competition and the number of firms in a market are duopolies more competitive than atomistic markets this paper uses a variant of the standard search model to examine market equilibrium and the consequences for market equilibrium of an increase in the number of firms if marginal search costs increase with the number of searches then the demand curve facing any firm will be kinked with the elasticity of demand with respect to price decreases being less than with respect to price increases prices may not change in response to changes in marginal costs as the number of firms increases the maximum price that is consistent with equilibrium increases to the monopoly price but the minimum price decreases on the other hand if marginal search costs decrease with the number of searches equilibrium if it exists is characterized by a

bank consolidation and the dynamics of consumer loan interest rates this paper analyzes interest rates quoted by individual banks for personal and automobile loans in 10 cities personal loan rates are higher in concentrated markets and banks involved in mergers reduce personal rates relative to their competitors prior to the merger s completion this is consistent with mergers changing the size structure of personal loan markets and merger participants desire to gain regulatory approval auto rates are unaffected by local concentration and mergers suggesting that their market is nationwide rates for both loan types respond asymmetrically to changes in treasury rates being more sensitive to a rise than a fall

search costs and prices abstract this paper examines the effect of consumer search costs on the level of prices and price dispersion we show that as search costs decrease prices may increase and price dispersion may also increase

coordination and policy moderation at midterm coordination and policy moderation at midterm eligible voters have been coordinating their turnout and vote decisions for the house of representatives in midterm elections coordination is a noncooperative rational expectations equilibrium stochastic choice models estimated using individual level data from nes surveys of years 1978 1998 support the coordinating model and reject a nonstrategic model the coordinating model shows that many voters have incentives to change their votes between presidential year and midterm after learning the outcome of the presidential election but this mechanism alone does not explain the size of midterm cycles the largest source of loss of support for the president s party at midterm is a regular pattern in which the median differences between voters ideal points and the parties policy positions have become less favorable for the president s party than they were at the time of the presidential election nonvoters show the same pattern the interelection changes are not consistent with the theory of surge and decline do americans coordinate their electoral choices in midterm congressional elections we use coordination to describe a situation in which two conditions hold for everyone who is eligible to vote i e every elector each elector combines information that each elector has privately with information that everyone has in common to make the best possible prediction of the election outcome and each elector makes the choice consistent with the elector s prediction that is most likely to produce the best possible result for the elector each elector s prediction takes into account what all electors best strategies would be given the information they have in common a condition described by saying that each elector has rational expectations the choice each elector makes is part of the elector s private information when every elector makes choices according to a strategy that is consistent with the elector s rational expectations and no elector can produce a personally better outcome by using a different strategy then there is a noncooperative equilibrium coordination is defined as the existence of a noncooperative equilibrium that is based on everyone having rational expectations beyond implications for the regularity with which the president s party loses vote share in midterm elections which we discuss below the existence of coordination is important because coordination implies that electors take one another into account in a constitutionally significant way in american elections coordination is based on the separation of powers between the president and congress coordination occurs when electors anticipate how election outcomes will affect bargaining about policy within the legislature and between the legislature and the executive by instituting the constitutional separation of powers madison believed that elected officials pursuit of their selfish interests and ambitions would lead them to act with regard to one another in ways that would prevent governmental tyranny carey 1978 159 160 even electors who did not coordinate might hope with madison that the separation of powers would affect officials in that way but if coordination exists electors shift from being mere observers of consequences the constitutional provisions may produce to being agents who are led to counteract one another by the constitutional incentives coordinating electors are as wary of one another as they are of officials

coordination moderation and institutional balancing in american presidential and house elections outcome in the theoretical equilibrium the proportion of voters who split their ticket in order to balance the house with the president has been small but large enough to affect election outcomes moderation has usually been based on voters expectations that the president will be at least an equal of the house in determining postelection policy d o americans coordinate their votes for president and for congress suppose a voter knows that policy outcomes are compromises between the positions taken by the president and congress and believes the two political parties push for distinct policy alternatives then the voter believes that different combinations of party control of the presidency and congress will produce different policy outcomes if the voter cares about the policy outcomes then the voter s choices among candidates should depend on the combination of party control the choices will help bring

discrete equilibrium price dispersion an explicit solution of an equilibrium model with price setting firms and searching customers makes possible a number of comparativestatics predictions about how cost differences among firms search costs of customers and taxes will affect the mean and variance of the distribution of market prices another implication of the model is that a firm s demand depends on the difference between its price and the average price in the market

price asymmetry in the dutch retail gasoline market abstract this article analyses the retail price adjustments in the dutch gasoline market we estimate an asymmetric error correction model on weekly price changes for the years 1996 2001 we construct five datasets one for each working day the conclusions on asymmetric pricing are shown to differ over these datasets suggesting that the choice of the day for which the prices are observed matters more than commonly believed in our view the insufficient robustness of the outcomes might explain the mixed conclusions found in the literature using these two approaches we also show that the effect of asymmetry on the dutch consumer costs is negligible

political stability and fiscal policy time series evidence for the swiss federal level since 1849 this paper explores the role of political stability on fiscal policy in a time series analysis over 158 years at the swiss federal level we argue that the fiscal commons problem of public finances is affected by the number of years a finance minister remains in office because the incentives for an incumbent to maintain a good reputation with sound policy decisions are stronger a finance minister who succeeds to stay a long time in office enjoys a politically powerful position towards the administration parliament and interest groups in contrast frequent government turnover weakens the position of the finance minister

testing for asymmetric pricing in the canadian retail gasoline market abstract this paper applies a threshold regression model to test for asymmetric pricing in the retail gasoline market in canada using weekly data for the period january 1990 to december 1996 we present results for 13 canadian cities for both premium and regular gasoline within the context of an error correction model we test for the presence of asymmetric price behaviour using average changes in crude prices as well as various lags for the change in crude as possible thresholds we are unable to find any evidence to support this view

price discrimination and retail configuration the hypothesis that price discrimination based on willingness to pay for quality can occur in multifirm markets is confirmed using microdata on gasoline retailing a test that discriminates between price structures associated with discrimination and with cost driven competitive differentials is developed and implemented with controls for variation in outlet and market characteristics a second test based on profitability variation rejects a competitive peak load pricing explanation for the observed price dispersion the data suggest that price discrimination at the retail level adds at least 9 a gallon to the average price of full service gasoline

