the solution to the tullock rent seeking game when r 2 mixed strategy equilibria and mean dissipation rates in tullock s rent seeking model the probability a player wins the game depends on expenditures raised to the power r we show that a symmetric mixed strategy nash equilibrium exists when r 2 and that overdissipation of rents does not arise in any nash equilibrium we derive a tight lower bound on the level of rent dissipation that arises in a symmetric equilibrium when the strategy space is discrete and show that full rent dissipation occurs when the strategy space is continuous our results are shown to be consistent with recent experimental evidence on the dissipation of rents

benefit incidence with incentive effects measurement errors and latent heterogeneity a case study for china abstract in what is probably the largest cash transfer program in the world today china s dibao program aims to fill all poverty gaps in theory the program creates a poverty trap with 100 benefit withdrawal rate bwr but is that what we see in practice the paper proposes an econometric method of estimating the mean bwr allowing for incentive effects measurement errors and correlated latent heterogeneity under the method s identifying assumptions a feasible instrumental variables estimator corrects for incentive effects and measurement errors and provides a bound for the true value when there is correlated incidence heterogeneity the results suggest that past methods of assessing benefit incidence using either nominal official rates or raw tabulations from survey data are deceptive the actual bwr appears to be much lower than the formal rate and is likely to be too low in the light of the literature on optimal income taxation the paper discusses likely reasons based on qualitative observations from field work the program s local implementation appears to matter far more than incentives implied by its formal rules

rents dissipation and lost treasures comment in an interesting recent paper dari mattiacci and parisi 2005 extended tullock s 1980 rent seeking game with an entry decision the mixed strategies identified by dari mattiacci and parisi for the case of increasing returns in the contest success function r2 do not constitute an equilibrium of the game they study however these strategies are an equilibrium if the strategy space of the game is restricted by a minimum expenditure requirement and this minimum expenditure requirement is an element of a specific interval

imputed income from owner occupied housing and income inequality imputed income from owner occupied housing is generally not included in analyses of the distribution of income yet the value of homeownership is undoubtedly an important element distinguishing the economic status of one family from another in this paper using a new method to decompose income inequality by income source we analyze the impact of potential income derived from the net worth of housing on a representative national sample of us homeowners using 1980 survey of residential finance data we find that housing income adds less to inequality per dollar of income than does income from all other sources

nature of transfers income tax function and empirical estimation of elasticity of taxable income for brazil abstractthis article aims to estimate the elasticity of taxable income eti taking into account the nature of transfers and their use as a redistribution package involving cash and in kind transfers to households in brazil our contributions are twofold first we provide a simple model with balanced budget government that reveals the role played by cash and in kind transfers on the labour supply and income tax revenues thereof next in order to estimate eti in the presence of cash and in kind transfers brazilian population surveys pesquisa nacional por amostra de domicilios pnad are used to explore a limited tax reform that was implemented between 1997 and 1998 this reform only affected the higher income tax bracket our findings suggest that in kind cash transfers are positively negatively associated with reported taxable income and precise estimation of eti requires estimates of both types of transfers last we estimate the eti for brazil in the range from 0 4 to 1 3 not different fro

conditional cash transfers schooling and child labor micro simulating brazil s bolsa escola program a growing number of developing economies are providing cash transfers to poor people that require certain behaviors on their part such as attending school or regularly visiting health care facilities a simple ex ante methodology is proposed for evaluating such programs and used to assess the bolsa escola program in brazil the results suggest that about 60 percent of poor 10 to 15 year olds not in school enroll in response to the program the program reduces the incidence of poverty by only a little more than one percentage point however and the gini coefficient falls just half a point results are better for measures more sensitive to the bottom of the distribution but the effect is never large

free entry and efficient rent seeking this paper concerns rent seeking and the extent to which rents are dissipated under various circumstances gordon tullock s 1967 insight that expenditures made to capture an artificially created transfer represent a social waste suggested that the cost to the economy of monopoly and regulation is greater than the simple harberger 1954 deadweight loss indeed under tullock s original formulation and in the extensions of his work by krueger 1974 and posner 1975 rents are exactly dissipated at the social level 1 is spent to capture 1 so that the total welfare loss from such activities is equal to the harberger triangle plus the rectangle of monopoly profits

