fully absorbing dynamic compromise abstract i consider a repeated divide the dollar voting model with rejections leading to the implementation of the previous period s allocation see kalandrakis 14 i show that if proposals can be non exhaustive then equal division can be achieved as an absorbing steady state from any initial allocation given a large enough discount factor as a part of a markov perfect equilibrium this result is robust to changes in voting thresholds and persistence in proposal power outside of unanimity or total persistence

agenda restrictions in multi issue bargaining abstract we study a bilateral multi issue bargaining procedure with complete information and endogenous agenda in the procedure proposals must be made on only one issue at a time although the proposer can choose which issue to bring to the table when bargaining frictions are small there is a large multiplicity of equilibrium agreements including ones with delay however equilibrium payoffs cannot be made arbitrarily small perpetual disagreement cannot be supported in equilibrium this multiplicity contrasts with the uniqueness found in the literature for a procedure where offers can be made in any subset of remaining issues

china s collectivisation puzzle a new resolution according to total factor productivity trends in chinese agriculture china achieved productivity gains both when collectivising 1954 58 and when decollectivising 1979 84 its agriculture if the productivity gains from decollectivisation were due mainly to eliminating the incentive problems of collective farms how the initial collectivisation could also have been associated with gains in productivity presents a major historical puzzle we suggest as an answer the possibility that agricultural production in china was widely organised on a household basis until 1958 despite the collectivisation of property rights and that the formation of the agricultural producers co operatives reduced the inefficiencies in factor allocation that existed following china s land reform

the search for economics talent doctoral completion and research productivity economists hold an annual talent search in which students from around the world apply to doctoral programs and economics departments top economics phd programs seek candidates with the preparation aptitude drive and creativity to become academic professionals whose research will advance the frontiers of the discipline admission committee members must judge students potential economic talent based on the evidence provided in the application folders which includes standardized test scores course selection and grades quality of the undergraduate institution fellow economists evaluations and other relevant information due to the nonobservability of important characteristics the admission committee s task of matching opportunity with talent constitutes a signaling problem as modeled by michael a spence 1973 what information then credibly signals otherwise unobservable economics talent viewing quantitative graduate record examination gre scores as a proxy for ability ronald g ehrenberg and panagiotis g mavros 1995 found that these scores failed to predict phd completion or time to degree for 25 years of economics phd students at cornell university attributing that result to a poor proxy for ability they recommended obtaining a richer set of information about a student s true ability by using for example the quality of applicants undergraduate institution information from letters of recommendation and the graduate committee s ranking the search for economics talent doctoral completion and research productivity

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

policy reform and productivity change in chinese agriculture a distance function approach abstract agricultural policy reform has been an important source of change in the chinese agricultural sector the reforms led to productivity growth and helped china to pursue its self sufficiency goal especially in the grain sector in order to analyze whether observable productivity growth stems from technologically induced components or from the market induced parts a multi input multi output model is derived by using an econometric distance function framework a decomposition allows to distinguish allocative effects scale effects technological change and technical efficiency change data on farms in zhejiang from 1986 to 2000 are used to analyze the impact of policy reform

on the trail of china s phantom farmers abstract many studies of china s economy use standard yearbook data for china s farm labor force these data massively overestimate the number of chinese farm workers our calculations show that the number of phantom farmers actually working outside agriculture may easily surpass 100 million this paper reveals the implausible implications of the standard data uses information from cost surveys to derive new estimates of china s farm work force and investigates the implications of the new lower series for agricultural employment on the measurement and interpretation of recent chinese growth

bargaining with imperfect enforcement the game theoretic bargaining literature insists on a noncooperative bargaining procedure but implicitly assumes cooperative implementation of agreements in reality courts cannot implement agreements costlessly and parties often prefer to use noncooperative implementation we present a bargaining model which incorporates the idea that agreements may be enforced noncooperatively we show that this has a substantial impact in limiting the inequality of agreements and results in a nonmonotonicity of the discount rate the model also explains why some parties may have incentives to deliberately write incomplete contracts as a way to enhance their bargaining power

the power to delay abstract this paper studies a bilateral bargaining game in which one party can suspend the game indefinitely if suspension is costless multiple equilibria arise if suspension is costly and subject to a budget constraint a unique equilibrium with immediate agreement is obtained

the institutional causes of china s great famine 1959 1961 this paper studies the causes of china s great famine during which 16 5 to 45 million individuals perished in rural areas we document that average rural food retention during the famine was too high to generate a severe famine without rural inequality in food availability that there was significant variance in famine mortality rates across rural regions and that rural mortality rates were positively correlated with per capita food production a surprising pattern that is unique to the famine years we provide evidence that an inflexible and progressive government procurement policy where procurement could not adjust to contemporaneous production and larger shares of expected production were procured from more productive regions was necessary for generating this pattern and that this policy was a quantitatively important contributor to overall famine mortality