divided we reform evidence from us welfare policies abstract divided government is often thought of as causing legislative deadlock i investigate the link between divided government and economic reforms using a novel data set on welfare reforms in us states between 1978 and 2010 panel data regressions show that under divided government a us state is around 25 more likely to adopt a welfare reform than under unified government several robustness checks confirm this counter intuitive finding case study evidence suggests an explanation based on policy competition between governor senate and house

rockets and feathers the asymmetric speed of adjustment of uk retail gasoline prices to cost changes abstract the paper develops a quadratic quantity adjustment model to test the hypothesis put forward in the recent monopolies and mergers commission report that the speed of adjustment of uk retail gasoline prices to cost changes is more rapid when costs rise than when they fall and that the adjustment path is more concentrated around the mean value on the upswing using data from 1982 to 1989 evidence of faster and more concentrated responses to cost increases were found

do rockets rise faster and feathers fall slower in an atmosphere of local market power evidence from the retail gasoline market this study explores the possibility that local market power influences the observed asymmetric relationship between changes in wholesale gasoline costs and changes in retail gasoline prices i exploit an original data set of weekly gas station prices in southern california from september 2002 to may 2003 and take advantage of detailed station and local market level characteristics to determine the extent to which geographic and product differentiation influence price response asymmetry i find that brand identity proximity to rival stations and local market features and demographics each influence a station s predicted price response asymmetry

on dynamic linkages of the state natural gas markets in the usa evidence from an empirical spatio temporal network quantile analysis we empirically investigate the dynamic linkages of the state level natural gas markets in the usa by introducing a novel spatio temporal network quantile econometric model we can estimate the dynamic cross state dependency or market integration of the state level natural gas markets and the dependence of the state natural gas markets on the national crude oil market at different quantile levels we find that significant local dynamic neighbouring market integrations exist in the natural gas markets not only in the eastern and central states as evidenced in the literature but also in some western and southwest states our results also show that there are significant linkages of the state level natural gas markets to the national crude oil market through the lagged price shocks and the long run price equilibrium with the national gas markets under varying price shock propagations the results can help local government and energy users to mitigate the negative impacts from the expected or unexpected fluctuations in the oil and the neighbouring natural gas markets which will enact appropriate state level price discovery and energy policy and investment decision makings

elections governments and parliaments in proportional representation systems this paper presents a theory of parliamentary systems with a proportional representation electoral system a formateur selected based on party representation in parliament and parties that cannot commit to the policies they will implement once in government government formation involves efficient proto coalition bargaining and elections yield unique strong nash equilibrium outcomes depending on the status quo minimal majority surplus or consensus governments can form if parties and voters are myopic and the status quo is subject to shocks consensus governments and centrist policies occur only in a crisis otherwise governments are minimal winning and policies reflect only the preferences of the government parties

presidential coattails versus the median voter senator selection in us elections abstract we show that senators elected in presidential elections are more ideologically extreme than senators elected in midterm elections this finding is in contrast to the literature suggesting that voters in presidential elections are more ideologically moderate than voters in midterm elections to explain this incongruence we propose a theory of spillover effects in which party labels enable voters to update their beliefs about candidates across contemporaneous races for office unexpected support for a candidate in one race carries marginal candidates from the same party in other races our theory implies that presidential coattails may skew representative government away from the median voter ideal

divided we vote divided government is known to correlate with limited government but less is understood about the empirical conditions that lead to divided government this paper estimates the determinants of continuous and categorical measures of divided government in an empirical macro political economy model using 30 years of data from the american states voters support more divided government after increased government spending per dollar of tax revenues but more unified government after worsening incomes and unemployment rates only conditional support is found for the strategic moderating theory alesina and rosenthal in econometrica 64 6 1311 1341 1996 that focuses purely on midterm cycles and split ticket voting absent economic conditions

price pass through in us gasoline markets abstract using an error correction model in a seemingly unrelated regression framework we examine regional differences in the price pass through from crude oil spot prices to retail gasoline pump prices we show that regional differences do exist both in the short run and long run adjustment processes depending on the region a 1 per barrel change in crude oil prices is correlated with a change in retail gasoline pump prices somewhere between 2 36 and 2 58 we examine the presence of the rockets and feathers phenomenon using both single period coefficient tests and multiple period impulse response functions

separation of powers and the tax level in the u s states we estimate a nonlinear and discontinuous relationship between the tax level and the degree of alignment between the legislature and the governor measured as the number of seats in the legislature that belong to the governor s party in the states with the line item veto the tax level jumps at the point where the government switches from divided to unified with a regression discontinuity design we show that this jump can be interpreted as a causal effect we propose a simple model to account for this nonlinear relationship the sequential nature of the budget bargaining game that is the legislature proposes and the governor cuts with the line item veto implies that the tax level is determined by the overlap between the supporters of the governor and the supporters of the legislative majority changes in the size of the overlap determine the tax level

market structure and the nature of price rigidity evidence from the market for consumer deposits panel data on consumer bank deposit interest rates reveal asymmetric impacts of market concentration on the dynamic adjustment of prices to shocks banks in concentrated markets are slower to raise interest rates on deposits in response to rising market interest rates but are faster to reduce them in response to declining market interest rates thus banks with market power skim off surplus on movements in both directions since deposit interest rates are inversely related to the price charged by banks for deposits the results suggest that downward price rigidity and upward price flexibility are a consequence of market concentration