dissipation of contestable rents by small numbers of contenders the theory of rent seeking with its origins in the observations of gordon tullock 1967 or to use jagdish bhagwati s 1982 proposed term the theory of directly unproductive profit seeking activities is concerned with the potentially adverse effects on resource allocation of incentives to cap ture and defend artificially contrived rents and transfers the scope for so cial loss proposed by the theory derives from the relation between the value of a contestable prize and the value of the resources attracted into the con test to determine the beneficiary of the prize underlying this social loss is a specification of how rational behavior by optimizing agents links the value of the prize sought to the resources expended it has been traditional to assume competitive behavior in describing the activities of lobbying and influence seeking then if some further condi tions are satisfied l the total value of the resources expended precisely equals the value of the prize sought so dissipation is complete 2 conse quently the social cost associated with contestability of a rent can be in ferred from the value of the rent itself and the detailed and hard to come by information on individual outlays made in the course of the contest be comes unnecessary by basing their analyses on competitive dissipation contributors to the rent seeking literature see the review by robert tollison 1982 have been able to presume that the observed value of a contested rent is an exact measure of the associated social cost of monopoly power or regu lation similarly in the trade theoretic literature where the rights contested are to quota premia or revenues from trade taxes krueger 1974 bhagwati

examining the reliability of self reported data on school participation abstract many studies evaluate the impacts of conditional cash transfer cct programs on schooling using self reports on enrollment and attendance even though there are reasons to doubt the reliability of these data in this paper we examine the extent to which school age girls overstate their school participation using administrative data from a cash transfer experiment in malawi and school attendance ledgers collected as part of the impact evaluation we find that while all study participants overstate their enrollment and attendance rates the extent to which this happens is significantly higher in the control group than the cct arm this finding implies that exclusive reliance on self reported school participation data can lead to a serious underestimation of actual program impacts we recommend that self reports be supplemented using alternative sources of data on school participation that are appropriate to the experiment at hand even if such efforts are likely to increase evaluation costs

in the same boat but not equals the heterogeneous effects of parental income on child labour this paper examines the impact of parental income on child labour the empirical literature has found conflicting results regarding whether poverty leads parents to send their children to work mos

the global child labor problem what do we know and what can we do the problem of child labor has moved from a matter of regional and national concern to one of international debate and possible global persuasion and policy intervention in crafting policy for mitigating this enormous problem of our times it is important to start with a proper theoretical and empirical understanding of the phenomenon what gives rise to child labor and what are its consequences what interventions might end child labor without hurting children a well meaning but poorly designed policy can exacerbate the poverty in which these laboring children live even leading to starvation the article surveys the large and rapidly growing literature on this subject focusing mainly on the new literature based on modern economic theory and econometrics it also looks at some of the broad policy implications of these new findings with the objective of contributing to better informed discussion and policy design

child labor cause consequence and cure with remarks on international labor standards although the literature on child labor is enormous it lacks a common theoretical foundation in this paper analytical survey of this field is provided keeping in mind that this is an area where the primary reason for theorizing is ultimately to influence policy overall it is noted that the literature on child labor is an illustration of abundance and anarchy although empirical writings on child labor are numerous they are not usually founded on theory it is argued that there is much that can be done in curbing the issue of child labor several theories were studied in this paper including collaborative intervention such efforts include public action which alters the economic environment such that the parents of their own accord prefer to withdraw the child from labor force another strategy involves the government a legal intervention is enforcing a total ban on the subject although such interventions have good intentions some of them may not be feasible in general it is better to take economy wide measures against child labor and if there is to be a sector specific ban it should be based on the working conditions of that sector rather than the destination of the goods

the design of rent seeking competitions in the standard tullock model of rent seeking as a noncooperative game aggregate expenditures by seekers can equal exceed or fall short of total rents depending on what is assumed about the number of seekers and the marginal return to a seeker s investment if the supply of an input into the rent seeking process is controlled by a politician who receives payment from seekers for it the indeterminacy of the process becomes a less serious problem he supplies it and designs the rent seeking game to maximize his wealth the author derives expressions for the number of seekers and the marginal return parameter which maximize the politician s wealth in one input and two input rent seeking processes

is child labor inefficient we build a model of child labor and study its implications for welfare we assume that there is a trade off between child labor and the accumulation of human capital even if parents are altruistic and child labor is socially inefficient it may arise in equilibrium because parents fail to fully internalize its negative effects this occurs when bequests are zero or when capital markets are imperfect we also study the effects of a simple ban on child labor and derive conditions under which it may be pareto improving in general equilibrium we show that the implications of child labor for fertility are ambiguous

multiple prize contests the optimal allocation of prizes abstract multiple prize contests are important in various fields of economics ranging from rent seeking over labour economics patent and r d races to tendering for governmental projects hence it is crucial to understand the incentive effects of multiple prizes on effort investment this survey attempts to outline compare and evaluate the results from the literature while a first prize always results in a positive incentive to invest effort second and later prizes lead to ambiguous effects depending on the objective function the characteristics of the individuals and the type of contest a different prize allocation is optimal