pre play research in a model of bank runs se estudia un modelo de corrida bancaria en el que los depositantes no llegaron a un consenso sobre la accion a elegir pero pueden informarse acerca de las intenciones de los otros jugadores la propiedad de equilibrio indeterminado reaparece en el juego con adquisicion de informacion en el escenario bajo analisis el equilibrio con niveles positivos de adquisicion de informacion resulta en mayores probabilidades de quiebra del banco la correlacion en las senales aumenta el espacio de parametros para el cual existen equilibrios con niveles positivos de adquisicion de informacion y mayor probabilidad de quiebra del banco

bargaining orders in a multi person bargaining game abstract this paper studies a complete information bargaining game with one buyer and multiple sellers of different sizes or bargaining strengths the bargaining order is determined endogenously with a finite horizon there is a unique subgame perfect equilibrium outcome in which the buyer purchases in order of increasing size from the smallest to the largest with an infinite horizon if the sellers have sufficiently different sizes there is a unique equilibrium outcome which has the same bargaining order if the sellers have similar sizes with an infinite horizon there may be multiple equilibrium outcomes with different bargaining orders

coase theorem complexity and transaction costs this paper by introducing complexity considerations provides a dynamic foundation for the coase theorem and highlights the role of transaction costs in generating inefficient bargaining negotiation outcomes we show when the players have a preference for less complex strategies the coase theorem holds in negotiation models with repeated surplus and endogenous disagreement payoffs if and only if there are no transaction costs specifically complexity considerations select only efficient equilibria in these models without transaction costs while every equilibrium induces perpetual disagreement and inefficiency with transaction costs we also show the latter is true in the rubinstein bargaining model with transaction costs

the creation and spread of technology and total factor productivity in china s agriculture the overall goal of this study is to create a framework for assessing the trends of china s national and international investment in agricultural research and to measure its impact on total factor productivity the main methodological contribution is to provide more convincing measures of crop specific technologies from china s national research program and of those imported from the international agricultural research system our results find that from 1980 to 1995 china s total factor productivity for rice wheat and maize grew rapidly and new technology accounts for most of the productivity growth

economics of transaction costs saving forestry following the arguments concerning the problems of traditional forest economics in putz 2000 this article shows that transaction cost economics can overcome some of the shortcomings of the main stream forest economics the public forestry subsistence forestry non industrial private forestry china s share holding forestry and their revolutions are analyzed by the relative transaction costs of labor capital land and forest products potential implications of transaction cost economics in forest policy including regulated access to commons sustainable forestry criteria ecological certificates and land tenure decentralization have also been discussed 2001 elsevier science b v all rights reserved

collective bargaining awareness of general equilibrium effects and unemployment we explore the significance of general equilibrium feedback effects for wage bargaining we examine a two sector economy and show that if agents only consider labor demand effects low real wages and low unemployment are the consequences with an intermediate view i e when partial equilibrium effects within a sector are taken into account high real wages and unemployment result if all general equilibrium effects are perceived simultaneously we once again obtain a situation with low wages and unemployment the results may explain why unemployment is high in some european countries

trends in rankings of economics departments in the u s an update economics departments in the u s are ranked based on 1 the number of pages published in thirty six economics journals 2 publications in five of the top journals 3 output per faculty member and 4 an index of the concentration of research in a department evidence shows that the top twenty departments have generally retained their positions since the 1970s but rather large changes have occurred in departments ranked from 240 to 100 an economists hall of fame is developed listing the top fifty individual producers of research in the thirty six journal set and the top five journals

do economics departments with lower tenure probabilities pay higher faculty salaries the simplest competitive labor market model asserts that if tenure is a desirable job characteristic for professors they should be willing to pay for it by accepting lower salaries conversely if an institution unilaterally reduces the probability that its assistant professors receive tenure it will have to pay higher salaries to attract new faculty our paper tests this theory using data on salary offers accepted by new assistant professors at economics departments in the united states during the 1974 75 to 1980 81 period along with data on the proportion of new ph d s hired by each department between 1970 and 1980 that received tenure in the department or at a comparable or higher quality department within the first eight years of receipt of their ph d s we find evidence that supports the hypothesis that a tradeoff existed equally importantly departments that offered low tenure probabilities to assistant professors also paid higher salaries to their tenured faculty we attribute this to low tenur

the urban rural income gap in china implications for global food markets with the exceptions of the agricultural and financial sectors china has essentially become a market economy and indications are that it will enjoy a sustained period of high economic growth well into the twenty first century naughton however growth in china s agriculture has slowed since 1984 crook 1996 wen and this seems to be related to a policy bias against agriculture from 1978 to 1984 agriculture grew at 7 6 but this slowed to 4 from 1985 to 1994 crook 1996 agriculture remains underdeveloped in china largely because the government still purchases at fixed prices more than 50 of the grain sold off the farm the government forces some farmers to produce grain and supports this policy by discouraging integration between the rural and urban economies as a result rural product and factor markets are distorted nowhere is this more evident than in the labor market banister carter zhong and cai cook knight and song riskin taylor yang and zhou despite large increases in rural nonagricultural employment since 1978 the absorption has not kept up with population growth and the job of shifting labor out of agriculture is far from complete as of 1995 there were approximately 50 million more farmers in china than at the be

