dynamic animal economics market equilibrium dynamics of herd inventory management are derived for homogenous female populations short run supply is backward bending in response to permanent changes in demand and is rising in response to transitory changes in demand increasing inventories are associated with high and falling prices and decreasing inventories with low and rising prices but there is no market instability in this these unusual intertemporal substitution effects follow from both rational expectations and appropriately formulated cobweb models and go part of the way toward explaining hog and cattle inventory cycles

on the early holocene foraging to early agriculture we consider a world in which the mode of food production foraging or agriculture is endogenous and in which technology grows exogenously within a model of coalition formation we allow individuals to form co operative communities bands of foragers or farmers rationally at the lowest levels of technology equilibrium entails the grand coalition of foragers a co operative structure which avoids over exploitation of the environment but at a critical state of technology the co operative structure breaks down through an individually rational splintering of the band at this stage there can be an increase in work and through the over exploitation of the environment a food crisis in the end technological growth may lead to a one way transition from foraging to agriculture

sticks and carrots two incentive mechanisms supporting intra group cooperation abstract in this note we introduce two distinct incentive mechanisms that support dynamic intra group cooperation in the context of prisoner s dilemma payoffs rewards for cooperating and punishments for defection where the rewarding or punishing party may be outside the relationship

endogenous formation of coalitions with composite goods abstract we construct a model of endogenous formation of coalitions when three goods are necessary for a composite good and composite goods are substitutes for each other this analysis extends economides and salop s journal of industrial economics xl 1992 105 model of composite goods where two goods are necessary we analyze the welfare implications of coalition structure and investigate which coalition structure leads to the highest social welfare the paper investigates whether the most desirable coalition structure represents an equilibrium and provides a sufficient condition for the socially efficient coalition structure to be a stable nash coalition structure

cattle cycles heterogeneous expectations and the age distribution of capital abstract this paper builds a dynamic forward looking model describing the approximate 10 year cattle cycle the theoretical model improves on existing models by 1 keeping track of the age distribution of the capital stock 2 allowing for heterogeneous expectations and 3 recognizing that cow calf operators make investment decisions on both the cow and calf margins the structural parameters are estimated with gmm techniques and used to produce impulse response functions which show that the model endogenously propagates shocks to produce 10 year cattle cycles without relying on shocks that hit every 10 years focusing solely on several major macroeconomic shocks i also show that the model is capable of matching the timing and amplitude of the u s cattle cycle

the dynamic linkages between crude oil and natural gas markets abstract the time varying price spillovers between natural gas and crude oil markets for the period 1994 to 2014 are investigated contrary to earlier research we show that in a large part of our sample the natural gas price leads the price of crude oil with price spillover effects lasting up to two weeks this result is robust to a battery of tests including out of sample forecasting exercises however after 2006 we detect little price dependencies between these two energy commodities these findings arise due to a conjunction of both demand and supply side shocks arising from both natural and economic events including hurricane katrina the tohoku earthquake and the global financial crisis as well as infrastructure and technological improvements the increased use of new technologies such as hydraulic fracking for the extraction of gas and oil in particular affected supply in the latter part of the study we conclude that the long term relation present in the early part of the sample has decoupled such that price determination of these two energy sources is now independent

balanced contributions for tu games with awards and applications abstract calleja et al calleja p borm p hendrickx r 2005 multi issue allocation situations european journal of operational research 164 730 747 introduced multi issue allocation situations with awards in this paper we extend the classical model of cooperative games with transferable utility to the cooperative games with transferable utility and awards we define a run to the bank rule for cooperative games with transferable utility and awards and characterise it in terms of a property of balanced contributions we apply our main result to bankruptcy problems and multi issue allocation situations with awards

political coalition breaking and sustainability of policy reform abstract this paper examines the need and potential for coalition breaking in policy reform efforts related to agriculture and the environment the objective is to consider traditional policy tools that can break existing political coalitions given the powerful noncompetitive role of strong interest groups such as government bureaucracy and large trading organizations choice of the policy mix is modeled as a cooperative game a modification of the nash bargaining solution is used to endogenize coalition formation this framework is then used to examine the potential for an external development agency to promote environmental interests in the policy formation process the results explain how in some countries a small increase in strategic aid may achieve a major breakthrough in policy reform even if past activities have been unproductive and how in other countries a major increase in aid may be fruitless

the proportional shapley value and applications abstract we study a non linear weighted shapley value shapley 1953b for cooperative games with transferable utility in which the weights are endogenously given by the players stand alone worths we call it the proportional shapley value since it distributes the harsanyi dividend harsanyi 1959 of all coalitions in proportion to the stand alone worths of its members we show that this value recommends appealing payoff distributions in several applications among which a land production economy introduced in shapley and shubik 1967 although the proportional shapley value does not satisfy the classical axioms of linearity and consistency hart and mas colell 1989 the main results provide comparable axiomatic characterizations of our value and the shapley value by means of weak versions of these two axioms these characterizations rely on another result which states that there exists a unique extension of a value defined on games that are additive except possibly for the grand coalition to the set of all games in the much larger class we consider moreover our value inherits several well known properties of the weighted shapley values

whose deletion does not affect your payoff the difference between the shapley value the egalitarian value the solidarity value and the banzhaf value abstract this study provides a unified axiomatic characterization method of one point solutions for cooperative games with transferable utilities any one point solution that satisfies efficiency the balanced cycle contributions property bcc and the axioms related to invariance under a player deletion is characterized as a corollary of our general result bcc is a weaker requirement than the well known balanced contributions property any one point solution that is both symmetric and linear satisfies bcc the invariance axioms necessitate that the deletion of a specific player from games does not affect the other players payoffs and this deletion is different with respect to solutions as corollaries of the above characterization result we are able to characterize the well known one point solutions the shapley egalitarian and solidarity values in a unified manner we also studied characterizations of an inefficient one point solution the banzhaf value that is a well known alternative to the shapley value

