nash cournot or lindahl behavior an empirical test for the nato allies this paper derives systems of demand equations for distinguishing between nash cournot and lindahl behavior in a group that either shares a pure public good or an activity that provides a private and a pure public joint product systems of simultaneous equations are estimated based upon nash cournot and lindahl behavior for a sample of ten nato allies for the 1956 1987 period nonnested hypothesis tests support the nash cournot specification for five of the ten sample allies no evidence of lindahl behavior is found the nash cournot joint product specification outperforms the pure public model for all sample allies

changing threat perceptions and the efficient provisioning of international security this paper proposes a mechanism for structuring international institutions to efficiently provision global security against the threat of a rogue nation the effects of security effort by an alliance member are assumed to be non rival and non excludable for other members specifically this effort has both positive and negative effects as security measures prevent attacks by the rogue nation but also involves loss of commercial and diplomatic benefits further the alliance members are assumed to have heterogeneous tastes regarding the desired security level the allies act strategically vis a vis one another with regard to security provision and the alliance a whole acts strategically with respect to the rogue nation which strategizes in turn importantly this paper investigates how the evolution of public opinion in the respective countries facing the rogue nation s threat impacts the proposed mechanism

convergence to efficiency in a simple market with incomplete information a model of trade with m buyers and m sellers is considered in which price is set to equate revealed demand and supply in a bayesian nash equilibrium each trader acts not as a price taker but instead misrepresents his true demand supply to influence price in his favor this causes inefficiency we show that in any equilibrium the amount by which a trader misreports is o 1 m and the corresponding inefficiency is o 1 m2 the indeterminacy and the inefficiency that is caused by the traders bargaining behavior in small markets thus rapidly vanishes as the market increases in size

overconfidence and asymmetric information the case of insurance this paper contributes to the recent behavioral economics literature by showing that whether or not overconfidence changes qualitative predictions in asymmetric information markets may depend on the market structure itself we first show that overconfidence may overturn fundamental relations between observable variables in perfect competition asymmetric information insurance markets in monopolistic insurance markets in constrast we find that overconfidence may be observationally equivalent to variations in the risk composition of the economy our analysis provides a number of novel testable implications on i price heterogeneity within and across risk classes ii the relationship between ex post risk and insurance coverage iii the fact that a significant fraction of agents chooses to be uninsured and iv the relationship between underinsurance and age

the attack and defense group contests best shot versus weakest link this study analyzes a group contest in which one group defenders follows a weakest link whereas the other group attackers follows a best shot impact function if we fully characterize the nash and coalition proof equilibria and show that with symmetric valuation the coalition proof equilibrium is unique up to the permutation of the identity of the active player in the attacker group with asymmetric valuation it is always an equilibrium for one of the highest valuation players to be active it may also be the case that the highest valuation players in the attacker group free ride completely on a group member with a lower valuation however in any equilibrium only one player in the attacker group is active whereas all the players in the defender group are active and exert the same effort we also characterize the nash and coalition proof equilibria for the case in which one group follows either a best shot or a weakest link but the other group follows an additive if jel c72 d70 d72 d74 h41

dyke maintenance and other stories some neglected types of public goods the orthodox summation model of a pure nonexcludable public good assumes that each individual consumes a quantity of public good defined as the sum of all individuals contributions to that good recently hirshleifer 1983 1985 has analyzed models that do not fall within this class at one extreme is the weakestlink in which the total quantity available to each consumer equals the smallest individual contribution at the other is the best shot in which the total quantity available equals the largest individual contribution hirshleifer s example of the weakest link case concerns a circular region of which each citizen owns a pie shaped slice the perimeter is marked by a dyke floods may penetrate the weakest point of the dyke and cause damage equally throughout the region each citizen decides the height and state of repair of that section of the dyke adjoining his piece of land its maintenance constituting his contribution to the public good thus the level of protection enjoyed by all is determined by the least well maintained section of the dyke an example of the best shot case concerns a number of antimissile batteries ringing a city firing at an incoming icbm all that matters is the accuracy of the best shot bliss and nalebuff 1984 discuss dragon slaying as another example of a best shot situation section ii of this paper introduces a class of functions of which the summation weakest link and best shot are examples section iii analyzes the properties of equilibrium when consumers have identical tastes and incomes section iv analyzes the implications of income redistribution in the summation case the equilibrium is unaffected by the initial redistribution over a range and outside that range transfers help the recipient and hurt the donor within the broader class of models however the invariance property does not generally hold and there may be opportunities for paretoimproving income redistribution i give an example similar to the weakest link case in which a pareto improving redistribution is

