preferences of citizens for agricultural policies evidence from a national survey the increasing costs of agricultural programs is raising concern about the future direction of agricultural policies data from a nationwide survey on public attitudes toward agriculture are used to examine the structure of citizens preferences for government involvement in agriculture and especially for policies to protect family farms estimates of the influence of economic and sociodemographic variables on policy preferences are computed using a multiple indicator model signs and magnitudes of estimated coefficients lend support to the self interest theory of voter behavior results question economic arguments suggesting altruistic motives as a cause of redistributionary agricultural policies

name your own price at priceline com strategic bidding and lockout periods a buyer suggests prices to n sellers in a time period and buys from the seller who accepts the bid first the number of bidding rounds is determined by how frequently the buyer can make an offer we show that with no limit on the frequency and without discounting the price path is either kept flat initially with large jumps at the end or increasing steadily over time which class of path occurs in equilibrium depends on the buyer s trade off between committing to a price ceiling versus finely screening the sellers costs with discounting limiting the number of rounds mitigates the delay caused by the reluctance to raise bids in the first class of equilibrium and therefore can benefit the buyer this result suggests why in reality bargaining parties often take measures to make their offers rigid and consequently force themselves to make fewer offers copyright oxford university press

time is money time pressure incentives and the quality of decision making many decisions in economics and finance have to be made under severe time pressure furthermore payoffs frequently depend on the speed of decision making as for instance when buying and selling stocks in this paper we examine the influence of time pressure and time dependent incentive schemes on the quality of decision making in an experimental beauty contest game we find that convergence to equilibrium is faster and payoffs are higher under low time pressure than under high time pressure interestingly time dependent payoffs under high time pressure lead to significantly quicker decision making without reducing the quality of decisions

strikes and holdouts in wage bargaining theory and data we develop a private information model of union contract negotiations in which disputes signal a firm s willingness to pay previous models have assumed that all labor disputes take the form of a strike yet a prominent feature of u s collective bargaining is the holdout negotiations often continue without a strike after the contract has expired production continues with workers paid according to the expired contract we analyze the union s decision to strike or hold out and highlight its importance to strike activity strikes are more likely to occur after a drop in the real wage or a decline in unemployment

in search of the good samaritan estimating the impact of altruism on voters preferences this paper continues the development of a theoretical foundation for measuring altruistic behaviour with respect to tax versus expenditure preferences in three specific spheres health education and welfare payments particular emphasis is placed on analysing the choice theoretic calculus that underlies individual preferences using this theoretical foundation econometric techniques allow progress to be made in measuring the characteristics of the underlying utility function the empirical work relates to the uk and confirms that both self interest and public interest with a slight emphasis on the latter determine overall preferences the implications of this for the public choice school are then examined

price discovery and learning during the preopening period in the paris bourse before the opening of the paris bourse traders place orders and indicative prices are set this offers a laboratory to study empirically the t tonnement process through which markets discover equilibrium prices since preopening orders can be revised or canceled before the opening indicative prices could be noise we test this against the hypothesis that preopening prices reflect learning early in the preopening the noise hypothesis is not rejected as the opening gets closer the informational content and efficiency of prices increase and the learning hypothesis is not rejected we also propose a gmm based estimate of the speed of learning

bargaining games with a random sequence of who makes the offers abstract this note relaxes the rigid assumption in recent bargaining theory of a strictly alternating sequence of offers and instead considers the opposite extreme at each bargaining round a random event determines who gets to make an offer irrespective of who made the previous offer the equilibrium of this game is practically identical to the equilibrium of the alternating offers game if the horizon is infinite with a finite horizon the properties of the equilibrium are more satisfying than the properties of the equilibrium of the alternating offers game

unions and strikes with asymmetric information strikes seem to be a pareto inefficient outcome of bargaining between a union and a firm however this paper shows that strikes can be the outcome of rational behavior by both agents if the firm has more information than the union concerning the state of nature the union can use strikes as a way of gaining information the paper uses an asymmetric information model where the firm has information about the state i e profitability that the union does not know the schedule of wage offers by the union then depends on the probability that a given state will occur

