unionization and labor market institutions in advanced capitalism 1950 1985 this article examines the depedence of unionization on labor market institutions and long run trends in inflation unemployment and the sectoral composition of the labor force in 18 oecd countries the large number of contending explanations highlights the difficulty in comparative sociology of drawing confident conclusions when there are few cases to compare this problem is addressed through diverse evidence a review of the comparative historical record and a time series analysis to form a bayesian prior distribution which is combined with a cross sectional data set to sharpen conventional estimates of economic and institutional effects this analysis indicates working class organization in trade unions expanded in the postwar period where labor acquired an institutional influence over capitalist labor markets

the regulation of non point source pollution and risk preferences an experimental approach many environmental problems notably arising from agriculture can be classified as non point source pollution problems in this paper we present results of an experimental study on the performance of three mechanisms designed to deal with such problems collective fining random fining and a tax subsidy scheme we find that the fining schemes induce under abatement a feature being enforced with experience we further elicit the participants risk attitude and show that the performance of collective fining is not affected by the subjects risk preferences under a system based on random fining the performance of the mechanism worsens in the presence of risk seeking subjects however coordination on over abatement under the tax subsidy can be alleviated if subjects are risk averse c 2011 elsevier b v all rights reserved

learning about a new technology pineapple in ghana this paper investigates the role of social learning in the diffusion of a new agri cultural technology in ghana we use unique data on farmers communication patterns to define each individual s information neighborhood conditional on many potentially confounding variables we find evidence that farmers adjust their inputs to align with those of their information neighbors who were surpris ingly successful in previous periods the relationship of these input adjustments to experience further indicates the presence of social learning in addition applying the same method to input choices for another crop of known technol ogy correctly indicates an absence of social learning effects jel d83 013 033 q16

optimal symmetric punishments in a bertrand differentiated products duopoly abstract this paper studies how product differentiation affects collusive pricing in a duopoly when products are horizontally differentiated and firms compete in prices in contrast to earlier work the punishment mechanism supporting collusion is assumed to be the optimal symmetric punishment proposed by abreu 1986 journal of economic theory 39 191 225 such punishments have previously been characterized only for cournot oligopolies and for bertrand oligopolies with capacity constraints the optimal symmetric punishment turns out to have a simple two phase structure after one period of an intense price war firms return to the collusive outcome if prices are restricted to be non negative and the discount factor is large the price war will be extended to more than one period the best collusive price is shown to be lower the more substitutable are products

farm household production efficiency evidence from the gambia this article investigates the economic efficiency of farm households with an application to the gambia the efficiency analysis is conducted not at the farm level but at the household level thus capturing the importance of off farm activities output based measures of technical allocative and scale efficiency are generated using nonparametric measurements an econometric analysis of factors affecting the efficiency indexes is then conducted using a tobit model technical efficiency is fairly high indicating that access to technology is not a severe constraint for most farm households the cost of scale inefficiency is modest allocative inefficiency by contrast is found to be important for the majority of farm households on the basis of the tobit results imperfections in markets for financial capital and nonfarm employment contribute to significant allocative inefficiency

improving welfare through climate friendly agriculture the case of the system of rice intensification we use rich survey data to investigate the economic impact of a climate friendly rice farming method known as the system of rice intensification sri on the welfare of rain dependent small holder farmers in tanzania sri reduces water consumption by half which makes it a promising farming system in the adaptation to climate change in moisture constrained areas and it does not require flooding of rice fields resulting in reduced methane emissions endogenous switching regression results suggest that sri indeed improves yield in rain dependent areas but its profitability hinges on the actual market price farmers face sri becomes profitable only when the rice variety sells at the same market price as that of traditional varieties but results in loss when sri rice sells at a lower price we argue that the effort of promoting adoption of such types of climate friendly agricultural practices requires complementary institutional reform and support in order to ensure their profitability to small holder farmers

price setting supergames with capacity constraints this paper examines the role of industry capacity in enforcing collusion in the context of repeated games for a fixed capacity per firm it is shown that changes in the number of firms have a non monotone effect on the best enforceable cartel price this is due to the fact that while an additional firm lowers the share that each of the other firms enjoys at the collusive price it also increases the losses to each firm should the cartel fail

