is improved this article suggests underlying conditions facilitating the growth of organizations that use synergies and the constellations resources effectively

gatt a cooperative equilibrium in a noncooperative trading regime abstract as global tariff rates have fallen the use of nontariff barriers to trade have become more prevalent one incentive for a country to depart from free trade is to levy the optimal tariff in order to maximize domestic welfare the gatt was designed to maintain free trade through a system of managed retaliation as is well known in a game theoretic trade model of tariffs with no uncertainty free trade is an equilibrium outcome however with the introduction of uncertainty and asymmetric information it is shown that the equilibrium outcome s has each country imposing nontariff barriers to trade

core and periphery in networks abstract we study a model of network formation where the benefits from connections exhibit decreasing returns and decay with network distance we show that the unique equilibrium network is a periphery sponsored star where one player the center maintains no links and earns a high payoff while all other players maintain a single link to the center and earn lower payoffs both the star architecture and payoff inequality are preserved in an extension of the model where agents can make transfers and bargain over the formation of links under the condition that the surplus of connections increases in the size of agents neighborhoods our model thus generates two common features of social and economic networks 1 a core periphery structure 2 positive correlation between network centrality and payoffs

the economic consequences of social network structure we survey the literature on the economic consequences of the structure of social networks we develop a taxonomy of macro and micro characteristics of social interaction networks and discuss both the theoretical and empirical findings concerning the role of those characteristics in determining learning diffusion decisions and resulting behaviors we also discuss the challenges of accounting for the endogeneity of networks in assessing the relationship between the patterns of interactions and behaviors

firm employee matching an industry study of u s lawyers the authors study the sources of match specific value at large u s law firms by analyzing how graduates of law schools group into law firms they measure the degree to which lawyers from certain schools concentrate within certain firms and then analyze how this agglomeration can be explained by natural advantage factors such as geographic proximity and by productive complementarities across graduates of a given school large law firms tend to hire from a select group of law schools and individual offices within these firms are substantially more concentrated in terms of hires from particular schools the degree of concentration is highly variable as there is substantial variation in firms hiring strategies two main drivers of variation in law school concentration occur within law offices first geography drives a large amount of concentration as most firms hire largely from local schools second school based networks and possibly productive complementarities appear to be important because p

trade skirmishes and safeguards a theory of the wto dispute settlement process i propose a framework within which to interpret and evaluate the major reforms introduced to the gatt system in its transition to the wto in particular i examine the wto agreement on safeguards that has replaced the gatt escape clause article xix and the dispute settlement process dsp that resembles a court of law under the wto using this framework i interpret the weakening of the reciprocity principle under the agreement on safeguards as an attempt to reduce e ciency reducing trade skirmishes the dsp is interpreted as an impartial arbitrator that announces its opinion about the state of the world when a dispute arises among member countries i demonstrate that the reforms in the gatt escape clause should be bundled with the

multilateral tariff cooperation during the formation of free trade areas we consider the impact of the formation of free trade agreements on multilateral tariff cooperation we assume that countries are limited to selfenforcing multilateral arrangements that balance the gains from deviating against the costs of an ensuing trade war we find that the emergence of free trade areas will be accompanied by a temporary retreat from liberal multilateral trade policies as the initial balance supporting multilateral cooperation is upset eventually however as the full impact of the emerging free trade agreement on multilateral trade patterns is felt this initial balance tends to reemerge and liberal multilateral trade policies can be restored

multilateral trade negotiations bilateral opportunism and the rules of gatt wto abstract trade negotiations occur through time and between the governments of many countries an important issue is thus whether the value of concessions that a government wins in a current negotiation may be eroded in a future bilateral negotiation to which it is not party we identify rules of negotiation that serve to protect the welfare of governments that are not participating in the bilateral negotiation our main finding is that the two central principles of gatt wto nondiscrimination mfn and reciprocity preserve the welfare of nonparticipating governments and therefore offer a first line of defense against bilateral opportunism

