efficient and durable decision rules with incomplete information we compare six concepts of efficiency for economies with incomplete information depending on the stage at which individuals welfare is evaluated and on whether incentive constraints are recognized an example is shown in which an incentive efficient decision rule may be unanimously rejected by the individuals in the economy we define durable decision rules which can resist such unanimous rejection and show that efficient durable decision rules exist

speculation under unawareness no trade theorems establish that in various trading environments investors who share a common prior will not engage in speculation as long as expected utility bayesian updating and full awareness are imposed we relax the last assumption by allowing for asymmetric unawareness and examine under which conditions speculative behaviour emerges we find that if common knowledge is assumed as in the settings of aumann 1976 and milgrom and stokey 1982 unawareness cannot generate speculation this is not true however in settings where no common knowledge is assumed such as speculation in equilibrium geanakoplos 1989 and betting that is always beneficial morris 1994 unless stronger conditions on awareness are imposed

the other margin do minimum wages cause working hours adjustments for low wage workers this paper estimates the impact of the introduction of the uk minimum wage on the working hours of low wage employees using difference in differences estimators the estimates using the employer based new earnings surveys indicate that the introduction of the minimum wage reduced the basic hours of low wage workers by between one and two hours per week the effects on total paid hours are similar indicating negligible effects on paid overtime and lagged effects dominate the smaller and less significant initial effects within this estimates using the employee based labour force surveys are typically less significant

who minimum wage increases bite an analysis using monthly data from the sipp and the cps 1 introduction neoclassical competitive models of firm behavior predict that wage increases reduce the quantity of labor demanded by firms and holding the wage rate constant that the least valued workers are the first fired or the last hired minimum wage legislation exogenously increases the price of labor and data from periods when the minimum wage changes can be used to empirically test its effect on the employment of vulnerable workers however a new body of research using such data suggests that minimum wage increases do not reduce employment and may even increase it card 1992a b katz and krueger 1992 card katz and krueger 1994 card and krueger 1994 1995 from a theoretical perspective this new economics of the minimum wage has been characterized as an assault on the law of demand ehrenberg 1995 if modest increases in the minimum wage have no employment effects then the appropriateness of this method in helping the working poor is strictly a distributional issue 2 however if minimum wage increases reduce employment and if the jobs lost are concentrated among the vulnerable groups the policy claims to assist then policy makers must consider this unintended consequence hence estimating the elasticity of employment with respect to minimum wage increases is more than simply an empirical test of economic theory in this paper we use monthly data from the survey of income and program participation sipp and the current population survey cps to examine the effect of raising the minimum wage on employment in contrast to much of the new minimum wage literature we find that minimum wage increases significantly reduce employment moreover we find that the elasticity of demand for labor with respect to increases in the minimum wage is greatest for the most vulnerable groups in the working age population young adults who have low levels of education young black adults and teenagers and teenagers we also find that minimum wage increases reduce the overall employment of young adults and teenagers though the estimated elasticities are smaller 2 the new economics of the minimum wage the new minimum wage literature is dominated by studies that find that minimum wage increases have an insignificant or in some cases a positive and significant effect on the employment of young adults and teenagers aged 16 24 or on other subgroups within that population card 1992a b katz and krueger 1992 card katz and krueger 1994 card and krueger 1994 1995 most of these studies have now generated replies arguing that raising the minimum wage significantly decreases employment in these populations neumark and wascher 1992 1994 1996 in press deere murphy and welch 1995 taylor and kim 1995 burkhauser couch and wittenburg in press because these new studies of the minimum wage vary widely in their techniques we focus our discussion on those that use cps data and employ an estimation strategy related to the one we use in this paper neumark and wascher 1992 1994 1996 card katz and krueger 1994 card and krueger 1995 deere murphy and welch 1995 burkhauser couch and wittenburg in press 3 specifically we review studies that use a pooled time series cross sectional approach to estimate the employment effects of minimum wage increases on vulnerable groups such as teenagers with cps data deere murphy and welch 1995 also use pooled repeated cross sectional data from the cps to estimate the impact of minimum wage increases but their specification differs in some important ways from the studies discussed above deere murphy and welch 1995 estimate the effect of minimum wage increases over the period from 1985 through 1993 they construct intervals of monthly data from 1985 through 1993 that begin on the first day of april of each year and end on the last day of match during the following year for each interval they create annual averages of variables

