truthful bundle multiunit double auctions we address the mechanism design problem for a market with multiple buyers and sellers each buyer demands some bundle s of various commodities and each seller supplies multiple units of one commodity to design truthful double auction mechanisms we propose a novel padding method that intentionally creates imbalances between the supply availability and demand requirement by introducing a phantom buyer with unlimited budget to the best of our knowledge this padding method leads to a class of mechanisms that are the first strategy proof individually rational budget balanced and asymptotically efficient mechanisms for the specified exchange environment furthermore these mechanisms dominate known truthful bundle single unit mechanisms with higher efficiency lower buying prices and higher selling prices

efficient mechanisms for bilateral trading we consider bargaining problems between one buyer and one seller for a single object the seller s valuation and the buyer s valuation for the object are assumed to be independent random variables and each individual s valuation is unknown to the other we characterize the set of allocation mechanisms that are bayesian incentive compatible and individually rational and show the general impossibility of ex post efficient mechanisms without outside subsidies for a wide class of problems we show how to compute mechanisms that maximize expected total gains from trade and mechanisms that can maximize a broker s expected profit journal of economic literature classification number 026

optimal incentive contracts under inequity aversion we analyze the classic moral hazard problem with the additional assumption that agents are inequity averse the presence of inequity aversion alters the structure of optimal contracts when the concern for equity becomes more important there is convergence towards linear sharing rules the sufficient statistics result is violated depending on the environment contracts may be either overdetermined i e include non informative performance measures or incomplete i e neglect informative performance measures finally our model delivers a simple rationale for team based incentives implying wage compression 2010 elsevier inc

bargaining in legislatures bargaining in legislatures is conducted according to formal rules specifying who may make proposals and how they will be decided legislative outcomes depend on those rules and on the structure of the legislature although the social choice literature provides theories about voting equilibria it does not endogenize the formation of the agenda on which the voting is based and rarely takes into account the institutional structure found in legislatures in our theory members of the legislature act noncooperatively in choosing strategies to serve their own districts explicitly taking into account the strategies members adopt in response to the sequential nature of proposal making and voting the model permits the characterization of a legislative equilibrium reflecting the structure of the legislature and also allows consideration of the choice of elements of that structure in a context in which the standard institution free model of social choice theory yields no equilibrium

inequity aversion may increase inequity inequity aversion models have been used to explain equitable payoff divisions in bargaining games i show that inequity aversion can actually increase the asymmetry of payoff division if unanimity is not required this is because responders may be willing to accept a lower share rather than risk being left out inequity aversion may also affect comparative statics the advantage of being the proposer can decrease as players become more impatient game theory usually assumes that players care only about their own material payoffs this hypothesis is clearly refuted by the experimental evidence in the ultimatum and related games see camerer 2003 for a recent survey inequity aversion theories have been developed in order to account for the stylised facts observed in the laboratory see fehr and schmidt 1999 and bolton and ockenfels 2000 inequity aversion means that people are willing to give up some material payoffs in order to achieve more equitable outcomes inequity averse responders prefer to reject small offers in the ultimatum game and the proposers anticipating this make higher offers in this article i examine the implications of inequity aversion for bargaining games in which unanimity is not required e g legislative bargaining games and show that it may lead to a more inequitable outcome than would occur with selfish preferences the leading model of legislative bargaining is due to baron and ferejohn 1989 in this model n symmetric players must divide a budget by simple majority each player has an equal chance of being chosen to propose a division of the budget once a proposal is made the remaining players vote yes or no if a majority of the players supports the proposal it is implemented and the game ends otherwise the procedure is repeated this model predicts that minimal winning coalitions will form and that the proposer will receive a disproportionate share of the proceedings thus the equilibrium of the baron ferejohn model with selfish preferences exhibits a substantial amount of inequity some players are excluded almost half of them if the decision rule is simple majority and the proposer receives a substantial share more than half of the total payoff if the decision rule is simple majority the advantage of the proposer increases as players become more impatient or more risk averse the baron ferejohn model has led to many applications and extensions 1 in its simplest form it assumes that parties are selfish risk neutral and only concerned with their share of cabinet posts as opposed to policy the predictions of the model under these assumptions have been tested by ansolabehere et al 2005 using data on the