social networks and technology adoption in northern mozambique despite their potentially strong impact on poverty agricultural innovations are often adopted slowly using a unique household dataset on sunflower adoption in mozambique we analyse whether and how individual adoption decisions depend upon the choices of others in the same social networks since farmers anticipate that they will share information with others we expect farmers to be more likely to adopt when they know many other adopters dynamic considerations however suggest that farmers who know many adopters might strategically delay adoption to free ride on the information gathered by others we present empirical evidence that shows that the relationship between the probability of adoption and the number of known adopters is shaped as an inverse u in line with information sharing the network effect is stronger for farmers who report discussing agriculture with others the data contains information which is needed to ameliorate the identification issues that commonly arise in this context in particular social networks are precisely identified and in addition we can control for village heterogeneity and endogenous group formation

long run competition in capacity short run competition in price and the cournot model in this article we investigate the nature of equilibrium in markets in which firms choose the scale of operation before they make pricing decisions we analyze a duopoly model in which firms choose their capacities before engaging in bertrand like price competition we demonstrate that the cournot outcome is unlikely to emerge in such markets and that the equilibrium tends to be more competitive than the cournot model would predict in addition our results indicate a tendency toward asymmetric firm sizes and price dispersion that results from the mixed strategies firms use in equilibrium

the political economy of government domestic expenditure in the affluent democracies 1960 80 despite the large number of studies of the determination of government expenditure in the affluent democracies most students of the subject admit that we know relatively little about the complex dynamics of spending change using multiple regression analyses of changes in nonmilitary outlays over the years 1960 to 1973 and 1973 to 1980 this study attempts to remedy some of the problems in the literature by providing new tests of several old hypotheses by introducing and testing several relatively new hypotheses and by evaluating such propositions in the context of an integrated theoretical framework and of analyses that span two distinct political economic eras results suggest that the dynamics of domestic expenditure change are partially conditioned by macroeconomic and political environments of particular eras overall the self interests and ideological preferences of policymakers the institutional and extrainstitutional political action of policy relevant groups and needs for state assistance emerge as principal sources of changes in domestic expenditure

the dynamics of trade unionism and national economic performance i test two theories of the political processes of trade unions the first argues that wage moderation depends on a centralized labor movement the second contends that institutional conditions permitting unions coordination of bargaining strategies is sufficient coordination is most likely to he achieved when there are small number of unions that do not compete for members that is when union monopoly is high important empirical anomalies may be resolved by analyzing the effects of union centralization and monopoly separately rather than combining them into a composite index of corporatism reanalyzing comparative data from organization of economic cooperation and development countries between 1963 and 1985 largely corroborates the hypothesis that monopoly is more important than either centralization or composite indices of corporatism for national economic performance the conceptual rationale underlying indices of corporatism should be reexamined

the political impact of economic crisis in latin america in the 1980s research on the political implications of economic conditions is separated into two relatively distinct bodies of literature i bridge the theoretical gap between them by examining the effects of economic crisis on electoral outcomes in latin america from 1982 to 1990 an analysis of 21 competitive elections indicates that crisis conditions undermine support for incumbents and provoke high levels of electoral volatility but without necessarily fostering the growth of political extremism or the exhaustion of elite consensus associated with the breakdown of democracy the results also suggest that the relationship between economic conditions and electoral instability is mediated by party system structure rather than democratic age paradoxically the findings buttress prior research on electoral outcomes in the comparatively stable and homogeneous organization for economic cooperation and development oecd nations while undercutting theoretical frameworks elaborated with specific reference to the breakdown and consolidation of third world democracy

how should commodities be taxed a supergame theoretic analysis abstract this paper studies the impact of commodity taxes on the sustainability of collusion in imperfectly competitive markets we consider both a cournot and a bertrand supergame with discounting with collusion being supported by either grim trigger strategies or stick and carrot optimal punishments we show that irrespective of firms choice variable and under both punishment schemes increased reliance on ad valorem taxation makes it easier for firms to sustain a collusive agreement contrary to the conventional wisdom according to which ad valorem taxation should be preferred on welfare grounds we find that welfare under specific taxation might be higher than welfare under ad valorem taxation the main conclusion of our analysis is that traditional welfare results on the comparison between ad valorem and specific taxation based on static models do not necessarily survive in a dynamic setting where the possibility of collusion among firms is taken into account in response to an increase in the ad valorem tax rate sufficiently patient firms might find it rational to form an implicit cartel which would not have existed otherwise