recurrent trade agreements and the value of external enforcement abstract this paper presents a theory of dynamic trade agreements in which external institutions such as the wto play a central role in supporting credible enforcement in our model countries engage in ongoing negotiations and as a consequence cooperative agreements become unsustainable in the absence of external enforcement institutions by using mechanisms such as delays in dispute resolution and direct penalties enforcement institutions can restore incentives for cooperation despite the lack of coercive power the occurrence of costly trade disputes and the feasibility of mechanisms such as escape clauses depend on the degree to which enforcement institutions can verify and condition on events that may lead to trade disputes

tariff retaliation from a strategic viewpoint one of the most perplexing questions in international trade concerns the rationale for the existence of widespread barriers to trade in the current world economy 1 the numerous explanations that have been offered for the existence of tariffs are generally based on one of the following four arguments a the existence of market imperfections monopolies externalities etc invalidates the free trade theorem and thus free trade is not desirable or perhaps not obtainable b sluggish adjustment of the world economy to free trade implies that the existing tariffs are a temporary phase c non economic phenomena such as nationalism induce political or institutional tariff arrangements or d protectionist motives to improve the welfare of a country or a group of individuals in that country induce all countries to simultaneously impose tariffs while all of these factors can be important in the explanation of the existence of tariffs the purpose of this paper is to develop an extended analysis of the protectionist view the protectionist view is based on the optimal tariff theorem which states under very restrictive assumptions that a country can improve its welfare by imposing a tariff 5 12 a serious difficulty with this explanation is that the optimal tariff theorem assumes that no retaliation occurs as scitovsky 12 points out a country that could benefit from charging a tariff has monopoly power in trade surely a country sophisticated enough to exercise monopoly power in trade would expect its rivals to respond when tariffs are erected hence scitovsky argues that if protection is the monopolistic behavior of a collectivity two countries raising tariffs against each other are bilateral monopolists and we know that bilateral monopoly results in the two parties coming to some working agreement whose terms depend on their bargaining skill and are analytically indeterminate scitovsky concluded that a tariff war would result in an indeterminate solution with both countries worse off johnson 6 formalized scitovsky s agrument by allowing each country to adopt a cournot type assumption regarding its rival s reaction to a change in its own tariff thus

the slowdown of the economics publishing process over the last three decades there has been a dramatic slowdown of the publication process at top economics journals a substantial part is due to journals requiring more extensive revisions various explanations are considered democratization of the review process increases in the complexity of papers growth of the profession and cost and benefit arguments changes in the profession are examined using time series data connections between these changes and the slowdown are examined using paper level data there is evidence for some explanations but most of the slowdown remains unexplained changes may reflect evolving social norms

dynamic tariffs with asymmetric information recent developments in dynamic game theory are applied to determine when two countries can sustain freer trade given that they determine trade policies non cooperatively countries know their own level of protection but not the other country s level of protection using import trigger strategies cooperation in the form of low tariffs can be supported although there are periodic reversionary high tariff episodes however if terms of trade trigger strategies are used cooperation does not occur

multilateral tariff cooperation during the formation of customs unions abstract we study the implications of customs union formation for multilateral tariff cooperation we model cooperation in multilateral trade policy as self enforcing in that it involves balancing the current gains from deviating unilaterally from an agreed upon trade policy against the future losses from forfeiting the benefits of multilateral cooperation that such a unilateral defection would imply the early stages of the process of customs union formation are shown to alter this dynamic incentive constraint in a way that leads to a temporary honeymoon for liberal multilateral trade policies we find however that the harmony between customs unions and multilateral liberalization is temporary eventually as the full impact of the emerging customs union becomes felt a less favorable balance between current and future conditions re emerges and the liberal multilateral policies of the honeymoon phase cannot be sustained