oil and gas markets in the uk evidence from a cointegrating approach the paper examines the relationship between uk wholesale gas prices and the brent oil price over the period 1996 2003 in order to investigate whether oil and gas prices decoupled during this period as orthodox gas market liberalisation theory suggests tests for unit roots and cointegration are carried out and it is discovered that a long run equilibrium relationship between uk gas and oil prices exists moreover this relationship pre dates the opening of the uk mainland europe interconnector following a recursive methodology hansen h and johansen s 1999 some tests for parameter constancy in cointegrated var models econometrics journal 2 306 333 it was found that the cointegrating relationship is present throughout the sample period however the long run solutions seem to be more volatile evidence is provided that the short run relationship is linear and impulse response functions are used to examine the effects that a shock in oil would have on gas these findings do not support the assumption that gas prices and oil prices decouple

a theory of endogenous coalition structures consider an environment with widespread externalities and suppose that bind ing agreements can be written we study coalition formation in such a setting our analysis proceeds by defining on a partition function an extensive form bargaining game we establish the existence of a stationary subgame perfect equilibrium for such a game our main results are concerned with the characterization of equilib rium coalition structures we develop an algorithm that generates under certain conditions an equilibrium coalition structure our characterization results are especially sharp for symmetric partition functions in particular we provide a uniqueness theorem and apply our results to a cournot oligopoly journal of economic literature classification numbers c71 c72 c78 d62 q 1999 academic press

the relationship between regional natural gas markets and crude oil markets from a multi scale nonlinear granger causality perspective this study first decomposes the daily returns of regional gas and crude oil at different time scales using the ensemble empirical mode decomposition eemd method it then investigates the causality relationship between each pair of components at the different time scales by employing the linear and nonlinear granger causality tests for the original returns series this study finds that unidirectional linear granger causality exists from crude oil markets to north american and european gas markets however for nonlinear characteristics the crude oil and regional gas markets exhibit bidirectional nonlinear granger causality on the medium term time scale a bidirectional nonlinear spillover effect is found between the markets the long term trends for the markets suggest a significant linear relationship however no nonlinear spillover effect is found between the crude oil and regional gas markets

mergers and the importance of fitting well abstract this paper highlights the importance of partners fitting well for a stable merger to arise if all firms fit perfectly no stable merger can be performed on the contrary if not all firms are compatible a stable merger may arise

do binding agreements solve the social dilemma we investigate whether binding agreements can provide a solution to the social dilemma that arises in the presence of pure public goods by signing a binding agreement players can prevent free riding by the contributors to a public good however a well known theoretical result is that the outcome of the endogenous formation of agreements is not necessarily efficient in our setting the individual level of contribution to the public good increases with the size of the coalition reaching an agreement and the global coalition is always the socially optimal structure agreements form sequentially and the equilibrium outcome is an asymmetric structure which consists of two coalitions our experiment therefore lends force to the theoretical result that outcomes may be inefficient in fact we observe an outcome which is even less efficient than that predicted by the equilibrium agreement structure however it seems that when subjects reach agreements they do so with the intention of cooperating rather than free riding furthermore it seems that they learn to cooperate over time and reach the global agreement more often towards the end of sessions keywords

forming coalitions and the shapley ntu value a simple protocol for coalition formation is presented first an order of the players is randomly chosen then a coalition grows by sequentially incorporating new members in this order the protocol is studied in the context of non transferable utility ntu games in characteristic function form if weighted utility transfers are feasible when everybody cooperates then the expected subgame perfect equilibrium payoff allocation anticipated before any implemented game is the shapley ntu value

global connectedness of msci energy equity indices a system wide network approach abstract the paper utilizes msci energy indices of 21 major energy consumer economies as a full sample to serve as a proxy indicator of the energy sector of these economies and then studies the squared return spillover interlinkages among them for the pre and post global financial crisis of 2008 and during the crude oil crises of 2008 09 and 2014 15 the squared return spillover connectedness has been analyzed on intra and inter regional basis based on the segregation of indices into regions viz europe north and latin america and asia pacific and africa the connectedness interlinkage has been quantified deploying generalized error variance decomposition gevd and the results have been visualized via network diagrams the result shows that the return spillover connectedness is significant and is more prominent in some economies primarily in europe and north america for the full sample however post crisis the squared return spillover connectedness of emerging economies of asia pacific has witnessed a boost surprisingly russia as a major oil exporter sends moderate shocks system wide in the post crisis era implying economic sanctions downplay the influence it could make in the energy sector during the crisis year though spillover risk transmission is high during the 2008 09 crisis it is more spread out during the 2014 15 crisis with the inclusion of the asia pacific emerging market energy indices

collusion exclusion and inclusion in random order bargaining this paper examines the profitability of three types of integration in a cooperative game solved by a random order value e g the shapley value collusion between players i and j is a contract merging their resources in the hands of one of them say i this contract can be represented as a combination of exclusion which lets i exclude j s resource but not use it himself and inclusion which lets i use j s resource but not exclude j from it this representation yields a third difference condition on the characteristic function that determines the profitability of collusion generalizing existing results for specific games namely collusion is profitable unprofitable when the complementarity of the colluding players is reduced increased by other players