the efficiency of competitive equilibria in insurance markets with asymmetric information abstract this paper addresses the relationship between competitive equilibria and efficient allocations in an insurance market with asymmetric information using the definition of second best efficiency proposed by harris and townsend 1981 for environments characterized by informational assmmetry the efficiency properties of several proposed market equilibria are examined we find an analogue to the first optimality theorem a miyazaki wilson equilibrium always results in a second best allocation

is there a relationship between a geocentric mind set and multinational strategy this paper operationalizes and tests relationships between a geocentric managerial mind set geographic scope and the structural and strategic characteristics of firms and industries relationships are tested using data from a survey of senior corporate international hrm managers of large u s based manufacturing multinationals an index of a geocentric mind set is found to correlate with geographic scope and various aspects of ihrm policy and practice however no relationship is found with measures of multinational strategy or organizational structure the paper concludes with a speculative hypothesis development of a geocentric mind set may relate to the information or knowledge intensity of the firm rather than its position on the strategic continuum

economics of alliances the lessons for collective action this essay provides an up to date summary of the findings of the literature on the economics of alliances we show that the study of the economics of alliances has played a pivotal role in understanding and applying public good analysis to real world applications we establish that the manner in which alliances address burden sharing and allocative issues is related to strategic doctrines weapon technology perceived threats and membership composition past contributions are evaluated and areas needing further development are identified the theoretical and empirical knowledge gained from the study of alliances is shown to be directly applicable to a wide range of international collectives

harmful competition in insurance markets there is a general presumption that competition is a good thing in this paper we show that competition in the insurance markets can be bad and that adverse selection is in general worse under competition than under monopoly the reason is that monopoly can exploit its market power to relax incentive constraints by cross subsidization between different risk types cream skimming behavior on the contrary prevents competitive firms from using implicit transfers in effect monopoly is shown to provide better coverage to those buying insurance but at the cost of limiting participation to insurance performing simulation for different distributions of risk we find that monopoly in general performs much better than competition in terms of the realization of the gains from trade across all traders in equilibrium

the triple entente and the triple alliance 1880 1914 a collective goods approach the distribution of burdens in alliances may be explained in terms of public and private outputs a joint product model is applied to the triple alliance and triple entente using generalized least squares auto regressive moving average gls arma techniques and time series data results indicate that countries regarded allies military effort more as complements than as substitutes though several examples of free riding behavior are noted the method used here may provide more accurate estimation of publicness problems than is found in the usual static tests

the politics of redistributive social insurance this paper analyses the political support for a social insurance that includes elements of redistribution when there exists an imperfect private insurance alternative individuals differ both in their income and risk the social insurance is compulsory and charges an income related contribution with pooling of risks the private insurance is voluntary and charges a contribution based on individual risks however due to the adverse selection problem private insurance companies provide only partial insurance adopting a non expected utility model we show that there is a general majority support for social insurance and that this support is increasing with risk aversion we also show that a mixed insurance is politically impossible regardless of the degree of redistribution of social insurance and the joint distribution of risk and income in the population lastly we analyse how the political support for social insurance is affected by any change in its redistributive component and the possibility of using genetic tests

the corona pandemic a game theoretic perspective on regional and global governance we argue that the incentive structure of all individual and coordinated measures across countries to contain the corona pandemic is that of a weakest link public good game we discuss a selection of theoretical and experimental key results of weakest link games and interpret them in the light of the corona pandemic first we highlight that experimental evidence does not support the assumption that coordination can be trivially solved even among symmetric players second we argue that for asymmetric countries the weakest link game does not only pose a problem of coordination but also a problem of cooperation third we show how and under which conditions self enforcing treaties can foster coordination and cooperation we account for the possibility that countries make mistakes when choosing their actions our discussion shows that north south cooperation is relevant and likely to be self enforcing and that regional cooperation e g within the eu will also be important