tools or toys the impact of high technology on scholarly productivity i introduction and motivation in the past several decades investment that makes communication easier has increased rapidly in the united states and other developed economies since the mid 1980s a combination of technical change and deregulation has also reduced long distance telephone rates in the united states by 50 reported by allen 1995 pitney bowes 1997 reported that fax usage increased by 20 between 1996 and 1997 alone and electronic mail e mail unknown before 1985 is ubiquitous today popular discussion of a wide range of additional examples of rapidly declining prices and explosive growth of the use of telecommunications is provided by cairncross 1997 attempts to measure the impact on aggregate total factor and labor productivity of these supposedly productivity enhancing investments in broad reaching technical improvements such as computing machinery and communications equipment have not met with great success as in morrison 1997 but see greenan and mairesse 1996 1 an alternative to measuring effects on the broader economy is to measure the impact of generalized technical change on productivity in specific activities observed at the micro level an earlier literature including griliches 1958 and trajtenberg 1989 has clearly traced the effect of specific innovations in raising productivity in specific sectors of the economy this article expands on that tradition by trying to identify the effect of the recent broad revolution in communications on one activity scholarly publishing we propose studying scholarly publishing before and after technical change greatly lowered communication costs we examine in particular whether increasing ease of communication has altered scholars choices about their methods of production and whether those methods yielded changes in the productivity of scholarly activity that are consistent with increasing access to new communications technologies 2 in section ii we discuss a model of the production process in scholarly writing in relation to the cost of communications in section iii we describe the unique data set we assembled to examine the relation between technical change and scholarly productivity section iv presents the results of using these data to test the hypotheses that we develop and section v compares coauthored to solo authored studies and provides a suggestion for the increased prevalence of the former section vi offers a consistent explanation for most of the results ii a model of scholarly production the example that we use in this study of the impact of technology is the nature and outcomes of the choices of co workers by authors of scholarly publications in economics the importance of team research has been stressed by a number of authors studying the economics of innovation including dasgupta 1988 who also presents a research summary so that our specific example has broader implications for the study of technical change has the decline in the cost of communication altered scholars choices in a way consistent with these technologies increasing scholarly productivity in examining scholarly productivity we focus on research output in particular we view scholars as having three production choices 1 work solo s 2 work with close by coauthor s c or 3 work with distant coauthor s d in the model in this section the scholar is assumed to choose a production technology that maximizes his or her scholarly productivity measured as the quality of the article produced in section vi we a dopt an alternative characterization of a scholar s choices we assume that the scholar has a wide range of potential research activities to choose among and has perfect knowledge of the productivity p valued in dollars of all potential matches s c sub i member of c and d sub i member of d 3 each match generates one solo equivalent article per period

altruists egoists and hooligans in a local interaction model the authors study a population of agents each of whom can be an altruist or an egoist altruism is a strictly dominated strategy agents choose their actions by imitating others who earn high payoffs interactions between agents are local so that each agent affects and is affected by only his neighbors altruists can survive in such a world if they are grouped together so that the benefits of altruism are enjoyed primarily by other altruists who then earn relatively high payoffs and are imitated altruists continue to survive in the presence of mutations that continually introduce egoists into the population copyright 1998 by american economic association

three s a crowd third parties and wto dispute settlement in spite of the recent failure of two referendums the drafting of a constitution for the second biggest economic power in the world the european union eu remains a major event in the history of european integration whether the constitution or a revised version of it will come into force or not several important questions emerge how did an increased number of twenty five member states reach a conclusion whereas a lower number of fifteen had failed at previous intergovernmental attempts in particular how did the constitutional convention differ from previous intergovernmental conferences igcs at which the eu exclusively bargained its treaty documents in the past how can one explain the outcomes of the convention which proposes redistribution of power and resources among twenty five or more member states this article uses the positions of the delegates of the eu s constitutional convention to examine bargaining in a setting with few formal rules the authors use theoretical insights from a spatial model and new survey data to determine the implicit voting rule used at the convention they find that the convention differed from previous igcs because the convention was governed by consensus whereas previous eu bargains on treaties had always required unanimous support the level of consensus was higher than simple majority rule but lower than unanimity since this threshold impacted who won and who lost at the convention the authors also examine the sources of bargaining power such as delegates distance to the status quo distance to the median population size and domestic constraints the results confirm several findings in the eu bargaining and two level game literature for example that actors closer to the status quo hold a stronger bargaining position and that actors from larger member states are neither more likely nor less likely to win at the negotiating table than are actors from smaller states the findings on the irrelevance of domestic constraints also indicate why the popular votes in france and the netherlands failed