credibility and policy convergence in a two party system with rational voters the traditional approach to modeling political parties behavior based upon the contribution of anthony downs 1957 assumes that the parties unique objective is to win elections thus they maximize their popularity the crucial implication of this assumption for a two party system is that if the two parties have the same information about voters preferences full convergence of policies results from electoral competition this is the crucial implication of the median voter theorem more generally it may be argued that different parties are motivated differently because they represent different constituencies parties may not care only about winning elections per se but also about the quality of the policies resulting from an election in this case the candidates of the two parties view winning an election not only as a goal per se but also as a means of implementing a better policy for their respective constituencies this paper shows that electoral competitions imply dynamic inconsistency if the voters are modeled as rational and forwardlooking agents and parties do not care exclusively about being elected but also about which policy to implement once elected the dynamic inconsistency arises as follows the parties have an incentive to announce convergent platforms to increase their chances of election however if the elected party is not committed to its electoral platform it has an incentive to follow its most preferred policy rather than the policy announced in its platform if voters are rational they account for this incentive thus in general in a one shot electoral game the only timeconsistent equilibrium is one in which no convergence is possible the two parties follow their most preferred policies and the voters rationally expect this outcome full convergence of parties platforms results only as a limiting case when the parties are completely indifferent with respect to the quality of the policies resulting from the election thus these results differ from the existing literature on ideologically motivated politicians for instance donald wittman 1977 1983 randall calvert 1985 which implicitly assumes the possibility of binding commitments to electoral platforms complete or partial policy convergence can be the outcome of political competition if the interaction between the parties and the voters is modeled as an infinitely repeated game in fact if the candidates have concave objective functions the welfare maximizing policy rule implies a complete convergence of parties policies however this cooperative and agreed upon policy may or may not be sustainable as a subgame perfect equilibrium depending on parameter values in particular it depends on the discount rates of the two parties the degree of polarization of their preferences and the relative popu graduate school of industrial administration carnegie mellon university pittsburgh pa 15213 and national bureau of economic research cambridge ma 02138 this paper is based upon a chapter of my unpublished doctoral dissertation at harvard university i am greatly indebted to jeffrey sachs for directing my attention toward these issues and for many conversations i also wish to thank andrew abel dilip abreu olivier blanchard ramon caminal andrew caplin alex cukierman morris fiorina benjamin friedman herschel grossman howard rosenthal and the referees for very useful comments the responsibilitv af anv n mtnkieis af calrirp nfnlv mine the result of policy convergence in a two party system is more general than the median voter theorem for discussions of convergence results not at the median see john ledyard 1984 peter coughlin 1984 coughlin and shmuel nitzan 1981 melvin hinich 1977 for earlier work on spatial competition see richard mckelvey 1975 hinich ledyard and peter ordeshook 1972 1973 and the references quoted therein the present paper focuses on the result of convergence rather than on the median voter theorem per se

vertical relationships and competition in retail gasoline markets empirical evidence from contract changes in southern california comment this study examines how much if any of the differences in retail gasoline prices between markets is attributable to differences in the composition of vertical contract types at gasoline stations in each market the purchase of the independent retail gasoline chain thrifty by arco provides a unique opportunity to examine the effects of changes in different vertical contract types on local retail prices this event caused sharp changes in the market share of i fully vertically integrated stations and ii independent stations differentially affecting local markets in the los angeles and san diego metropolitan areas using unique and detailed station level data this study examines how these sharp changes affected local retail prices the detailed data and the research design based on the thrifty station conversions allow for credible estimation of the effects of the market share of independent retailers and vertically integrated retailers on local market prices controlling for any omitted factors at the station level and the city level over time results for the los angeles and san diego metropolitan areas indicate that a decrease in the market share of independent stations has a significant positive impact on local retail price however a change in the market share of refiner owned and operated branded stations does not have a significant impact on local market price these results have important implications as policy makers consider the regulation of vertical contracts as a means to increase competition in gasoline markets the research design and detailed data also allow for inference on the underlying nature of retail gasoline competition

prices rise faster than they fall output prices tend to respond faster to input increases than to decreases this tendency is found in more than two of every three markets examined it is found as frequently in producer goods markets as in consumer goods markets in both kinds of markets the asymmetric response to cost shocks is substantial and durable on average the immediate response to a positive cost shock is at least twice the response to a negative shock and that difference is sustained for at least five to eight months unlike past studies which documented similar asymmetries in selected markets gasoline agricultural products etc this one uses large samples of diverse products 77 consumer and 165 producer goods accordingly the results suggest a gap in an essential part of economic theory as a start on filling this gap the study finds no asymmetry in the resonse of an individual decision maker a supermarket chain to its costs but it finds above average asymmetry where a cost shock is filtered through a fragmented w

retail gasoline price dynamics and local market power using monthly data from the 48 contiguous states except nevada for the 1988 2002 period it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases moreover markets with high average retail wholesale margins experience a slower adjustment and a more asymmetric response since gasoline is the only variable input average margins in a state likely reflect the degree of retail market power this suggests that sticky prices and response asymmetries in the gasoline market are at least partially a consequence of retail market power

optimal adaptive price search consider the problem of a consumer desiring to buy a good which is sold at a variety of prices such a buyer will be able to obtain a sequence of price quotations from various sellers when should the buyer stop searching for a lower price if he continues he may obtain a lower price but he incurs additional time effort and expense in searching the optimal price search decision is one of balancing the expectation of a possibly lower price obtained by continued search against cumulative costs from search when the prices arise from a known probability distribution the optimal search strategy has certain well defined and desirable properties in the more realistic case that the buyer has only partial information about the price distribution and must update his beliefs after observing prices in the marketplace the problem becomes more complex and search strategies become less well behaved the major purpose of this article is to determine new conditions under which optimal policies have these desirable characteristics in the case where the consumer possesses only incomplete information about the distribution of prices price quotations he receives in addition to providing him with price possibilities provide him with information about that distribution rothschild 151 in citing an unpublished paper of gastwirth has noted that small specification errors for an assumed distribution can lead to substantial changes in expected number of searches and expected cost consequently the assumption of a known distribution of prices can have a profound effect on total cost 1 0022 053 l 8 l 040001 20 02 00 o

oil and pump prices testing their asymmetric relationship in a robust way abstract the aim of this study is to provide a novel method to assess whether retail fuel prices respond asymmetrically to changes in the international crude oil prices to do so we consider the whole supply chain we use daily data and we depart from the current practice in the literature that focuses on prices rather we consider the mark ups of both the refineries and retailers hence we show that we first need to assess whether the refineries mark up responds asymmetrically to the international crude oil prices and subsequently whether the retailers mark up shows an asymmetric behaviour relatively to changes in the refined fuel prices focusing in greece as our case study our findings show that greek fuel retailers do not change their mark up behaviour based on changes of the refined fuel price by contrast the asymmetric behaviour is evident in the refineries mark up relatively to changes in the international crude oil prices which is then passed through to the retailers and consumers finally we provide evidence that weekly and monthly data mask any such asymmetric relationship thus we maintain that unless the appropriate data frequency fuel price transformations and the whole supply chain are considered misleading findings could be revealed