the welfare effects of disarmament on the united states under nato and the warsaw pact this paper develops a model of disarmament by incorporating rationing theory into the economic theory of alliance in order to provide an econometric measure of welfare gain from a disarmament treaty the author employs the cost functions predicated on rationed and unrationed demand systems by combining the economic theory of foreign aid with that of alliance the author examines the impact of disarmament on the developed economies foreign aid to developing countries as a peace dividend the model is applied to the case of the u s economy under mutual disarmament between nato and the warsaw pact copyright 1996 by mit press

strategic transfers and private provision of public goods abstract this paper considers strategic monetary transfers between two agents when these contribute to a mutual public good if the agents differ in their contribution productivity then the less productive agent has an incentive to make large unconditional transfers to the more productive agent although agents move simultaneously in each stage of the game the less productive agent becomes a stackelberg leader furthermore the generic subgame perfect equilibrium is characterized by full specialization

economic models of nato abstract the seminal work of olson and zeckhauser 1966 on the economic theory of alliances in particular nato provides the theoretical background for this paper after restating their results on alliance allocation behavior in a formal framework we show that these results may fail in a context with decentralized production of the public defense commodity finally we introduce a simple mechanism which allows the implementation of an efficient allocation characterized by proportional burden sharing and cost monotonicity these results can also be applied to other public goods problems

farsighted r d networks we analyze the formation of bilateral r d collaborations in an oligopoly when each firm benefits from the research done by other firms it is connected to in contrast to myopic stability farsighted stability leads to r d networks consisting of two minimally connected components with the largest one comprising three quarters of firms

complementarity free riding and the military expenditures of nato allies abstract this paper examines the major influences of an ally s demand for military expenditures demand equations are estimated for a sample of nato nations using the iterative seemingly unrelated regressions technique evidence is presented indicating that structural changes occured in these equations in the early 1970s this instability is the predicted effect of the doctrine of flexible response adopted by nato during this time period the statistical tests show that the medium sized nuclear powers military expenditures responded identically to income and defense spillins the same held true for the lowland allies

transfers and the weakest link an extension of hirshleifer s analysis abstract with the weakest link social composition function analysed by hirshleifer it is shown that an incentive exists for some agents to transfer resources to others so as to achieve higher quantities of the public good the characteristics of such an equilibrium with transfers are examined together with the implications of differing income distributions for the quantity of the public good some observations are offered as to how well the model can capture co operative behaviour

land tenure choice in chinese villages the rational versus the political model the rational and political decision models are developed and tested for the land tenure choice in rural china a novelty of the test is to link the collective decision with general relative factor scarcities competing hypotheses are developed for the two models and tested with panel data collected on 83 chinese villages the results show that neither model is strongly rejected although the political model fares slightly better in more sophisticated econometric testing this suggests that popular political participation is emerging in chinese villages implications of this finding to chinese land policy are discussed

advantageous selection in insurance markets this article reverses the standard conclusion that asymmetric information plus competition results in insufficient insurance provision risk tolerant individuals take few precautions and are disinclined to insure but they are drawn into a pooling equilibrium by the low premiums created by the presence of safer more risk averse types taxing insurance drives out the reckless clients allowing a strict pareto gain this result depends on administrative costs in processing claims and issuing policies as does the novel finding of a pure strategy partial pooling subgame perfect nash equilibrium in the insurance market copyright 2001 by the rand corporation

incentive compatibility in signaling games with a continuum of types on donne deux resultats utiles pour demontrer l existence et pour caracteriser des equilibres de separation dans des jeux de signalement

market equilibrium with hidden knowledge and self selection the problem of the existence of a competitive equilibrium in models with hidden knowledge and self knowledge has been discussed previously by m rothschild and j e stiglitz 1976 c a wilson 1977 and j g riley 1979 recent analyses of such models by i cho and d kreps 1986 and riley argue for a particular outcome the pareto dominant separating zero profit one the authors prove the existence of such an outcome under very general conditions and generalizing the reactive equilibrium concept introduced by riley they prove this outcome is the unique reactive equilibrium copyright 1987 by the econometric society