research joint ventures product differentiation and price collusion abstract we investigate the interplay between firms decisions in product development either joint or independent and their ensuing repeated pricing either collusive or bertrand nash a joint venture develops a single product whereas independent ventures develop their respective products which can be differentiated we prove that joint product development and the resulting lack of horizontal product differentiation may destabilise collusion whilst firms r d decisions have no bearings on collusive sustainability if differentiation is vertical we also discover the non monotone dependence of firms venture decisions at the development stage upon their time preferences as well as upon consumers willingness to pay

on the detection of collusion and predation abstract this lecture not only shows how game theory can contribute to the detection of collusion and predation but also how experts for the defense can use game theoretic arguments to make such detection difficult a few important european anti trust cases are discussed to illustrate

collusive equilibrium in the great salt duopoly this paper uses data presented in a report of the monopolies and mergers commission on the market for white salt to test the implications of some recent developments in oligopoly theory the market in question is a homogeneous price setting duopoly where firms are subject to capacity constraints we find that the conclusions of models based on one shot non cooperative games do not hold collusion in the market is readily explained by the types of threat strategies underlying abreu s simple penal codes possible explanations of the collusive equilibrium in terms of joint profit maximization are not supported by the data indeed the explanation of the equilibrium remains an open question copyright 1993 by royal economic society

the suboptimality of optimal punishments in cournot supergames we investigate within a cournot supergame whether optimal punishments may become suboptimal when economies of scale are not negligible we show that for sufficiently strong increasing returns to scale the critical discount factor associated to grim trigger strategies is lower than the one associated to optimal penal codes

the political geography of the eurocrisis the european union provided a mixed response to the 2008 financial crisis on the one hand it refused to pursue fiscal integration through a common budget on the other it introduced significant transfers between countries that were designed to produce financial stabilization the authors analyze this response as the outcome of democratic constraints on eu leaders given the eu s current institutional structure citizens preferences pose a binding constraint on what leaders can do as these preferences limit the scope of risk pooling among members and the degree of political tolerance for different courses of action the authors show that citizens preferences reflect differences in the geography of income production regimes and institutional organization the heterogeneity of constituencies redistribution preferences combined with a diverse economic geography helps to explain why political constraints on national governments prevent them from engaging in further fiscal integration by contrast externalities among member states shift the preferences of citizens who may experience negative effects and make international redistribution politically feasible the authors analyze these two mechanisms and present novel empirical results on the determinants of preferences for fiscal integration and international redistribution in the aftermath of the eurocrisis

the statistical analysis of roll call data modern studies of legislative behavior focus upon the relationship among the policy preferences of legislators institutional arrangements and legislative outcomes in spatial models of legislatures policies are represented geometrically as points in a low dimensional euclidean space each legislator has a most preferred policy or ideal point in this space and his or her utility for a policy declines with the distance of the policy from his or her ideal point see davis hinich and ordeshook 1970 for an early survey the primary use of roll call data the recorded votes of deliberative bodies 1 is the estimation of ideal points the appeal and importance of ideal point estimation arises in two ways first ideal point estimates let us describe legislators and legislatures the distribution of ideal points estimates reveals how cleavages between legislators reflect partisan affiliation or region or become more polarized over time e g mccarty poole and rosenthal 2001 roll call data serve similar purposes for interest groups such as americans for democratic action the national taxpayers union and the sierra club to produce ratings of legislators along different policy dimensions second estimates from roll call analysis can be used to test theories of legislative behavior for instance roll call analysis has been used in studies of the u s congress both contemporary and