is there a hold up problem most literature on the hold up problem starts from the assumption that ex post bargaining outcomes are insensitive to prior investment costs we argue that this approach is unsatisfactory if the bargaining procedure is relatively symmetric it typically admits multiple perfect equilibria some of which give the investor a high enough payofi to sustain e cient investment even if the bargaining procedure is asymmetric and rigged against the investor there may be investment if agents are driven by moral concerns or if communication creates commitment laboratory experiments indicate that communication is necessary and su cient for agents to coordinate on e cient outcomes when the bargaining game is symmetric when the bargaining game is rigged against the investor the hold up problem is mitigated but not eliminated by moral behavior communication is quite credible and we flnd that promises are more believable than threats

termination restrictions and investment in general training abstract conditional separation payments efficiently increase firms investment in general training if the latter is not directly contractible since training is vested in the worker on separation a firm s return to training is zero when a match ends or more generally when the firm s outside return is binding large enough conditional separation penalties ensure that independently from outside opportunities the ex post situation is one of bilateral monopoly this allows the firm to capture a positive share of the return to the general component of training in all states of nature a fixed wage contract and large enough separation penalties ensure that the firm s investment decision is fully efficient if training is general in becker s 1964 sense

money burning and multiple equilibria in bargaining abstract this paper synthesizes recent work on delay and multiple equilibria in complete information rubinstein bargaining we identify a general principle money burning underlying prior results and develop a general model of the phenomena money burning is a threat by one player to destroy surplus which can serve to enhance that player s bargaining power if it is credible our results show that the uniqueness and efficiency properties of the subgame perfect equilibrium of rubinstein bargaining are vulnerable to players ability to burn money journal of economic literature classification number 026

dimensions and diversity of property rights in rural china dilemmas on the road to further reform abstract this paper contributes to the debate over land tenure in rural china by conceptualizing and measuring multiple dimensions of property rights in a way that elucidates the competing interests that are affected by the property rights regime utilizing a unique village level data set this paper argues that the regional and temporal variation in rural property rights signals a pattern in which decentralized institutional innovation occurs in response to the competing interests of the national state of local authorities and of present and possible future individual land users unlike the earlier debate concerning the household responsibility system the current property rights dilemma is intrinsically more complex because the potential conflicts of interest between individuals local collectives and the state are greater resolution of that debate will ultimately require careful exploration of the reality and substance of the tradeoffs and competing interests that make further reform of rural property rights so difficult

wage rigidity inflation and institutions we study the possible existence of downward nominal wage rigidity dnwr at wage growth rates different from zero in aggregate data even if dnwr prevails at zero for individual workers compositional effects might lead to falling aggregate wages while changes in relative wages combined with dnwr might lead to positive aggregate wage growth we explore industry data for 19 oecd countries over the 1971 2006 period we find evidence for a floor on nominal wage growth at 6 percent in the 1970s and 1980s at 1 percent in the 1990s and at 0 5 percent in the 2000s furthermore we find that dnwr is stronger in country years with strict employment protection legislation high union density centralized wage setting and high inflation

multi issue bargaining with endogenous agenda abstract the first part of this paper shows that in a noncooperative bargaining model with alternating offers and time preferences the timing of issues the agenda matters even if players become arbitrarily patient this result raises the question of which agenda should come up endogenously when agents bargain over a set of unrelated issues it is found that simultaneous bargaining over packages should be a prevailing phenomenon but we also point to the possibility of multiple equilibria involving even considerable delay journal of economic literature classification number c78

perfect equilibria in a model of bargaining with arbitration abstract we consider an alternating offer bargaining model in which the players may agree to call in an arbitrator in case of disagreement the main message of our study is that the mere presence of an arbitrator who can only become active with the consent of both parties in the background of negotiations may entirely drive their outcome we compare our results with those obtained in models with outside options journal of economic literature classification number c78

india and china contrasts in economic liberalization abstract it is argued that in both india and china despite some important differences 1 a similar cultural and political imperatives led to similar systems of dirigisme and economic outcomes with the chinese growth higher than the indian because of higher investment 2 b crises engendered by their dirigiste regimes impelled reform 3 c their attempts to replace the plan by the market have striking similarities but 4 d ultimately because of continuing atavistic attitudes to toward trade and commerce the reforms remain insecure