alternative collective goods models of military alliances theory and empirics i introduction in a seminal article mancur olson and richard zeckhauser 1966 characterized the north atlantic treaty organization nato in the mid 1960s as a group of allies who shared a pure public good in the form of deterrence to qualify as a pure public good a good s benefits must be nonexcludable i e available to all group members once provided and nonrival in consumption i e consumption opportunities associated with a unit of the good do not decline with the number of users pure public goods are characterized by free riding behavior owing to non excludability which permits individuals to partake in the benefits of the good without expending their own scarce resources olson and zeckhauser also demonstrated that a pure public good such as deterrence is associated with an exploitation hypothesis whereby the large agents allies shoulder the payment burdens of the small agents allies using data from 1964 olson and zeckhauser 1966 274 77 established that defense burdens are positively correlated with the economic size of the allies as measured by gross national product gnp over the next twenty five years a large literature has generalized and extended the olson and zeckhauser collective goods theory of alliances van ypersele de strihou 1967 recognized that defense expenditures could generate country specific private benefits e g disaster relief protection of colonies management of domestic unrest along with purely public deterrence with the presence of ally specific benefits the strength of the exploitation hypothesis is attenuated since a small ally might willingly shoulder a relatively large burden provided that this ally views its defense expenditures as possessing a large share of nation specific benefits in a series of articles murdoch sandler and others 1 formulated a joint product model in which the military activity of an ally yields pure public impure public and or private jointly produced outputs or benefits if the benefits derived from the allies military expenditures were from a single purely public good then the joint product model would obviously degenerate to the model of olson and zeckhauser 1966 murdoch and sandler 1984 sandler and forbes 1980 and sandler and murdoch 1990 have shown that the joint product model outperforms the pure public good deterrence model for nato during various time periods in recent years a number of important contributions to the collective good analysis of alliances have appeared these include the inclusion of foreign trade considerations wong 1991 marginal cost differentials among allies mcguire 1990 weber and wiesmeth 1991 leader follower behavior bruce 1990 and median voter considerations dudley and montmarquette 1981 murdoch sandler and hansen 1991 and okamura 1991 mcguire and groth 1985 engineered an econometric procedure for distinguishing between allocative processes e g non cooperative and cooperative within an alliance while subsequent work by sandler and murdoch 1990 operationalized this econometric procedure until now collective good models of alliances have computed alliancewide defense levels by simply summing the allies expenditures however the appropriate manner for aggregating defense efforts among allies may depend on geographical strategic and technological determinants for example the defense efforts of the weakest ally or link along a front may determine the strength of the allies defenses since the enemy s ability to penetrate behind the front hinges on the weakest fortification hirshleifer 1983 in consequence the minimal defense level of the allies and not the sum determines alliance capabilities the purpose of this paper is fivefold first we intend to look at different methods of aggregating allies military expenditures to determine alliancewide defense levels three procedures summation weakest link and best shot are examined

strategic interaction among governments in the provision of a global public good abstract how do governments respond to other governments when providing a global public good using data from 2007 to 2014 on medical research funding for infectious and parasitic diseases we examine how governments and foundations in 41 countries respond to funding changes by the us government which accounts for half of funding for these diseases because funding across governments might be positively correlated due to unobserved drivers they have in common we use variation in the representation of research intensive universities on us congressional appropriations committees as an instrument for us funding we find that a 10 increase in us government funding for a disease is associated with a 2 to 3 reduction in funding for that disease by another government in the following year

foreign aid and weakest link international public goods an experimental study in this paper we investigate efficiency differences between income and in kind transfers as distribution mechanisms of foreign aid to weakest link international public goods in a laboratory environment we find that if there is relatively small difference in country size then income transfers seem to provide a higher provision of the international public good and thus higher overall welfare level than that of in kind transfers however if there is a large disparity in country size then in kind transfers appear to provide a higher level of ipg provision and higher accompanying global welfare