dynamic rent seeking games the present paper analyses rent seeking games in which competitors for a rent can act and react finitely or infinitely often it argues for an infinite move model as the most appropriate specification of a model of rent seeking dynamic equilibrium analysis of this game suggests that wasteful expenditures in rent seeking competitions are lower than previously studied static simultaneous move games predict journal of economic literature classification numbers d72 c73

the policy analysis of child labor a comparative study the policy analysis of child labour c grootaert h a patrinos modelling the determinants of child labour c grootaert child labour in cote d ivoire k cartwright child labour in urban bolivia k cartwright h a patrinos child labour in the philippines c sakellariou a lall policies to reduce child labour c grootaert h a patrinos

collective rent dissipation the theory of rent seeking was initiated by tullock 1967 1980 followed by krueger 1974 and posner 1975 and more recently extended in various directions by allard 1988 appelbaum and katz 1986a b c gradstein and nitzan 1989 hillman and katz 1984 1987 hillman and samet 1987 hillman and riley 1989 katz et al 1990 long and vousden 1987 ursprung 1990 and varian 1989 the purpose of this paper is to extend this theory by introducing the possibility of collective group rent seeking with voluntary individual decisions regarding their extent of participation in the collective rent seeking efforts

household income as a determinant of child labor and school enrollment in brazil evidence from a social security reform abstractthis article studies the effects of household income on labor participation and school enrollment of children aged 10 14 in brazil using a social security reform as a source of exogenous variation in household income i find that increased benefits are associated with increases in school enrollment for girls as well as a smaller reduction in their labor participation but i find no effects for boys i also uncover evidence that the gender of the benefit receiver matters for girls labor variables only benefits received by females reduce girls work

waiting line auctions if prizes are to be awarded simultaneously at a specified time on a first come first served basis then individuals who queue for them will choose different waiting times through their arrivals at the queue this choice of arrival time at a queue is similar to the choice of a sealed tender in an auction an equilibrium for this waiting line auction is obtained here using methods for analyzing sealed tender auctions when individuals are risk neutral it is shown that several alternative waiting line allocation procedures result in the same transactions cost associated with waiting in line

wealth crucial but not sufficient evidence from pakistan on economic growth child labor and schooling the relationship between wealth and child labor has been widely examined this paper uses three rounds of time series cross sectional data to examine the relationship between wealth and child labor and schooling the paper finds that wealth is crucial in determining a child s activities but that this factor is far from being a sufficient condition to enroll a child in school this is particularly the case for rural girls nonparametric analysis shows a universal increase in school enrollment for rural girls from 1998 to 2006 this increase is independent of wealth measured by per capita expenditure multinomial logit regression further shows that wealth is insignificant in determining rural girls activity decisions thus interventions to increase school enrollment should incorporate broad targeted demand side interventions as well as supply side interventions

an estimate of resource expenditures on transfer activity in the united states this paper details resource expenditures on nonexchange noncharity transfer activity in the united states in 1985 expenditures designed to facilitate and inhibit nonexchange transfers executed privately or through the state are reported the numbers indicate that individuals plausibly invested nearly a trillion dollars in transfer activity that year nominal gnp in 1985 was just over 4 trillion which includes numerous transfer related resource investments that arguably should be subtracted out transfer activity thus apparently constitutes a much larger fraction of all economic activity conducted in the united states than previously recognized

symmetric two stage contests with budget constraints the impact of a budget constraint on individual expenditures is examined in two models of two stage contests with homogenous and risk neutral players competing to win a single indivisible commonly valued rent the set of players is partitioned into equally sized groups in the first model one contestant from each group survives to compete on the second stage against the other survivors in the second model one group survives the first stage and its members compete against each other on the second stage we derive and discuss the symmetric subgame perfect equilibrium solution for each model

the targeting benefit of conditional cash transfers conditional cash transfers ccts are a popular type of social welfare program that make payments to households conditional on human capital investments in children compared to unconditional cash transfers ucts ccts may exclude some low income households as access is tied to normal investments in children this paper argues that conditionalities on children s school enrollment offer an unexplored targeting benefit over ucts ccts target money to households that forgo a discrete amount of child income this paper shows that the size of this targeting benefit is directly related to the distribution of parental incomes the size of forgone child incomes and two elasticities already popular in the literature the income effect of a uct and the price effect of a cct these elasticities are estimated for a large cct program in rural mexico progresa using variation in transfers to younger siblings to identify income effects in this setting the analysis finds that the targeting benefit is almost as large as the cost of excluding some low income households this implies that 41 percent of the progresa budget should go to a cct over a uct based on targeting grounds alone