fishes ponds and productivity student advisor matching and early career publishing success for economics phds i introduction research productivity is an important concern for members of the academe publishing success is important for individual departments because more productive faculty increases the department s research profile which in turn increases the department s professional reputation as evidence thursby 2000 and ehrenberg and hurst 1998 find that a department s reputation in the national research council nrc ratings increases with published research while smyth 1999 finds that pages published in the top 5 journals have a greater impact than pages published in other journals publishing success is important for individual faculty members because peer reviewed publications have long been shown to be economic currency for academic economists bratsberg ragan and warren 2003 moore newman and turnbull 1998 sauer 1988 among others research promise is important for graduate students because students with the greatest promise for productive careers are likely to receive the best initial job placements buchmueller dominitz and hansen 1999 krueger and wu 2000 long 1978 indeed according to a survey of hiring departments carson and navarro 1988 every single top 20 domestic economics program considered the quality of one s research agenda to be of moderate to great importance in the hiring decision an important question then is how to identify which factors are associated with the likelihood of having a more productive research career to date empirical studies have focused on the program from which the student graduated recent examples include collins cox and stango 2000 davis huston and patterson 2001 stock and alston 2000 this focus implicitly assumes that because only the very best students become enrolled in elite programs graduates of highly ranked programs should hold the greatest promise for publishing success 1 in support coupe 2001 and buchmueller dominitz and hansen 1999 find that students graduating from top programs are more likely to publish in core economics journals while hogan 1981 finds that students graduating from programs with more active faculty publish more journal articles before placing total faith in these results however members of the academe should ask whether such findings hold across all points in the graduate distribution or whether they are only accurate predictors on average previously published data clearly suggest the latter for instance buchmueller dominitz and hansen 1999 find that 30 of tier 1 graduates do not publish any academic articles within the first 9 yr after phd receipt while 50 do not publish any top 50 articles as defined by liebowitz and palmer 1984 in other words there is a large amount of unexplained variability in the future success of a program s graduates krueger and wu 2000 93 consequently it is likely that significant overlap exists between the performance of top program graduates and lesser program graduates with significant portions of the latter outperforming significant portions of the former with this in mind the question becomes is there a readily observable factor that is a less noisy predictor of a student s likelihood for publishing success we argue that there is during a student s postgraduate education one of the most significant influences is his or her dissertation advisor we posit that for timing reasons advisors will possess additional insight into a student s true research potential that was not available to the admission committee when deciding whether to admit the student into the program consequently we expect a student s dissertation advisor to be a more informed predictor of his or her early career productivity than the program from which he or she receives the phd 2 in other words we believe that considering the identity of a student s dissertation advisor in addition to the quality of the program from which the student receives the phd should help reduce the uncertainty inherent in predicting the student s position within the early career productivity distribution

on the efficiency of decentralized exchange with resale possibilities this paper studies decentralized exchange by bilateral matching and bargaining when resale is possible decentralized exchange involves the risk that goods and services may be allocated inefficiently if low valuation buyers consume while high valuation buyers do not then social welfare is reduced if resale is possible and transaction costs are negligible we would nevertheless expect an efficient allocation to result from decentralized exchange this paper suggests that this depends on the nature of the commodity while the allocation of a durable good will be efficient the allocation of a consumable good need not

breakdown in multilateral negotiations abstract we analyze a complete information multilateral bargaining model in which a buyer is to purchase two complementary goods from two sellers binding cash offer contracts are used to govern transactions in contrast to preexisting literature we do not normalize the parties reservation utilities to zero we show that this assumption holds critical importance by demonstrating that a complete breakdown of negotiations may occur as the unique equilibrium outcome even if only two sellers are present

production and productivity growth in chinese agriculture new measurement and evidence abstract this study uses a more appropriate approach to measure growth in output input and total factor productivity for chinese agriculture using newly estimated production and productivity growth indexes the impact of rural reforms have been reassessed the conventional approach would overestimate the impact of the rural reforms on both production and productivity growth nevertheless both production and productivity still grew at respectable rates during the reform period the study also found that in order to promote the long term production and productivity growth which is much needed to feed the chinese population in the future it is imperative for the government to increase its investment in agriculture as the effects of recent institutional changes have been largely exhausted

the impact of china s economic reforms on agricultural productivity growth this paper presents a method for assessing the relative importance of price increases and strengthened individual incentives due to the introduction of the responsibility system for the post 1978 increase in china s agricultural productivity data on post 1978 chinese agricultural performance suggest that a little over three quarters of the measured productivity increase is due to payment system changes and the remainder to price increases we also use our method to calculate incentive indices giving an estimate of the fraction of their marginal product that peasants received under the pre 1978 regime

reforms the weather and productivity growth in china s grain sector we use disaggregate county level production data to study the effects of economic reform on china s grain production between 1980 and 1990 china s grain production area is divided into five regions based on geographic agronomic and meteorological criteria regional grain production functions are estimated and weather is explicitly modeled the institutional impact of economic reform was found to explain about 38 of the production growth from 1980 to 1985 this is lower than the estimates reported in many previous studies regional differences in efficiency gains from economic reform and in the effects of weather on grain production are found to be significant

