testing for preference change in consumer demand an indirectly separable semiparametric model this article considers the hypothesis that preference changes may partly explain observed consumption patterns a model is developed based on indirect weak separability the kernel estimator of the regression function models the unknown shape of demand functions and a parametric structure models seasonality dynamics and preference change this semiparametric specification is applied to u s meat demand the results support the notion that changes in consumer preferences due to consumers awareness of the health hazards of cholesterol and saturated fat intake may explain an increased consumption of white meat and a decreased consumption of red meat

downward nominal and real wage rigidity survey evidence from european firms downward nominal and real wage rigidity it has been well established that the wages of individual workers react little especially downwards to shocks that hit their employer this paper presents new evidence from a unique survey of firms across europe on the prevalence of downward wage rigidity in both real and nominal terms we analyse which firm level and institutional factors are associated with wage rigidity our results indicate that it is related to workforce composition at the establishment level in a manner that is consistent with related theoretical models e g efficiency wage theory insider outsider theory we also find that wage rigidity depends on the labour market institutional environment collective bargaining coverage is positively related with downward real wage rigidity measured on the basis of wage indexation downward nominal wage rigidity is positively associated with the extent of permanent contracts and this effect is stronger in countries with stricter employment protection regulations

firm behavior under quantity controls the theory of virtual quantities the theory of virtual quantities the dual to virtual prices provides a framework to analyze competitive multiproduct firm behavior under multiple quantity controls on inputs and outputs including command and control quotas and transferable property rights the framework addresses the firm s reactions to regulatory controls impacts of adding or dropping quantity controls inferring unrationed from rationed production and conversion from command and control quotas to cap and trade systems with transferable property rights and secondary market behavior the paper develops reasons for failure of quasi concavity of technology extends the elasticity of intensity s properties and integrates the virtual price and virtual quantity frameworks virtual quantities are applied to assess potential firm responses to quantity controls and a potential transferable property right in a malaysian fishery

unemployment insurance and labor contracts under asymmetric information theory and facts the paper provides evidence to show that many u s labor contracts havelittle or no private unemployment insurance provision a model of an optional contract under asymmetric information with no private unemployment insurance is presented underemployment and involuntaryunemployment may coexist copyright 1986 by american economic association

firm level contracting and the structure of wages in spain in many european countries sectoral bargaining agreements are automatically extended to cover all firms in an industry employers and employees can also negotiate firm specific contracts the authors of this paper use a large matched employer employee data set from a 1995 survey in spain to study the effects of firm level contracting on the structure of wages they estimate a series of wage determination models including specifications that control for individual characteristics coworker characteristics the bargaining status of the workplace and the probability that the workplace was covered by a firm level contract they find that firm level contracting was associated with a 5 10 wage premium with larger premiums for more highly paid workers although they cannot decisively test between alternative explanations for the firm level contracting premium they find that workers with firm specific contracts had substantially longer job tenure than other workers suggesting that the premium was at least

economic inefficiency in a revenue setting the norwegian whitefish fishery the main focus in the inefficiency literature is on suboptimal input use and how this causes increased costs due to technical and allocative inefficiency production or cost functions are then typ

the perverse effects of partial labour market reform fixed term contracts in france we argue that the effects of a partial reform of employment protection by allowing firms to hire workers on fixed term contracts may be perverse the main effect may be high turnover in entry level jobs leading to higher not lower unemployment even if unemployment falls workers may be worse off going through many spells of unemployment and entry level jobs before obtaining a regular job considering french data for young workers since the early 1980s we conclude that the reforms have substantially increased turnover without a substantial reduction in unemployment duration if anything the effect on their welfare appears to have been negative

capacity and capacity utilization in common pool resource industries excess capacity poses one of the most pressingproblems that arise when industries exploitcommon pool natural resources it entailsover investment in the capital stock andexcessive use of variable inputs and placesadditional exploitation pressures on theresource stocks confusion persists over theappropriate definition and measurement ofcapacity and capacity utilization for theseindustries but understanding capacity and itsmeasurement is necessary to properly design acapacity management program this paperaddresses these issues by overviewing theconceptual and theoretical bases for capacityand capacity utilization measurement identifying specific problems for common poolresources outlining alternative methodologiesfor their measurement and illustrating the useof these definitions and measurement methods ina fisheries case study