the impact of the bolsa escola familia conditional cash transfer program on enrollment dropout rates and grade promotion in brazil this paper examines the impact of brazil s bolsa escola later renamed bolsa familia program on children s progress in school in brazil the bolsa program which started in the 1990s and expanded rapidly in 2001 and 2002 provides monthly cash payments to poor households if their children between the ages of 6 and 15 are enrolled in school using eight years of school census data from 1998 to 2005 our estimation method compares changes in enrollment and in dropout and grade advancement rates across schools that adopted the bolsa program at different times we estimate that after accounting for cumulative effects the bolsa program has increased enrollment in brazil by about 5 5 percent in grades 1 4 and by about 6 5 percent in grades 5 8 we also estimate that the program has lowered dropout rates by about 0 5 percentage points and raised grade promotion rates by about 0 9 percentage points for children in grades 1 4 and has reduced dropout rates by about 0 4 percentage points and increased grade promotion rates by about 0 3 percentage points for children in grades 5 8 only about one third of brazil s children participate in the bolsa program so the assumption that these results are due only to the impact of the program on participants with no spillover effects onto non participants implies that the impact of participating in the bolsa program is about three times higher than these estimates while these impacts cast a favorable light on the program simple calculations based on the enrollment impacts suggest that the likely benefits in terms of increased wages may not exceed the costs of the program

campaign contributions as investments the u s house of representatives 1980 1986 this paper treats the market for special interest campaign contributions and political favors as a simple asset market the model yields a simple equilibrium relationship among three variables the total amount of investor contributions a candidate receives the monetary value of the favors he has promised and his probability of winning using data on open seat races for the u s house of representatives i confront the model with a series of tests despite the starkness of the model the results of these tests are highly supportive

sri lanka can conditional cash transfer programs serve as safety nets in keeping children at school and from working when exposed to shocks this brief summarizes the results of a gender impact evaluation study can conditional cash transfer cct programs serve as safety nets in keeping children at school and from working when exposed to shocks conducted the program started in 1997 and still exists today in sri lanka the study observed that income shocks on poor households are known to induce parents to take their children out of school and send them to work when other risk coping instruments are insufficient cct programs where the condition is on school attendance have been shown to be effective in increasing educational achievements and reducing child work shocks are highly prevalent and children have irregular periods of school enrollment children who are taken out of school are less likely to re enroll

child labour in indonesian small industries abstract we analyse the geographic incidence of child labour in small manufacturing firms in indonesia at the village level our unique data set covers virtually all indonesian villages and urban neighbourhoods it allows us to distinguish between demand and supply side determinants of child labour we show by correcting for sample selection that a number of counterintuitive results child labour being unaffected by credit access and school proximity are the result of an interplay between supply and demand side determinants credit access and school proximity reduce child labour supply but simultaneously constitute positive location factors for firms thereby increasing the demand for child labourers to effectively reduce child labour growth oriented policies such as enhancing school and credit facilities should be complemented by policies specifically geared towards increasing school attendance

families schools and primary school learning evidence for argentina and colombia in an international perspective this article presents evidence on the associations between family background school characteristics and student performance in primary school in argentina colombia and several comparison countries as a general pattern educational performance is strongly related to family background weakly to some institutional school features and hardly to schools resource endowments in an international perspective family background effects are relatively large in argentina and relatively small in colombia a specific argentine feature is the lack of performance differences between rural and urban areas a specific colombian feature is the lack of significant between gender performance differences nonnative students and students not speaking spanish at home perform particularly weak in both countries in argentina students perform better in schools with a centralized curriculum and ability based class formation

efficient delivery of subsidies to the poor improving the design of a cash transfer program in ecuador abstract many governments provide monetary transfers to low income families the mechanism through which these subsidies are distributed may contain several inefficiencies that diminish the net value obtained by the recipients in this paper we build and estimate a behavioral dynamic model that allows us to evaluate the efficiency of current and alternative distribution mechanisms the proposed model is simple and resembles the individual s decision to collect the transfer to estimate it we use data from a cash transfer program in ecuador where recipients incur high transaction costs each time they collect their benefits despite its simplicity our model is able to replicate the observed data remarkably well we use it to simulate alternative payment mechanisms and show that an adequate design of the delivery of payments can substantially increase the value of cash transfer programs

reexamining efficient rent seeking in laboratory markets given millner and pratt s 1989 finding of behavior inconsistent with theory we reexamine efficient rent seeking in experimental markets we show that a when r 3 no nash equilibrium exists and therefore behavior has no theoretical benchmark to judge consistency and b when r 1 with a new experimental design utilizing an explicit expected payoff matrix rent seeking behavior is consistent with both nash equilibrium and dissipation hypotheses