does evolution solve the hold up problem abstract the paper examines the theoretical foundations of the hold up problem at the first stage one agent decides on the level of a relationship specific investment there is no contract so at the second stage the agent must bargain with a trading partner over the surplus that the investment has generated we show that the conventional underinvestment result hinges crucially both on the assumed bargaining game and on the choice of equilibrium concept in particular we prove the following two results i if bargaining proceeds according to the nash demand game any investment level is subgame perfect but only a particular efficient outcome is stochastically stable ii if bargaining proceeds according to the ultimatum game with the trading partner as proposer only the minimal investment level is subgame perfect but any investment level is stochastically stable journal of economic literature classification numbers l14 c78

survive then thrive determinants of success in the economics ph d program this study investigates the completion of the ph d in economics we use ex ante information based upon reviewing individual applications from former doctoral students students need different skills to succeed at each distinct stage of the doctoral program significant determinants for passing the comprehensive exams include graduate record exam gre verbal and quantitative scores a masters degree and prior focus on economics by contrast research motivation and math preparation play significant roles in completing the dissertation gre scores become insignificant for completion in the generalized ordered logit estimates which emphasize the sequential nature of the economics ph d program jel i210 i introduction every spring admission committees review a pile of applications to select candidates for their ph d programs beyond normal attrition economics departments clearly have a stake in seeing a significant proportion of students finish the program aside from whatever resources may accrue todepartmentswith high completion rates they receive prestige from the placement and success of their completed ph d students in academic institutions or private sector jobs obtaining a ph d in economics requires clearing a series of distinct hurdles and constitutes a riskier venture than attending medical school an mba program

research productivity and output growth in chinese agriculture recent attempts to quantify the sources of growth in chinese agriculture have attributed an exceptionally large share of this growth to the contemporary institutional and market reforms within china to analyze this important issue we use a newly constructed panel data set that includes an agricultural research or stock of knowledge variable our results suggest that while still a significant source of growth the direct growth promoting consequence of institutional change and market reforms have been overstated by these earlier studies research induced technical change accounts for a significant share 20 of the growth in agricultural output since 1965

bargaining and commitment in a permanent relationship abstract when bargaining over a flow of trades the players may decide themselves whether or not to continue trade during the bargaining previous work has shown that if one extends the rubinstein alternating offers bargaining model by adding the feature that one of the players the union in each period can choose whether to disrupt trade strike in that period then there is a multiplicity of equilibria this paper shows that if one of the players is able to commit to disrupt trade for two periods then there is a unique subgame perfect equilibrium journal of economic literature classification numbers j5 c78

revocable commitment and sequential bargaining in this paper the author presents a noncompetitive bargaining model which unifies the two well known but distinct bargaining games due to j nash 1953 and a rubinstein 1982 moreover the author explores the robustness of the equilibrium set of these two bargaining games to a particular kind of perturbation in the commitment structure of the underlying extensive forms from a different perspective and interpretation of the model the author examines and studies the relationship between the equilibrium commitment levels and the costs to the bargainers of revoking their respective commitments copyright 1992 by royal economic society

revealed performances worldwide rankings of economists and economics departments 1990 2000 in this paper i study the production of academic research by economics departments and economists worldwide rankings are provided based on both citations and publications these rankings reveal a dominant position of the united states in the production of economics literature over time however the extent of this dominance is decreasing jel a10 a14

a letter to the editor on wage bargaining abstract the rubinstein perfect information alternating offers bargaining model is problematic when applied to wage negotiations a strike or any other industrial action is not an automatic consequence of a delay in reaching an agreement because production can continue normally also when negotiations take place this paper extends the rubinstein model to incorporate the choice of calling a strike and it is shown that in this model there is no longer a unique subgame perfect equilibrium and that strikes with a length in real time can occur in equilibrium

the great leap forward anatomy of a central planning disaster the great leap forward disaster characterized by a collapse in grain production and a widespread famine in china between 1959 and 1961 is found attributable to a systemic failure in central planning wishfully expecting a great leap in agricultural productivity from collectivization the chinese government accelerated its aggressive industrialization timetable grain output fell sharply as the government diverted agricultural resources to industry and imposed an excessive grain procurement burden on peasants leaving them with insufficient calories to sustain labor productivity our analysis shows that 61 percent of the decline in output is attributable to the policies of resource diversion and excessive procurement

selective acceptance and inefficiency in a two issue complete information bargaining game abstract this paper explores the effects of a selective acceptance rule on the outcome of two issue negotiations the alternating offer game introduced here allows for the possibility that settlement may be reached on one issue while negotiation continues about the other this model captures features of laws that are generally believed to increase efficiency the analysis shows that if one issue is indivisible there are inefficient subgame perfect equilibria with no pareto improving alternative equilibria with opposing valuations rapid communication guarantees inefficiency these are unique examples of this strong form of inefficiency in an alternating offer bargaining game with complete and perfect information journal of economic literature classification numbers c72 j30