selling costs and switching costs explaining retail gasoline margins recent theoretical work has shown that price discrimination can take place in imperfectly competitive as well as monopoly markets the persistence of higher retail margins on unleaded than on leaded gasoline during the 1980s suggests that discrimination may occur even in very competitive markets this article studies a number of cost based explanations for such gasoline pricing as well as the possibility of price discrimination the analysis indicates that gas stations discriminate against groups of customers who are less likely to switch to another station the conclusions highlight the influence of shopping or search costs on pricing decisions even in markets thought to be quite competitive

number of sellers average prices and price dispersion abstract a variety of models provide differing predictions regarding the effect of an increase in the number of competitors in a market seller density on prices and price dispersion we review different approaches to generating equilibrium price dispersion and then empirically estimate the relationship between seller density average product price and price dispersion in the retail gasoline industry using four unique gasoline price data sets controlling for station level characteristics we find that an increase in station density consistently decreases both price levels and price dispersion across four geographical areas

policy boards and policy smoothing partisan politics and random election outcomes generate policy uncertainty and partisan business cycles to reduce policy uncertainty society must design the policy making environment to overcome electoral uncertainty and partisanship i show that delegating policy to an independent policy board with discretionary powers will produce substantial policy smoothing and lower policy uncertainty relative to a simple model in which elected officials set policy board members are chosen in a partisan noncooperative environment yet in the benchmark model policy variability is eliminated and the cooperative bargaining solution is replicated

dynamic pricing in retail gasoline markets supergame models of tacit collusion show that supportable price cost margins increase with expected future collusive profits ceteris paribus as a result collusive margins will be larger when demand is expected to increase or marginal costs are expected to decline using panel data on sales volume and gasoline prices in 43 cities over 72 months we find behavior consistent with tacit collusion in retail gasoline markets controlling for current demand and cost current margins increase with expected next month demand and decrease with expected next month cost the results are not consistent with intertemporal l inkages due to inventory behavior or customer loyalty

economic freedom and government ideology across the german states potrafke n economic freedom and government ideology across the german states regional studies this paper examines whether government ideology influenced economic freedom across the german states the results show that in former west germany rightwing governments promoted economic freedom whereas leftwing governments confined it in the former east germany however rightwing governments were not associated with propagating economic freedom this finding appears to conflict with the common notion of policy convergence at the federal level in fact the observed variation in political preferences across states may indicate that politicians gratify the local electorate and in return offer moderate policies at the federal level potrafke n potrafke n la liberte economique et l ideologie du gou

redistribution pork and elections why might citizens vote against redistributive policies from which they would seem to benefit many scholars focus on wedge issues such as religion or race but another explanation might be geographically based patronage or pork we examine the tension between redistribution and patronage with a model that combines partisan elections across multiple districts with legislation in spatial and divide the dollar environments the model yields a unique equilibrium that describes the circumstances under which poor voters support right wing parties that favor low taxes and redistribution and under which rich voters support left wing parties that favor high taxes and redistribution the model suggests that one reason standard tax and transfer models of redistribution often do not capture empirical reality is that redistributive transfers are a less efficient tool for attracting votes than are more targeted policy programs the model also underlines the central importance of party discipline during legislative bargaining in shaping the importance of redistribution in voter behavior and it describes why right wing parties should have an advantage over left wing ones in majoritarian systems

a model of the political economy of the united states we develop and test a model of joint determination of economic growth and national election results in the united states the formal model which combines developments in the rational choice analysis of the behavior of economic agents and voters leads to a system of equations in which the dependent variables are the growth rate and the vote shares in presidential and congressional elections our estimates support the theoretical claims that growth responds to unanticipated policy shifts and that voters use both on year and midterm elections to balance the two parties on the other hand we find no support for rational retrospective voting we do reconfirm in a fully simultaneous framework the naive retrospective voting literature s finding that the economy has a strong effect on presidential voting we find congressional elections unaffected by the economy except as transmitted by presidential coattails

pork barrel politics and electoral returns at the local level does the targeted spending of public resources provide electoral benefits for incumbents despite the attention of scholars to that question the empirical results are mixed thus far the present paper supplies insights into the electoral benefits of discretionary funding on local elections i study the consequences of pork barrel politics in 7355 competitive mayoral elections in slovakia between 2006 and 2018 finding that more grants from the central government enhance the likelihood of mayors winning reelection the same advantage applies to mayors whose municipalities receive grants in local election years the effects of the number of grants obtained as well as the timing of their distribution are however moderated by municipal population more specifically a larger number of grants and resources obtained near the end of the mayoral term provides electoral benefits only to small town mayors but give no advantage to the mayors of larger urban areas

no return no refund an analysis of deposit refund systems firms and governments in developed economies frequently employ deposit refund systems to promote return and reuse of product packages and containers we analyze a model of monopoly facing heterogeneous consumers in which recycling package return by consumers generates an external benefit it is shown that when consumer s preferences over recycling differ the monopolist can price discriminate between consumers leading to socially suboptimal recycling in the absence of any externalities the analysis can be viewed as a model of couponsor mail in rebateswhich work as price discrimination devices the role of government subsidies and additional deposits to eliminate suboptimal recycling is also analyzed finally the model is extended to incorporate hustling i e allowing consumers to recycle packages discarded by other consumers 2001 elsevier science

a rational voter explanation of the cost of ruling it is well known that the average government loses votes the so called cost of ruling we show that the loss can be explained as a perfectly rational demand for change in a median voter model once the model is amended to let the two parties be visibly different

the impact of local and national economic conditions on legislative election results using data for 278 portuguese mainland municipalities we estimate the impact of national and local economic conditions on legislative electoral outcomes over the period from the reestablishment of democracy in 1974 to the present empirical results indicate that the performance of the national economy is important but that the municipal situation also conditions electoral outcomes