the impact of the north american shale gas revolution on regional natural gas markets evidence from the regime switching model this paper investigates the impact of the north american shale gas revolution on price movement regimes in the north american and european gas markets using the markov regime switching model it then measures price spreads between oil and gas from 1998 to 2015 to identify the impact of the revolution on the relationship between oil and regional gas prices the results show that the typical movement regime of henry hub prices changes from slightly upward to sharply downward in addition the clear seasonal effect of henry hub prices has disappeared after the shale gas revolution the typical movement of national balancing point nbp prices has changed gradually from a sharply upward regime to the alternative regimes between sharply downward and slightly upward tending to follow oil prices this indicates that the shale gas revolution has had little impact on nbp price movement meanwhile henry hub prices have decoupled from wti prices while nbp and brent prices have continued to exhibit a long term equilibrium level around which they have swung in the short time frame since the shale gas revolution pertinent energy policy makers and energy market participants should pay attention to these changes and adjust their trade production and investment strategies accordingly

interfuel competition in the industrial sector of seven oecd countries abstract the purpose of this article is to present an analysis of interfuel substitution in the industrial sector of seven major oecd countries the united states canada japan germany france the united kingdom and italy over the 1960 1993 period translog models are used to provide estimates of price elasticities from annual data for each country results outline the weakness of price elasticities and changes in behaviour over the last 35 years and show evidence of asymmetric effects since the collapse of oil prices in 1986 substitution has stopped industrial energy demand and oil consumption have stagnated interfuel substitution is widely induced by events other than relative price changes energy policy political and institutional constraints changes in economic activity characteristics within individual country sectors

oil indexation market fundamentals and natural gas prices an investigation of the asian premium in natural gas trade abstract a heated debate has arisen over whether the asian premium i e higher prices in asia than elsewhere in natural gas trade is due to price discrimination or different market fundamentals determining the origin of this premium can help to guide the gas industries and policy makers in asia especially when the traditional oil indexed price mechanism fades away using a new systemic time series approach this paper explores the extent to which oil prices and market fundamentals contribute to variations in gas prices in japan the united states and germany we find clear cross country differences and time varying patterns gas prices are much less affected by supply and demand factors than oil prices in japan and germany whereas these factors are more important than oil prices in the us market which has a pricing hub through rolling windows and subsample analysis we discover that oil prices were important in japan and germany but the level of importance has declined significantly in recent years though the contribution of fundamentals does not change much the results show that asian gas prices are determined more by oil prices than by the market fundamentals thus the asian premium is more likely due to this oil indexed pricing mechanism rather than market fundamentals this suggests that developing asia s benchmark prices through trading hubs with a better reflection of regional specific fundamentals can lead to a more efficient allocation of gas resources

bidding for the surplus a non cooperative approach to the shapley value abstract we propose a simple mechanism to determine how the surplus generated by cooperation is to be shared in zero monotonic environments with transferable utility the mechanism consists of a bidding stage followed by a proposal stage we show that the subgame perfect equilibrium outcomes of this mechanism coincide with the vector of the shapley value payoffs we extend our results to implement the weighted shapley values finally we generalize our mechanism to handle arbitrary transferable utility environments the modified mechanism generates an efficient coalition structure and implements the shapley values of the super additive cover of the environment journal of economic literature classification numbers c71 c72

equilibrium binding agreements abstract we study equilibrium binding agreements the coalition structures that form under such agreements and the efficiency of the outcomes that result we analyze such agreements in a context where the payoff to each player depends on the actions of all other players thus a game in strategic form is a natural starting point unlike the device of a characteristic function explicit attention is paid to the behavior of the complementary set of players when a coalition blocks a proposed agreement a solution concept and its applications are discussed journal of economic literature classification numbers c70 c71

a one stage model of link formation and payoff division abstract in this paper we introduce a strategic form model in which cooperation structures and divisions of the payoffs are determined simultaneously we analyze the cooperation structures and payoff divisions that result according to nash equilibria strong nash equilibria and coalition proof nash equilibria we find that no cycle will be formed if a player claims a positive amount for the formation of one of its links and that a player does not necessarily profit from a central position in a cooperation structure journal of economic literature classification numbers c71 c72

crude oil risk forecasting new evidence from multiscale analysis approach fluctuations in the crude oil price allied to risk have increased significantly over the last decade frequently varying at different risk levels although existing models partially predict such variations so far they have been unable to predict oil prices accurately in this highly volatile market the development of an effective predictive model has therefore become a prime objective of research in this field our approach albeit based in part on previous research develops an original methodology in that we have created a risk forecasting model with the ability to predict oil price fluctuations caused by changes in both fundamental and transient risk factors we achieve this by disintegrating the multi scale risk structure of the crude oil market using variational mode decomposition normal and transient risk factors are then extracted from the crude oil price using variational mode decomposition and modelled separately using the quantile regression neural network qrnn model both risk factors are integrated and ensembled to produce the risk estimates we then apply our proposed risk forecasting model to predicting future downside risk level in three major crude oil markets namely the west taxes intermediate wti the brent market and the opec market the results demonstrate that our model has the ability to capture downside risk estimates with significantly improved precision thus reducing estimation errors and increasing forecasting reliability

strategy proofness and essentially single valued cores revisited abstract we consider general allocation problems with indivisibilities where agents preferences possibly exhibit externalities in such contexts many different core notions were proposed one is the individually rational core ir core whereby blocking is only allowed via allocations where the non blocking agents receive their endowments we show that if there exists an allocation rule satisfying individual rationality efficiency and strategy proofness then for any problem for which the ir core is non empty the allocation rule must choose an ir core allocation and all agents are indifferent between all allocations in the ir core we further show that the result cannot be generalized to supersets of the ir core we apply our result to housing markets coalition formation and networks

core existence in vertically differentiated markets we prove that a sufficient condition for the core existence in a n firm vertically differentiated market is that the qualities of firms products are equispaced along the quality spectrum this result contributes to see that a fully collusive agreement among firms in such markets is more easily reachable when product qualities are not distributed too asymmetrically along the quality ladder