dynamically consistent beliefs must be bayesian abstract experimental evidence such as the ellsberg paradox contradicts the savage model of decision making under uncertainty since the representation of beliefs underlying preferces by a single probability measure leaves no room for the degree of imprecision in information to affect decisions proceeding axiomatically this paper shows that the existence of a bayesain prior is implied even if savage s sure thing principle is deleted if preferences i are based on beliefs and ii admit dynamically consistent updating in response to new information the result raises questions about the appeal of models of preference that feature a separation of tastes and beliefs journal of economic literature classification number d81

employment effects of minimum and subminimum wages panel data on state minimum wage laws using panel data on state minimum wage laws and economic conditions for the years 1973 89 the authors reevaluate existing evidence on the effects of a minimum wage on employment their estimates indicate that a 10 increase in the minimum wage causes a decline of 1 2 in employment among teenagers and a decline of 1 5 2 in employment for young adults similar to the ranges suggested by earlier time series studies the authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers

a theory of disappointment aversion an axiomatic model of preferences over lotteries is developed it is shown that this model is consistent with the allais paradox includes expected utility theory as a special case and is only one parameter beta richer than the expected utility model allais paradox type behavior is identified with positive values of beta preferences with positive beta are said to be disappointment averse it is shown that risk aversion implies disappointment aversion and that the arrow pratt measures of risk aversion can be generalized in a straight forward manner to the current framework copyright 1991 by the econometric society

the effect of the tipped minimum wage on employees in the u s restaurant industry according to federal law in 2013 employers can take a credit of up to 5 12 for tips received by workers in satisfying the minimum wage requirement of 7 25 this article uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment hours and earnings in the u s restaurant industry using data from the quarterly census of employment and wages and the current population survey we find that a reduction in the tip credit increases weekly earnings but reduces employment in the full service restaurant industry and for tipped workers the results are robust to controls for spatial heterogeneity in employment trends and are supported by a series of falsification tests

trade with heterogeneous prior beliefs and asymmetric information no trade theorems have shown that new information will not lead to trade when agents share the same prior beliefs this paper explores the structure of no trade theorems with heterogeneous prior beliefs it is shown how different notions of efficiency under asymmetric information ex ante interim ex post are related to agents prior beliefs as well as incentive compatible and public versions of those efficiency concepts these efficiency results are used to characterize necessary and sufficient conditions on agents beliefs for no trade theorems in different trading environments

interim efficient allocations under uncertainty abstract this paper considers an exchange economy under uncertainty with asymmetric information uncertainty is represented by multiple priors and posteriors of agents who have either bewley s incomplete preferences or gilboa schmeidler s maximin expected utility preferences the main results characterize interim efficient allocations under uncertainty that is they provide conditions on the sets of posteriors thus implicitly on the way how agents update the sets of priors for non existence of a trade which makes all agents better off at any realization of private information for agents with the incomplete preferences the condition is necessary and sufficient but for agents with the maximin expected utility preferences the condition is sufficient only a couple of necessary conditions for the latter case are provided

dealing with monopsony power employment subsidies vs minimum wages abstract we show in a monopsony model that accounting for changes in hours a minimum wage has ambiguous effects on employment and welfare when all workers have the same preference ordering over leisure and consumption employment subsidies unambiguously improve welfare many countries have minimum wages and also tax minimum wage workers

the private provision of public goods altruism and voluntary giving abstract a unique data set on exact giving by individual households for the support of a rural health care facility is used to examine the determinants of charitable giving including the role of altruism we examine whether a household s decision to give or not give and the amount it gives are influenced in the same or different ways by the household s characteristics and economic circumstances we also examine whether a household s altruistic history affects its current giving decisions

the effect of minimum wages on immigrants this study examines how minimum wage laws affect the employment and earnings of low skilled immigrants and natives in the united states minimum wage increases might have larger effects among low skilled immigrants than among natives because on average immigrants earn less than natives due to lower levels of education limited english skills and less social capital results based on data from the current population survey for the years 1994 2005 do not indicate that minimum wages had adverse employment effects among adult immigrants or natives who did not complete high school however low skilled immigrants may have been discouraged from settling in states that set wage floors substantially above the federal minimum

a reassessment of the new economics of the minimum wage literature with monthly data from the current population survey we estimate the employment effects of federal minimum wage increases using monthly current population survey cps data from 1979 through 1997 we find that the empirical differences in the new minimum wage literature based on cps data primarily can be traced to alternative methods of controlling for macroeconomic conditions we argue that the macroeconomic controls commonly included in models where no employment impact is found are inappropriate we consistently find a significant but modest negative relationship between minimum wage increases and teenage employment using alternative controls or allowing employer responses to the policy to occur with some delay