price transmission and local market power empirical evidence from the austrian gasoline market we analyse the impact of local market power on price margins and different dimensions of price adjustment dynamics speed and asymmetry of price transmission using data for a large number of indiv

gubernatorial midterm slumps this article studies gubernatorial midterm slumps in u s state legislative elections we employ a regression discontinuity design which allows us to rule out the hypothesis that the midterm slump simply reflects a type of reversion to the mean generated by simple partisan swings or the withdrawal of gubernatorial coattails or anticipatory balancing our results show that the party of the governor experiences an average seat share loss of about 3 5 percentage points we also find evidence suggesting that a large share of the variation in gubernatorial midterm slumps can be accounted for by 1 crude partisan balancing and 2 referendums on state economic performance with approximately equal weight given to each

coattail voting in recent presidential elections this article presents a method for analyzing the extent and strength of coattail voting in presidential elections this method allows the authors to estimate the magnitude of coattail voting and then to decompose this estimate into more basic elements estimates are given for presidential elections beginning with 1956 the determination of the coattail vote and its decomposition depend on the theory of the voting decision that is assumed in this article we present a model of vote determination that is similar in most respects to the traditional src model the vote for congressional representation in a presidential election year is determined jointly by partisan affiliation attitudes toward the presidential candidates and local forces unique to the congressional race such as may be captured by an incumbency variable this model permits the separate estimation of the strength of short term forces and of the efficiency of the presidential coattails application of the model to survey data since 1956 indicates that efficiency of presidential coattails has declined during this period furthermore the 1980 election does not appear to be an exception to this trend on the other hand there has not been any particular trend in the strength of short term forces during this period instead events peculiar to the context of a specific election generate short term forces at the level of the presidential election but the degree to which these forces are carried over to local races seems to have declined

perverse committee appointments may foster divide and rule abstract a plurality rule spatial committee can select an extreme decision if a bare minority of members prefer the opposite extreme decision the majority who prefer a moderate decision are immobilised by internal divisions consequently a nominator may appoint candidates with the opposite preference ordering so as to build up the bare minority our results may explain why disraeli extended the franchise to skilled male workers in 1867 against centrist opposition and why an electorate whose preferences are not polarized may have to choose between extremist candidates

a theory of divided government this paper extends the spatial theory of voting to an institutional structure in which policy choices depend upon not only the executive but also the composition of the legislature voters have incentives to be strategic since policy reflects the outcome of a simultaneous election of the legislature and the executive and since the legislature s impact on policy depends upon relative plurality to analyze equilibrium in this game between voters we apply coalition proof type refinements the model has several testable implications which are consistent with voting behavior in the united states for instance the model predicts a split tickets where some voters vote for one party for president and the other for congress b for some parameter values a divided government with different parties controlling the executive and the majority of the legislature and c the midterm electoral cycle with the party holding the presidency always losing votes in midterm congressional elections

a threshold cointegration analysis of asymmetric price transmission from crude oil to gasoline prices abstract this study provides new supportive evidence for asymmetric adjustment in u s retail gasoline prices the asymmetric transmission is found to occur not just through the spot markets of crude oil and refinery gasoline but also through their future markets further evidence also shows that the observed asymmetry in price transmission primarily occurs downstream not upstream of the transmission process

are all the good men married uncovering the sources of the marital wage premium a longstanding and yet unsettled question in labor economics is does marriage cause men s wages to rise cross sectional wage studies consistently find that married men earn significantly higher wages than do men who are not currently married however it is well known that inferring causal relationships from crosssectional analysis is inappropriate because of the biases introduced by unobserved heterogeneity as a means of circumventing this problem this paper uses data on identical twins to control for unobserved heterogeneity our estimates suggest that marriage increases men s wages by as much as 27 and that little if any of the cross sectional relationship between marriage and wages is due to selection in addition we find little evidence that the marital wage premium is a consequence of household specialization

comparative politics and public finance we propose a model with micropolitical foundations to contrast different political regimes compared to a parliamentary regime the institutions of a presidential congressional regime produce fewer incentives for legislative cohesion but more separation of powers these differences are reflected in the size and composition of government spending a parliamentary regime has redistribution toward a majority less underprovision of public goods and more rents to politicians a presidential congressional regime has redistribution toward powerful minorities more underprovision of public goods but less rents to politicians the size of government is smaller under a presidential regime this last prediction is consistent with cross country data

polarized platforms and moderate policies with checks and balances abstract in standard spatial models of elections parties with policy preferences take divergent positions their platform positions are less separated than are the parties ideal policies if policy is the result of an executive legislative compromise the policy preferences of the parties can be moderated by voter behavior divided government may result since parties anticipate the moderated outcomes they have an added incentive to choose separated platforms consequently divergence in platforms is greater than in the standard model especially when uncertainty is high and the legislature more powerful than the executive for some parameters parties may even posture by adopting platforms that are more extreme than their true ideal points

vote splitting as insurance against uncertainty the present article offers a rational choice explanation for political ticket splitting it considers a game theoretic model of voting and bargaining within congress and between congress and the president when parties are ideologically oriented and voters utilities are state dependent the model shows that if there is uncertainty about the true state of the world ticket splitting emerges as a tool risk averse voters use in order to insure themselves against extreme policies in bad states of nature

electoral rules strategic entry and polarization abstract how does electoral rule disproportionality affect the structure of the party system i e the number and the policy platforms of the competing parties by studying a model where both party entry and platform choice are endogenous we are able to provide a unified theory an increasing electoral rule disproportionality exhibits a a first order negative effect on platform polarization b a second order negative effect on the number of parties as polarization decreases centrist parties are squeezed between other contenders and prefer not to enter and c an additional third order negative effect on polarization via the reduction of the number of parties we then conduct a laboratory experiment and strongly confirm the theoretical predictions of the model

the speed of gasoline price response in markets with and without edgeworth cycles retail gasoline prices are known to respond fairly slowly to wholesale price changes this does not appear to be true for markets with edgeworth price cycles recently many retail gasoline markets in the midwestern u s and in other countries have been shown to exhibit price cycles in which competition generates rapid cyclical retail price movements we show that cost changes in cycling markets are passed on 2 to 3 times faster than in markets without cycles we argue that the constant price movement inherent within the edgeworth cycle eliminates price frictions and allows firms to pass on cost fluctuations more easily