does adaptation to climate change provide food security a micro perspective from ethiopia we examine the driving forces behind farmers decisions to adapt to climate change and the impact of adaptation on farmers food production we investigate whether there are differences in the food production functions of farm households that adapted and those that did not adapt we estimate a simultaneous equations model with endogenous switching to account for the heterogeneity in the decision to adapt or not and for unobservable characteristics of farmers and their farm we compare the expected food production under the actual and counterfactual cases that the farm household adapted or not to climate change we find that the group of farm households that adapted has systematically different characteristics than the group of farm households that did not adapt the relationship between production and average temperature is inverted u shaped for farm households that adapted while it is u shaped for farm households that did not adapt and vice versa in the case of precipitation we find that adaptation increases food production however the impact of adaptation on food production is smaller for the farm households that actually did adapt than for the farm households that did not adapt in the counterfactual case that they adapted

bayesian inference for comparative research rv egression analysis in comparative research suffers from two distinct problems of statistical inference first because the data constitute all the available observations from a population conventional inference based on the long run behavior of a repeatable data mechanism is not appropriate second the small and collinear data sets of comparative research yield imprecise estimates of the effects of explanatory variables we describe a bayesian approach to statistical inference that provides a unified solution to these two problems this approach is illustrated in a comparative analysis of unionization a widely used tool in quantitative comparative politics is the linear regression model estimating relationships between institutional and economic variables observed for a set of countries constituting some population of interest a brief survey of recent comparative research finds no shortage of work of this type for instance remmer 1991 identifies economic crisis as a source of electoral volatility in latin american countries in the 1980s robertson 1990 presents evidence that institutions moderating the transaction costs of negotiations between capital and labor reduce industrial conflict and golden 1993 finds that union wage moderation in industrialized democracies results from coordinated collective bargaining although the methodological advantages are well documented jackman 1985 we identify two distinct problems of statistical inference endemic to this type of quantitative comparative research first because the data constitute all the available observations from a population conventional inference based on the long run behavior of some repeatable data mechanism is not appropriate second because data sets tend to be small and collinear the effects of explanatory variables are estimated imprecisely in most applications the first problem is generally ignored and the second is solved by imposing restrictions on the regression model to obtain sensible results the bayesian model of statistical inference provides a unified solution to these two distinct problems of quantitative comparative research two features of bayesian inference are important in this context first probability is conceived subjectively as characterizing a researcher s uncertainty about the parameters of a statistical model this subjective probability concept seems particularly useful in comparative settings where the data are typically convenience samples not generated by a known probability mechanism such as random sampling second bayesian inference allows the inclusion of other information in addition to the quantitative sample information again this seems useful in the comparative context where rich historical material is commonly available sparking ideas for researchers but formally discarded in the final analysis in the bayesian approach this historical material can be formally incorporated into the analysis we begin by detailing why the nonstochastic and weak data typical of comparative research are problematic for conventional linear regression analysis we next introduce some ideas about bayesian inference and describe bayesian regression analysis these ideas are applied to a comparative analysis of unionization the subject of a recent exchange in the american political science review between michael wallerstein and john stephens stephens and wallerstein 1991 wallerstein 1989 the bayesian regressions we present are supplemented with a sensitivity analysis that investigates how our conclusions depend upon the sample data and our prior beliefs although we survey some ideas in bayesian statistics a full introduction to the bayesian approach to statistical inference is beyond our scope here good book length treatments are pollard 1986 lee 1989 and at a slightly higher level press 1989 our intention here is to spotlight problematic but ignored issues of statistical inference in a common area of application the bayesian alternative that we present represents just one way forward to address these inferential problems

price knowledge in household demand for utility services a household s decision to acquire price knowledge is endogenous in the demand for utility services and may affect elasticities and consumption levels a simultaneous equation model with endogenous switching is developed to evaluate the effects of price knowledge and other sources of heterogeneity results indicate informed households were more responsive to average and marginal price signals informed households also use less water but this is due to heterogeneity rather than price knowledge controlling for heterogeneity price knowledge actually increases monthly water usage the implications of accounting for differences in price knowledge in utility demand modeling and demand management policy are discussed