hidden flexibility institutions incentives and the margins of selectivity in fishing the degree to which selectivity in fisheries is malleable to changes in incentive structures is critical for policy design we examine data for a multispecies trawl fishery before and after a transition from management under common pool quotas to a fishery cooperative and note a substantial shift in postcooperative catch from bycatch and toward valuable target species we examine the margins used to affect catch composition finding that large and fine scale spatial decision making and avoidance of night fishing were critical we argue that the poor incentives for selectivity in many systems may obscure significant flexibility in multispecies production technologies

enforcement of implicit employment contracts through unionization in a world in which employment contracts are incomplete it is costly for a firm to establish credibility for honoring implicit terms of employment agreements by monitoring the employment relationships between the firm and its workers the labor union may provide the workforce with valuable information regarding the firm s adherence to these implicit agreements thus the union provides a signaling mechanism that allows workers to coordinate their actions in order to discipline the firm for a breach of the implicit contract this mechanism enhances the firm s credibility when forming employment contracts and facilitates increased employment levels

why not cut pay abstract i interviewed over 300 business people labor leaders business consultants and counselors of unemployed people all in the northeast of the united states during the recession of the early 1990 s in order to learn why wages and salaries declined in only a few firms employers were reluctant to cut pay because they believed doing so would hurt employee morale leading to lower productivity and current or future difficulties with hiring and retention it was thought that these effects would in the end cost more than the savings from lower pay there were few indications that unemployed people had excessive wage expectations on the contrary many unemployed were too flexible and found themselves rejected by firms as overqualified in most companies pay cuts were not a useful alternative to layoffs because pay cuts would not make it worthwhile to retain many employees and because layoffs harmed morale less than would pay cuts the findings support none of the theories of wage rigidity except those of solow and akerlof that emphasize morale

wage bargaining and nominal rigidities abstract delays in wage negotiations do not necessarily mean work stoppage production can continue under the terms of the old contract while the parties are bargaining holdout this holdout option is included in a strategic bargaining game in addition to strike and lock out threats integrating the bargaining model in a standard macroeconomic framework it turns out that holdout threats will prevail under certain circumstances in this case wages will be rigid in nominal terms so that an increase in aggregate nominal demand increases aggregate output

why firms avoid cutting wages survey evidence from european firms firms very rarely cut nominal wages even in the face of considerable negative economic shocks this paper uses a unique survey of fourteen european countries to ask firms directly about the incidence of wage cuts and to assess the relevance of a range of potential reasons for why the firms avoid cutting wages the paper examines how firm characteristics and collective bargaining institutions affect the relevance of each of the common explanations put forward for the infrequency of wage cuts concerns about the retention of productive staff and a lowering of morale and effort were reported as key reasons for downward wage rigidity across all countries and firm types restrictions created by collective bargaining were found to be an important consideration for firms in western european eu 15 countries but were one of the lowest ranked obstacles in the new eu member states in central and eastern europe

regulation of fisheries bycatch with common pool output quotas abstract many fisheries around the world are plagued with the problem of bycatch the inadvertent harvesting and discard of non targeted species bycatch occurs when targeted and non targeted species coincide in the same habitat and gear is imperfectly selective one of the prevailing methods of controlling bycatch is the common pool quota system under this system biologists set total allowable catches tacs for both the targeted and non targeted species and the fishing season is closed when one of these tacs binds we develop a predictive model of a renewable resource that is regulated with this kind of common pool quota system the model demonstrates that the equilibrium will generally be characterized by excessive discards shortened seasons and foregone target species harvest these results occur even with very efficient low bycatch fishing gear we examine the sensitivity of our predictions to changes in technological parameters and degrees of spatial correlation of target and non target species finally we derive the optimal bycatch penalty function and describe its significance in light of various policy options available to regulators