the game of negotiations ordering issues and implementing agreements abstract we use a two issue bargaining model with asymmetric information to study agent choice of how to structure bargaining we uncover the settings in which different agenda structures are chosen in equilibrium how the order in which issues are bargained over matters and what impact the rules for implementing agreements have if agreements are implemented as they are reached easy issues are negotiated first and hard issues later if agreements are implemented only after all issues are settled then it is size that matters with large issues settled first all parties prefer the former rules of implementation to the latter

contract adjustment under uncertainty abstract consider trade in continuous time between two players the gains from trade are divided according to a contract and at each point in time either player may unilaterally induce a costly adjustment of the contract players payoffs from trade under the contract as well as from trade under an adjusted contract are exogenous and stochastic we consider players choice of whether and when to adjust the contract payment we show that there exists a nash equilibrium in thresholds where each player adjusts the contract whenever the contract payment relative to the outcome of an adjustment passes the threshold there is strategic substitutability in the choice of thresholds so that if one player becomes more active by choosing a threshold closer to unity the other player becomes more passive

justifiable punishments in repeated games abstract in repeated games subgame perfection requires all continuation strategy profiles must be effective to enforce the equilibrium they serve as punishments should deviations occur it does not require whether a punishment can be justified for the deviation which creates a great deal of freedom in constructing equilibrium strategies resulting the well known folk theorem we introduce justifiable punishments in repeated games after one player deviates the corresponding continuation or punishment is justifiable if either the deviation is bad to the other player or the continuation itself is good to the other player we characterize the set of payoff vectors that can be supported by subgame perfect equilibria with justifiable punishments as the discount factor goes to one this limiting set of equilibrium payoffs can be quite different from the set of subgame perfect equilibrium payoffs any efficient feasible and strictly individually rational payoff can be supported by equilibrium with justifiable punishments

rent seeking and surplus destruction in unanimity bargaining abstract in non cooperative bargaining games in the tradition of rubinstein the proposer s bargaining power stems from the prospect of a delay in case of disagreement since players are impatient this delay is costly for everyone we consider a unanimity bargaining game in which the proposer can strategically choose the length of this delay we assume that the size of the surplus depends endogenously on the chosen length of the prospective delay intuitively the proposer faces the following trade off the more he exploits his proposer power the smaller is the surplus that can be divided one interpretation is that aggressive bargaining tactics hurt the fruitful cooperation among players and thus the surplus we characterize stationary equilibrium strategies and payoffs and obtain sharp predictions on the extent of surplus destruction the size of the social loss and the surplus allocation

collectivization and china s agricultural crisis in 1959 1961 the agricultural crisis in china in 1959 61 after the initial success of the collectivization movement resulted in 30 million extra deaths in this paper a game theory hypothesis proposes the main cause of this catastrophe i argue that because of the difficulty in supervising agricultural work the success of an agricultural collective depends on a self enforcing contract in which each one promises to discipline oneself a self enforcing contract however can be sustained only in a repeated game in the fall of 1958 the right to withdraw from a collective was deprived the nature of the collectivization was thus changed from a repeated game to a one time game as a result the self enforcing contract could not be sustained and agricultural productivity collapsed the empirical evidence is consistent with this hypothesis

striking for a bargain between two completely informed agents this paper models the wage contract negotiation procedure between a union and a firm as a sequential bargaining process in which the union must decide in each period whether or not to strike for the duration of that period we show that there exist subgame perfect equilibria in which the union engages in several periods of strikes prior to reaching a final agreement although both parties are completely rational and fully informed this has implications for other inefficient phenomena such as tariff wars debt negotiations and wars in general we characterize the set of equilibria show that strikes can occur in real time and discuss extensions of the model such as lockouts and the possibility of multiple recontracting opportunities copyright 1991 by american economic association

strategic wage bargaining with destructive power the role of commitment abstract we build a simple alternating offers bargaining model in which one of the players can commit to damage the pic that they are bargaining over in the unique equilibrium partition his share does not vary monotonically with the discount factor

opportunistic accountability state society bargaining over shared interests conflicting preferences between the state and society underpin most accountability mechanisms by providing a credible way for society to impose costs on the state adapting a classic bargaining framework we argue that broader conditions can support state society bargaining policies that both the state and society value can also enhance society s negotiating power provided society has a relatively lower valuation and is more patient than the state by threatening to sabotage their own interests but hurt the impatient state even more citizens can compel the state to deliver broader policy benefits we illustrate this logic with the case of polio vaccination in northern nigeria where entire communities have resisted the vaccine as a strategy to bargain for more desired services to resolve and preempt noncompliance the nigerian government has enhanced service delivery in other areas demonstrating the opportunity for improved accountability in the presence of shared interest policies

wage bargaining and nominal rigidities abstract delays in wage negotiations do not necessarily mean work stoppage production can continue under the terms of the old contract while the parties are bargaining holdout this holdout option is included in a strategic bargaining game in addition to strike and lock out threats integrating the bargaining model in a standard macroeconomic framework it turns out that holdout threats will prevail under certain circumstances in this case wages will be rigid in nominal terms so that an increase in aggregate nominal demand increases aggregate output

