unemployment in south africa the nature of the beast abstract unemployment in south africa is so widespread that it demands an explanation this paper examines a central question about south african unemployment why do the unemployed not enter the informal sector as is common in other developing countries the data do not support the idea that unemployment is largely voluntary the policy implications that government should diminish labor market segmentation and the obstacles to entering the productive informal sector may be relevant also to other developing countries with high unemployment

implementation in differential information economies abstract we consider the problem of implementation of social choice correspondences in differential information economies we provide necessary conditions for implementation and slightly stronger conditions which are sufficient to guarantee implementation

continuous and feasible implementation of rational expectations lindahl allocations abstract in this paper we consider bayesian implementation of rational expectations lindahl allocations for economic environments with public goods when agents are incompletely informed about environments we construct a continuous and feasible mechanism whose bayesian equilibrium allocations coincide with rational expectations lindahl allocations we not only allow the types of individuals to be unknown but also allow both the preferences and the initial endowments to be unknown to the designer in addition we allow some types of boundary equilibrium allocations and a continuous information structure journal of economic literatureclassification number c72 d71 d82 h41

efficiency and voluntary implementation in markets with repeated pairwise bargaining we examine a simple bargaining setting where heterogeneous buyers and sellers are repeatedly matched with each other we begin by characterizing efficiency in such a dynamic setting and discuss how it differs from efficiency in a centralized static setting we then study the allocations which can result in equilibrium when the matched buyers and sellers bargain through some extensive game form we take an implementation approach characterizing the possible allocation rules which result as the extensive game form is varied we are particularly concerned with the impact of making trade voluntary imposing individual rationality on and off the equilibrium path no buyer or seller consummates an agreement which leaves them worse off than the discounted expected value of their future rematching in the market finally we compare and contrast the efficient allocations with those that could ever arise as the equilibria of some voluntary negotiation procedure

incentive mechanism design for production economies with both private and public ownerships in this paper we dealwith the probl em of incentive mechanism design which yields efficient allocations for general mixed ownership economies when preferences individual endowments and coalition patterns among individuals are unknown to the planner we do so by doubly implementing the proportional solution for economies with any number of private sector and public sector commodities and any number of individuals as well as the coexistence of privately and publicly owned firms with general convex production possibility sets furthermore the mechanisms work not only for three or more agents but also for two agent economies journal of economic literature classification numbers c72 d61 d71 d82 2000 academic press

markets correlation and regret matching inspired by the existing work on correlated equilibria and regretbased dynamics in games we carry out a first exploration of the links between the leading equilibrium concept for exchange economies walrasian equilibrium and the dynamics specifically regret matching dynamics of trading games that fit the economic structure and have the property that their pure nash equilibria implement the walrasian outcomes interestingly in the case of quasilinear utilities or transferable utility all the concepts essentially coincide and we get simple deterministic dynamics converging to walrasian outcomes connections to sunspot equilibria are also studied

feasible and continuous implementation there has been a great deal of research in recent years investigating the question of whether or not there exist institutions game forms for which the set of equilibria will coincide with the set of walrasian equilibria in this paper we show the existence of a game form that is feasible both for equilibrium and disequilibrium strategies continuous and for which the set of nash equilibria coincides with the set of constrained walrasian equilibria for all pure exchange economies the game form allows agents to behave strategically both with respect to their preferences and their initial endowments

private information in large economies this paper examines the effect of private information in large economies we show that in a model with stochastic information structures the restrictions imposed on allocations by the presence of private information disappear in large economies we also show that for a large class of direct mechanisms the incentive for any agent to falsely report private information goes to zero as the number of agents becomes large these results provide an informational smallness analog to existing quantity smallness limiting results in the literature

a dynamic non direct implementation mechanism for interdependent value problems much of the literature on mechanism design and implementation uses the revelation principle to restrict attention to direct mechanisms we showed in mclean and postlewaite 2014 that when agents are informationally small there exist small modifications to vcg mechanisms in interdependent value problems that restore incentive compatibility we show here how one can construct a two stage non direct mechanism that similarly restores incentive compatibility while improving upon the direct one stage mechanism in terms of privacy and the size of messages that must be sent the first stage that elicits the part of the agents private information that induces interdependence can be used to transform certain other interdependent value problems into private value problems