the axiomatic approach to three values in games with coalition structure we present a unified framework for a broad class of values in transferable utility games with coalition structure including the owen coalitional value and two weighted versions with weights given by the size of the coalitions we provide three axiomatic characterizations using the properties of efficiency linearity independence of null coalitions and coordination with two versions of balanced contributions inside a coalition and weighted sharing in unanimity games respectively

on the stability of coalition structures abstract we resolve a seeming conflict between a non existence result on solutions to coalition formation in hedonic games barbera s gerber a 2007 a note on the impossibility of a satisfactory concept of stability for coalition formation games economics letters 95 85 90 and the universal existence of stable coalition structures in tu games under the value casajus a 2008 outside options component efficiency and stability games and economic behavior forthcoming doi 10 1016 j geb 2007 04 003

macro determinants of volatility and volatility spillover in energy markets abstract we analyze the time varying volatility and spillover effects in crude oil heating oil and natural gas futures markets by incorporating changes in important macroeconomic variables and major political and weather related events into the conditional variance equations we allow asymmetric responses to random disturbances in each market as well as to good and bad economic news related to the overall economy results show the presence of asymmetric effects in both random disturbances and macroeconomic variables a bidirectional volatility spillover effect is found between natural gas and crude oil and between the natural gas and heating oil markets crude oil volatility is found to increase following major political financial and natural events seasonality and day of the week effects are found in the crude oil and heating oil markets

the dynamic dependence of fossil energy investor sentiment and renewable energy stock markets abstract this study investigates the dynamic directional information spillover of return and volatility between the fossil energy market investor sentiment towards renewable energy and the renewable energy stock market using the connectedness network approach empirical results show that the spillover effects of the volatility system are generally stronger than that of the return system which suggest that risk transmission among the markets is more obvious in both systems the impact of the fossil energy market especially crude oil on the renewable energy stock market is greater than the impact of investor sentiment on the renewable energy stock market this finding shows that the renewable energy stock market is closely related to the fossil energy market furthermore the rolling window approach is adopted to examine the time varying information spillover among them the dynamic findings suggest that investor sentiment towards renewable energy can explain the return and volatility of renewable energy stock to a certain degree

does market timing contribute to the cattle cycle recent evidence suggests that cyclical cattle inventories are driven by exogenous shocks this article examines a second possible contributing factor to the cattle cycle a market timing effect that arises from individual attempts to maintain countercyclical inventories the model uncovers an important conceptual point to the extent that cycles are driven by exogenous shocks a representative producer should outperform one who maintains a constant inventory whereas for cycles induced by market timing a representative producer should underperform one with a constant inventory simulated net returns over 1974 98 reveal that a constant inventory manager significantly outperformed the representative u s producer which indicates that market timing influences the cattle cycle

proposal rights and political power in a canonical model of sequential collective bargaining over a divisible good we show that equilibrium expected payoffs are not restricted by players voting rights or their impatience for all monotonic voting rules and discount factors and for all divisions of the good among players there exists a stationary proposal making rule such that this division represents players expected payoffs in a stationary subgame perfect nash equilibrium in pure strategies the result highlights the significance of proposal rights in determining political power in collective deliberations t he purpose of this article is to further our understanding of political power in a committee environment we consider the problem of a group of two or more agents who must split a fixed divisible good agents cannot use physical force to divide this good our goal is to clarify the role and relative significance of other features of the political environment such as voting rights proposal rights agents patience etc in determining political power following shapley and shubik 1954 we gauge political power in terms of expected outcomes rather than a priori equate it with individual prerogatives 1 in that spirit political power is the share of the divisible good that agents can expect to obtain when their behavior conforms to an appropriately defined equilibrium notion 2 we model committee interaction using a canonical sequential bargaining game in each period a member of the committee is recognized with some probability that is fixed across periods and proposes a division of the good committee members then vote on the proposal if the proposal is approved in accordance with the underlying voting rule the proposed division is implemented and the

international fisheries agreements a game theoretical approach this paper surveys the application of game theory to the economic analysis of international fisheries agreements the relevance of this study comes not only from the existence of a vast literature on the topic but especially from the specific features of these agreements the emphasis of the survey is on coalition games an approach that has become prominent in the fisheries economics literature over the last decade it is shown that coalition games were first applied to international fisheries agreements in the late 1990s addressing cooperative issues under the framework of characteristic function games then progressively this cooperative approach was combined with non cooperative elements such as the stability analysis of the agreements finally partition function games which model coalition formation endogenously were introduced and became the standard approach to study the formation and stability of international fisheries agreements a key message that emerges from this literature strand is that self enforcing cooperative management of internationally shared fish stocks is generally difficult to achieve hence the international legal framework and regulations play a decisive role on ensuring cooperation over the use of these resources

on the core the weber set and convexity in games with a priori unions this paper deals with the concepts of core and weber set with a priori unions a la owen as far as we know the owen approach to games with a priori unions has never been studied from the coalitional stability point of view thus we introduce the coalitional core and coalitional weber set and characterize the class of convex games with a priori unions by means of the relationships between both solution concepts

an extension of the τ value to games with coalition structures abstract we introduce the coalitional value which is an extension of the value for tu games to games with a coalition structure we identify a class of tu games that satisfy the property that for every game in this class and every coalition structure on its player set it holds that the coalitional value can be defined for the corresponding game with a coalition structure we study properties of the coalitional value and provide an axiomatic characterization of this allocation rule we use the coalitional value to study bankruptcy problems and the determination of aircraft landing fees