bargaining with surplus destruction in a two player alternating offer bargaining model if one player can destroy the surplus to be allocated then the value to bargain for is endogenous except at the beginning even with complete information the model has perfect equilibria with delayed agreement and or surplus destruction the model therefore explains inefficiency and destruction that may appear irrational we characterize the set of equilibrium payoffs and its limiting be haviour as the time between offers vanishes real time delay remains possible even in the limit we also consider the case of surplus destruction that is exogenously limited by the

success and failure of reform insights from the transition of agriculture this paper analyzes the linkages between the reform strategies in transition countries and economic performance the authors focus on agriculture because of the sharpness of the policy changes fundamental differences among countries and relative simplicity of agricultural relationships the authors document post reform performance in the transition countries of asia and europe the authors show how a pricing reform and subsidy reductions b land rights reform and policies that affect farm restructuring and c the presence institutions that facilitate exchange either markets or market substitutes affect output and productivity the paper ends with general lessons on reforms and transition

a theory of consumer boycotts under symmetric information and imperfect competition this article models strategic interactions between non identical duopolistic firms and a public interest environmental organisation eo that promotes green production practices by threatening consumer boycotts against brown producers the article describes when boycotts are deterred by prior firm commitments to be green and also when a boycott arises in equilibrium despite symmetric information when a boycott arises it is either a small persistent boycott against the small firm in the industry or a large transitory boycott against the large firm in the industry that prompts the target firm to accede to the boycott demands quickly

bargaining reputation and equilibrium selection in repeated games with contracts consider a two person intertemporal bargaining problem in which players choose actions and offers each period and collect payoffs as a function of that period s actions while bargaining proceeds this can alternatively be viewed as an infinitely repeated game wherein players can offer one another enforceable contracts that govern play for the rest of the game theory is silent with regard to how the surplus is likely to be split because a folk theorem applies perturbing such a game with a rich set of behavioral types for each player yields a specific asymptotic prediction for how the surplus will be divided as the perturbation probabilities approach zero behavioral types may follow nonstationary strategies and respond to the opponent s play in equilibrium rational players initially choose a behavioral type to imitate and a war of attrition ensues how much should a player try to get and how should she behave while waiting for the resolution of bargaining in both respects she should build her strategy around the advice given by the nash bargaining with threats nbwt theory developed for two stage games in any perfect bayesian equilibrium she can guarantee herself virtually her nbwt payoff by imitating a behavioral type with the following simple strategy in every period ask for and accept nothing less than that player s nbwt share and while waiting for the other side to concede take the action nash recommends as a threat in his two stage game the results suggest that there are forces at work in some dynamic games that favor certain payoffs over all others this is in stark contrast to the classic folk theorems to the further folk theorems established for repeated games with two sided reputational perturbations and to the permissive results obtained in the literature on bargaining with payoffs as you go

dynamic contractual enforcement a model of strikes this paper provides a theory of strikes as part of a constrained efficient enforcement mechanism for an implicit contractual agreement a firm possessing contemporaneously private information about demand engages in an enduring relationship with its workforce if the information becomes perfectly observable subsequently then modulo discounting the first best is implementable but strikes are always off the equilibrium path if the observations of the workforce are imperfect strikes occur in equilibrium the dynamic contracting problem is modeled as a repeated game with imperfect monitoring the equilibrium exhibits production inefficiency and incomplete insurance to mitigate the inefficiencies caused by strikes

on the search for talent in academic labor markets easily observable later graduate study outcomes as predictors of early career publishing placement and tenure three easily observed later graduate study outcomes working with a prominent advisor publishing while in graduate school and coauthoring with the advisor are demonstrated to be significant determinants of early career publishing success for a sample of nearly 3 000 ph d recipients from more than 100 domestic programs between 1990 and 1993 out of sample predictions for 681 ph d recipients from the class of 1994 indicate that these easily observed later graduate study signals dramatically improve our ability to forecast which students become prolific and which students fail to publish more than one article analyzing initial domestic tenure track economics placements indicates that hiring departments placed far more emphasis on ph d program pedigree leading to an initial tenure rate of less than 50 but eventually nearly three fourths currently hold tenured positions in the united states jel j24 j44

total factor productivity change in china s farming sector 1952 1989 a crucial problem in economic development is choosing institutions that are relatively efficient in resource allocation and conducive to growth however institutional innovations usually take time and it is often difficult to isolate these effects from the effects of noninstitutional factors modern china is one of the few exceptions it offers a rich experience in dramatic institutional changes after 1949 a smallholder system was experimented with immediately after the land reform this was quickly followed by various forms of collectivization since 1979 the household responsibility system hrs has gradually replaced the commune system thus china provides a unique opportunity for a comparative study of these different rural institutions in terms of the total factor productivity index tfpi this index measures the change in output relative to the change in inputs the examination of the tfpi also has policy implications the apparent plateau in grain production and the slow growth in other crop production from 1985 to 1989 constitute a sharp contrast to the period 1979 84 which witnessed rapid growth in both grain and economic crop production in china public ownership is favored by orthodox ideology and noneconomic factors often play an important role in economic life 2 in facing slower growth in crop production whether the hrs should or should not be the long term rural institution has become a sensitive question again and has kindled a heated debate within china in this study i will examine the performance of the successive rural institutions in china in terms of changes in the tfpi over the period 1952 89 using 1989 as the final year of my study the most important finding of this study is that the hrs showed a clear advan