national systems of biotechnology innovation complex interdependence in the global system this paper explores the relationship between national institutional context and the development of biotechnology in the united states united kingdom japan and germany national patterns in biotechnology r d are linked to the configuration of county specific institutional features into a system of innovation which supports or impedes the accumulation and diffusion of knowledge between the scientific and industrial communities building on this comparative analysis it is argued that the particular characteristics of national systems of biotechnology innovation form the basis for complex interdependence within the global system through international technological cooperation and the cross border adoption and adaptation of institutional forms and practices implications for national technological advantage and the stability of national institutional systems are discussed

work history and later life labor force participation evidence from a large telecommunications firm this study examines the relationship between later life labor force participation and work history survey data on 1 805 bell canada early retirees show that 40 returned to work of whom 17 took full time employment 51 took part time employment and 32 became self employed return to work was positively related to work attachment and tenure in the last job and negatively related to having been in a non managerial occupation and lacking upward career mobility those with high attachment to work as measured by responses to several survey questions were more likely to return to full time employment than to retire clerical workers were less likely than managers to choose part time employment over retirement both lateral versus upward mobility in the last job and high work attachment were negatively related to the choice of self employment over retirement

unions pension wealth and age compensation profiles this paper examines the effect of unions on both the magnitude and distribution of pension benefits an analysis of experience during 1973 79 under a sample of defined benefit plans shows that beneficiaries retire at an earlier age under collectively bargained plans than under other plans receive larger benefits when they retire and receive larger increases in their benefits after they retire also benefit differentials within and across cohorts of retirees are smaller among union than nonunion beneficiaries the average union nonunion differential is therefore greater in total compensation wages plus pension benefits than in wages alone because pension benefits grow more rapidly with years of service in the nonunion sector however the total compensation differential narrows with age more quickly than the wage differential

do pensions increase the labor supply of older men this paper investigates the relationship between pension coverage and the retirement behavior of older men pensions are associated with higher work involvement for males in their late fifties and early sixties but with lower rates of job holding for those aged 65 69 age of entry into pension employment is shown to be positively correlated with future labor supply when combined with evidence on age specific changes in labor force participation rates this pattern casts doubt on the hypothesis that broadened pension coverage explains a substantial portion of the trend towards earlier male retirement

a bargaining model of collective choice we present a general model of legislative bargaining in which the status quo is an arbitrary point in a multidimensional policy space in contrast to other bargaining models the status quo is not assumed to be bad and delay may be pareto efficient we prove existence of stationary equilibria the possibility of equilibrium delay depends on four factors risk aversion of the legislators the dimensionality of the policy space the voting rule and the possibility of transfers across districts if legislators are risk averse if there is more than one policy dimension and if voting is by majority rule for example then delay will almost never occur in one dimension delay is possible if and only if the status quo lies in the core of the voting rule and then it is the only possible outcome this core selection result yields a game theoretic foundation for the well known median voter theorem our comparative statics analysis yield two noteworthy insights i if the status quo is close to the core t hen equilibrium policy outcomes will also be close to the core a moderate status quo produces moderate policy outcomes and ii if legislators are patient then equilibrium proposals will be close to the core legislative patience leads to policy moderation

changes in pension incentives through time a common assumption in the compensation and retirement literature often necessitated by lack of data is that company sponsored pensions are static institutions the present paper a study of the pension plans at 14 companies for the years 1960 1970 and 1980 challenges this assumption showing that pension schemes are actually quite dynamic over time specifically the authors find that in 1960 all 14 pension plans tended to reward delayed retirement but by 1980 many of the union plans actively encouraged early retirement nonunion plans in the sample however rewarded deferred retirement in all three years the observed changes in pension incentives may have resulted in part from statutory increases in the age at which workers can be forced to retire by an employer

simultaneous offers bargaining with a mediator abstract an arbitrator is often introduced into bargaining to avoid disagreement the arbitrator s role is to impose some agreement when negotiators cannot reach an agreement however in models with an arbitrator a fair agreement for negotiators is eliminated from equilibrium outcomes if the arbitrator is biased to avoid disagreement without eliminating the achievability of a fair agreement in equilibrium we consider introducing a mediator while an arbitrator imposes an agreement a mediator can only give advice we analyze a simultaneous offers bargaining model with a mediator and obtain the following desirable results first disagreement is not supported as an outcome of a stationary subgame perfect equilibrium sspe second even if a mediator is biased the fair agreement in the sense of the nash bargaining solution nbs is always one of the sspe agreements finally if a mediator is fair negotiators always reach an agreement with the nbs in sspe