the political economy of state medicaid policy we develop and test a market based model to explain variations in states welfare medicine policy decisions the empirical results support the model of state policy outputs indicating that states spending efforts for welfare medicine are most sensitive to the supply of services within their borders we learn in addition that spending effort declines with demand for services indicating that the states spending the highest proportions of total personal income for the program are those who need it most and can afford it least measures of political system development affect spending effort positively and significantly suggesting that ideology diversity of interests and administrative professionalism increase states welfare efforts

government partisanship labor organization and macroeconomic performance governments of the left and right have distinct partisan economic policies and objectives that they would prefer to pursue their propensity to do so however is constrained by their desire for reelection we argue that the ability of governments to further their partisan interests and preside over reelectable macroeconomic outcomes simultaneously is dependent on the organization of the domestic economy particularly the labor movement we hypothesize that there are two different paths to desirable macroeconomic performance in countries with densely and centrally organized labor movements leftist governments can promote economic growth and reduce inflation and unemployment conversely in countries with weak labor movements rightist governments can pursue their partisan preferred macroeconomic strategies and achieve similarly beneficial macroeconomic outcomes performance will be poorer in other cases these hypotheses are supported by analysis of pooled annual time series data for 16 advanced industrial democracies between 1967 and 1984

aggregate efficiency market demand and the sustainability of collusion this paper studies the effects of firms aggregate efficiency and the level of demand on collusion collusion is more difficult in markets where aggregate efficiency i e the ability of firms to profitably produce at prices exceeding the cournot price is large relative to the level of demand

why reputation favors joint ventures over vertical and horizontal integration a simple model abstract this paper investigates the effect of reputation in a model where two parties make noncontractable contributions to an economic undertaking it is shown that the optimal allocation of ownership between the parties is more similar in a repeated than in a one shot version of the model this implies that unified ownership and reputation are substitutes low discount rates and repeated investment decisions thus favor subcontracting and joint venture arrangements of the type commonly observed in japanese industry while full integration is more likely to be optimal when reputational forces are weak

the system of rice intensification and its impacts on household income and child schooling evidence from rural indonesia the yield potential of a set of improved rice management practices known as the system of rice intensification sri has attracted much attention yet we know surprisingly little about sri s socio economic impact using data from indonesia in 2009 this study assesses the impact of sri on household incomes and child schooling we find that sri generates significant estimated yield gains however because sri induces a reallocation of family labor from non farm to farm sri users enjoy no household income gains despite the increased labor demand for farming we find no evidence that sri has a child labor effect

union organization in advanced industrial democracies i suggest a new explanation of cross national differences in unionization rates the size of the labor force size matters because the gains unions are able to achieve in collective bargaining depend on the proportion of substitutable workers who are organized while the costs of organizing depend in part on the absolute number to be recruited the comparison of the costs and benefits of organizing new workers yields the conclusion that unions in larger labor markets will accept lower levels of unionization statistical analysis of cross national differences in unionization rates among advanced industrial societies in the late 1970s indicates that the size of the labor force and the cumulative participation of leftist parties in government explain most of the variance

government partisanship labor organization and macroeconomic performance a corrigendum alvarez garrett and lange 1991 used cross national data panel data on the organization for economic coordination and development nations to show that countries with left governments and encompassing labor movements enjoyed superior economic performance here we show that the standard errors reported in that article are incorrect reestimation of the model using ordinary least squares and robust standard errors upholds the major finding of alvarez garrett and lange regarding the political and institutional causes of economic growth but leaves the findings for unemployment and inflation open to question we show that the model used by alvarez garrett and lange feasible generalized least squares cannot produce standard errors when the number of countries analyzed exceeds the length of the time period under analysis also we argue that ordinary least squares with robust standard errors is superior to feasible generalized least square for typical cross national panel studies

on the feasibility of maximal collusion abstract this note explores when joint profit maximizing behavior between firms can be supported by arbitrary subgame perfect equilibrium strategies we show that for a large class of games maximal collusion is feasible if and only if a simple discount parameter condition is satisfied