the political economy of scandinavian neutrality the article examines whether three of the neutral nations of eu rope sweden switzerland and finland have adhered to their choice of armed neu trality by being self reliant on their own defenses using a joint product model the authors specify a reduced form equation for a nation s demand for military expenditures empirical estimates of these demands suggest that sweden free rod e on nato after institution of the doctrine of flexible response however the o thertwo netural nations have been self reliant throughout the period 1957 82 w ith pooled data cross equation restrictions highlight theessential differences between nato and nonaligned scandinavian countries copyright 1986 by the editors of the scandinavian journal of economics

efficient competitive equilibria with adverse selection do walrasian markets function orderly in the presence of adverse selection in particular is their outcome efficient when exclusive contracts are enforceable this paper addresses these questions in the context of a rothschild stiglitz insurance economy we identify an externality associated with the presence of adverse selection as a special form of consumption externality consequently we show that competitive equilibria always exist but are not typically incentive efficient however as markets for pollution rights can internalize environmental externalities markets for consumption rights can be designed to internalize the consumption externality due to adverse selection with such markets competitive equilibria exist and incentive constrained versions of the first and second welfare theorems hold

weakest link public goods giving in kind or transferring money abstract this paper extends the analysis of weakest link public goods whose level equals the smallest of the agents provision levels by permitting an agent either to increase one s own provision or else augment both one s own provision and that of the other agent s nash equilibria may be either symmetric with agents matching one another s provision or else asymmetric with an in kind transfer by one agent to another an equilibrium with cash transfers but no in kind transfers may be pareto superior to one with only in kind transfers if agents differ in their efficiency then in kind transfers by the low cost agent may dominate a cash transfer the possibility of pareto improving transfers is enhanced as the number of agents increases

the demand for military expenditures an international comparison earlier studies have explained inter country variations in the share of gnp devoted to military expenditures by international spillovers and by differences in the threat of attack related to relative incomes in this paper we use the theory of public choice to explain these differences we attempt to measure the importance of both international spillovers and relative incomes along with two other factors the tax price elasticity of demand and economies of scale in the consumption of security we find that international spillovers are significant and positive that the income elasticity of demand is greater than unity that the tax price elasticity of demand explains part of observed inter country differences and that there are considerable economies of scale in the consumption of military spending finally between 1960 and 1975 there was apparently a substantial increase in the value which each country derived from a dollar of military spending by its allies this phenomenon which seems related to the increased importance of deterrent weapons has tended to induce individual alliance members to reduce the share of their national income devoted to defense

solar power investment in north africa reducing perceived risks abstract climate protection targets for mid century imply a need to scale up european renewable power production to a level that may exceed the available land area within europe s borders one attractive solution from a cost and feasibility perspective is the development of large scale concentrating solar power plants in north africa and the middle east however these developments are seen by many people as risky in terms of both european energy security and in terms of the risks faced by project developers in this paper we focus on the latter of theses issues first we examine the risks that project developers are most concerned about and identify these as being associated not with terrorism and rogue state behavior but rather with corruption and inefficient and unpredictable bureaucracies second we identify a range of policy approaches that can reduce these risks either by mitigating their consequences or by seeking to eliminate their underlying causes third we investigate the financial benefits of taking such steps to reduce or eliminate investment risks we find the potential savings to european electricity consumers to exceed 200 billion

individual organizational work and environmental influences on expatriate turnover tendencies an empirical study foreign postings for executives are costly undertakings for multinational corporations especially when they fail yet little research has been done on the causes of expatriate turnover this 155 expatriate survey assesses individual organizational work and environmental influences on both internal and external turnover tendencies it was found that job autonomy and material life satisfaction were key predictors for both internal and external turnover tendencies only for organizational turnover did job autonomy supersede material life satisfaction as the lead predictor of turnover tendencies american expatriates attach much importance to maintaining living standards in postings to foreign locations

non exclusive competition in the market for lemons in order to check the impact of the exclusivity regime on equilibrium allocations we set up a simple akerlof like model in which buyers may use arbitrary taris under exclusivity we obtain the zero profit separating riley rothschilds stiglitz allocation under non exclusivity there is also a unique equilibrium allocation that involves a unique price as in akerlof 1970 these results can be applied to insurance in the dual model in yaari 1987 and have consequences for empirical tests of the existence of asymmetric information