the reeded edge and the phillips curve money neutrality common knowledge and subjective beliefs abstract i present a simple two person auction model in which a seller and a buyer make bids in terms of money however the value of a unit of money is uncertain i show 1 a monetary revaluation has purely nominal effects if and only if it is common knowledge 2 if seller and buyer have identical beliefs making the value of money common knowledge maximizes total gains from trade 3 if seller and buyer are equally well informed and have identical beliefs then monetary revaluations have no net effect 4 when the seller knows the value of money but the buyer does not the expected utilities of both seller and buyer are proportional to 1 1 2 where is the standard deviation of the value of money expressed as a fraction of the mean and 5 when beliefs are subjective monetary policy can improve total gains from trade as in friedman s explanation of the phillips curve and an optimal level of inflation can be determined journal of economic literature classification numbers c78 e52

bargaining under incomplete information this paper presents and analyzes a bargaining model of bilateral monopoly under uncertainty under the bargaining rule proposed the buyer and the seller each submit sealed offers that determine whether the good in question is sold and the transfer price the nash equilibrium solution of this bargaining game implies an offer strategy of each party that is monotonic in its own reservation price and depends on its assessment of the opponent s reservation price issues of relative bargaining advantage and efficiency are examined for a number of special cases finally we discuss the appropriateness of the nash solution concept

bargaining under incomplete information fairness and the hold up problem in the hold up problem incomplete contracts cause the proceeds of relation speciflc investments to be allocated by ex post bargaining the present paper investigates the e ciency of incomplete contracts if individuals have heterogeneous preferences implying heterogeneous bargaining behavior and equally important preferences are private information as the sunk investment costs can thus potentially signal preferences they can in uence beliefs and consequently bargaining outcomes the necessities of signalling are shown to generate very strong investment incentives these incentives are based on the desire not to reveal information that is unfavorable in the ensuing bargaining after flnding all perfect bayesian equilibria in pure strategies the paper derives the necessary and su cient conditions under which it is optimal to invest and trade e ciently

why should majority voting be unfair the common use of majority rule in group decision making is puzzling in theory it inequitably favors the proposer and paradoxically it disadvantages voters further if they are inequity averse in practice however outcomes are equitable the present paper analyzes data from a novel experimental design to identify the underlying social preferences our experiment compares one shot and indefinite horizon versions of random proposer majority bargaining the baron ferejohn game which allow us to disentangle behaviors compatible with altruism inequity aversion and reference dependent altruism most subjects are classified as reference dependent altruists around 10 are inequity averse subjects are egoistic when their payoff is below their reference point they become efficiency concerned when satisfied and the reference point is either the ex ante expectation or the opponent s payoff finally we successfully test rda out of sample on a number of distribution and bargaining games from three seminal social preference experiments

legislative bargaining with teams abstract we study legislative bargaining with two person teams versus individuals teams come closer to the predictions of the stationary subgame perfect equilibrium passing minimum winning coalitions mwcs more often and having significantly more proposer power the increase in proposer power results from increased numbers of mwcs along with increased proposer power within an mwc we investigate the driving forces behind teams coming closer to the theoretical predictions the results favor their greater insightfulness as opposed to being more aggressive or more selfish

durable goods monopoly with incomplete information this article reconsiders the durable goods monopoly problem when the monopolist s marginal cost is private information we show that the coase conjecture implies the no trade theorem in any equilibrium in which the lowest cost seller s initial offer approaches her marginal cost the aggregate probability of trade must vanish however we also construct non coasean equilibria which approximate the unique outcome of the rental version of the same model these stationary equilibria are comparatively efficient the results are equally applicable to the mathematically equivalent problem of sequential bargaining with two sided incomplete information where one party makes all the offers what are the consequences of monopoly in a market for a durable good present day understanding of this question divides into two strands of thought first the monopolist may effectively lack any ability to credibly precommit on her future output under this scenario the price will drop almost instantaneously to marginal cost apparently yielding the efficient outcome normally associated with perfect competition 1 second the monopolist may possess an explicit e g leasing the good rather than selling2 or implicit e g the maintenance of reputation3 device enabling her to adhere to an output restriction under such circumstances price will be maintained at a non competitively high level suggesting an outcome fraught with all the inefficiency of classical monopoly the conclusions of the first paragraph rest on analysis of a standard model in which the monopolist s payoff function is taken to be common knowledge a single firm with known constant marginal cost sells an infinitely durable good to consumers with a known distribution of valuations for the good 4 the firm has the ability to revise its posted price