participative democracy and local environmental issues the present paper deals with the management of environmental quality at the level of a city more precisely we propose two different contractualisms among citizens that allow them to reduce the polluting emissions caused by their consumption of both a private and a collective good in the first contractualism the mayor proposes to citizens to establish neighbourhood committees they have the responsibility of defining the total amount of polluting emission by private and public transportation means in their neighbourhood it comes out that the mediation of the neighbourhood committees brings out a lower total pollution than in the case where each individual citizen acts on his own interest however the emission level brought out by the neighbourhood committees is not pareto optimal on the other hand extending the first coalitional game by a supplementary stage focused on bargaining between the neighbourhood committees allows us to define a participative democracy procedure this two stage procedure brings about a pareto optimal pollution level 2008 elsevier b v all rights reserved

have oil and gas prices got separated abstract this paper applies vector error correction models that show that oil and natural gas prices decoupled around 2009 before 2009 us and uk gas prices had a long term equilibrium with crude prices to which gas prices always reverted after exogenous shocks both us and uk gas prices adjusted to the crude oil price individually and departure from the equilibrium gas price on one continent resulted in a similar departure on the other after an exogenous shock the adjustment between us and uk gas prices took approximately 20 weeks on average and the convergence was mediated mainly by crude oil with a necessary condition that arbitrage across the atlantic was possible after 2009 however the uk gas price has remained integrated with oil price but the us gas price decoupled from crude oil price and the european gas price as the atlantic arbitrage has halted the oversupply from shale gas production has not been mitigated by north american export as there has been no liquefying and export capacity

hog cycles and countercyclical production response the cycle in prices and output is not a permanent fixture of the pork industry exogenous shocks occasionally give rise to predictable cycles in pork prices but these are eventually eliminated in a manner that is consistent with the existence of countercyclical producers it normally takes several revolutions of the cycle before a sufficient number of countercyclical producers notice that a cycle has begun and are able to alter their production patterns sufficiently to eliminate it consequently the more compelling the evidence is in favor of a cycle the less likely it is to continue

international evidence on aggregate short run and long run interfuel substitution in this paper we build on recent work by serletis et al 2010 in press and report short and long run estimates of aggregate interfuel substitution for a number of oecd and non oecd countries in doing so we use recent pooled intercountry data since 1980 and state of the art advances in microeconometrics including duality theory and flexible functional forms also motivated by the widespread practice in the empirical energy demand literature of ignoring theoretical regularity we estimate our model subject to global curvature but not monotonicity using methods developed by diewert and wales 1987 we provide inference and also a policy perspective using parameter estimates that are consistent with the theoretical regularity conditions of neoclassical microeconomic theory

coalition formation as a dynamic process abstract we study coalition formation as an ongoing dynamic process with payoffs generated as coalitions form disintegrate or regroup a process of coalition formation pcf is an equilibrium if a coalitional move to some other state can be justified by the expectation of higher future value compared to inaction this future value in turn is endogenous it depends on coalitional movements at each node we study existence of equilibrium pcfs we connect deterministic equilibrium pcfs with unique absorbing state to the core and equilibrium pcfs with multiple absorbing states to the largest consistent set in addition we study cyclical as well as stochastic equilibrium pcfs

a game theoretic mathematical programming analysis of cooperative phenomena in oligopolistic markets this paper investigates cooperative behavior in an industry that supplies a homogeneous product and consists of oligopolistic firms the analysis is conducted within a game theoretic framework in which each firm is viewed as a player whose strategy is its level of production by defining a suitable characteristic function that evaluates the worth of each possible coalition we attempt to quantify the individual and collective bargaining powers of firms in order to predict merger or contractual agreements and production strategies in particular we define three games via three characteristic functions each of which is based upon some assumed market behavior on the part of the players for each game we investigate whether the firms would choose to remain separate or form a grand coalition or some other coalition structure for some insightful special cases we are able to establish the resulting outcome and assert whether a core allocation of profits among members of an emerging coalition exists and whether the shapley value allocation belongs to the core in the more general case we use the u s copper industry as an example to illustrate how shapley values may be used to determine possible emerging coalition structures

climate clubs overcoming free riding in international climate policy notwithstanding great progress in scientific and economic under standing of climate change it has proven difficult to forge inter national agreements because of free riding as seen in the defunct kyoto protocol this study examines the club as a model for international climate policy based on economic theory and empirical modeling it finds that without sanctions against non participants there are no stable coalitions other than those with minimal abatement by contrast a regime with small trade penalties on non participants a climate club can induce a large stable coalition with high levels of abatement jel q54 q58 k32 k33

endogenous formation of coalitions the formation of coalitions is a fundamental problem in game theory by a coalition is meant a group of players e g economic or political agents which decide to act together as one unit relative to the rest of the players this includes the instances of syndicates unions cartels blocks political parties parliamentary coalitions etc we would like to emphasize that forming a coalition does not eliminate the individual players as decision makers in all interactions with the other players coalition members act as one unit it may be useful to think of a representative agent taking their place 2 however this arrangement will continue only as long as each player finds it desirable to act this way further bargaining occurs among the members of each coalition on how to divide what they obtained together thus the existence of coalitions implies that the interactions among the players will be conducted on two levels first among the coalitions and second within each coalition most of the existing models in economics and game theory assume that the coalition structure is given exogenously instead we try here to obtain it as an endogenous outcome of our model namely we want to be able to predict which coalitions will in fact form in each given situation 3 our theory combines two kinds of game theoretic concepts value and stability the basic idea is first to evaluate the players prospects in the various coalition structures and then based on these values to find which ones are stable we will call this value coalition structure value or cs value for short the reason we are considering coalition structures i e partitions of the set of players into disjoint coalitions rather than just coalitions is that in general players may find it to their advantage to join forces in some situations and to act separately in others all depending on the way the other participants are organized this implies that both the value and the stability concepts should depend on the entire coalition structure the cs value we analyze in this paper was first developed by owen 7