durable goods monopolists durable goods monopolists face special problems because the sale of their products creates a secondhand market not controlled by the monopolist to the extent the monopolist is able to rent his product rather than sell it or to make binding promises about his future production such problems are ameliorated given the inability to do the above the monopolist is led to producing goods less durable than those produced by either competitive firms or monopolist returns a reverse averch johnson result that monopolist sellers may invest less in fixed costs including plant modernization and research and development than would the renters is shown it is also shown that even though sellers have less monopoly power than renters and nondurable goods monopolists it is possible that the seller will cause a greater deadweight loss than the other types of monopolies

tribunal specialization and institutional targeting in patent enforcement recent scholarship on nonmarket strategies has sought to understand organizational decisions to target specific institutional venues for nonmarket actions we contribute to this emerging literature by studying institutional targeting between specialized and general purpose tribunals which are available to resolve disputes in a number of settings whereas prior work on institutional targeting has primarily focused on the differences in the policy preferences of public actors and the susceptibility of policy positions to influence activities we focus on the differences in expertise and procedural flexibility that typically accompany tribunal specialization we develop a theory about targeting decisions forum shopping in such contexts which suggests two main drivers of tribunal targeting expected settlement and expected returns drawing on these mechanisms we formulate hypotheses linking tribunal targeting decisions to firm level attributes such as market strategic stakes institutional distance from competitors and tribunal specific capabilities our hypotheses are tested using a novel data set of patent enforcement against u s imports which also sheds light on nonmarket strategies in patents

an analysis of bargaining power for milk cooperatives and milk processors in florida the florida dairy market has a few fluid milk processors and many dairy farmers the dairy farmers are represented in negotiation with the processors by a cooperative this research builds a theoretical model of bargaining between the processors and a cooperative the model is applied to the florida dairy market to examine price negotiations between florida milk processors and a dairy cooperative an expectation maximization em algorithm along with maximum likelihood estimation is used to estimate the econometric disequilibrium model with time series data for the period of october 1998 to may 2009 the results show that the class i price set by the federal milk marketing order is the major factor influencing the cooperative s supply reservation price negotiated quantity and production seasonality affect the processors demand reservation price the processors appear to be more patient and have higher average bargaining power 0 8804 than the cooperative 0 1196 the highest lowest bargaining power

bargaining and strikes strikes are generally regarded as an important economic phenomenon and yet good theoretical explanations of them are hard to come by the difficulty is to understand why rational parties should resort to a wasteful mechanism as a way of distributing the gains from trade why could not both parties be made better off by moving to the final distribution of surplus immediately or if it is uncertain to its certainty equivalent and sharing the benefits from increased production

wage bargaining with time varying threats we study wage bargaining in which the union is uncertain about the firm s willingness to pay and threat payoffs vary over time strike payoffs change as replacement workers are hired as strikers find temporary jobs and as inventories or strike funds run out we find that bargaining outcomes are substantially altered if threat payoffs vary if dispute costs increase in the long run then dispute durations are longer settlement rates are lower and wages decline more slowly during the short run and may even increase the settlement wage is largely determined from the long run threat rather than the short run threat

misrepresentation of utilities in bargaining pure exchange and public good economies in order to analyze bargaining in pure exchange and public good economics when the agents are not informed about their opponents payoffs we embed each bargaining problem into a noncooperative game of misrepresentation in pure exchange public good economies with an arbitrary number of agents whose true utilities satisfy a mild assumption the set of allocations obtained at the linear strategies nash equilibria of this game is equal to the set of constrained walrasian lindahl allocations with respect to the agents true utilities without this assumption the result holds for two agent pure exchange economies and under alternative assumptions for public good economies c 2002 elsevier science usa

foundations of dynamic monopoly and the coase conjecture subgame perfect equilibria are characterized for a market in which the seller quotes a price each period assume zero costs positive interest rate continuum of buyers and some technical conditions if buyers valuations are positive then equilibrium is unique buyers strategies are stationary and the price sequence is determinant along the equilibrium path but possibly randomized elsewhere otherwise a continuum of stationary equilibria can exist but at most one with analytic strategies coase s conjecture is verified for stationary strategies reducing the period length drives all prices to zero or the least valuation connections to bargaining models are described journal qf economic literature classification

