duopoly supergames with product differentiation abstract when goods are complements or very close substitutes more tacit collusion is supported by trigger strategies in price setting supergames than in quantity setting supergames for moderate or poor substitutes the situation is reversed this contrasts with the static situation where price setting strategies always lead to higher welfare

buy local pollute less what drives households to join a community supported farm this paper examines which factors determine the participation of households in long term contracting with local farmers are households motivated by reducing the environmental impacts of their food consumption a discrete choice model of community supported agriculture csa participation is applied to a sample of 264 french households the findings suggest that difficult to measure attributes notably environmental considerations play a major role in explaining csa participation

testing deterrence theory rigor makes a difference there is no consensus among scholars on how to test hypotheses about deterrence systematically the disputes are sometimes rooted in differences about theory or sources of data but they are magnified by methodological confusion especially over concepts and operational definitions that produce perverse empirical results serious theoretical errors include inadequate appreciation of the role of uncertainty in deterrence as well as selection biases that undermine empirical tests rigorous examination of our previous work in light of recent criticism discloses very robust findings on the conditions for deterrence success and failure

the role of market forces in assuring contractual performance the conditions under which transactors can use the market repeat purchase mechanism of contract enforcement are examined increased price is shown to be a means of assuring contractual performance a necessary and sufficient condition for performance is the existence of price sufficiently above salvageable production costs so that the nonperforming firm loses a discounted steam of rents on future sales which is greater than the wealth increase from nonperformance this will generally imply a market price greater than the perfectly competitive price and rationalize investments in firm specific assets advertising investments thereby become a positive indicator of likely performance

systemic politics and the origins of great power conflict why do great powers fight one another this obviously central and seemingly simple questionleadsdirectlytooneofthemostfrustrating gaps in the empirical literature on international conflict great powers are states whose interests and capabilities extend beyond their immediate neighbors more so than other states they shape and respond to thestructureoftheinternationalsystem thatstructure is typically implicated in systemic wars which evolve from the interactions of all of the major states in the system yet somehow if the conflict literature is to be believed those same states cease to be driven by systemic interests and systemic imperatives in the long stretches of time between systemic wars in typical statisticalmodelsofconflict theyarepooledwithallofthe other states in the system under the assumption that theyrespondinthesamewaytothesamestimuli which aretypicallybothlocalanddyadic 1 becausenoonecan predict with certainty whether a given crisis between great powers will be resolved without bloodshed or explodeintoasystemicwar however arguingthatonly systemic wars have systemic causes is unsustainable the main barrier to understanding the systemic origins of great power conflict is that systemic theories of international politics are notoriously vague in the

the initiation and termination of enduring rivalries the impact of political shocks theory breaking the stability of interstate conflictual relationships requires a dramatic change in the environment of those relationships hypotheses the beginning and end of enduring rivalries are closely related to the timing of large political shocks in the form of world wars territorial changes alterations in the international power distribution civil wars and national independences methods descriptive statistics on timing of enduring rivalry initiation and termination vis a vis political shocks supplemented by event history analysis results political shocks were found to be a modest necessary condition for the initiation and termination of enduring rivalries with the strongest impact from world wars civil wars and national independences

general deterrence between enduring rivals testing three competing models general deterrence unlike immediate deterrence has rarely been analyzed in a systematic comparative manner we outline a research design for doing so by studying the circumstances under which in a set of enduring rivalries challengers are likely to initiate militarized disputes we indicate the conceptual and operational steps necessary to make and empirically compare predictions stemming from three often competing theoretical frameworks rational deterrence a general model of rational conflict initiation and a cognitive psychological model of behavior emphasizing risk orientation and misperception the results of probit analysis on a pooled time series of enduring rivalries since 1945 provide support for hypotheses from each of the different theoretical models