rent seeking market structure and growth we study the role of productive and unproductive entrepreneurship in economic growth in a setting where firms compete in both economic and political markets specifically firms compete for market share through cost reducing technological innovation and they vie for influence over government transfer policy through rent seeking activities we find that rent seeking affects growth in two ways it allows firms to ignore economic competition leading to less innovation and it alters the number of firms that are supported in equilibrium the former effect is negative while the latter is ambiguous we show how these effects depend on various characteristics of economic and political markets

social transfers and growth what do we know what do we need to find out summary the paper examines the extent to which emerging social transfer programs in developing countries can improve the productive capacity of households in poverty and contribute to micro level growth it introduces a basic framework linking transfers to growth mediating processes and productive capacity outcomes this is then used to organize and assess relevant findings from program evaluation studies the paper concludes that social transfer programs can have positive effects on the productive capacity of poor and poorest groups but further research is needed to identify and measure the size and significance of these effects

mobility and the return to education testing a roy model with multiple markets self selected migration presents one potential explanation for why observed returns to a college education in local labor markets vary widely even though u s workers are highly mobile to assess the impact of self selection on estimated returns this paper first develops a roy model of mobility and earnings where workers choose in which of the 50 states plus the district of columbia to live and work available estimation methods are either infeasible for a selection model with so many alternatives or place potentially severe restrictions on earnings and the selection process this paper develops an alternative econometric methodology that combines lee s 1983 parametric maximum order statistic approach to reduce the dimensionality of the error terms with more recent work on semiparametric estimation of selection models e g ahn and powell 1993 the resulting semiparametric correction is easy to implement and can be adapted to a variety of other polychotomous choice problems the empirical work which uses 1990 u s census data confirms the role of comparative advantage in mobility decisions the results suggest that self selection of higher educated individuals to states with higher returns to education generally leads to upward biases in ols estimates of the returns to education in state specific labor markets while the estimated returns to a college education are significantly biased correcting for the bias does not narrow the range of returns across states consistent with the finding that the corrected return to a college education differs across the u s the relative state to state migration flows of college versus high school educated individuals respond strongly to differences in the return to education and amenities across states

rigging the lobbying process an application of the all pay auction textabstractin a world where a politician can explicitly auction off a prize to the high bidder the standard auction literature can be used to analyse political behavior the justice system however precludes politicians from explicitly selling the prize to the highest bidder thus politicians cannot let it become public knowledge that they are in the business of selling political favors an institution has emerged in political markets to overcome this constraint which are termed as lobbying lobbyists make implicit payments to the politician through campaign contributions if these up front payments were rebated to those failing to receive the prize it would be clear that the politician was selling favors this article has examined an interesting principle arising in all pay auctions this principle states that a politician wishing to maximize political rents may find it in his best interest to exclude certain lobbyists from participating in the lobbying process particularly lobbyists valuing most the political prize

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

effects of public policy on child labor current knowledge gaps and implications for program design many policy instruments can be used to address or affect child labor even if they are implemented to achieve other objectives from a theoretical point of view however the impact of these policies on child labor is undetermined this paper discusses the evidence generated by rigorous evaluations on the impact on child labor of labor market programs conditional and unconditional transfers and microcredit among other social programs and interventions the study finds that although transfer programs generally tend to reduce child labor other policies risk increasing child labor especially if they affect households productive opportunities the findings also point to knowledge gaps that should be addressed in future evaluations while progress has been made over the past decade there is still much to learn about the effects of public policy on the labor participation of many children in developing countries

gordon tullock entrepreneur of public choice when gordon tullock first encountered james m buchanan in 1957 as an initial step in his transition from the bureaucracy of the u s department of state to the ivy league atmosphere of the university of virginia he carried with him a voluminous manuscript on bureaucracy that he had tried unsuccessfully to publish buchanan 1987a 11 although eight years would pass before that manuscript eventually would be published three years after publication of the calculus of consent 1962 tullock s pioneering instincts already had directed him to the as yet uncharted path of public choice already had alerted him to the ubiquitous presence of homo economicus in the marketplace of politics buchanan quickly recognized the potential importance of combining tullock s insight with his own wicksellian notion of the importance of consent in political process as the basis for a radical research program trespassing across the traditional boundaries of economics and politics ignoring tullock s lack of formal training in economics buchanan installed him in the thomas jefferson center for studies in political economy and thereby provided that crucially important initial support absent which many a potential entrepreneur has failed to fulfill his talent steadfast in this judgment and firm in his resolve buchanan later was to gamble his own career together with the future of the virginia school of political economy in a 1968 exodus from charlottesville as the left leaning ideologically activist bureaucracy of thomas jefferson s academy thrice denied tullock a well earned promotion to full professor breit 1986 buchanan s judgment was sound and the virginia school reemerged unscathed and fortified as buchanan and his protege regrouped in the foothills of the appalachian mountains to carry the baton of the virginia public choice research