the political manipulation of macroeconomic policy conventional wisdom and some research indicate that macroeconomic policies follow cycles corresponding to political as well as economic forces using vector autoregression analysis i test three models of monetary policy determination for the united states 1953 1984 the electoral cycle model that reelection motivations on the part of presidents create a policy cycle the party differences model that policy changes reflect revolving presidential party administrations and the referendum model that changes in presidential approval create in effect a continuing referendum allowing presidents to monitor their success and change macroeconomic policies when necessary analysis shows that monetary policies as measured by the monetary base and short term interest rates respond to the election cycle and presidential approval although the effect on macroeconomic outcomes is ambiguous party differences are found in real income but are not very significant in other variables

electoral competition and agricultural support in oecd countries agricultural trade protectionism in developed countries remains a politically charged issue yet few studies have attempted to explain the political dynamics behind this important trade issue we consider agricultural subsidies as a type of distributive policy that targets the agricultural sector at the expense of consumers and taxpayers based on cox 1987 1990 and myerson 1993 we argue that electoral systems that encourage politicians to appeal to a narrow constituency tend to have a higher level of agricultural support we test this theoretical hypothesis using oecd agricultural support data disaggregated by commodity and country a cross classified multilevel model is employed to account for complex variation of agricultural support across countries commodities and time our empirical results show that electoral systems that encourage politicians to target narrow broad constituencies are associated with relatively high low levels of agricultural subsidies

transaction cost economics and cross national patterns of industrial conflict a comparative institutional analysis at the core of a capitalist system is an implied coalition between labor and capital built upon a system of exchange and compromise without capital the material condition upon which labor s interests are realized would be impossible likewise without labor s consent to exchange wages for future investment capital could not procure the profits and savings necessary for its reproduction and transformation organizing stable and cost efficient class coalitions has long been recognized as not merely an economic priority but a political challenge yet some democracies have met this challenge more successfully than others for the student of comparative political economy an enduring question remains why the present study is an attempt to provide an answer that complements and integrates the more common macroand microanalytic studies of industrial conflict it is argued here that a useful approach is to explicate some of the major microeconomic dynamics that condition exchanges between labor and capital and to demonstrate how institutional devices designed to accommodate political representation and conflict resolution facilitate or impede the process of class compromise by employing the logic of transaction cost economics the analysis highlights the comparative institutional elements fundamental to economizing on the costs of exchange shaping consensus within a political economy s industrial relations system the resulting transaction cost efficiency model of industrial conflict specifies the ex ante cost factors price margin of transaction and the institutional control of bounded rationality and the ex post cost factors legislative polarized pluralism executive hegemony and the frequency of general elections central to the process of building and sustaining class coalitions the model is tested on data drawn from 19 democracies covering the years 1965 83 use of simulation models reveals the relative trade offs associated with different patterns of ex ante and ex post cost structures

demons and repentance abstract this paper presents a new explanation for the stability of cartels for a large class of repeated cournot duopoly games with discounting strategies are constructed which have the property that cheating on the cartel is followed by repentance it is shown than these repentance strategies are subgame perfect equilibrium strategies and that in the presence of demons infrequently irrational behavior on the part of both players they lead to pareto superior expected discounted payoffs in comparison with either friedman s trigger strategies or abreu s stick and carrot strategies

tacit collusion in repeated auctions uniform versus discriminatory within an infinitely repeated game i compare the level and conduct of collusion under uniform and discriminatory auctions for this purpose i characterize the optimal collusive schemes and sets of sustainable profits under these auction formats i show that uniform auctions facilitate collusion more than discriminatory auctions the optimal penal code is equally severe under the two formats but bidders deviation incentives are weaker in uniform auctions given that the payoff irrelevant bids can be used to relax the enforcement problem this discussion is particularly relevant after the recent reforms in the electricity industry in england wales and elsewhere

prisoners dilemma in duopoly super games abstract the choice between quantity and price in order to stabilize collusion is modeled here it is shown that this relocates the prisoners dilemma backward from the market stage to the stage where the market variable is chosen in order to sustain collusion and where discount rates appear as the payoffs likewise a prisoners dilemma arises also when both the market variable and the type of behavior cooperative or non cooperative are simultaneously chosen journal of economic literature classification numbers c72 d43 l13