a strategic model of social and economic networks we study the stability and efficiency of social and economic networks when self interested individuals can form or sever links first for two stylized models we characterize the stable and efficient networks there does not always exist a stable network that is efficient next we show that this tension persists generally to assure that there exists a stable network that is efficient one is forced to allocate resources to nodes that are not responsible for any of the production we characterize one such allocation rule the equal split rule and another rule that arises naturally from bargaining of the players

infinitely repeated games with public monitoring and monetary transfers this paper studies infinitely repeated games with imperfect public monitoring and the possibility of monetary transfers it is shown that all public perfect equilibrium payoffs can be implemented with a simple class of stationary equilibria that use stick and carrot punishments a fast algorithm is developed that exactly computes the set of pure strategies equilibrium payoffs for all discount factors

gradualism in aid and reforms abstract dynamic strategic interaction between an international donor and a recipient government is analyzed to review the efficacy of aid conditionality for governance reforms in ldcs it is shown that irrespective of whether the donor can fully commit to the aid program or not for maximal improvement in governance the aid should be disbursed in increments with each subsequent tranche being conditional on prior reforms demonstrating aid gradualism while the attraction of future aid incentivizes authorities to push through reforms these reforms in turn also make aid diversion less feasible further under full commitment the optimal aid package may involve offering scope for interim aid diversion to the elite for long term improvement in governance with such aid diversion being more likely to happen when the total aid budget is large with only partial commitment so that time consistency requires the donor to reconfigure aid in each round it is shown that a interim aid diversion is no longer viable and b both aid and reforms exhibit strong gradualism or what is known as the starting small and grow later principle in commitment models

sovereign debt as intertemporal barter author s kletzer kenneth m wright brian d abstract borrowing and lending between sovereign parties is modeled as intertemporal barter that smoothes the consumption of a risk averse party subject to endowment shocks the surplus anticipated in the relationship offers sufficient incentive for cooperation by all parties including any other competitive agents who are potential lenders to the sovereign the sole punishments consist of renegotiation proof changes in the path of future payments we show that intertemporal trade can be sustained in the absence of any exogenous enforcement of lending relationships whatsoever that is borrowing and lending are possible under anarchy and are supported by punishments that consist of cheating any cheater long term implicit relationships may be fulfilled as the continual renegotiation of simple incomplete short term loans the analysis suggests that the crucial role of the explicit loan contract is the identification of the relationship and the parties involved

the formation of migrant networks in this paper we provide the first direct evidence on the internal structure of the migrant social network by using a purposely designed survey on sri lankan immigrants living in milan we show that the pattern of within group link formation is heterogeneous across immigrants and differentiated according to the network function i e accommodation credit job finding we find that migrants tend to interact with co nationals who come from nearby localities at origin while the time of arrival has a u shaped effect once the link is formed material support is provided mainly to relatives while early migrant fellows are helpful for job finding abstract from author

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

the effects of publication lags on life cycle research productivity in economics we investigate how increases in publication delays have affected the life cycle of publications of recent ph d graduates in economics we construct a panel dataset of 14 271 individuals who were awarded ph d s between 1986 and 2000 in u s and canadian economics departments for this population of scholars we amass complete records of publications in peer reviewed journals listed in the jel a total of 368 672 observations we find evidence of significantly diminished productivity in recent relative to earlier cohorts when productivity of an individual is measured by the number of aer equivalent publications diminished productivity is less evident when the number of aer equivalent pages is used instead our findings are consistent with earlier empirical findings of increasing editorial delays decreasing acceptance rates at journals and a trend toward longer manuscripts this decline in productivity is evident in both graduates of top 30 and non top 30 ranked economics departments and may have important implications for what should constitute a tenurable record we also find that the research rankings of top economics departments are a surprisingly poor predictor of the subsequent research rankings of their ph d s graduates jel a11 j24 j29 j44