child schooling and child work in the presence of a partial education subsidy could a partial subsidy for child education increase children s participation in paid work in contrast to much of the theoretical and empirical child labor literature this paper shows that child work and school participation can be complements under certain conditions using data from the randomized evaluation of a conditional cash transfer program in the philippines the analysis finds that some children who were in neither school nor work before the program increased participation in school and work for pay after the program earlier cash transfer programs notably those in mexico brazil and ecuador increased school attendance while reducing child labor those programs fully offset schooling costs while the transfers under the philippine transfers fall short of the full costs of schooling for a typical child as a result some beneficiary children from poor philippine households increased work to support their schooling the additional earnings from this work represent a substantive share of the shortfall in the schooling costs net of transfer the paper rules out several potential alternative explanations for the increase in child labor including changes in household productive activities adult labor supply and household expenditure patterns that in principle can arise after a cash transfer and may also affect the supply of or demand for child labor

the global child labor problem the problem of child labor has moved from a matter of regional and national concern to one of international debate and possible global persuasion and policy intervention in crafting policy for mitigating this enormous problem of our times it is important to start with a proper theoretical and empirical understanding of the phenomenon what gives rise to child labor and what are its consequences what interventions might end child labor without hurting children a well meaning but poorly designed policy can exacerbate the poverty in which these laboring children live even leading to starvation the article surveys the large and rapidly growing literature on this subject focusing mainly on the new literature based on modern economic theory and econometrics it also looks at some of the broad policy implications of these new findings with the objective of contributing to better informed discussion and policy design

the existence of equilibrium in discontinuous economic games i theory the article presents information about the existence of equilibrium in discontinuous economic games in this paper and its sequel presents study the existence of nash equilibrium in games where agents payoff functions are discontinuous the enquiry is motivated by a number of recent studies that have uncovered serious existence problems in seemingly innocuous economic games in the sequel to this paper authors have explained the utility function in the economic games referred to earlier are neither continuous nor quasi concave however they demonstrate that the payoff functions in mildly modified versions of these constructs exhibit two weaker forms of continuity which together with the requirement of quasi concavity suffice for the existence of an equilibrium from this one may conclude that at least in the modified versions of these models discontinuities in the payoff functions are not the real source of the problem rather it is the failure of the payoff functions to the quasi concave which is responsible for the non existence of equilibrium these observations bear on the existence of nash equilibrium in pure strategies

long run equilibrium and total expenditures in rent seeking a comment although corcoran is mathematically correct i believe his comment is not very helpful in order to discuss the matter in some detail the reader should consult table 7 1 from my original efficient rent seeking reproduced on page 92 1 this shows the equilibrium investment of each individual different numbers of individuals playing the game n and differing values of r table 7 2 also reproduced on page 93 shows the total investment

efficient rents 1 rent seeking behavior in the long run we have analyzed long run behavior in rent seeking under several conditions and behavioral hypotheses the question of interest is whether or not the long run expenditures will exactly equal the value of the rents our results depend on the type of competitive response which is assumed to exist in the long run and on the r value governing the probability of winning

the schooling decision family preferences intergenerational conflict and moral hazard in the brazilian favelas this paper experimentally analyzes the schooling decisions of poor households in urban brazil we elicit parents choices between monthly government transfers conditional on their adolescent child attending school and guaranteed unconditional transfers of varying sizes in the baseline treatment an overwhelming majority of parents prefer conditional transfers to larger unconditional transfers however few parents prefer conditional payments if they are offered text message notifications whenever their child misses school these findings suggest important intergenerational conflicts in these schooling decisions a lack of parental control and observability of school attendance and an additional rationale for conditional cash transfer programs the monitoring they provide

household choices of child labor and schooling a simple model with application to brazil this paper argues that conflicting results from previous literature related to the effect of economic conditions on child labor derive from different income and substitution effects implicit in different types of income variation we use agricultural shocks to local economic activity in brazil coffee production to distinguish between increases in household income and increases in the opportunity cost of time results show that higher household wealth is associated with lower child labor and higher schooling nevertheless temporary increases in local economic activity are associated with higher child labor and lower schooling particularly for children with poor economic backgrounds