divided government versus incumbency externality effect quasi experimental evidence on multiple voting decisions abstract this paper explores the causal relationship between vote outcomes in different elections we ask 1 does the partisan identity of the mayor influence the voter s decision in subsequent town council elections 2 do voters condition their vote for the mayor on the result of the last council election the analysis mainprod type flply relies on a regression discontinuity design focusing on close election outcomes based on municipal level data for germany we find that the party of the mayor can receive a significant bonus in the next town council election moreover voters punish mayor candidates of parties that performed strongly in earlier council elections throughout the paper we highlight how these findings can be related to an incumbency externality effect and to the theory of divided government

price search in a product market regressions using panel data on grocery purchases show lower purchase costs are significantly associated with a larger number of stores visited per week there is also evidence but somewhat weaker of diminishing gains from such search an economic model of the determinants of search suggests that prices paid quantities purchased and number of store visits are interrelated a view supported by results of estimating a proposed simultaneous equations model

the competitive impact of hypermarket retailers on gasoline prices abstracthypermarkets are large retail suppliers of general merchandise or grocery items that also sell gasoline often at very low margins this paper estimates the impact of hypermarkets on average state level retail gasoline prices and margins the empirical results indicate an economically and statistically significant price decreasing effect of increased hypermarket competition the estimations also suggest that refiners lower the delivered wholesale prices charged to their affiliated lessee dealer and open dealer stations in response to increased hypermarket competition which in turn translates to lower retail street prices the adoption of sales below cost laws may lessen the price reducing effects from hypermarket competition

beyond the median voter preferences district heterogeneity and political representation despite the centrality of the median voter prediction in political economy models overwhelming empirical evidence shows that legislators regularly take positions that diverge significantly from the preferences of the median voter in their districts however all these empirical studies to date lack the necessary data to directly measure the preferences of the median voter we utilize a unique data set consisting of individual level voting data that allows us to construct direct measures of voter preferences we find that legislators are most constrained by the preferences of the median voter in homogeneous districts

logrolling under fragmented authoritarianism theory and evidence from china this paper provides a rigorous theoretical and empirical analysis of the effect of logrolling between interest groups on social welfare in a non democratic political system in particular we focus on china where bureaucratic interest groups are separate vertical organizations reaching down from beijing to the provinces and cities the key question in this paper is what are the effects of the logrolling of parochial interest groups on state policies and social welfare in autocracies we address this question both theoretically and empirically the theory predicts a specific distortion in resource allocation because of logrolling while the empirical results confirm the theoretical prediction we find policy outcomes under logrolling are characterized by excessive spending on all the interest groups preferred goods and insufficient spending on public goods we test the existence of logrolling between the ministry of civil affairs and ministry of health in china our result shows logrolling between the two ministries lead to inefficiencies in social security and health care policies

closed loop supply chains under reward penalty mechanism retailer collection and asymmetric information abstract being motivated by the issue of waste electrical and electronic equipment weee collection we consider a contract design problem for a manufacturer with entrusting the collection of weee to a retailer however the manufacturer has asymmetric information on the collection effort level of the retailer this paper designs an information screening contract for the manufacturer to obtain the information of collection effort level and the optimal decision making with several properties of contract parameters are derived the results indicate that the manufacturer would offer lower wholesale price and higher buy back price for the h type retailer while charge more franchise fee to the h type retailer considering the government intervention reward penalty mechanism rpm is developed to stimulate the asymmetric information closed loop supply chain clsc we also analyze the impacts of rpm by comparing the cases whether or not rpm is implemented the comparison results show that the rpm can lower the wholesale price and retail price meanwhile raise buy back price and collection quantity finally several numerical studies are conducted for more managerial insights

vancouver s gasoline price wars an empirical exercise in uncovering supergame strategies this paper uses a unique data set to determine which dynamic model of tacit collusion best describes behaviour in a particular industry the area investigated is a region of the vancouver british columbia retail gasoline market players are service station managers who compete daily firms choose price in each period using strategies that depend on prices chosen in the previous period periodically unanticipated demand shocks precipitate price wars when shocks occur the firms in the market must determine the new demand conditions and adjust their strategies from an econometric point of view slopes of intertemporal reaction functions are latent variables the resulting system of equations with time varying parameters is estimated via the kalman filter different repeated game oligopoly models correspond to different transition matrices for the latent variables the models can thus be assessed in terms of their power to explain firm behaviour in this market

new evidence on asymmetric gasoline price responses in a 1997 paper borenstein cameron and gilbert bcg claim that gasoline prices rise quickly following an increase in the price of crude oil but fall slowly following a decrease this note estimates an error correction model with daily spot gasoline and crude oil price data over the period 1985 1998 and finds no evidence of asymmetry in wholesale gasoline prices the sources of the difference in results are twofold first we use the standard engle granger two step estimation procedure whereas bcg used a nonstandard estimation methodology second even using bcg s nonstandard specification the use of daily rather than weekly data yields little evidence of price asymmetry

design and analysis of government subsidized collection systems for incentive dependent returns we present and solve two bilevel programming bp models describing the subsidization agreement between the government and a company engaged in collection and recovery operations these enable the company to capture the remaining value in cores referring to used products of different quality types to pick up the cores the company needs to open collection centers and dispatch vehicles on direct routes to customer sites customers have an inherent willingness to return their core and decide to do so according to the quality dependent financial incentive offered by the company in order to promote collection and recovery the government pays a uniform subsidy to the company for each core collected we introduce a supportive and a legislative bp model to tackle this comprehensive collection system design problem in both models the outer problem of the bp formulation involves the government which is the leader and wants to minimize the unit subsidy the company is the follower in the inner problem and tries to maximize its net profit from the cores subject to the government s subsidy decision in the supportive model the company itself is not bound by the minimum collection rate targeted by the government thus the amount of collected cores may not be sufficient the government tries to resolve this situation with increased subsidization the legislative model assigns the minimum collection rate responsibility to the company but also entitles it to a certain profitability ratio guaranteed by the government the solution methodology proposed for both models consists of brent s method for the outer problem and a tabu search heuristic solving the inner problem its effectiveness is tested in computational experiments the results show that for the same collection rate and profitability ratio the government has to grant a higher subsidy in the supportive model than in the legislative model