conflict leads to cooperation in demand bargaining abstract we consider a multilateral nash demand game in which short sighted players come to the bargaining table with requests for both coalition partners and the potentially generated resource we prove that the resulting process converges with probability one to a state in which all players agree on a strictly self enforcing division of resources i e a strict core allocation highlighting group dynamics we show how the myopic actions of players may lead to the break up of groups in the short run but can ultimately bring about a situation from which a strictly self enforcing allocation can be reached

an econometric model of cattle inventories dynamic regression equations are estimated for each beef cattle breeding herd and beef cattle inventories at two levels of aggregation the u s and montana the analysis for montana was utilized as a guide for specification of the national equation to reduce the inference problem associated with letting the sample data help specify the model rational lags on average price received by farmers for calves and the ratio of fed beef to corn prices at omaha constitute the primary explanatory variables the equations perform exceedingly well over the sample period 1950 80 and in post sample forecasts with the sample truncated back to 1970

on coalitional semivalues in this paper we propose a characterization of the coalitional value for transferable utility games owen 1977 and we define and study coalitional semivalues which are generalizations of semivalues dubey neyman and weber 1981

market power and the cattle cycle the relationship between the dynamic cattle cycle and the potential for market power in cattle purchases has rarely been studied this paper provides a conceptual framework showing how the cattle cycle and buyer market power are related not only does a larger cattle stock lead to a lower fed cattle price but the cattle stock s negative effect on price is magnified by the degree of buyer market power in cattle procurement empirical findings support the posited theoretical relationships and help explain why previous researchers reached different conclusions regarding the extent of market power in the industry copyright 2010 oxford university press

endogenous trading bloc formation in a north south global economy the majority of the trading blocs to date are between similar countries rather than between developed and developing countries this paper provides a rationale for why trading blocs among similar countries may arise as an equilibrium phenomenon it develops a model of an asymmetric world economy in which there are at least four countries the countries are differentiated with respect to their market size and they choose their trading partners in the coalition proof nash equilibrium either there is global free trade or free trade areas are formed among similar countries la plupart des blocs commerciaux sont formes de pays similaires plutot que de pays developpes et en voie de developpement ce memoire explique pourquoi ce genre de resultat peut emerger en tant que phenomene d equilibre on developpe un modele d economie mondiale asymetrique dans lequel il y a au moins quatre pays les pays different par la taille et la nature de leurs marches et choisissent leurs partenaires commerciaux dans un equilibre libre de coalitions a la nash ou bien il existe un regime global de libre echange ou bien des zones de libre echange entre pays similaires emergent

self insurance against natural disasters abstract expenditures on self insurance to mitigate the effects of natural disasters on the value of private assets are examined in a model where individuals are partially insured against financial loss by a public relief program and where private insurance is unavailable the model predicts that optimal private expenditures on self insurance will be excessive or insufficient according to the nature of the technology by which individuals protect their assets the comparative static effects of variations in the level of public compensation individual wealth and attitudes toward risk and the degree of environmental uncertainty on self insurance expenditures and on the magnitude and frequency of public compensation are also characterized and their implications for remedial government policies are examined

coalition formation in standard setting alliances we present a theory for predicting how business firms form alliances to develop and sponsor technical standards our basic assumptions are that the utility of a firm for joining a particular standard setting alliance increases with the size of the alliance and decreases with the presence of rivals in the alliance especially close rivals the predicted alliance configurations are simply the nash equilibria i e those sets of alliances for which no single firm has an incentive to switch to another alliance we illustrate our theory by estimating the choices of nine computer companies to join one of two alliances sponsoring competing unix operating system standards in 1988

what drives natural gas prices a structural var approach abstract in this study we develop a structural vector autoregressive model var for the german natural gas market our setup allows us to analyze the determinants of the natural gas price in a comprehensive framework in particular we illustrate the usefulness of our approach by disentangling the effects of different fundamental influences on gas prices during three recent supply interruptions the russian ukrainian gas dispute of january 2009 the libyan civil war in 2011 and the withheld russian exports in february 2012 our results show that the natural gas price is affected by temperature storage and supply shortfalls in the short term while the long term development is closely tied to both crude oil and coal prices capturing the economic climate and the substitution relationship between the different energy commodities

linear and nonlinear granger causality investigation between carbon market and crude oil market a multi scale approach abstract this paper investigates the causality between carbon market and crude oil market using a multi scale analysis approach in which two main steps are involved multi scale analysis and causality testing in multi scale analysis bivariate empirical mode decomposition bemd is employed to decompose the two series of market returns at different time scales in causality testing a linear and nonlinear integrated granger test is formulated to investigate the relationship among each pair of matched components on a similar time scale with the european union emission allowance eua futures and brent futures as study samples some interesting findings can be obtained 1 at the original data level without multi scale decomposition this study finds evidence supporting a neutrality hypothesis i e no granger causality between the carbon and crude oil markets 2 on small time scale within one week excluding non work days the two markets might be uncorrelated and driven by their own respective supply demand disequilibriums 3 for medium time scale above one week but below one year there is a strong bi directional linear and nonlinear spillover effect between the two markets due to certain extra factors with medium term effects e g significant events and policy changes 4 for long time scale the long term trends of the two markets appear an obvious linear relationship

a limit theorem for the core of betrand oligopoly games with externalities abstract this paper formulates the concept of betrand oligopoly partition games furthermore it is demonstrated that such well defined games have positive externalities more importantly the core is proved to approximate the equal division solution in infinite markets