union contracts and money wage changes in u s manufacturing industries this paper analyzes the relationship between wage changes negotiated in selected large collective bargaining agreements and industry wide changes in average hourly earnings multiple regressions are used to examine the relationship in two digit manufacturing industries for the period 1958ii to 1978il negotiated wage changes are found to have a major impact on overall movements in hourly earnings the estimated equations have potential applications for short run wage forecasting and for policy analyses

uniqueness of equilibrium payoffs in the stochastic model of bargaining abstract i provide a sufficient condition for the uniqueness of equilibrium payoffs in a model of stochastic bargaining with unanimity rule and risk averse players my condition s implies condition c of merlo and wilson 1995 and is easy to verify in applications

bargaining with deadlines and imperfect player control anecdotal and experimental evidence suggests that bargaining sessions subject to deadlines often begin with cheap talk and rejected proposals agreements if they are reached at all tend to be concluded near the deadline we attempt to capture and explain these phenomena in a strategic bargaining model that incorporates a bargaining deadline the possibility of strategic delay and a lack of perfect player control over the timing of offers imperfect player control is generated by an exogenous uniformly distributed random delay in offer transmission our model has a symmetric markov perfect equilibrium unique at almost all nodes in which players adopt strategic delay early in the game make and reject offers later on and reach agreements late in the game if at all in equilibrium players miss the deadline with positive probability the expected division of the surplus is unique and close to an even split

revealed preferences between public expenditures and taxation cuts public sector choice abstract a survey was carried out in england and wales to provide information on how people would allocate a sum of money between increases in government spending and lowering taxes by means of a coupon scale questionnaire relatively new to this country and used for the first time to ascertain choice at the central and local government level we hoped to overcome the problem of getting people to reveal their true preferences statistical analysis of the data reveals some significant differences in responses

bargaining with endogenous deadlines we develop a two person negotiation model with complete information that makes endogenous both the deadline and the level of surplus destruction after the deadline we show that the undominated nash equilibrium outcome is always unique but might be inefficient moreover as the bargaining period becomes short or as the players become very patient the unique undominated nash equilibrium outcome is always inefficient

reputation in bargaining and durable goods monopoly this paper analyzes durable goods monopoly in an infinite horizon discrete time game we prove that as the time interval between successive offers approaches zero all seller payoffs between zero and static monopoly profits are supported by subgame perfect equilibria this reverses a well known conjecture of coase alternatively one can interpret the model as a sequential bargaining game with one sided incomplete information in which an uninformed seller makes all the offers our folk theorem for seller payoffs equally applies to the set of sequential equilibria of this bargaining game

tough negotiations bilateral bargaining with durable commitments abstract we offer a tractable model of tough negotiations and delayed agreement the setting is an infinite horizon bilateral bargaining game in which negotiators can make strategic commitments to durable offers commitments decay stochastically but uncommitted negotiators can make new commitments the game s unique markov perfect equilibrium outcome takes the form of a war of attrition negotiators initially commit to incompatible offers but agreement occurs once a negotiator s commitment decays if commitments decay more quickly the terms of the agreement become more equal in expectation more patient committed and less risk averse negotiators obtain a larger fraction of the surplus

a non cooperative bargaining game with risk averse players and an uncertain finite horizon abstract for an alternating offer bargaining game with an uncertain horizon the equilibrium payoff to a player is greater the less risk averse is he relative to his opponent as the horizon becomes infinite in length the equilibrium partition converges to the nash bargaining solution

evaluating price enhancement by processing cooperatives section 2 of the capper volstead act requires the secretary of agriculture to determine whether a cooperative has unduly enhanced its prices there has been no consensus about what level of price enhancement is too high this paper contrasts pricing of cooperative and proprietary brands of differentiated food products empirical evidence indicates that market share and advertising do not generally provide cooperatives any more power to enhance prices than they give proprietary firms the paper suggests a standard for undue price enhancement the predicted price level of proprietary brands in similarly structured markets