how strong is the macroeconomic case for downward real wage rigidity we explore the existence of downward real wage rigidity drwr at the industry level based on data from 19 oecd countries for the period 1973 1999 the results show that drwr compresses the distributions of industry wage changes overall as well as for specific geographical regions and time periods but there are not many real wage cuts that are prevented more important however drwr attenuates larger real wage cuts thus leading to higher real wages there is stronger evidence for downward nominal wage rigidity than for drwr real wage cuts are less prevalent in countries with strict employment protection legislation and high union density

a deep recession came with deep wage cuts abstract while economists historically have considered wages rigid downwards recent studies have shown that cuts in nominal wages are more common than previously thought the deep recession experienced in iceland in 2008 coupled with iceland s flexible labor market provided an extreme example of a labor market that experienced widespread and deep cuts in nominal wages data covering two fifths of the labor market showed that 80 of employees experienced a nominal cut in regular hourly wages between 2008 and 2010 the data was collected directly from organizations and excluded the effects of a change in hours worked nominal hourly wages for full time work were cut by 9 3 on average at the same time inflation measured 18

auctions for initial sale of annual catch entitlement we use a laboratory experiment calibrated to a representative new zealand fishery to assess three sealed bid multi unit demand auction mechanisms under consideration for allocating quota for species being introduced into the quota management system these auctions allocate the k units to the k highest bids but prices are determined according to discriminative kth price and k 1st price rules in our experiment the auctions are equally efficient but revenue is highest in the discriminative auction and lowest in the k 1st price auction results are robust to industry subjects and subjects are responsive to the across unit bidding incentives present in multi unit demand auctions

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

individual transferable quotes in a multiproduct common property industry this paper extends the method of virtual prices for quantity constraints to provide inverse derived demand functions for quotas and quota market equilibrium and pricing the approach is applied to evaluate the anticipated effects of a potential program of individual transferable quotas addressing the ill structured property rights and market failure of a multiproduct common property fishery the results indicate that individual transferable quotas on multiple products may not generate the desired rents or achieve biological objectives owing to limitations when joint products are regulated however an individual transferable quota on a single joint product may induce industry disinvestment and reduce overcapitalization

resource rent in individual quota fisheries traditional fisheries management schemes generate incentives for vessels to maximize catch resulting in rent dissipation and overcapacity individual vessel quota management schemes change the incentives to maximize profit and have the potential to generate resource rent and reduce capacity an interesting question is whether it is the changed incentives due to individual quota or the capacity reduction due to transferability of individual quota that is most important in generating rent in this study a cost function approach is used to model and measure rent generated and potential rent in a fishery managed with individual vessel quotas

explaining non compliance in the norwegian coastal cod fishery an application of the multinomial logit establishing motive is central to the analysis of criminal behaviour this article analyses the range of motives for noncompliant behaviour among coastal cod fishermen a multinomial logit model is employed to analyse the reasons that underlie various motives the four motives compared in this study are economic technological and social and motives caused by bureaucracy and legitimacy problems the economic motive is found to be most important for coastal fishermen however the cross sectional data indicate that motives vary with fishing gear vessel length and fishermen s age the results indicate that identifying motives for noncompliant behaviour is not straightforward but is important for reducing the extent of infringements of the regulations fishermen who use gill net seine and long line for example are more often motivated to noncompliance by technical problems and bureaucracy than hand jig fishers the study suggests that in order to prevent noncompliance behaviour the authorities manageme

downward nominal and real wage rigidity survey evidence from european firms it has been well established that the wages of individual workers react little especially downwards to shocks that hit their employer this paper presents new evidence from a unique survey of firms across europe on the prevalence of downward wage rigidity in both real and nominal terms the authors analyse which firm level and institutional factors are associated with wage rigidity the results indicate that it is related to workforce composition at the establishment level in a manner that is consistent with related theoretical models e g efficiency wage theory insider outsider theory the analysis also finds that wage rigidity depends on the labour market institutional environment collective bargaining coverage is positively related with downward real wage rigidity measured on the basis of wage indexation downward nominal wage rigidity is positively associated with the extent of permanent contracts and this effect is stronger in countries with stricter employment protection regulations