shadow wages and peasant family labour supply an econometric application to the peruvian sierra a striking feature of developing economies is the large proportion of the work force that is self employed lack of widespread labor market participation in the agricultural sector can pose a major obstacle to the empirical implementation of economic models of the peasant household whether because wage data are simply not available or because the assumptions required to make use of wage data stretch the bounds of credulity this paper develops a methodology for estimating a structural labor supply model for primarily self employed peasant households which holds under a general agricultural technology and set of labor market conditions the unique feature of the approach is that the opportunity cost of time or shadow wage of household workers is explicitly estimated from an agricultural production function and is subsequently used to identify a set of structural labor supply parameters recent household survey data from rural peru is employed to estimate and perform various diagnostic tests on the model the empirical findings lend support to the hypothesis that peasant households allocate their members time as if to maximize a family utility function and moreover demonstrate the tractability of the shadow wage methodology and its usefulness in estimating more elaborate time allocation models

a bayesian perspective on inference from macroeconomic data bayesian methods are logical admissible linguistically natural helpeful conceptually simple and honest but they are also preposterous and very labor intensive generalized bayesian methods allow data to be confusing and inconclusive a bayesian viewpoint allows one to get a handle on the conundrums of exploratory data analysis which are prevalent when the theory is vague and experiments are expensive these ideas are illustrated with a bayesian analysis of the determinants of the u s unemployment rate using four different priors as inputs

shadow wages allocative inefficiency and labor supply in smallholder agriculture this article introduces a method for estimating structural labor supply models in the presence of unobservable wages and deviations of households marginal revenue product of self employed labor from their shadow wage this method is therefore robust to a wide range of assumptions about labor allocation decisions in the presence of uncertainty market frictions locational preferences etc we illustrate the method using data from rice producers in cote d ivoire these data like previous studies reveal significant systematic differences between shadow wages and the marginal revenue product of family farm labor we demonstrate how one can exploit systematic deviations in the present case related to household characteristics such as the land labor endowment ratio to control for both unobservable wages and prospective allocative inefficiency in labor allocation in structural household labor supply estimation

the welfare state turnout and the economy a comparative analysis while the economic voting literature is voluminous comparatively little attention has been paid to the question of how or whether the economy affects turnout i address this issue by examining national elections in 29 countries using time series data the initial findings are replicated by a case study of american presidential and midterm elections since 1896 it is argued that the effect of economic adversity depends upon the degree of welfare state development this relationship is argued to be nonlinear so that mobilization occurs at either extreme while withdrawal obtains in the middle range the importance to democratic theory the study of elections and the politics of welfare policy are discussed

politics and the structural dependence of the state in democratic capitalist nations i explore empirically a central claim of the structural dependence thesis namely that capitalists ability to disinvest fundamentally conditions policy choices in democratic capitalist systems utilizing time series data for 16 affluent democracies from 1965 to 1984 i find that indeed low rates of business investment are associated with reductions in corporate tax burdens and that these reductions are more pronounced in periods of economic crisis moreover low rates of capital formation engender cuts in personal income taxes during periods of economic stress however i also find that the magnitude of responsiveness of taxation to low rates of investment is relatively small and that analyses of the political context of investment and taxation indicate that governments have choices the responsiveness of corporate tax burdens to capital formation may under some governments be part of a policy mix designed to maintain adequate investment and to address the demands of core constituencies

profit sharing with workers facilitates collusion among firms we show how profit sharing by firms with workers facilitates collusion among firms in a dynamic oligopoly environment with uncertain demand we first show that firm profits can always be increased by tying wages to market conditions the optimal agreement takes the form of an option and features partial sharing because increased sharing raises the expected price wage differential but reduces price wage variability we then show that given any cartel there exist market conditions such that simply giving some expected profit to workers raises expected firm profits via the transfer s impact on the incentive to cheat on the cartel

consumption risk technology adoption and poverty traps evidence from ethiopia much has been written on the determinants of input and technology adoption in agriculture with issues such as input availability knowledge and education risk preferences profitability and credit constraints receiving much attention this paper focuses on a factor that has been less well documented the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests building on an explicit model this is explored in panel data for ethiopia historical rainfall distributions are used to identify the counterfactual consumption risk controlling for unobserved household and time varying village characteristics it emerges that not just ex ante credit constraints but also the possibly low consumption outcomes when harvests fail discourage the application of fertilizer the lack of insurance causes inefficiency in production choices