long run equilibrium and total expenditures in rent seeking the lure of excess profits or rents associated with monopoly power gives rise to expenditures to obtain these rents competitive rent seeking behavior is recognized as a factor which must be included among the wastes associated with monopoly power tullock 1967 posner 1975 1 the expenditures are aimed at transferring wealth rather than its creation and the use of resources to obtain this transfer is a loss to society how important rent seeking is as a part of the total monopolistic waste hinges on the size of the total expenditures induced by a given level of excess profits

rent seeking with non identical sharing rules the primary object of this paper is to examine the role of differential sharing rules within a collective rent seeking setting on the possible non existence of nash equilibrium focusing on groups that distribute part of the rent equally among their members and the residual according to relative effort we show that in rent seeking societies applying the two polar sharing rules equilibrium never exists in the general case where groups apply different but not necessarily the polar sharing rules we study the relationship between group variability in distributing rents and the problem of non existence of equilibrium in the rent seeking game

rent seeking rent defending and rent dissipation in the preceding analyses of rent defending the posner model yielded welfare losses in excess of the combined areas of the tullock rectangle and the harberger triangle in only one instance furthermore this particular circumstance necessitated voluntary participation in a game with a negative expected value 13 for the tullock rogerson model the explicit addition of rent defenders had no impact on aggregate dissipation

agricultural spillover effects of cash transfers what does lewie have to say lewie simulations suggest that there are positive production spillovers fromsctprograms in nominal terms total production multipliers are always significantly greater than zero and income multipliers are always greater than one however real impacts depend on supply elasticities and market closure assumptions to date studies do not point to inflationary impacts of scts opm 2012a opm 2012b although the evidence on price effects is very limited this suggests that simulation 2 best characterizes the production impacts of scts which target poor economies with under utilized factors this simulation reveals a minimal inflationary impact and real production value added multipliers of 1 58 ksh per shilling transferred a key finding of lewie is that the production impacts are concentrated in nonbeneficiary households this is not surprising given the program s eligibility criteria which target the most asset and labor constrained households rcts focusing on treated households are likely to miss many or most of the productive impacts of social cash transfer programs this finding reaffirms the importance of a local economy wide approach if we wish to capture the transfers full impact finally our findings underline the importance of local supply constraints in shaping the impacts of transfer programs in the high unemployment environment characterizing rural kenya we believe it unlikely that there are significant labor constraints on production nevertheless production constraints limit program benefits particularly in nonbeneficiary households which are far and away the main source of new supply when production bottlenecks generate inflation transfers may even negatively affect some households interventions focusing on local production constraints in nonbeneficiary as well as beneficiary households may be needed to unlock the productive potential of scts

an experimental investigation of efficient rent seeking the debate about the measurement of the amount of rent dissipated in rent seeking activities is unable to be answered by observations from the naturally occurring environment current theoretical investigations have indicated that a number of factors will affect the amount of rent that can be assumed to be dissipated by rent seeking the theory of efficient rent seeking predicts that the number of rent seekers their risk posture their ability to enter and exit the rent seeking process and the manner in which the probability of receiving a rent is determined will affect the amount of rent that is dissipated

does child labour displace schooling evidence on behavioral responses to an enrollment subsidy this brief summarizes the results of a gender impact evaluation study entitled does child labour displace schooling evidence on behavioral responses to an enrollment subsidy conducted between 1995 and 1996 in bangladesh the study observed that the subsidy increases schooling but its effect on child labour is ambiguous the subsidy increased schooling by far more than it reduced child labour substitution effects helped protect current incomes from the higher school attendance induced by the subsidy substitution effects helped protect current incomes from the higher school attendance induced by the subsidy the reduction in the incidence of child labour by boys girls represents about one quarter eighth of the increase in their school enrollment rate

cash or condition evidence from a cash transfer experiment this brief summarizes the results of a gender impact evaluation study entitled cash or condition evidence from a cash transfer experiment conducted from 2008 to the end of 2009 in malawi the study observed the impact of conditionality in cash transfer programs with two distinct interventions unconditional transfers uct arm and transfers conditional on school attendance cct arm targeted at adolescent girls in malawi on individual level dropout rates declined in both treatment arms however the uct arm is 43 percent as large as the cct arm the fraction of days attended in the cct arm is significantly higher than the uct cognitive ability math and english scores significantly improve for the cct but not for the uct probability of pregnancy and marriage were much lower in the uct arm the delays in marriage and fertility in the uct arm are found entirely among adolescent girls who dropped out of school after the start of the intervention improvements in human capital for the recipients of the cct are achieved at the cost of worse outcomes for people who drop out of school funding for the study derived from the global development network bill and melinda gates foundation national bureau of economic research nber africa project world bank research support budget grant world bank knowledge for change trust fund world development report 2007 small grants fund spanish impact evaluation fund and gender action plan trust fund