buyer power and mutual dependency in a model of negotiations we study bilateral bargaining between several buyers and sellers in a framework that allows both sides in case of a bilateral disagreement flexibility to adjust trade with each of their other trading partners and receive the gross benefit generated by each adjustment a larger buyer pays a higher per unit price when buyers bargaining power in bilateral negotiations is sufficiently low and a lower price otherwise an analogous result holds for sellers these predictions and the implications of different technologies are explained by the fact that size is a source of mutual dependency and not an unequivocal source of power

vertical integration with endogenous contract leadership stability and fair profit allocation abstract this paper studies vertical integration in serial supply chains with a wholesale price contract we consider a business environment where the contracting leader may be endogenously changed before and after forming the integration a cooperative game is formulated to normatively analyze the stable and fair profit allocations under the grand coalition in such an environment our main result demonstrates that vertical integration is stable when all members are pessimistic in the sense that they are sure that they will not become the contracting leader if they deviate from the grand coalition we find that in this case the grand coalition s profit must be allocated more to the retailer and the members with higher costs nevertheless we also show the conditions under which the upstream manufacturer can have strong power as in traditional supply chains

endogenous mergers in endogenous sunk cost industries abstract this paper uses an endogenous coalition formation game to derive an upper bound to industry concentration the proposed coalitional stability concept assumes that firms are endowed with foresight in that they look ahead and anticipate the ultimate outcome of their actions it is shown that while in exogenous sunk cost industries the upper bound to concentration falls as the market becomes large in endogenous sunk cost industries regardless of the size of the market arbitrarily concentrated outcomes can arise in equilibrium in addition for this second class of industries if products are sufficiently good substitutes then duopoly coalition structures can only be sustained in equilibrium if composed of sufficiently size asymmetric coalitions the results therefore complement those of sutton sutton j 1991 sunk costs and market structure cambridge ma mit press sutton j 1998 technology and market structure theory and history cambridge ma mit press

information spillovers and connectedness networks in the oil and gas markets abstract this paper investigates the oil gas relationship from a multi scale perspective by combining the connectedness network framework and the ensemble empirical mode decomposition eemd method the empirical results show that the direction and magnitude of the information flow between oil and gas returns behave differently across time scales in general wti and its refinery products tend to act as net information transmitters while the united states and united kingdom natural gas markets act as net receivers the total spillover connectedness for the oil and gas markets as measured by a rolling window approach has dynamic volatile characteristics the robustness of the results is shown by substituting brent for wti

on the emergence of an mfn club equal treatment in an unequal world motivated by gatt we endogenize the formation of a club whose members have to abide by the mfn principle of non discrimination the underlying model is that of oligopolistic intraindustry trade while an mfn club does not alter average tariff levels across countries it increases aggregate world welfare makes non members worse off and can immiserize its high cost members these results imply that i core wto rules such as mfn are valuable even if multilateral negotiations deliver limited trade liberalization and ii the distributional effects of mfn maybe one reason why developing countries have been granted special and differential treatment at the wto jel classification f13 f10 f15

a competitive partnership formation process a group of heterogeneous agents may form partnerships in pairs all single agents as well as all partnerships generate values if two agents choose to cooperate they need to specify how to split their joint value among one another in equilibrium which may or may not exist no agents have incentives to break up any existing partnerships or form new partnerships this paper proposes a dynamic competitive adjustment process that always either finds an equilibrium or exclusively disproves the existence of any equilibrium in finitely many steps when an equilibrium exists partnership and revenue distribution will be automatically and endogenously determined by the process moreover several fundamental properties of the equilibrium solution and the model are derived

dynamics of beef cow herd size an inventory approach cow herd inventories are the primary determinant of beef supply the principal decisions determining inventories are studied in a dynamic framework short run and long run impacts of one time shocks in economic factors influencing culling and replacement decisions are estimated via simulations changes in economic factors have the greatest impact on younger members of the herd these changes have long term impacts on inventories through their influence on age dynamics impacts on age dynamics could influence the cattle cycle

the socially stable core in structured transferable utility games we consider socially structured transferable utility games for every coalition the relative strength of a player is measured by a power function the socially stable core consists of the socially and economically stable payoff vectors it is non empty if the game itself is socially stable the socially stable core consists of a finite number of faces of the core generically it consists of a finite number of payoff vectors convex tu games have a non empty socially stable core irrespective of the underlying social structure when the game is permutationally convex the socially stable core is shown to be non empty if the power vectors are permutationally consistent and is shown to contain a unique element if the power vectors are permutationally compatible we demonstrate the usefulness of the concept of the socially stable core by applying it to structured hierarchy games sequencing games and the distribution of water

bidirectional causality in oil and gas markets abstract do events in the natural gas market cause repercussions in the crude oil market this paper studies linkages between the two markets using high frequency intraday oil and gas futures prices by analyzing the effect of weekly oil and gas inventory announcements on price volatility we show a bidirectional causal relationship both inventory gluts and shortages have a cross commodity effect on price volatility not only for the next month nearby futures contract but also for the following six months contracts

further evidence on the debate of oil gas price decoupling a long memory approach abstract the long run oil gas price relationship has been challenged more often in recent years as these two prices have shown evidence of decoupling from each other this paper proposes the use of a long memory approach and a rolling windows method to model the time varying oil gas price relationship in three markets namely the united states europe and japan the results extend existing research conclusions on the oil gas price relationship and answer the question of whether it is a temporary phenomenon or a permanent market change our findings indicate that the us oil gas relationship remains nonstationary at almost all windows and illustrate strong evidence of decoupling conversely the european and asian oil gas prices exhibit temporary decoupling over time although the overall relationship still favours the oil indexation hypothesis the us experience suggests that oil and gas do not share the same fundamentals and a pricing hub can better reflect the true value of natural gas policy makers in europe and asia should reinforce their efforts towards a market based pricing mechanism for gas