providing health care benefits in retirement this volume highlights many of the special health insurance problems facing the elderly and some of the solutions that the reform process must consider the contributors to this book represent the diverse professions involved in providing health care security to older americans policymaking and academic economists actuaries statisticians physicians employee benefit plan sponsors labor union representatives attorneys and health care policy specialists issues central to the debate are the elderly population s special risk of health problems and its precarious position as health reform proposals unfold the evolving process of reforming our health care system must reflect the politics and economics of retiree health care coverage no other book includes such a diverse cross section of research and opinion about this extremely expensive and valuable benefit providing health care benefits in retirement will be of interest to students scholars and professionals in areas of human resources economics health insurance and employee benefits

the role of pensions in the labor market a survey of the literature because employer sponsored group pension plans entail agreements between workers and their employers explicitly linking future payment and employment they offer an unusual window into long term employment relationships this review of recent research on pensions explores how pensions influence employee compensation retirement turnover and other matters central to the determination of labor s price and quantity over time the authors also outline some unanswered questions and difficult to reconcile findings because the pension promise involves an explicit and relatively well documented set of statements regarding future contingent payment and employment an examination of the design and operation of employersponsored group pension plans can yield important insights into the long term employment relationship specifically pension research illuminates some important labor market questions in two ways it offers insight into an important element of compensation in its own right and it furthers our understanding of labor markets in which long term

gender differences in pensions the causes of gender differences in pensions are examined for retirees and employees using the 1982 newly entitled beneficiary survey and the 1979 and 1988 may current population surveys for both retirees and the employed population much of the gender gap in coverage is accounted for by gender differences in labor market characteristics while children and marriage have a negative effect on female coverage among retirees even after controlling for labor market characteristics the negative effect is not observed among more recent groups of female employees finally recent convergence of male and female labor market characteristics contributed to a decline in the coverage gap during the 1980s

legislative bargaining with heterogeneous disagreement values theory and experiments we study a legislative bargaining game in which failure to agree in a given round may result in a breakdown of negotiations in that case each player receives an exogenous disagreement value we characterize the set of stationary subgame perfect equilibria under all q majority rules under unanimity rule equilibrium payoffs are strictly increasing in disagreement values under all less than unanimity rules expected payoffs are either decreasing or first increasing and then decreasing in disagreement values we conduct experiments involving three players using majority and unanimity rule finding qualitative support for several but not all of our main predictions having a high disagreement value is indeed an advantage under unanimity under majority the player with the highest disagreement value is more likely to be excluded but this does not consistently result in a lower average payoff

a three player dynamic majoritarian bargaining game this file contains two sets of calculations first we report the calculations of demands and continuation values of proposition 1 second the mixing probabilities of proposition 1 are shown to be well defined

do retirement dreams come true the effect of unanticipated events on retirement plans analyzing data from the retirement history study the authors find that the retirement plans of male workers aged 58 63 in 1969 were significantly affected by unanticipated events over the next decade specifically unanticipated increases in social security wealth induced retirement earlier than originally planned as did deterioration in personal health whereas the recession of the 1970s tended to delay retirement this evidence that policy changes do affect retirement behavior in systematic ways provides support for the decision by congress to defer until the turn of the century the application of several important provisions of the 1983 amendments to the social security act

technological innovation in a corporatist state the case of biotechnology in the federal republic of germany abstract this article examines a decade of federal support for biotechnology in the federal republic of germany in order to determine the impact of liberal corporatist patterns of decision making on industrial policy for this purpose industrial policy is taken to include both public initiatives aimed at promoting the new technology and those designed to control its risks two distinct forms of corporatism are discernible in this case study in the first the principal actors are large businesses the state and to a lesser extent the academic reserch community these actors have been most influential in defining the scope and specific objectives of the federally funced r d program in biotechnology a more traditional form of corporatism including organized labor has been engaged in the debate on regulatory policies in the case of biotechnology these patterns of corporatism have created the consensus necessary for the adoption of a comprehensive r d program but have perpetuated certain barriers to technological innovation in particular the reliance on established peak organizations to formulate policy has discouraged structural changes that could have enhanced germany s early competitiveness in biotechnology incrementalism has produced more favorable results in the context of regulatory policy by permitting control strategies to develop in step with technological progress

noncooperative foundations of the nucleolus in majority games abstract this paper studies coalition formation payoff division and expected payoffs in a divide the dollar by majority rule game with random proposers a power index is called self confirming if it can be obtained as an equilibrium of the game using the index itself as probability vector unlike the shapley value and other commonly used power indices the nucleolus has this property the proof uses a weak version of kohlberg s siam j appl math 20 1971 62 balancedness result reinterpreting the balancing weights as probabilities in a mixed strategy equilibrium