pareto optima and competitive equilibria with adverse selection and moral hazard this paper explores the extent to which standard general equilibrium analysis of pareto optima and of competitive equilibria can be applied to environments with moral hazard and adverse selection problems allowing for lotteries contracts with random components we first establish that an adverse selection insurance economy a moral hazard insurance economy a signaling economy and a private information labor market economy are all special cases of a simple general structure we then show that techniques for characterizing pareto optimal contracts as solutions to concave programming problems are useful and nice and appear to be broadly applicable allowing for lotteries we show how to characterize the optimal allocations for the adverse selection insurance and labor market economies we then show that standard existence and optimality theorems for competitive equilibria apply in the linear space containing lotteries if agents with characteristics which are distinct and privately observed at the time of initial trading enter the economy wide resource constraints in a homogeneous way other kinds of diversity are not critical for economies with moral hazard which satisfy the homogeneity condition competitive contract markets single out a subset of the optima and thus can be consistent with apparent unemployment and with a random allocation of labor supplied though all households are averse to risk the adverse selection insurance and signaling economies however do not satisfy the homogeneity condition and are difficult to decentralize efficiently with a price system

international transfers of managers in north american and european mnes global scale mnes require a network of managers to direct and control operations around the world managerial resources for these jobs can be managers from the headquarters country host and third countries international transfers can be for specific staffing needs for management development and for organization development the general hypothesis examined in this paper was the global scale mnes would operate in a regio or geocentric fashion with full integration of the world pool of managerial resources for all international transfers case studies were done on two north american and two european mnes in the chemicals and electronics industries world wide transfers and consequent career opportunities were found in all cases for managers from headquarters countries regional transfers and careers were possible for host and third country managers in regio centric mnes but only national careers were possible in a poly centric mne temporary transfers to world or regional headquarters for management development were found for host and third country managers but transfers for organization development were for headquarters nationals no consistent differences in uses of transfers or international careers were found between north american and european mnes

overconfidence insurance and paternalism it is well known that when agents are fully rational compulsory public insurance may make all agents better off in the rothschild and stiglitz 1976 model of insurance markets we find that when sufficiently many agents underestimate their personal risks compulsory insurance makes low risk agents worse off hence behavioral biases may weaken some of the well established rationales for government intervention based on asymmetric information

estimating the impact of the soviet union s threat on the united states japan alliance a demand system approach an empirical model of the united states japan alliance is presented by employing the linear logarithmic expenditure system to analyze and test the impact of the soviet union s threat on both allies external threats are incorporated into the demand system the empirical results obtained the military buildup by the soviet union affects the preferences of both japan and the united states toward military over civilian goods japan is more sensitive to the soviet union s threat than the united states and the external threat is a more significant factor in affecting the military expenditures of each ally than a change in prices copyright 1991 by mit press

competitive pooling rothschild stiglitz reconsidered we build a model of competitive pooling which incorporates adverse selection and signaling into general equilibrium pools are characterized by their quantity limits on contributions households signal their reliability by choosing which pool to join in equilibrium pools with lower quantity limits sell for a higher price even though each household s deliveries are the same at all pools the rothschild stiglitz model of insurance is included as a special case we show that by recasting their hybrid oligopolistic competitive story in our perfectly competitive framework their separating equilibrium always exists even when they say it does not and is unique

strategic information acquisition and the mitigation of global warming abstract we consider the strategic role of uncertainty and information acquisition for the mitigation of global warming before the countries decide on their contribution to a mitigation of global warming they may invest in information about the country specific benefit of reductions of the emissions of greenhouse gases we show that information acquisition has a substantial strategic value countries may prefer not to learn their benefit of climate protection even if information acquisition does not involve a direct cost this strategic information choice may further decrease the efficiency of the public good provision

top guns may not fire best shot group contests with group specific public good prizes we analyze a group contest in which n groups compete to win a group specific public good prize group sizes can be different and any player may value the prize differently within and across groups players exert costly efforts simultaneously and independently only the highest effort the best shot within each group represents the group effort that determines the winning group we fully characterize the set of equilibria and show that in any equilibrium at most one player in each group exerts strictly positive effort there always exists an equilibrium in which only the highest value player in each active group exerts strictly positive effort however perverse equilibria may exist in which the highest value players completely free ride on others by exerting no effort we provide conditions under which the set of equilibria can be restricted and discuss contest design implications