is german domestic social policy politically controversial this paper investigates empirically the influence of government ideology on social policy using german data examining the funding and the benefits of social security and public healthcare policy my results suggest that policies implemented by governments dominated by left and rightwing parties were similar over the 1951 2007 period leftwing governments however spent more in the 1970s and rightwing governments did so after german reunification in 1990 since policy convergence encourages new parties to enter the political arena and party platforms on social policy matters are likely to undergo further changes in light of demographic change the observed pattern may thus be a transitory phenomenon

the political economy of dynamic elections accountability commitment and responsiveness we survey the literature on dynamic elections in the traditional settings of spatial preferences and rent seeking under perfect and imperfect monitoring of politicians we define stationary electoral equilibrium which encompasses notions used by barro 1973 ferejohn 1986 banks and sundaram 1998 and others we show that repeated elections mitigate the commitment problems of politicians and voters and that a responsive democracy result holds under general conditions term limits however attenuate the responsiveness finding we also touch on related applied work and we point to areas for fruitful future research including the connection between dynamic models of politics and economics

subjective price search and price competition abstract in this paper we study price rivalry between two firms facing a population of imperfectly informed buyers the two sellers are geographically dispersed and consumers search for the lowest price the competitive process either suffers from cyclical instability or stabilises at that price at which no buyer searches

political budget cycles and divided government abstractpolitical budget cycles and divided government regional studies this study empirically examines the effect of divided governments on the existence of political budget cycles it uses a setting at the german municipality level where divided governments occur frequently and can be clearly disentangled from the underlying political system in this setting the executive does not have full discretion over expenditures and tax rates and needs support from the legislative to manipulate policy before executive elections the study shows that political budget cycles in expenditures and tax rates are more likely when the same party controls executive and legislative under divided government policy manipulation is significantly smaller

partisan cycles in congressional elections and the macroeconomy in the postwar united states the president s party has always done worse in the midterm congressional elections than in the previous congressional election republican administrations exhibit below average and democratic administrations above average economic growth in the first half of each term whereas in the latter halves the two see equal growth our rational expectations model is consistent with these two regularities in presidential elections voters choose between two polarized candidates they then use midterm elections to counterbalance the president s policies by strengthening the opposition in congress since presidents of different parties are associated with different policies our model predicts a spurious correlation between the state of the economy and elections our predictions contrast with those of retrospective voting models in which voters reward the incumbent if the economy is doing well before the election our model performs empirically at least as well as and often better than alternative models

a structural model of turnout and voting in multiple elections this paper develops a unified approach to study participation and voting in multiple elections the theoretical setting combines an uncertain voter model of turnout with a spatial model of voting behavior we apply our framework to the study of turnout and voting in u s presidential and congressional elections we structurally estimate the model using individual level data for the 2000 elections and quantify the relationships between observed individual characteristics and unobserved citizens ideological preferences information and civic duty we then use the estimated model which replicates the patterns of abstention selective abstention split ticket voting and straight ticket voting observed in the data to assess the effects of policies that may increase citizens information and sense of civic duty on their turnout and voting behavior

the pass through of oil prices into euro area consumer liquid fuel prices in an environment of high and volatile oil prices abstract crude and refined oil prices have been relatively high and volatile on a sustained basis since 1999 this paper considers the pass through of oil prices into consumer liquid i e petrol diesel and heating fuel prices in such an environment the pass through of oil prices into consumer liquid fuel prices has already been addressed extensively in the literature nonetheless much of this literature has either focused on the united states or on a time period when oil prices were relatively stable or has used monthly data the main contribution of this paper is a comprehensive combination of many features that have been considered before but rarely jointly these features include 1 the analysis of the euro area as an aggregate and a large number of countries the initial 12 member states 2 the consideration of different time periods 3 the modelling of the data in raw levels rather than in log levels this turns out to have important implications for our findings 4 the use of high frequency weekly data which as results will suggest are the lowest frequency one should consider 5 the investigation of the different stages of the production chain from crude oil prices to retail distribution refining costs and margins distribution and retailing costs and margins 6 the examination of prices including and excluding taxes excise and value added 7 the modelling of prices for three fuel types passenger car petrol and diesel separately and home heating fuel oil 8 lastly we also address the issue of possible asymmetries allowing for the pass through to vary according to a whether price are increasing or decreasing and b whether price levels are above or below their equilibrium level the main findings are as follows first as distribution and retailing costs and margins have been broadly stable on average the modelling of the relationship between consumer prices excluding taxes and upstream prices in raw levels rather than in logarithms has important implications for the stability of estimates of pass through when oil price levels rise significantly second considering spot prices for refined prices improves significantly the fit of the estimated models relative to using crude oil prices it also results in more economically meaningful results concerning the extent of pass through third oil price pass through occurs quickly with 90 occurring within three to five weeks fourth using a relatively broad specification allowing for asymmetry in the pass through from upstream to downstream prices there is little evidence of statistically significant asymmetries furthermore even where asymmetry is found to be statistically significant it is generally not economically significant lastly these results generally hold across most euro area countries with few exceptions

design and planning of a closed loop supply chain with three way recovery and buy back offer abstract due to strict environmental legislations and competitive economics worldwide closed loop supply chain clsc management has been receiving increasing attention in order to improve the return rate of used products in this paper a recovery framework is proposed by employing buy back offer at retailer level the proposed recovery framework is integrated with an optimization model for a multi period clsc under demand and capacity uncertainty to determine optimal buy back price that needs to be offered to consumers so that the minimum collection limit set by the legislators is fulfilled as well as overall cost of the integrated system is minimized the developed model addresses the possibility of three way recovery options namely product remanufacturing component remanufacturing and raw material recovery to determine the optimal manufacturing remanufacturing and recycling quantity sensitivity analysis suggests that there is a trade off between the extra benefit generated through remanufacturing and the cost of acquisition of used products due to the employment of buy back offer a condition for the buy back offer to be simultaneously advantageous for both manufacturer and retailer under revenue sharing contract is derived a comparative study is also undertaken to examine the performance of the clsc when collection is made through buy back offer vs third party collection the proposed clsc model is further extended by adding a separate demand for remanufactured products and the performance of the initial model with the extended model is compared