standards and the form of agreement 2002 presidential address western economic association i introduction the use of standards in exchange agreements involves a great deal more than meeting some criteria or quality level 1 standards are necessary for communication they facilitate trade and their use economizes on the cost of information figuratively speaking they turn amorphous entities into orderly ones more concretely standards bring under a common denominator commodity attributes that may appear disparate in the absence of standards long term relations are best suited to enforce agreements on the other hand the state s comparative advantage is in enforcing standardized components of agreements standards along with state enforcement move the economy toward perfect competition that standards enhance competition has been understood for a long time the 1937 encyclopaedia britannica states that standardization enables buyers and sellers to speak the same language and makes it possible to compel competitive sellers to do likewise thus putting tenders on an easily comparable basis it promotes fairness in competition despite its long standing this basic understanding of standards has not been incorporated into the economic literature i am concerned primarily with commodity standards independent of who sets them or whether they are voluntary or mandatory the basic hypotheses of this article are that new commodity standards created by a fall in the cost of measurement turn private information about commodities into a public good that may also be publicly available shift self enforced components of agreements into their contractual state enforced components lead to less vertical integration increase the incidence of theft and make the contents of commodities clearer more comparable and easier to enforce and thus make competition more perfect the random house dictionary s 1967 apt definition of standard is an object considered by an authority or general consent as a basis of comparison apples for instance meet this dictionary s definition of a standard because there is general consent about the term on the other hand for a ton general consent is lacking the dictionary lists six definitions for it for the term ton to be used as a basis of comparison then an authority must decree what the standard is in the absence of such a ruling transactors may hold conflicting views as to the exact meaning of the term if however a court rules and the ruling publicized that a ton is 1000 kilograms the term becomes a public good new users need not spend resources to determine what it means consider now a commodity such as campbell s tomato soup a buyer unacquainted with it may try a can however he or she will not deem it necessary to compare it with other cans of campbell s tomato soup an assumption seems to be at work that in its desire to protect its brand name campbell s will produce all tomato soup cans to the same standard however commodity standards do not fully cover every commodity in terms of what the standard covers apples differ from campbell s tomato soup whereas there is general consent for the meaning of the term apple the standard does not fully delineate apples it does not cover the diverse features of the individual specimens thus part of the information one gathers when examining an apple is a private good and it has to be gathered separately for each apple standard units as well as graded commodities discussed in section iii such as eggs have been around for a long time commodity standards however seem to have been rare before the industrial revolution and the enhanced level of commodity uniformity that it brought about one of the earliest industrial standards was for screw threading suggested by whitworth in 1841 and introduced in england shortly thereafter hemenway 1975 3 2 i hypothesize that the emergence of standards brought about an increase in litigation to resolve disputes about the quality of commodities disputes that in earlier times were resolved primarily by the use of long term relations

risk perception in psychology and economics abstract the concept of rationality has been basic to most economic analysis its content has been successively refined over the generations as applied to the static world of certainty it has turned out to be a weak hypothesis not easily refuted and therefore not very useful as an explanation though not literally a tautology but recent decades have seen the development of stronger versions applied to a world in which time and uncertainty are real among its most important manifestations have been criteria for consistency in allocation over time the expected utility hypothesis of behavior under uncertainty and what may be termed the bayesian hypothesis for learning that is the consistent use of conditional probabilities for changing beliefs on the basis of new information these hypotheses have been used widely in offering explanations of empirically observed behavior though as not infrequently in economics the theoretical development has gone much further than the empirical implementation these hypotheses have also been used increasingly in normative analysis as a component of benefit cost studies therefore frequently referred to as benefit risk studies the value of reducing mortality rates from diseases for example has been studied by assuming that choice of occupations is made inter alia by comparing wage differences with mortality differences

what makes deterrence work cases from 1900 to 1980 the use of military force to achieve foreign policy objectives is an enduring feature of international politics force or the threat of force may be used either to change the status quo or to maintain it threatening the use of force to maintain the status quo often takes the form of deterrence defined by patrick morgan as the threat to use force in response as a way of preventing the first use of force by someone else 1 deterrence sometimes succeeds and sometimes fails failures are attested to by numerous international wars of history in the nuclear age a failure could cost us our lives the conditions of successful deterrence thus require thorough logical and empirical analysis

the war trap revisited a revised expected utility model the expected utility framework developed in the war trap is revised to correct several deficiencies risk taking orientations are now treated as an integral part of the model by introducing concavity or convexity into the utility functions the zero sum properties of the theory are largely eliminated and the tendency toward interpersonal comparisons of utility is removed several earlier results are replicated with the new model and with annual capabilities data new propositions are deduced that identify important limitations on conflict initiation and relationships resulting from differences in perceptions are tested support is found for the contention that the revised version of the theory of which the original model is a special case is a powerful tool for integrating many extant hypotheses about conflict and for explaining a substantial portion of the tendency for some threats to escalate to violence or warfare and for others to be resolved peacefully

cartel stability with multiproduct firms abstract i examine the implications of the presence of multiproduct firms for cartel stability in a horizontally differentiated market under quantity competition an increase in the number of varieties produced by each firm for any given number of firms increases the critical discount factor above which collusion is sustainable by trigger strategies and thus makes collusion less likely this is also the case under price competition except for a special case where the number of firms is small and the products are close substitutes these results may help explain apparent inconsistencies between theoretical predictions and empirical evidence on the effect of market structure and product differentiation on the likelihood of collusion

the escalation of great power militarized disputes testing rational deterrence theory and structural realism realism we test the relative explanatory power of these two theoretical approaches on the escalation of deterrence encounters among great powers from 1816 to 1984 we derive a set of hypotheses from each model operationalize them for systematic empirical analysis and test the hypotheses on 97 cases of great power deterrence encounters by means of probit analysis the results are that the hypotheses derived from deterrence theory receive considerable support whereas none of the hypotheses derived from structural realism are supported in contemporary research on the causes of international conflict the realist paradigm has been the dominant theoretical approach within this broad framework however scholars have developed at least two prominent alternative models of the conditions under which conflict is likely to arise the first approach structural realism 1 focuses on the attributes of the international system while the second deterrence theory is largely dyadic and emphasizes the resolve and relative military capabilities of adversarial states while both theoretical approaches attempt to identify the conditions under which international crises and wars are likely to arise their