task divisions in teams with complementary tasks abstract a team leader and a team follower non cooperatively produce a team specific public good out of two complementary tasks both team members are identically productive and can contribute to both tasks by moving first the team leader effectively determines the division of the tasks in the team we show that the existence of multiple but finitely many types of task divisions is associated with a non convex leader s budget constraint non convexity generates discontinuities and non monotonicities in the equilibrium provision of the good and also in the follower s utility if incomes are redistributed within the team non monotonicity of the follower s utility motivates the follower to give a cash transfer to the leader having received the cash transfer the leader adopts a task division that compensates the contributions of the follower hence we observe a non cooperative gift exchange with a monetary gift to the leader and a subsequent non monetary reward to the follower through a lighter task allocation these gift exchanges disappear in the presence of infinitely many types of task divisions generated by a continuum of complementary tasks

an econometric technique for comparing median voter and oligarchy choice models of collective action the case of the nato alliance this paper devises an empirical methodology for discriminating between the median voter model and the oligarchy choice model when applied to the collective provision of a public good in particular an empirical methodology is engineered so that a nested test procedure can evaluate competing models the authors apply this methodology to examine the demand for military activities of ten members of the nato alliance a two stage least squares procedure corrected for autocorrelation is used to estimate the demand equations test results vary some allies abide by the median voter model others by the oligarchy model and still others by neither copyright 1991 by mit press

structuring international institutions for the efficient provisioning of global security this paper analyzes the issue of security provision by an alliance against the threat of a rogue nation proactive security effort by an alliance member is assumed to be non rival and non excludable so the results of the effort jointly accrue to every other member this effort has both positive and negative effects as security measures mitigate the threat but also involve loss of commercial benefits collateral damages and infringement on human rights in this paper i suggest an institutional structure for the alliance which would lead to the achievement of the efficient level of world security through multilateral participation

spatial interaction model of spillovers from locally provided public services lundberg j 2006 spatial interaction model of spillovers from locally provided public services regional studies 40 631 644 this paper tests the hypotheses that recreational and cultural services provided at the local government level in sweden are associated with spillovers between municipalities a representative voter model is derived and the demand for recreational and cultural services is estimated using spatial sur techniques the result suggests a negative correlation between recreational and cultural services provided by neighbouring municipalities that indicate that these services are associated with spillovers in terms of strategic behaviour this result suggests that these services are strategic substitutes moreover the results provide week evidence that recreational and cultural services provided by local governments are complements lundberg j 2006 un modele d interaction geographique des retombees des services publics locaux regional studies 40 631 644 cet article cherche a test

a game theoretic foundation of competitive equilibria with adverse selection we construct an extensive form game that captures competitive markets with adverse selection it allows firms to offer any finite set of contracts so that cross subsidization is not ruled out moreover firms can withdraw from the market after initial contract offers have been observed we show that a subgame perfect equilibrium always exists in fact when withdrawal is costless the set of equilibrium outcomes may correspond to the entire set of feasible contracts we then focus on robust equilibria that continue to exist for small withdrawal costs we show that the miyazaki wilson contracts are the unique robust equilibrium outcome

the political economy of the peace dividend we develop a model of the peace dividend and use it to predict the fiscal consequences of a reduction in the demand for military spending the model is based on the assumption that the political process responds to political demands and costs in a way that maximizes net political benefits the predictions of our model on how a peace dividend will be allocated over nonmilitary spending tax relief and deficit reduction is tested against the experience of eight major wars in united states history

the management of the international executive compensation and benefits process scant attention has been given to the organizational locations of the various tasks that comprise the management process responsible for the international compensation and benefits program of particular international firms the organizational locations of 3 managerial tasks associated with these compensation and benefits programs are examined in this article development of policies and procedures financing and supervision and control the article examines the management of u s expatriate and third country manager programs based on the reported practices of u s based firms representing a variety of industries management and theoretical implications of the findings are discussed