overcoming incentive constraints by linking decisions consider a bayesian collective decision problem in which the preferences of agents are private information we provide a general demonstration that the utility costs associated with incentive constraints become negligible when the decision problem is linked with a large number of independent copies of itself this is established by defining a mechanism in which agents must budget their representations of preferences so that the frequency of preferences across problems mirrors the underlying distribution of preferences and then arguing that agents incentives are to satisfy their budget by being as truthful as possible we also show that all equilibria of the linking mechanisms converge to the target utility levels the mechanisms do not require transferable utility or interpersonal comparisons of utility and are immune to manipulations by coalitions

on public good provision mechanisms with dominant strategies and balanced budget abstract consider a mechanism for the binary public good provision problem that is dominant strategy incentive compatible dsic ex post individually rational epir and ex post budget balanced epbb it is well known that if there are only two agents then any such mechanism must have a threshold or fixed cost sharing form providing the public good if and only if both agents have values that are at least their respective thresholds when there are more than two agents there are mechanisms that are dsic epir and epbb that are not of the threshold form any dsic epir and epbb mechanism that additionally satisfies that the lowest types expect zero net utility from participating are again of the threshold form this additional condition arises endogenously when maximizing expected welfare subject to dsic epir and epbb

greasing the wheels pork and public goods contributions in a legislative bargaining experiment abstract when a legislature bargains over funds for pork and public goods and the funds come from a common budget increased spending on the public good means greater payoff equality since it comes at the expense of pork this paper explores whether inequity aversion then leads to greater public goods spending using both theory and a laboratory experiment we show inequity aversion generally decreases inequity within a coalition by limiting proposer power however this does not always mean greater public goods contributions because the types of proposals passed change in equilibrium in addition the experiment investigates the theoretical prediction that increasing players relative preference for pork can increase public goods contributions we show that while average public goods contributions remain unchanged there is evidence at the individual level that subjects hold out for higher public goods contributions as predicted

explaining pension dynamics whether and how the labor market will adapt to anticipated changes in the workforce age distribution depends on how able companies are to induce desired turnover patterns among older and younger employees this paper contends that companies can and will use pension plan provisions as powerful incentives to induce people to remain on their jobs and perhaps even more importantly to leave at later ages a longitudinalfile of collectively bargained pension plans gathered by the united states bureau of labor statistics is examined empirically we find dramatic increases in benefit levels reductions in early normal and deferred retirement ages and declines in the age at which pension present values peak with retirement after that age penalized several explanations for these observed pension outcomes are evaluated empirically we believe that these findings indicate how employer provided pensions can and will play an important role in helping companies induce desired turnover patterns as the workforce ages

cartel enforcement with uncertainty about costs what cartel agreements are possible when firms have private information about production costs in order for a cartel agreement to work it must take into account the incentives for firms to misrepresent their cost information and it must provide sufficient reward so that no firm wishes to defect for private cost uncertainty we characterize the set of cartel agreements with side payments that can be supported as bayesian nash equilibria we show that if defection results in either cournot or bertrand competition the incentive problems in large cartels are severe enough to prevent the cartel from achieving the monopoly outcome in contrast with common cost uncertainty the incentive problems become less severe in large cartels allowing perfect collusion

public goods with ambiguity in large economies abstract we consider a canonical problem in economics the financing and provision of a public good mailath and postlewaite 1990 show that under natural information and enforcement frictions the probability of providing the public good falls to zero as the population size goes to infinity even if provision of the public good is efficient in this paper we allow agents to have multiple prior beliefs about others valuations and to make choices that reflect their aversion to that ambiguity we show that as long as each agent s set of priors contains some distribution of valuations under which provision is inefficient it is possible to find a mechanism in large economies that finances provision of the public good

mediation and peace this article applies mechanism design to the study of international conflict resolution standard mechanisms in which an arbitrator can enforce her decisions are usually not feasible because disputants are sovereign entities nevertheless we find that this limitation is inconsequential despite only being capable of making unenforceable recommendations mediators can be equally effective as arbitrators by using recommendation strategies that do not reveal that one player is weak to a strong opponent a mediator can effectively circumvent the unenforceability constraint this is because these strategies make the strong player agree to recommendations that yield the same payoff as arbitration in expectation this result relies on the capability of mediators to collect confidential information from the disputants before making their recommendations simple protocols of unmediated communication cannot achieve the same level of ex ante welfare as they preclude confidentiality