unemployment in interwar britain in a recent article two american authors benjamin and kochin 1979a argide that keynes was wrong in attributing much of the abnormally high unemployment of the interwar years to a deficiency of aggregate demand they claim to have discovered an alternative clue to the riddle of high unemployment in interwar britain and to be able to show that the persistently high rate of unemployment in interwar britain was due in large part not to deficient aggregate demand but to high unemployment insurance benefits relative to wages ibid p 474 the army of the unemployed standing watch in britain at the publication of the general theory was largely a volunteer army ibid in making their case benjamin and kochin present three sets of evidence the first is a regression of unemployment on a measure of the benefits to wages ratio the so called replacement ratio and on a measure of deviations of output from trend over the period 1920 38 the second set of evidence concerns the implication of the lower rate of unemployment among juveniles than among adults and the third set consists of the inferences to be drawn from the differences in the rate of unemployment between single and married women at different times all the bodies of evidence are used to support the hypothesis of the existence of an association between the replacement ratio and the level of unemployment but only the first namely the time series regression is used to establish the amount of unemployment to be explained in this way that amount is seen to depend on the specific values of the coefficients on the replacement term and on the output term in the regression table 1 reports the data which are used by benjamin and kochin the figures for output are for net national product q as given by feinstein 1972 for w benjamin and kochin derive a figure for average weekly earnings from the data for annual wage and salaries

implementation with incomplete information in exchange economies in this paper we analyze the problem of designing incentive compatible mechanisms in pure exchange economic environments when agents have incomplete information the equilibrium concept employed is bayesian nash equilibrium and the notion of implemantation is full implementation which is stronger than the more commonly employed notion of truthful implementation an allocation rule is truthfully implementable if there exists a direct mechanism to which truth telling is an equilibrium and which yields the allocation rule as its truthful equilibrium outcome an allocation rule is fully implementable if there exists mechanism which yields the allocation rule as its unique equilibrium outcome more generally a set of allocation rules or a social choice set is fully implementable if there exist a mechanism whose equilibrium outcomes coincide with the set this stronger notion of implemention avoids the well known problems of multiple equilibria which arise in direct revelation games we develop a condition termed bayesian monotonicity which we show is necessary for full implementation an incentive compatibility condition is also necessary we prove that bayesian monotonicity and a slightly stronger incentive compatibility condition are sufficient for full implementation when there are at least three agents we present several examples of allocation rules which do and do not satisfy our condition one example is that of an allocation rule which is fully inplementable by an indirect mechanism but for which every equivalent direct mechanism has multiple equilibrium outcomes

implementation of lindahl allocations with nontotal nontransitive preferences abstract the purpose of this paper is to present a mechanism the nash allocations of which coincide with the lindahl allocations even when preferences are nontransitive or nontotal this extension to include nontotal nontransitive preferences is potentially very important since preferences of agents are nontransitive nontotal in many cases in particular in the case where the players are groups of individuals besides the mechanism presented here uses outcome functions that are individually feasible balanced not merely weakly balanced continuous differentiable around nash equilibria and furthermore almost everywhere differentiable moreover the mechanism has a message space of minimal dimension

the evolution of monetary equilibrium abstract the hahn problem is that even if a monetary equilibrium with valued fiat money exists in general equilibrium a nonmonetary equilibrium with a zero price on money generally also exists why should we expect the former over the latter here i consider the preferences that will survive repeated trading in an exchange economy where agents compete in biological fitness with unobservable preferences and positive assortativity in matching evolutionarily stable preferences implement the competitive equilibrium that maximizes the sum of agents fitnesses in a standard bewley townsend model this implies selection of the monetary over the nonmonetary equilibrium and also implies the survival of agents with money in the utility function trust in fiat money is only a recent development and even today such faith is hardly universal cass and shell 1980