bertrand edgeworth oligopoly in large markets the relation between perfectly competitive and monopolistically competitive equilibria is analysed for a bertrand edgeworth model of a single market in which capacity constrained firms choose prices as strategies the market always has a nash equilibrium in pure or mixed strategies as the number of firms increases the corresponding equilibria converge in distribution to a perfectly competitive price this result provides a justification for perfect competition that is based on an explicit account of price formation however monopoly prices persist with a positive but vanishing probability regularity or well defined inverse demand functions are not required

tacit collusion in the presence of cyclical demand and endogenous capacity levels abstract we analyze tacit collusion in an industry characterized by cyclical demand and long run scale decisions firms face deterministic demand cycles and choose capacity levels prior to competing in prices our focus is on the nature of prices we find that two types of price wars may exist in one collusion can involve periods of mixed strategy price wars in the other consistent with the rotemberg and saloner 1986 definition of price wars we show that collusive prices can also become counter cyclical we also establish pricing patterns with respect to the relative prices in booms and recessions if the marginal cost of capacity is high enough holding current demand constant prices in the boom are generally lower than the prices in the recession this reverses the results of haltiwanger and harrington 1991 in contrast if the marginal cost of capacity is low enough then prices in the boom are generally higher than the prices in the recession for costs in an intermediate range numerical examples are calculated to show specific pricing patterns

optimal penal codes in price setting supergames with capacity constraints this paper constructs optimal pure strategy penal codes for a broad class of symmetric bertrand supergames with capacity constraints the results should simplify the analysis of bertrand supergames because the punishments comprising the penal codes constructed below have a very simple form and the associated payoffs are often easy to calculate it is also shown that for a commonly employed subclass of the games considered the admission of mixed strategies does not allow severer punishments the analysis draws heavily on the pathbreaking work of abreu 1984 he demonstrated that in the search for optimal penal codes attention can be restricted to simple penal codes simple penal codes are characterized by a vector of outcome paths one for each player the ith outcome path is interpreted as the punishment to be imposed on the ith player if he deviates from the equilibrium path or from any punishment path section 2 explains the basic framework of analysis the class of bertrand games studied is very general no particular rationing rule is imposed some mild restrictions are placed on the firms sales functions instead the commonly used models of levitan and shubik 1972 and beckman 1965 are special cases of the games analysed below it is assumed throughout that there is a price firms can be induced to charge if the punishment for charging a different price gives the offending firm a payoff equal to its security level for the supergame thus either there must exist a static nash equilibrium in pure strategies or else the discount factor must not be too close to zero in section 3 optimal penal codes are constructed and it is established that the punishments comprising them always drive punished firms to their security levels the arguments employed make clear that optimal penal codes are not generally unique this issue is addressed in section 4 where it is also shown that the levitan shubik rationing rule exhibits more types of optimal penal codes than do other rules in particular if the levitan shubik rule is employed then punishments that are analogous to abreu s 1986 symmetric two phase punishments for cournot games can be used to construct optimal penal codes in bertrand games this property does not hold generally however

collusive price leadership with capacity constraints abstract in this paper collusive price leadership in homogeneous good capacity constrained repeated price competition is examined in the stage game firms choose their timing of price setting although setting a price early is disadvantageous per se a large firm has an incentive to move early in order to demonstrate its commitment not to deviate if the discount factor is not too large this behavior raises the collusive price compared to that arising in collusion with simultaneous moves as a result all firms obtain strictly higher profits

better technology better plots or better farmers identifying changes in productivity and risk among malagasy rice farmers we introduce a method for properly attributing observed productivity and risk changes among new production methods farmers and plots by controlling for farmer and plot heterogeneity results from madagascar show that the new system of rice intensification sri is indeed a superior technology although about half of the observed productivity gains appear due to farmer characteristics rather than sri itself the technology generates the estimated average output gains of more than 84 the increased estimated yield risk associated with sri would nonetheless make it unattractive to many farmers within the standard range of relative risk aversion