voting weights and formateur advantages in the formation of coalition governments over the last two decades a large and important literature has emerged that uses game theoretic models of bargaining to study legislative coalitions to test key predictions of these models we examine the composition of coalition governments from 1946 and 2001 these predictions are almost always expressed in terms of parties minimal integer voting weights we calculate such weights for all parliamentary parties in addition we develop a statistical model that nests the predictions of many of these models of the distribution of posts we find that for parties that join but did not form the government there is a linear relationship between their share of the voting weight in parliament and their share of cabinet posts the party that forms the government the formateur receives a substantial bonus relative to its voting weight the latter finding is more consistent with proposal based bargaining models of coalition formation and suggests that parties gain disproportionate power not because of their size but because of their proposal power

bargaining and inequity aversion on the efficiency of the double auction abstract in a bargaining setting with asymmetrically informed inequity averse parties a fully efficient mechanism i e the double auction exists if and only if compassion is strong less compassionate parties do not trade in the double auction in the limit of strong envy

the contrasting roles of government in the development of biotechnology industry in the us and germany abstract during the last 30 years biotechnology development has charted different paths in the us and in germany even though in germany federal support programs started very early to target biotechnology the innovative performance of this sector has been lagging behind that of the us where the federal support was less direct this article compares the two national science and technology s t policies and analyzes the political economic and social factors that determined the different paths the paper concludes that an indirect s t policy that tries to spread the factors thereby enabling a preferable economic ecology for biotech development is more successful than an interventionist policy political action however is limited and can only enhance science and technology development if the policies mesh with the social and economic dispositions

a noncooperative coalitional bargaining game with random proposers abstract we extend the stahl rubinstein s alternating offer model ton person coalitional bargaining the key feature of the model is the random selection of proposers at every round no delay of agreement occurs in equilibrium for a super additive game in contrast to the fixed order model of chatterjeeet al rev econ stud 60 1993 463 477 when the discount factor of future payoffs is sufficiently high the agreement on the grand coalition is reached if and only if it has the largest value per capita among all coalitions moreover in the limit as the discount factor goes to one all players divide equally the value of the grand coalition regardless of who makes a proposal journal of economic literatureclassification numbers c72 c73 c78

models for iterative multiattribute procurement auctions multiattribute auctions extend traditional auction settings to allow negotiation over nonprice attributes such as weight color and terms of delivery in addition to price and promise to improve market efficiency in markets with configurable goods this paper provides an iterative auction design for an important special case of the multiattribute allocation problem with special preferential independent additive structure on the buyer value and seller costs auction additive discrete provides a refined design for a price based auction in which the price feedback decomposes to an additive part with a price for each attribute and an aggregate part that appears as a price discount for each supplier in addition this design also has excellent information revelation properties that are validated through computational experiments the auction terminates with an outcome of a modified vickrey clarke groves mechanism this paper also develops auction nonlinear discrete for the more general nonlinear case a particularly simple design that solves the general multiattribute allocation problem but requires that the auctioneer maintains prices on bundles of attribute levels

toward explaining earlier retirement after 1970 this study investigates why after 15 years of virtual stability u s labor force participation rates for men aged 55 to 64 fell by approximately 20 from 1970 through 1986 the author s analysis of rule changes in the social security system and pension plans suggests that part of this reduction was caused by an increase in social security benefits by almost 50 during the 1970s half of which is not reflected in legislation which worked to create unexpected wealth effects similar to those that characterized the system during the early 1950s but an equally important cause was a widespread change in private pension plan rules toward encouraging earlier retirement these conclusions challenge the common notion that earlier retirement is largely a supply side phenomenon

seniority in legislatures we construct a stochastic game model of a legislature with an endogenously determined seniority system we model the behavior of the legislators as well as their constituents in an infinitely repeated divide the dollar game each legislative session must make a decision on redistributional issues modeled as a divide the dollar game however each session begins with a vote in which the legislators decide by majority rule whether or not to impose on themselves a seniority system legislative decisions on the redistributional issues are made by the baron ferejohn rule an agenda setter is selected by a random recognition rule which in our model is a function of the seniority system selected the agenda setter makes a proposal on redistributional issues and the legislature then votes whether to accept or reject the agenda setters proposal if the legislature rejects the proposal another agenda setter is randomly selected and the process is repeated if the legislature accepts the proposal the legislative session ends and the voters in each legislative district vote whether to retain their legislator or throw it out of office the voters verdict determines the seniority structure of the next period legislature we find a stationary equilibrium to the game having the property that the legislature imposes on itself a non trivial seniority system and that legislators are always reelected