multilateral bargaining with concession costs this paper presents a new non cooperative approach to multilateral bargaining we consider a demand game with the following additional ingredients i there is an exogenous deadline by which bargaining has to end ii prior to the deadline players may sequentially change their demands as often as they like iii changing one s demand is costly and this cost increases as the deadline gets closer the game has a unique subgame perfect equilibrium prediction in which agreement is reached immediately and switching costs are avoided moreover this equilibrium is invariant to the particular order and timing in which players make demands this is important as multilateral bargaining models are sometimes too sensitive to these particular details in our context players with higher concession costs obtain higher shares of the pie their increased bargaining power stems from their ability to credibly commit to a demand earlier we discuss how the setup and assumptions are a reasonable description for certain real bargaining situations

inventories and public information in private negotiation a laboratory market study using laboratory markets this research investigates the impacts of reporting different kinds of aggregated trade information to buyers and sellers who conduct transactions through bilateral private negotiation there are a limited number of bargaining rounds or matches between buyer and seller pairs sellers hold a perishable inventory before negotiations begin we find that knowledge of trades along with price improves the coordination and bargaining position of buyers trade prices are lower and buyer earnings are higher relative to the no information treatment or when just past quantities or just past prices are reported market efficiency declines as public information is reported copyright 2007 oxford university press

inventory accumulation wages and employment this paper analyzes the effect of inventory accumulation on the outcome of wage and employment agreements between a union and a firm a two period model is set up with bargaining in each period and the paper analyzes under what circumstances inventories will be held even if demand and production conditions are constant it is found that inventories have an important strategic role they bring forward employment and strengthen the bargaining position of the firm in the later period however the firm s strategic use of inventories will generally be to the detriment of both parties copyright 1991 by royal economic society

an empirical test of an asymmetric information model of strikes recent developments in the theory of strategic bargaining demonstrate how informational asymmetries can lead to prolonged and costly bargaining these models can be applied to contract negotiations yielding an economic theory of strikes to date however few empirical tests of these models have been carried out in this paper a set of predictions concerning the incidence and unconditional duration of strikes is derived from a simple bargaining model in which the union is uncertain about the firm s future profitability these predictions are then tested on a micro data set of major u s contract negotiations that took place from 1973 to 1977

negative externalities may cause delay in negotiation we study the strategic equilibria of a negotiation game where potential buyers are affected by identity dependent negative externalities the unique equilibrium of long finitely repeated generic games can either display delay where a transaction can take place only in several stages before the deadline or in spite of the random element in the game a well defined buyer exists that obtains the object with probability close to one

interpreting and enforcing section 2 of the capper volstead act based upon legislative intent court holdings and economic theory undue price enhancement is associated with the exercise of market power consequently a necessary condition for an agricultural marketing cooperative to be in violation of section 2 is the ability to prevent members from overproducing if market power is exercised investigations of undue price enhancement should first determine the extent to which a cooperative possesses potential market power if such potential exists the theory of workable competition provides the framework for determining whether price enhancement has become undue

collusion among asymmetric firms the case of different discount factors abstract this study investigates collusive behavior among asymmetric firms for this purpose we develop a selection criterion for deriving a unique collusive outcome and apply it to the case when firms have different discount factors our analysis reveals that for collusion to be self enforcing it is unnecessary that all firms have sufficiently high discount factors but rather only that firms on average have a sufficiently long run view the optimal collusive outcome entails a strict ordering of output quotas in which firms with relatively low discount factors receive a disproportionate share of market demand as found in the case of a common discount factor a fall in a firm s discount factor reduces the likelihood of successful collusion this effect reduces firm profits on the other hand in the event that firms can collude a lowering of a firm s discount factor increases its output quota so that its profits rise

taxes and expenditures in the u s public opinion surveys and incidence analysis compared the usefulness of surveys for eliciting fiscal opinions of voters is investigated using data from the u s advisory commission in intergovernmental relations annual surveys of attitude toward government and taxes the survey responses are related to economic and political factors and the survey results compared to those predicted by incidence analysis the results from this analysis and a review of previous studies of this type suggest that there is often no consistent economic foundation for answers to fiscal survey questions it also appears that some standard survey questions are too general to produce precise estimates of the factors influencing responses