a political agency model of coattail voting abstract this paper provides a theoretical model for the coattail effect where a popular candidate for one branch of government attracts votes to candidates from the same political party for other branches of government i assume a political agency framework with moral hazard in order to analyze the coattail effect in simultaneous presidential and congressional elections i show that coattail voting is the outcome of the optimal reelection scheme adopted by a representative voter to motivate politicians efforts in a retrospective voting environment i assume that an office motivated politician executive or member of congress prefers her counterpart to be affiliated with the same political party this correlation of incentives leads the voter to adopt a joint performance evaluation rule which is conditioned on the politicians belonging to the same party or to different parties two sided coattail effects then arise on the one hand an executive s success props up while failure drags down her partisan ally in the congressional election which implies a presidential coattail effect on the other hand the executive s reelection itself is affected by a congress member s performance which results in a reverse coattail effect

impact of government financial intervention on competition among green supply chains abstract this work analyzes the effects of governmental financial intervention on green supply chain competition using a three stage game theoretic model nash equilibrium solutions for governmental and chain member decisions are derived analytical results suggest that the government should adopt green taxation and subsidization to ensure that green profit attributed to green product production is non negative strategically low wholesale price strategies are suggested to recycled component suppliers under green subsidization to stimulate manufacturers intention of green product production under green taxation numerical results reveal that under equilibrium conditions social welfare and chain based profits improve by 27 8 and 306 6 respectively compared with the case without financial intervention

an endogenous policy model of hierarchical government endogenous policy models usually neglect that government policies are frequently the result of decisions taken at different tiers by different agents each enjoying some degree of autonomy in this paper policies are the outcome of the choices made by two agents within a hierarchy a legislator decides on the budget to be successively spent by a bureaucrat both agents are lobbied by one or two interest groups the combination of sequential decisionmaking and lobbying implies that the interaction between the agent at one tier and the interest group s depends on the exchange between the same interest group s and the agent at the other tier our results concerning multi tier lobbying and legislatorial oversight substantially qualify the conventional wisdom related to one tier lobbying in particular the reaction of the legislator to lobbying at the bureaucratic tier may make lobbying wasteful even when there is no competition from other lobbies moreover the legislator benefits from lobbying only when there is competition between interest groups at the upper tier it is also shown that competition for influence at the bureaucratic tier may work as a perfect substitute for legislatorial oversight extensions of the model indicate its usefulness for the analysis of decisionmaking in other multilevel governance structures like federations or firms

rockets and feathers revisited an international comparison on european gasoline markets this paper re examines the issue of asymmetries in the transmission of shocks to crude oil prices onto the retail price of gasoline relative to the previous literature the distinguishing features of the present paper are i use of updated and comparable data to carry out an international comparison of gasoline markets ii two stage modeling of the transmission of oil price shocks to gasoline prices first refinery stage and second distribution stage in order to assess possible asymmetries at either one or both stages iii use of asymmetric error correction models to distinguish between asymmetries that arise from short run deviations in input prices and from the speed at which the gasoline price reverts to its long run level iv explicit possibly asymmetric role of the exchange rate as crude oil is paid for in dollars whereas gasoline sells for different sums of national currencies v bootstrapping of f tests of asymmetries in order to overcome the lowpower problem of conventional testing procedures in contrast to several previous findings the results generally point to widespread differences in both adjustment speeds and short run responses when input prices rise or fall

retail price asymmetries in local gasoline markets the experience of the salt lake city retail gasoline market during the 1989 to 1993 period suggests that there was asymmetric adjustment wholesale and retail price data unique to the salt lake market are used to test for the existence of three types of price asymmetry during this period with respect to the magnitude of the pass through of wholesale price changes evidence of price asymmetry during periods of average weekly wholesale price changes is found however during market shocks the evidence points in the direction of retail price symmetry evidence of asymmetry with respect to the timing and pattern of the retail price response is found for periods of both average and market shock changes since gasoline is purchased by the consumer in local markets conclusions reached by studies of market pricing behaviour that rely on national data may not be relevant for local policy decisions this appears to be the case for the salt lake city market

do large cabinets favor large governments evidence on the fiscal commons problem for swiss cantons abstract the fiscal commons problem is one of the most prominent explanations of excessive spending in political economics for a panel of the 26 swiss cantons over the 1980 1998 periods this paper explores the role of fragmented governments on fiscal policy outcomes we distinguish between two variants of fragmented governments cabinet size and coalition size in addition we analyze whether constitutional rules for executive and legislature as well as formal fiscal restraints shape the size of government and how different rules interact with fragmentation the results indicate that the number of ministers in the cabinet is positively associated with the size of government while fiscal referendums effectively restrict the size of government there is also evidence that fiscal referendums relax the fiscal commons problem to some extent

can exchange rate pass through explain the asymmetric gasoline puzzle evidence from a pooled panel threshold analysis of the eu abstract this study contributes to the literature since it tries to link the exchange rate pass through erpt with the rockets and feathers hypothesis using a panel of eu 28 countries allowing for the existence of an endogenous threshold variable our empirical findings indicate that the threshold model is better suited to this analysis than the baseline linear adjustment model this is the case since the latter restricts the threshold to be centered around zero and the dynamic response to cumulative shocks cannot be properly identified the empirical findings reveal that the threshold variable expressed by the trade weighted dollar exchange rate index is statistically significant only in the sample above the threshold high regime this means that for the net eu exporting countries fluctuations in the real effective exchange rate of the us against its major eu trading partners do affect the level of pre tax retail gasoline prices with the relevant elasticity exceeding unity complete erpt moreover all the statistical tests reject the null hypothesis that there is no significant threshold and thus an asymmetric adjustment gasoline mechanism prevails the impulse response functions confirm our empirical findings that erpt can explain asymmetric gasoline pricing within the eu periphery

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers