sticks and carrots two incentive mechanisms supporting intra group cooperation abstract in this note we introduce two distinct incentive mechanisms that support dynamic intra group cooperation in the context of prisoner s dilemma payoffs rewards for cooperating and punishments for defection where the rewarding or punishing party may be outside the relationship

implications of bid design and willingness to pay distribution for starting point bias in double bounded dichotomous choice contingent valuation surveys we examine starting point bias in double bounded dichotomous choice contingent valuation surveys we investigate 1 the seriousness of the biases for the location and scale parameters of the willingness to pay wtp in the presence of starting point bias 2 whether or not these biases depend on the distribution of wtp and on the bid design and 3 how well a commonly used diagnostic for starting point bias a test of the null that bid set dummies entered in the right hand side of the wtp model are jointly equal to zero performs under various circumstances monte carlo simulations suggest that the effect of ignoring starting point bias depends on the bid design and on the true distribution of wtp a well balanced symmetric bid design may result in very modest biases even when the anchoring mechanism is very strong the power of bid set dummies in detecting starting point bias is low they tend to account for misspecifications in the distribution assumed by the researcher for the latent wtp rather than capturing the presence of starting point bias

semi nonparametric distribution free dichotomous choice contingent valuation abstract we apply a semi nonparametric distribution free estimator for binary discrete response data to the estimation of a dichotomous choice contingent valuation model using this estimator mean and median compensating and equivalent variation can be consistently estimated without making nontheoretically motivated assumptions on consumer preferences the approach is illustrated using a contingent valuation survey of willingness to pay for reduction of risk of premature death due to exposure to hazardous waste we find that a conventional parametric estimator and the proposed estimator give similar estimates of unconditional wtp but that conditional on explanatory variables the estimates are quite different

export demand us farm income and land prices 1945 1985 the growing openness of the u s economy has caused world supply and demand conditions to have significant farm level impacts emphasizing the important macroeconomic linkages between capital goods and factor markets in agriculture schuh 1983 this study considers the linkage from the international grain market to u s farm income in the post war period 194985 this linkage suggests that export demand may also have played an important role affecting land and other input prices through the derived demand relationship burt 1986 phipps 1984 and robison lins and venkataraman 1985 have each shown that land prices are closely tied to real and expected net returns to farming this study seeks to supplement their findings by examining the relative role of exports in determining these returns over time empirical results clearly show the export farm income connection the further linkage to land values while present is somewhat less clear

an analysis of growth of u s farmland prices 1963 82 increases in expected inflation or real growth in net rental income to land have been proposed as alternative explanations of the dramatic real growth in u s farmland prices in the 1970s in this paper the effect of inflation is shown to be theoretically ambiguous an empirical analysis using u s and international farmland prices suggests that most of the real land price growth can be explained by real growth in net rental income to land increases in expected inflation have had a negative effect on real land prices but the effect of inflation has been comparatively small

generalized additive models for nonmarket valuation via revealed or stated preference methods single site recreation demand and dichotomous choice contingent valuation analyses are typically conducted by implementing models containing strong parametric assumptions which are rarely underpinned by theoretical arguments this work illustrates how these assumptions can be relaxed and the estimation conducted semiparametrically by using generalized additive models gams this approach directly estimates the degree of the variables nonlinearities from the data thereby avoiding subjective choices on the smoothing parameters and offering many advantages when compared to the conventional modeling techniques that dominate the environmental economics literature additionally this paper illustrates how gams can be specified to construct theoretically consistent willingness to pay measures jel c14 q51

the impacts of the tax deferred exchange provision on farm real estate values this study examines the effects of the section 1031 tax deferred exchange provision on agricultural land values the provision allows taxpayers to defer taxation for relinquished productive assets if a like kind asset is acquired within the allotted time of 180 days the analysis examines a set of 3 580 farm real estate transaction from 55 agricultural counties in indiana over the period 2003 2006 hedonic price analysis suggests that properties acquired under a like kind exchange are associated with a 1 32 price premium jel h23 q15

equilibrium binding agreements abstract we study equilibrium binding agreements the coalition structures that form under such agreements and the efficiency of the outcomes that result we analyze such agreements in a context where the payoff to each player depends on the actions of all other players thus a game in strategic form is a natural starting point unlike the device of a characteristic function explicit attention is paid to the behavior of the complementary set of players when a coalition blocks a proposed agreement a solution concept and its applications are discussed journal of economic literature classification numbers c70 c71

a one stage model of link formation and payoff division abstract in this paper we introduce a strategic form model in which cooperation structures and divisions of the payoffs are determined simultaneously we analyze the cooperation structures and payoff divisions that result according to nash equilibria strong nash equilibria and coalition proof nash equilibria we find that no cycle will be formed if a player claims a positive amount for the formation of one of its links and that a player does not necessarily profit from a central position in a cooperation structure journal of economic literature classification numbers c71 c72

semiparametric approaches to welfare evaluations in binary response models applied welfare analysis is commonly based on mean or median benefit estimates however the whole conditional distribution of benefits is often of interest for policy makers this article compares the distributional information recovered by competing semiparametric methods results obtained using a valuation study for the improvement of water resources in brazil suggest that the semiparametric approaches are in line with each other capturing a rich heterogeneity structure that is ignored by the logit approach failure to take this structure into account may lead to the undue rejection of the project according to the kaldor hicks criterion

flexible functional form estimation of willingness to pay using dichotomous choice data abstract this paper introduces fully flexible semi nonparametric methods for calculating willingness to pay wtp bounded between zero and the respondent s income for dichotomous choice contingent valuation a method to estimate median wtp using fully flexible functional forms is also presented finally the numerical illustration demonstrates the importance of considering jensen s inequality in calculating wtp with nonlinear models

why do firms train theory and evidence this paper offers a theory of training whereby workers do not pay for the general training they receive the superior information of the current employer regarding its employees abilities relative to other firms creates ex post monopsony power and encourages this employer to provide and pay for training even if these skills are general the model can lead to multiple equlibria in one equilibrium quits are endogenously high and as a result employers have limited monopsony power and provide little training while in another equilibrium quits are low and training is high using microdata on german apprentices we show that the predictions of our model receive some support from the data

participative democracy and local environmental issues the present paper deals with the management of environmental quality at the level of a city more precisely we propose two different contractualisms among citizens that allow them to reduce the polluting emissions caused by their consumption of both a private and a collective good in the first contractualism the mayor proposes to citizens to establish neighbourhood committees they have the responsibility of defining the total amount of polluting emission by private and public transportation means in their neighbourhood it comes out that the mediation of the neighbourhood committees brings out a lower total pollution than in the case where each individual citizen acts on his own interest however the emission level brought out by the neighbourhood committees is not pareto optimal on the other hand extending the first coalitional game by a supplementary stage focused on bargaining between the neighbourhood committees allows us to define a participative democracy procedure this two stage procedure brings about a pareto optimal pollution level 2008 elsevier b v all rights reserved

shifting foundations of agricultural policy analysis welfare economics when risk markets are incomplete the neat alignment of resources output and prices specified by the perfect competition model is far from duplicated in free markets and the equally neat alignment assumed under the constraints of a program is not experienced when programs are in effect in particular areas under empirically determined supply curves are unlikely to represent opportunity costs the basic theory is invaluable in providing a conceptual orientation for the analysis of programs but the assumptions implicit in the literal use of simple forms of it for policy conclusions are breathtakingly heroic

coalition formation as a dynamic process abstract we study coalition formation as an ongoing dynamic process with payoffs generated as coalitions form disintegrate or regroup a process of coalition formation pcf is an equilibrium if a coalitional move to some other state can be justified by the expectation of higher future value compared to inaction this future value in turn is endogenous it depends on coalitional movements at each node we study existence of equilibrium pcfs we connect deterministic equilibrium pcfs with unique absorbing state to the core and equilibrium pcfs with multiple absorbing states to the largest consistent set in addition we study cyclical as well as stochastic equilibrium pcfs

semiparametric estimation of the binary choice model for contingent valuation this paper is concerned with the estimation of the binary choice model without imposing any parametric structure on the distribution of the stochastic term we adapt the distribution free maximum l

land prices and farm based returns the theoretical and empirical relationship between farm based residual returns the opportunity cost of farmland and farmland prices is developed temporal hypotheses concerning the source of land price movements are tested using a variant of granger causality in the aggregate farmland prices are found to be unidirectionally caused by residual farm based returns the findings support the hypothesis that farmland prices are determined mainly within the farm sector and lend credence to the use of extrapolative expectations processes in structural farmland price models

endogenous formation of coalitions the formation of coalitions is a fundamental problem in game theory by a coalition is meant a group of players e g economic or political agents which decide to act together as one unit relative to the rest of the players this includes the instances of syndicates unions cartels blocks political parties parliamentary coalitions etc we would like to emphasize that forming a coalition does not eliminate the individual players as decision makers in all interactions with the other players coalition members act as one unit it may be useful to think of a representative agent taking their place 2 however this arrangement will continue only as long as each player finds it desirable to act this way further bargaining occurs among the members of each coalition on how to divide what they obtained together thus the existence of coalitions implies that the interactions among the players will be conducted on two levels first among the coalitions and second within each coalition most of the existing models in economics and game theory assume that the coalition structure is given exogenously instead we try here to obtain it as an endogenous outcome of our model namely we want to be able to predict which coalitions will in fact form in each given situation 3 our theory combines two kinds of game theoretic concepts value and stability the basic idea is first to evaluate the players prospects in the various coalition structures and then based on these values to find which ones are stable we will call this value coalition structure value or cs value for short the reason we are considering coalition structures i e partitions of the set of players into disjoint coalitions rather than just coalitions is that in general players may find it to their advantage to join forces in some situations and to act separately in others all depending on the way the other participants are organized this implies that both the value and the stability concepts should depend on the entire coalition structure the cs value we analyze in this paper was first developed by owen 7

endogenous trading bloc formation in a north south global economy the majority of the trading blocs to date are between similar countries rather than between developed and developing countries this paper provides a rationale for why trading blocs among similar countries may arise as an equilibrium phenomenon it develops a model of an asymmetric world economy in which there are at least four countries the countries are differentiated with respect to their market size and they choose their trading partners in the coalition proof nash equilibrium either there is global free trade or free trade areas are formed among similar countries la plupart des blocs commerciaux sont formes de pays similaires plutot que de pays developpes et en voie de developpement ce memoire explique pourquoi ce genre de resultat peut emerger en tant que phenomene d equilibre on developpe un modele d economie mondiale asymetrique dans lequel il y a au moins quatre pays les pays different par la taille et la nature de leurs marches et choisissent leurs partenaires commerciaux dans un equilibre libre de coalitions a la nash ou bien il existe un regime global de libre echange ou bien des zones de libre echange entre pays similaires emergent

on coalitional semivalues in this paper we propose a characterization of the coalitional value for transferable utility games owen 1977 and we define and study coalitional semivalues which are generalizations of semivalues dubey neyman and weber 1981

vertical integration with endogenous contract leadership stability and fair profit allocation abstract this paper studies vertical integration in serial supply chains with a wholesale price contract we consider a business environment where the contracting leader may be endogenously changed before and after forming the integration a cooperative game is formulated to normatively analyze the stable and fair profit allocations under the grand coalition in such an environment our main result demonstrates that vertical integration is stable when all members are pessimistic in the sense that they are sure that they will not become the contracting leader if they deviate from the grand coalition we find that in this case the grand coalition s profit must be allocated more to the retailer and the members with higher costs nevertheless we also show the conditions under which the upstream manufacturer can have strong power as in traditional supply chains

on the emergence of an mfn club equal treatment in an unequal world motivated by gatt we endogenize the formation of a club whose members have to abide by the mfn principle of non discrimination the underlying model is that of oligopolistic intraindustry trade while an mfn club does not alter average tariff levels across countries it increases aggregate world welfare makes non members worse off and can immiserize its high cost members these results imply that i core wto rules such as mfn are valuable even if multilateral negotiations deliver limited trade liberalization and ii the distributional effects of mfn maybe one reason why developing countries have been granted special and differential treatment at the wto jel classification f13 f10 f15

semi parametric discrete choice measures of willingness to pay abstract a semi parametric discrete choice method is proposed to recover welfare measures from individual choice data the proposed method is compared with the traditional binary choice models in an application to measure benefits of recreation trips

overeducation in the labour market abstract this paper presents a review of the literature on overeducation the paper assesses the consistency of overeducation within the context of a number of theoretical frameworks including human capital theory hct and assignment theory the analysis goes on to discuss the various measurement controversies associated with the study of overeducation in order to provide an assessment of the extent to which the impacts of the phenomenon represent an economic reality as opposed to a statistical artefact after reviewing the literature it is concluded that the impacts of overeducation are likely to be non trivial and that the phenomenon may potentially be costly to individuals and firms as well as the economy more generally the existence of overeducation also raises some doubts with respect to the validity of some of the central assumptions and predictions of hct that are unlikely to be fully explained by gaps in the standard wage equation framework

modeling recreation demand within a random utility framework abstract this paper develops a single site single trip random utility model for describing recreation behavior the model is applied to a 1981 survey of households in the pennsylvania monongahela river basin hicksian benefit estimates derived from it are compared with those from a more conventional travel cost model estimated from the same survey

a competitive partnership formation process a group of heterogeneous agents may form partnerships in pairs all single agents as well as all partnerships generate values if two agents choose to cooperate they need to specify how to split their joint value among one another in equilibrium which may or may not exist no agents have incentives to break up any existing partnerships or form new partnerships this paper proposes a dynamic competitive adjustment process that always either finds an equilibrium or exclusively disproves the existence of any equilibrium in finitely many steps when an equilibrium exists partnership and revenue distribution will be automatically and endogenously determined by the process moreover several fundamental properties of the equilibrium solution and the model are derived

the scarcity syndrome that may affect us profoundly in years ahead after half a century of conventional wisdom that the farm problem was one of surplus today s perception is that the problem is shortage i call this the scarcity syndrome it has seeped into farmer attitudes economic analyses and legislation it has helped escalate farmland prices and the demand for credit it will probably profoundly affect commodity programs during the 1980s we are not sufficiently aware of the far reaching effects of this new attitude in this note i examine the scarcity syndrome its validity and effects

econometric modeling of the capitalization formula for farmland prices an econometric model is formulated to explain the dynamic behavior in farmland prices a second order rational distributed lag on net crop share rents received by landlords captures the dynamic movements of prices and performs well in conditional post sample forecasts the adjustment path of land prices in response to a perturbation in rents is a protracted dampened cycle the implicitly estimated tax free capitalization rate on rent associated with equilibrium land price is 4 0 neither the expected rate of inflation nor an exponential trend on rent expectations has a significant effect on land prices

quantitative overeducation and cooperative game theory abstract overeducation is an empirical phenomenon in two dimensions qualitative and quantitative quantitative overeducation addresses a firm s decision to train more employees than needed one explanation for this decision is modeled in this article that of classical bargaining power the main idea is that after investing in human capital the employer uses employees outside the firm to raise the bargaining power when he negotiates with the employees within the firm on how to share the profit of the firm to model this we use cooperative game theory for the first time the labor market is modeled by a coalition structure and the payoffs are determined by the value casajus 2009

outside options component efficiency and stability abstract in this paper we introduce a component efficient value for tu games with a coalition structure which reflects the outside options of players within the same structural coalition it is based on the idea that splitting a coalition should affect players who stay together in the same way we show that for all tu games there is a coalition structure that is stable with respect to this value

a semiparametric distribution for willingness to pay and statistical inference with dichotomous choice contingent valuation data this paper proposes a semiparametric willingness to pay distribution and discusses several aspects of statistical inference with dichotomous choice contingent valuation data we study likelihood based estimation of the model parameters with and without controlling for unobserved heterogeneity estimation of the mean and median willingness to pay and specification tests these statistical procedures are implemented using a data set in this application we find that a parametric model is rejected in favor of our semiparametric model that the heterogeneity can be adequately controlled using a simple density and that the semiparametric model offers more robust mean willingness to pay estimates

sharing the surplus an extension of the shapley value for environments with externalities economic activities both on the macro and micro level often entail wide spread externalities this in turn leads to disputes regarding the compensation levels to the various parties affected we propose a method of deciding upon the distribution of the gains costs of cooperation in the presence of externalities when forming the grand coalition is efficient we show that any sharing rule satisfying efficiency linearity dummy player and a strong symmetry axioms can be obtained through an average game adding an additional axiom we identify one unique rule satisfying these properties