the long term effects of conditional cash transfers on child labor and school enrollment this paper investigates the long term effects of conditional cash transfers on school attainment and child labor to this end we construct a dynamic heterogeneous agent model calibrate it with brazilian data and introduce a policy similar to the brazilian bolsa familia our results suggest that this type of policy has a very strong impact on educational outcomes sharply increasing primary school completion the conditional transfer is also able to reduce the share of working children from 22 to 17 we then compute the transition to the new steady state and show that the program actually increases child labor over the short run because the transfer is not enough to completely cover the schooling costs so children have to work to be able to comply with the program s schooling eligibility requirement we also evaluate the impacts on poverty inequality and welfare jel o11 i25 j24

conditional cash transfers adult work incentives and poverty conditional cash transfer cct programs aim to alleviate poverty through monetary and in kind benefits as well as reduce future levels of poverty by encouraging investments in education health and nutrition the success of cct programs at reducing poverty depends on whether and the extent to which cash transfers affect adult work incentives the authors examine whether the progresa program of mexico affects adult participation in the labor market and overall adult leisure time and they link these effects to the impact of the program on poverty using the experimental design of progresa s evaluation sample the authors find that the program does not have any significant effect on adult labor force participation and leisure time their findings on adult work incentives are reinforced further by the result that progresa leads to a substantial reduction in poverty the poverty reduction effects are stronger for the poverty gap and severity of poverty measures

transfers to households with children and child development in this paper we utilize a model of household investments in the development of children to explore the impact of various transfer policies on the distribution of child outcomes we develop a cost criterion that can be used to compare the cost effectiveness of unrestricted restricted and conditional cash transfer systems and find that an optimally chosen conditional cash transfer program is the most cost efficient way to attain any given gain in average child quality we explore several design elements for the conditional cash transfer system and discuss the role of production function uncertainty and measurement error

risk aversion and rent seeking an extension and some experimental evidence theoretical investigations indicate that the risk attitudes of individuals will effect the amount of rent that can be assumed to be dissipated by rent seeking activities following this line of investigation we extend hillman and katz s work to a small numbers case and demonstrate that the degree to which a monopoly rent is dissipated is dependent upon the structure of the risk attitudes of two risk averse individuals

lottery versus all pay auction models of lobbying i first provide a complete characterization of the unique equilibrium of the lottery game by n lobbyists with asymmetric valuations and then compare the lottery and the all pay auction models of lobbying i show that the exclusion principle discovered by baye kovenock and de vries 1993 for all pay auction does not apply to lottery i also show that the perverse effect that an exogenous cap may increase the total lobbying expenditure in a two bidder all pay auction discovered by che and gale 1998 does not apply to lottery

women s power conditional cash transfers and schooling in nicaragua the social safety net red de proteccion social rps program in nicaragua is one of many conditional cash transfer programs that pay households cash stipends in exchange for school attendance and regular visits to health clinics by the children a key feature is that payments go to the female head of household previous research suggests that exogenous transfers to women are more likely to be spent on their children s health nutrition and education and thus to reinforce the goals of these programs randomized experimental data from rps are used to test for heterogeneous program impacts on school enrollment and spending based on a woman s power as proxied by her years of schooling relative to her husband s years of schooling the results confirm previous findings that more household resources are devoted to children when women are more powerful however when a woman s power greatly exceeds her husband s additional female power reduces school enrollment rps impacts on schooling are much larger than the expected income effects estimated from the control group although no evidence is found that female power alters the impact of rps on school enrollment the conditionality of rps is probably decisive while rps significantly increases food and education expenditures the impact is attributable primarily to income effects

characterizations of the existence of equilibria in games with discontinuous and non quasiconcave payoffs this paper characterizes pure strategy and dominant strategy nash equilibrium in non cooperative games which may have discontinuous and or non quasiconcave payoffs conditions called diagonal transfer quasiconcavity and uniform transfer quasiconcavity are shown to be necessary and with conditions called diagonal transfer continuity and transfer upper semicontinuity sufficient for the existence of pure strategy and dominant strategy nash equilibrium respectively the results are used to examine the existence or non existence of equilibrium in some well known economic games with discontinuous and or non quasiconcave payoffs for example we show that the failure of the existence of a pure strategy nash equilibrium in the hotelling model is due to the failure of an aggregator function to be diagonal transfer quasiconcave not the failure of payoffs to be quasiconcave as has been elsewhere conjectured