how does the u s natural gas market react to demand and supply shocks in the crude oil market abstract in this paper we use monthly data over the period from january 1976 to december 2012 and a structural var model to disentangle demand and supply shocks in the global crude oil market and investigate their effects on the real price of natural gas in the united states we identify the model by assuming that innovations to the real price of crude oil are predetermined with respect to the natural gas market and show that close to 45 of the variation in the real price of natural gas can be attributed to structural supply and demand shocks in the global crude oil market

quantitative overeducation and cooperative game theory abstract overeducation is an empirical phenomenon in two dimensions qualitative and quantitative quantitative overeducation addresses a firm s decision to train more employees than needed one explanation for this decision is modeled in this article that of classical bargaining power the main idea is that after investing in human capital the employer uses employees outside the firm to raise the bargaining power when he negotiates with the employees within the firm on how to share the profit of the firm to model this we use cooperative game theory for the first time the labor market is modeled by a coalition structure and the payoffs are determined by the value casajus 2009

separated influence of crude oil prices on regional natural gas import prices this paper analyses the impact of global economic activity and international crude oil prices on natural gas import prices in three major natural gas markets using the panel cointegration model it also investigates the shock impacts of the volatility and the increase and decrease of oil prices on regional natural gas import prices the results show that both global economic activity and international crude oil prices have significant long term positive effects on regional natural gas import prices the volatility of international crude oil prices has a negative impact on regional natural gas import prices the shock impact is weak in north america lags in europe and is most significant in asia which is mainly determined by different regional policies for price formation in addition the response of natural gas import prices to increases and decreases in international crude oil prices shows an asymmetrical mechanism of which the decrease impact is relatively stronger

spillovers between oil and stock returns in the us energy sector does idiosyncratic information matter abstract this paper investigates the inter connectedness between wti oil price returns and the returns of listed firms in the us energy sector specifically we focus on the issue of whether firm level idiosyncratic information matters a generalised dynamic factor model is used to separate common components from idiosyncratic components in these energy stocks systemic connectedness is then estimated following diebold and yilmaz 2014 our empirical results demonstrate the important role of industrial level common information in understanding the oil stock relationship a number of interesting points include the us energy sector is the net contributor to wti price changes but the effect is mainly driven by industrial level common information the oil and gas industry dominates other industries in the energy sector the dynamic analysis shows that although idiosyncratic information is mostly independent of oil shocks individual energy stock returns do respond to wti price movements

outside options component efficiency and stability abstract in this paper we introduce a component efficient value for tu games with a coalition structure which reflects the outside options of players within the same structural coalition it is based on the idea that splitting a coalition should affect players who stay together in the same way we show that for all tu games there is a coalition structure that is stable with respect to this value

endogenous coalation formation in cooperative oligopolies coalition formation among firms in a cooperative oligopolistic market is endogenously derived in terms of the relevant market characteristics market demand firm costs and the behavioral assumptions that every possible coalition of firms makes about firms that are not in the coalition this is done by defining different games in characteristic function form each game corresponding to a different assumption about how a coalition s opponents will respond by establishing cooperative equilibria that cannot be upset by any firm acting alone or any group of firms acting in concert the authors are able to derive coalition formation in the market endogenously copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

asymmetric pass through of oil prices to gasoline prices with interval time series modelling abstract modelling and analyzing the pass through of crude oil prices to retail gasoline prices has received an increasing attention in existing literature however most of the ongoing efforts focus on point valued data which may suffer from the informational loss this paper first employs the threshold autoregressive interval valued tari models developed recently by sun et al 2018a to investigate this transmission and proposes a novel consistent interval based test to detect threshold effects and derives its asymptotic properties these interval based tari model and test superior to traditional point based methods can produce more efficient parameter estimation and more powerful inference due to the informational gain of interval data that is interval data simultaneously contain more information e g trend and volatility than point valued data during the same period empirical results suggest that retail gasoline prices are adjusted upwards faster than downwards and this short run asymmetry is statistically significant during the whole sample our findings reveal that both the level and volatility of oil prices have a positive impact on the price of gasoline which contributes to the asymmetries in the transmission of oil price shocks these results are robust before and after financial crisis furthermore it is interesting to find that after financial crisis both the error correction adjustment speeds and the asymmetries decrease

to deter or to moderate alliance formation in contests with incomplete information we consider two players choice about the formation of an alliance ahead of conflict in a framework with incomplete information about the strength of the potential ally when deciding on alliance formation players anticipate the self selection of other players and the informational value of own and other players choices in the absence of these signaling effects strong players have an incentive to stand alone which leads to a separating equilibrium this separating equilibrium can be destabilized by deception incentives if beliefs are updated on the basis of endogenous alliance formation choices weak players may find it attractive to appear strong in order to deter competitors from positive effort choices strong players may find it attractive to appear weak in order to give their competitors a false sense of security and then beat them with little effort moreover appearing weak allows players to free ride when alliances are formed jel d72 d74

stable coalition structures with externalities this paper argues that the sign of external effects of coalition formation provides a useful organizing principle in examining economic coalitions in many interesting economic games coalition formation creates either negatie externalities or posi tie externalities for nonmembers examples of negative externalities are research coalitions and customs unions examples of positive externalities include output cartels and public goods coalitions i characterize and compare stable coalition structures under the following three rules of coalition formation the open

sharing the surplus an extension of the shapley value for environments with externalities economic activities both on the macro and micro level often entail wide spread externalities this in turn leads to disputes regarding the compensation levels to the various parties affected we propose a method of deciding upon the distribution of the gains costs of cooperation in the presence of externalities when forming the grand coalition is efficient we show that any sharing rule satisfying efficiency linearity dummy player and a strong symmetry axioms can be obtained through an average game adding an additional axiom we identify one unique rule satisfying these properties