crime and punishment the role of norms in crisis bargaining in this work i test the proposition that normative standards of behavior can influence state actions in security related conflicts specifically i examine the construction of norms in the settlements of security related disputes and the effects these settlements have on subsequent militarized interactions i argue that dispute settlements alter subsequent crisis bargaining in two important ways first they act as normative referents that alter the interpretation of subsequent crisis bargaining behavior both by identifying a solution to the dispute which alleviates fears of demands for future concessions and by defining a set of acts which both sides consider illegitimate second in combination with the response to their violation dispute settlements inflict reputational costs on states that violate them i test these arguments against a realist theory of crisis bargaining through an analysis of 122 reinitiated international crises between 1929 and 1979 i find strong support for the hypothesis that states can and do construct normative standards that guide their behavior in international crises whereas realist theory receives only mixed support

on the efficiency of bertrand and cournot equilibria with product differentation in a differentiated products setting with n varieties it is shown under certain regularity conditions that if the demand structure is symmetric and bertrand and cournot equilibria are unique then prices and profits are larger and quantities smaller in cournot than in bertrand competition and as n grows both equilibria converge to the efficient outcome at a rate of at least 1n if bertrand reaction functions slope upwards and are continuous then even with an asymmetric demand structure given any cournot equilibrium price vector one can find a bertrand equilibrium with lower prices in particular if the bertrand equilibrium is unique then it has lower prices than any cournot equilibrium

a unified theory and test of extended immediate deterrence we present a unified theory and test of extended immediate deterrence unified in the sense that we employ our theoretical deterrence model as our statistical model in the empirical analysis the theoretical model is a straightforward formalization of the deterrence logic in huth 1988 and huth and russett 1984 coupled with private information concerning utilities our statistical analysis suggests that the attacker and defender s decisions are influenced by the balance of forces nuclear weapons defender protege military alliances arms transfers and trade as well as the regime types of those involved many of these findings contradict previous research by huth 1988 and huth and russett 1988 we find that many of the variables involved in the deterrence calculus are nonmonotonically linked to the probability of deterrence success or war we illustrate the results with case studies of the soviet japanese dispute over manchukuo 1937 1938 and the berlin blockade 1948

contrasting rational and psychological analyses of political choice we contrast the rational theory of choice in the form of expected utility theory with descriptive psychological analysis in the form of prospect theory using problems involving the choice between political candidates and public referendum issues the results showed that the assumptions underlying the classical theory of risky choice are systematically violated in the manner predicted by prospect theory in particular our respondents exhibited risk aversion in the domain of gains risk seeking in the domain of losses and a greater sensitivity to losses than to gains this is consistent with the advantage of the incumbent under normal conditions and the potential advantage of the challenger in bad times the results further show how a shift in the reference point could lead to reversals of preferences in the evaluation of political and economic options contrary to the assumption of invariance finally we contrast the normative and descriptive analyses of uncertainty in choice and address the rationality of voting

in which industries is collusion more likely evidence from the uk i examine the factors facilitating or hindering collusion using a comprehensive data set on the incidence of price fixing across uk manufacturing industries in the 1950s the econometric results suggest that collusion is more likely the higher the degree of capital intensity and less likely in advertising intensive than in low advertising industries there is also some evidence of a non monotonic relationship between market growth and the likelihood of collusion there is no clear link between concentration and the incidence of collusion

the effects of product differentiation on collusive pricing abstract using the spatial competition framework of hotelling 1929 this paper explores the relationship between the degree of product differentiation and the ability of firms to collude with respect to price we show that the minimum discount factor required to support the joint profit maximum as an equilibrium outcome monotonically increases as products become better substitutes when the joint profit maximum cannot be supported the optimal collusive price is shown to decline as products become more substitutable these findings suggest that firms producing stronger substitutes tend to find it tougher to collude in terms of their product price

multiple product firms a nested logit approach this paper proves the existence of a symmetric equilibrium with multiproduct firms using a nested logit model of demand the demand model is parameterized by two variables that characterize different dimensions of preference for variety these reflect intragroup heterogeneity and intergroup heterogeneity a group or nest being the set of products produced by a firm there are then two dimensions to market performance the total number of firms and the range of products produced per firm it is shown that the market equilibrium involves an excessive number of firms but each firm provides too few products copyright 1992 by blackwell publishing ltd

cartel stability and product differentiation abstract this paper employs a supergame theoretic model of collusion to analyze the effects of different levels of product differentiation on cartel stability in contrast to earlier work the ability of the parties to reach an agreement is assumed here the focus is on how greater product homogeneity increases both the gain to cheating on a collusive agreement and the magnitude of the punishments that follow a defection the total effect on the likelihood a cartel is stable is therefore unclear two particular differentiated products models are then used to demonstrate that contrary to the conventional view greater homogeneity can reduce cartel stability