minimum wage increase and firm productivity evidence from the restaurant industry abstract the purpose of this paper is to examine the effects of increasing the federal minimum wage on productivity in the restaurant industry based on the equity theory and fair wage hypothesis this study empirically investigated the relationship between the federal minimum wage and restaurant productivity the results revealed that increasing the federal minimum wage immediately enhances restaurant productivity for up to two years the results further indicated that both full service restaurants and low wage restaurants benefit from the positive effect while there is no significant effect on limited service restaurants and high wage restaurants the results suggest that restaurants should cope with minimum wage policies by focusing on implementing initiatives that can maximize enhanced work efforts and productivity more importantly the results further highlight that restaurants should consider either continuously raising wage levels or raising them every two years to consistently obtain enhanced motivation and productivity

on the duality between prior beliefs and trading demands in an abstract model with asymmetric information we show that there is a duality relationship between the prior beliefs and trading demands of bets for any given individual then we aggregate all the agents to obtain a second duality relationship between common prior beliefs and trading possibilities we easily derive from these relationships the no trade theorem and its converse general efficiency results can be obtained moreover our framework is sufficiently general to cover special cases proved previously for example econometrica 62 1994 1327 discussion paper 83 center for rationality and interactive decision theory the hebrew university of jerusalem 1995 j econom theory 91 2000 127 gameseconom behav 24 1998 172 yet our argumentsare both simple and intuitive r 2003 published by elsevier science usa

the possibility of speculative trade between dynamically consistent agents it is shown that interim dynamically consistent trade may be supported among agents who have resolute non consequential choice preferences

a more robust definition of subjective probability the goal of choice theoretic derivations of subjective probability is to separate a decisionmaker s underlying beliefs subjective probabilities of events from their preferences attitudes toward risk classical derivations have all relied upon some form of the marschak samuelson independence axiom or the savage sure thing principle which imply that preferences over lotteries conform to the expected utility hypothesis this paper presents a choice theoretic derivation of subjective probability in a savage type setting of purely subjective uncertainty which neither assumes nor implies that the decisionmaker s preferences over lotteries necessarily conform to the expected utility hypothesis copyright 1992 by the econometric society

the effect of minimum wages on immigrants employment and earnings this study examines how minimum wage laws affect the employment and earnings of low skilled immigrants and natives in the u s minimum wage increases might have larger effects among low skilled immigrants than among natives because on average immigrants earn less than natives due to lower levels of education limited english skills and less social capital results based on data from the current population survey for the years 1994 2005 do not indicate that minimum wages have adverse employment effects among adult immigrants or natives who did not complete high school however low skilled immigrants may have been discouraged from settling in states that set wage floors substantially above the federal minimum jel classifications j23 j38 j15

minimum wages and poverty will a 9 50 federal minimum wage really help the working poor using data drawn from the march current population survey we find that state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates when we then simulate the effects of a proposed federal minimum wage increase from 7 25 to 9 50 per hour we find that such an increase will be even more poorly targeted to the working poor than was the last federal increase from 5 15 to 7 25 per hour assuming no negative employment effects only 11 3 of workers who will gain live in poor households compared to 15 8 from the last increase when we allow for negative employment effects we find that the working poor face a disproportionate share of the job losses our results suggest that raising the federal minimum wage continues to be an inadequate way to help the working poor

employment effects of the new german minimum wage evidence from establishment level microdata the authors present the first evidence on the consequences of the new statutory minimum wage in germany which was implemented on january 1 2015 using the iab establishment panel they identify e

the response of hours of work to increases in the minimum wage this paper examines the effect of minimum wage increases on the hours of work of teenagers ages 16 to 19 using monthly data from the current population survey our findings are consistent with the prediction from neoclassical theory that minimum wage increases have a negative effect on labor demand however the estimates we provide here for the elasticity of hours of teen labor demanded with respect to the minimum wage suggest that alternative estimates based on aggregate employment consistently understate the total impact of minimum wage increases on teenage labor utilization

comment on david neumark and william wascher employment effects of minimum and subminimum wages panel data on state minimum wage laws in their article published in the minimum wage research symposium in the october 1992 issue of this journal industrial and laborrelations review volume 45 number 1 pp 55 81 david neumark and william wascher claim to find empirical support for three propositions 1 a higher minimum wage leads to a lower teenage employmentpopulation rate 2 the effect of the minimum wage on employment can be seen within a year but becomes stronger after two years and 3 in states with legal subminimum wages a significant fraction of teenage employees are paid a subminimum wage and the availability of a subminimum wage blunts the disemployment effect of the minimum wage the same symposium contains three papers by us that present empirical evidence suggesting conclusions opposite those of neumark and wascher 1 since neumark and