implementation in economies with non convex production technologies unknown to the designer this paper deals with the problem of incentive mechanism design in non convex production economies when production sets and preferences both are unknown to the designer we consider nash implementation of loss free average cost marginal cost voluntary trading and quantity taking pricing equilibrium allocations in economies involving increasing returns to scale or more general types of non convexities the mechanisms presented in the paper are well behaved they are feasible continuous and use finite dimensional message spaces moreover the mechanisms work not only for three or more agents but also for two agent economies

unemployment and unemployment benefits in twentieth century britain a reply to our critics in the turbulent years following world war i unemployment compensation in britain was raised from its 1913 level of 27 percent of average wages to levels that neared 60 percent of wages the unemployment rate which had averaged 4 percent during the 20 years before world war i rose dramatically averaging 10 percent even during the expansions of the late 1920s and late 1930s world war ii inflation drove the ratio of benefits relative to wages down to levels comparable to those of the pre world war i years and during the immediate post world war ii period the unemployment rate in britain was lower than ever before or since massive changes in british social policy begun in 1966 raised benefits relative to wages and markedly relaxed conditions on their receipt unemployment has followed benefits upward and by 1981 both the unemployment rate and the ratio of benefits to wages were at levels higher than during the late 1930s our critics argue that this story is misleading in addition to a rebuttal of our critics claims this reply contains 1 new crosssectional and time series evidence that the unemployment insurance system raised the unemployment rates in interwar britain and 2 new cross sectional evidence on the magnitude of the insurance sys

rational bargaining in games with coalitional externalities this paper provides a flexible strategic framework to analyze bargaining and values in environments with coalitional externalities within this framework we propose a new value that extends the shapley value to partition function form games the so called rational belief shapley rbs value we investigate the strategic foundation of the rbs value by constructing an implementation mechanism this mechanism extends existing models of multilateral bargaining by allowing players a higher degree of freedom to form coalitions the same framework of bidding and renegotiation allows for natural variations of the rbs mechanism in this way alternative shapley like values are obtained and a unified platform to analyze and compare these solutions is provided

implementation of the lindahl correspondence by a single valued feasible and continuous mechanism this paper considers the problem of designing mechanisms whose nash allocations coincide with the lindahl allocations for public goods economies with more than one private good unlike previous mechanisms the mechanism presented here has a single valued feasible and continuous outcome function furthermore when there are no public goods in economies feasible and continuous implementation of the constrained walrasian correspondence can be obtained as a corollary of our theorem 1

fair divisions as attracting nash equilibria of simple games abstract we give a mechanism fully implementing envy free divisions such that strategy spaces are symmetric the set of nash equilibria is a global attractor for the best reply dynamics as a byproduct undesired mixed strategy equilibria are weeded out by the adjustment process

implementation with partial provability we extend implementation theory by allowing the social choice function to depend on more than just the preferences of the agents and allowing agents to support their statements with hard evidence we show that a simple condition on evidence is necessary for the implementation of a social choice function f when the preferences of the agents are state independent and sufficient for implementation for any preferences including state dependent with at least three agents if the social planner can perform small monetary transfers beyond those called for by f if transfers can be large f can be implemented in a game with perfect information when there are at least two players under a boundedness assumption for both results transfers only occur out of equilibrium the use of evidence enables implementation which is robust in the sense that the planner needs little information about agents preferences or beliefs and agents need little information about each others preferences our results are robust to evidence forgery at any strictly positive cost

consumer search behavior and sunk costs abstract this paper presents the results of four economic experiments involving 41 undergraduate students who were assigned the task of searching for the lowest price from a known distribution of prices economic theory predicts that individuals should continue to draw until the expected gain of another search is less than the marginal search cost additionally once individuals have made a draw and then continued they should never return to a price drawn earlier exercise recall both of these predictions are tested in the paper and the results show that behavior is not always consistent with them it appears that individuals are making decisions based on the total return from searching rather than simply the marginal return from another draw