bargaining with history dependent preferences abstract two impatient players bargain over a pie of size one according to the infinite alternating offers procedure players payoffs depend not only on the outcome but also on the process of the bargaining specifically they prefer impasse to any agreement that gives them lower discounted utility than would have been derived from accepting earlier offers we characterize the essentially unique subgame perfect equilibrium path which consists of gradual concessions the more patient players are the longer it takes them to reach an agreement when players become infinitely patient the efficiency loss is substantial yet the equilibrium division converges to the nash solution

sequential bargaining with incomplete information this paper describes a simple two person two period bargaining game and solves it using the concept of perfect bayesian equilibrium in which the actions of each player convey information which is used by his opponent the paper examines the effects of changes in bargaining costs the size of the contract zone and the length of the bargaining process on such aspects of the solution as the probability of impasse and the likelihood of concessions the combination of information transfer and the lack of pre commitment embodied in perfectness yields many surprising results common perceptions about the effects of parameter changes on bargaining processes are suspect and should be checked in the particular game being discussed

reputational bargaining and deadlines i highlight how reputational concerns provide a natural explanation for deadline effects the high frequency of deals prior to a deadline in bargaining rational agents imitate the demands of obstinate behavioral types and engage in brinkmanship in the face of uncertainty about the deadline s arrival i also identify how surplus is divided when the prior probability of behavioral types is vanishingly small if behavioral types are committed to fixed demands outcomes converge to the nash bargaining solution regardless of agents respective impatience if behavioral types can adopt more complex demand strategies outcomes converge to the solution of an alternating offers game without behavioral types for the deadline environment

the advantageous nature of risk aversion in a three player bargaining game where acceptance of a proposal requires a simple majority abstract in a three player bargaining game in which acceptance of a proposed allocation requires only the approval of a simple majority it is shown that the most least risk averse player receives the highest lowest expected share when the preferences of the players are not too diverse

a multistage model of bargaining this paper presents a simple multistage model of bargaining wherein a seller makes an offer that can be either accepted or refused if rejected the process continues how the seller s ability to make commitments affects bargaining outcomes is analysed by comparing the commitment equilibria to those arising when commitment is impossible the effects of increasing uncertainty about preferences and varying the length of the bargaining horizon are analysed the ways in which the bargaining environment can be changed to improve outcomes are discussed

on delay in bargaining with one sided uncertainty recently attention has been given to a model of two person bargaining in which the parties alternate making offers and there is uncertainty about the valuation of one party the purpose of the analysis has been to identify delay to agreement with a screening process where agents with relatively lower valuations distinguish themselves by waiting longer to settle we point out a fundamental difficulty with this program by demonstrating that the assumptions used in the literature allow for delay only in so far as the time between offers is significant

durable goods coasian dynamics and uncertainty theory and experiments this paper presents a model in which a durable goods monopolist sells a product to two buyers each buyer is privately informed about his own valuation thus all players are imperfectly informed about market demand we study the monopolist s pricing behavior as players uncertainty regarding demand vanishes in the limit in the limit players are perfectly informed about the downward sloping demand we show that in all games belonging to a fixed and open neighborhood of the limit game there exists a generically unique equilibrium outcome that exhibits coasian dynamics and in which play lasts for at most two periods a laboratory experiment shows that consistent with our theory outcomes in the certain and uncertain demand treatments are the same median opening prices in both treatments are roughly at the level predicted and considerably below the monopoly price consistent with coasian dynamics these prices are lower for higher discount factors demand withholding however leads to more trading period

damaged durable goods i analyze a durable goods monopolist s incentives to introduce a damaged good a stripped down version of the original good in an infinite horizon framework the damaged good helps the monopolist to mitigate the coasian time inconsistency problem however it may lead to a welfare reduction low valuation buyers are induced to purchase the low quality damaged good early rather than buy the high quality original good later and when the players are patient the surplus loss from quality reduction outweighs the gain from earlier consumptions this welfare result contrasts with the previous literature based on a static framework

strategic delay in bargaining this paper analyses a bargaining model with incomplete information in which the time between offers is an endogenous strategic variable we find equilibria involving a delay to agreement that is due to the use of strategic time delay by bargainers to signal their relative strength under some specifications of the parameters delay is present in the unique sequential equilibrium whose beliefs satisfy one intuitive restriction this delay does not vanish as the minimal time between offers becomes small