bargaining under strategic uncertainty the role of second order optimism this paper shows that bargainers may reach delayed agreements even in environments where there is no uncertainty about payoffs or feasible actions under such conditions delay may arise when bargainers face direct forms of strategic uncertainty that is uncertainty about the opponent s play the paper restricts the nature of this uncertainty in two important ways first it assumes on path strategic certainty bargainers face uncertainty only after surprise moves second it assumes battigalli and siniscalchi s 2002 rationality and common strong belief of rationality rcsbr a requirement that bargainers are strategically sophisticated the main result characterizes the set of outcomes consistent with on path strategic certainty and rcsbr it shows that these assumptions allow for delayed agreement despite the fact that the bargaining environment is one of complete information the source of delay is second order optimism bargainers do not put forward good offers early in the negotiation process because they fear that doing so will cause the other party to become more optimistic about her future prospects

strategic bargaining with destructive power abstract this note studies a two player alternating offers bargaining model in which one of the agents has the ability to damage permanently the pie bargained over beside the rubinsteinian bilateral monopoly outcome i show that it is possible to select a harming equilibrium in which the sequence of damages to the pie is endogenously determined

can negotiations prevent fish wars abstract the standard alternating offer model is extended by integrating it with the levhari and mirman fish war model in order to investigate negotiations over fish quota the disagreement actions are endogenous the interior and linear markov perfect equilibrium mpe results in immediate agreement on an efficient path of fish quota this mpe is not analytically tractable numerical solutions show that patience is a disadvantage in this mpe and small differences in patience lead to large asymmetries in the bargaining outcome

what does performance in graduate school predict graduate economics education and student outcomes economists devote considerable effort to grad u ate stu dent edu cation bu t have condu cted rela tively little research on the determinants of stu dent performance or placement in the job market do gradu ate stu dents who do well in core microeco nomics micro cou rses also do well in core mac roeconomics macro and econometrics metrics cou rses are stu dents who achieve higher grades in their first year core classes or general exams more likely to complete their phd and obtain higher ranked positions in the job market in an attempt to answer these qu estions we assem bled a rich dataset on 1 029 economics gradu ate stu dents who enrolled at harvard university massachu setts institu te of technology mit princeton university stanford university or the university of chicago in the 1990s these schools were selected becau se in 1993 they had the five highest ranked economics phd programs accord ing to the national research cou ncil nrc ou r resu lts indicate that stu dents grades in requ ired core cou rses are highly correlated across su bjects the phd admissions com mittee s evalu ation of a stu dent predicts first year grades and phd completion bu t not job placement first year performance is a strong what does performance in graduate school predict graduate economics education and student outcomes

responsiveness flexibility and market liberalization in china s agriculture been at most only limited gains from market liberalization if one were to take the findings of this admittedly scant literature seriously it would appear as if there is at most only a relatively small impact from market reforms in china we believe there are three possible but only one plausible explanations for the findings first if market liberalization actually contributes little to no growth or increases in output or incomes this would of course in part explain why economies that lead reform with market liberalization do not experience significant gains theory and the experiences of other economies in other settings however would argue against such an interpretation second it could be that china s agricultural market liberalization has just proceeded so slowly that it is still too early for output to have been positively affected by market liberalization however as seen above the record on the market expansion and the observations of many researchers would not support this view

a welfare measurement of china s rural forestry reform during the 1980s abstract rural institutional innovation in china encompassed changes in land tenure arrangements and commodity pricing practices and their effects hinged on how they were carried out properly implemented the incentive structure could improve forest production would increase and thus producers and consumers would benefit otherwise if the reform programs were inappropriately implemented as reflected in market control and price distortions as well as policy uncertainty then the incentive structure might improve only slightly chances for production increase could be diminished making it hard for producers and consumers to benefit in addition to quantifying these impacts using contrasting cases this article also suggests some policy implications in a broader context

perfect equilibria in a negotiation model rubinstein s alternating offers bargaining model is enriched by assuming that players payoffs in disagreement periods are determined by a normal form game it is shown that such a model can have multiple perfect equilibria including inefficient ones provided that players are sufficiently patient delay is possible even though there is perfect information and the players are fully rational the length of delay depends only on the payoff structure of the disagreement game and not on the discount factor not all feasible and individually rational payoffs of the disagreement game can be supported as average disagreement payoffs indeed some negotiation games have a unique perfect equilibrium with immediate agreement