nonlinear price schedules and tied products illegal tying often occurs when a monopolist jointly sells a product with a complementary requirement also sold competitively along with selling the complement at its competi tive price this paper shows that profit can increase when a monopoli st lets consumers bundle any amount of the requirement with the basic product at a fixed price examples illustrate demand conditions that enhance the profitability of this nonlinear price strategy and show that profits can approximate those earned from tying as a noncoerciv e option to buyers legal entanglements are avoided certain nonlinea r schedules can be pareto superior to the most profitable uniform pri ces copyright 1988 by the london school of economics and political science

the effectiveness of a reemployment bonus abstract this paper investigates the effectiveness of the recently proposed reemployment bonus relative to the regular unemployment insurance benefits in a model where endogenous search effort plays a crucial role and the bonus is fully portrayed as an incentive contract

is the united states really underinvesting in agricultural research that the level of public investment in u s agricultural research is too low is widely accepted this paper argues that there are two important limitations to the evidence assembled in support of the underinvestment hypothesis a many authors have compared the social rate of return to public investments with the private rate of return to private investments b costs of public expenditures on agricultural research have been underestimated by a failure to account for the marginal excess burden of the tax collection system taking these two factors into account evidence in support of the underinvestment hypothesis is weakened considerably

search intensity job advertising and efficiency this paper demonstrates that if both firms and workers search the other side of the market for job matches the equilibrium rate of unemployment is likely to be too high both sides ignore a positive externality of their search when they establish a job match they remove from the market a job searcher so they save society his search costs i show that there is no feasible wage rate that can internalize this externality under fairly weak restrictions on the technology of search

demand curves for animal consumers results are reported from experiments showing that both income compensated and ordinary uncompensated demand curves for nonhuman consumers are negatively sloped essential commodities are determined to be gross complements while nonessential goods are independent or gross substitutes the experiments extend the concepts underlying value theory to nonhumans and provide a basis for intensive experimental investigations of additional aspects of the theory

search effort and unemployment insurance reconsidered in this paper the impact that receipt of unemployment benefit has on job search effort is investigated utilizing data drawn from the 1984 labour force survey reduced form search effort equations are estimated conditional on the decision to seek work

unemployment insurance recall expectations and unemployment outcomes this paper empirically examines the importance of explicitly accounting for the layoff rehire process in the analysis of unemployment outcomes in the united states we find that the spells of individuals who initially expect to be recalled account for much more of the unemployment of unemployment insurance ui recipients than do spells actually ending in recall our results indicate that the recall and new job escape rates from unemployment have quite different time patterns and are often affected in opposite ways by explanatory variables we also find that the probability of leaving unemployment both through recalls and new job finding increases greatly around the time that ui benefits lapse over the past fifteen years many studies have empirically analyzed the determinants of individual unemployment spell durations in the united states much of this literature has used a job search framework in which the unemployed are viewed as permanently displaced workers who are unattached to jobs the possibility of recall to a former job a process not requiring search has been omitted from explicit consideration in the majority of these studies 2 an explicit treatment of the layoff rehire process is necessary for a proper understanding of the determinants of unemployment durations and of the impacts of unemployment policies in the united states for at least three reasons first temporary layoffs in which workers are often rehired by their original employers are a quantitatively quite important feature of the u s labor market 3 second expectations concerning the likelihood of recall are likely to affect the responses of employers and unemployed workers to labor market interventions such as reemployment bonuses and subsidies

prices technology and farm size in this paper we construct and empirically test a theory of the agricultural firm which explains the long term growth in farm size in the united states typically the u s farm unit is a family enterprise consequently the ratio of the opportunity cost of farm labor to the price of machinery services determines the size of the farm operation by influencing the machine labor ratio applying the model to u s data we explain virtually all of the growth in the machine labor ratio and in farm size over the 1930 70 period by changes in relative factor prices without reference to technological change or economies of scale

the effect of unemployment insurance on unemployment duration this paper shows that unemployment insurance benefits could decrease the expected duration of unemployment induced by search an unemployed person who has to finance search from limited resources may use the benefits to intensify search effort and lower the expected duration of unemployment

changes in labor force status among the unemployed i argue against the popular view that young black men experience more joblessness than their white counterparts because they have priced themselves out of the labor market the seemingly excessive reservation wages of jobless young black men what they

estimating the effect of counseling and monitoring the unemployed using a job search model this paper examines the impact of the counseling and monitoring program for the unemployed with particular reference to their job finding rate application intensity and matching probability the effectiveness of counseling and monitoring is measured by using a job search model in which the job finding rate is equal to the product of the application intensity and the matching probability counseling and monitoring is an intensive job search assistance program designed to help unemployed people receiving unemployment benefits to find a job as quickly as possible the empirical analysis is based on data from a social experiment a sample of the inflow into unemployment was randomly assigned to a treatment and a control group the empirical results based on formal reduced form models show that counseling and monitoring does reduce the time taken to find a job because people participating in the program make more applications than those who are not participating although no differences are found in matching probabilities

a test of the underinvestment myopia and commodity bias hypotheses for u s agricultural research abstract analysts of agricultural research policy in the united states of america have claimed that the over all level of public investment in agricultural research is less than what would be socially optimal that the present composition of public research investment is excessively myopic in that too little basic research is performed relative to the level of applied research and that the allocation of research resources among commodities is inconsistent with economic efficiency a non linear optimal growth model of the u s economy was developed to analyse these propositions strong support was found for the claim that the overall level of investment has been inadequate no support was found for the contention that basic research has been relatively underfunded compared to applied research weak support was found for the view that crop research has suffered from more acute underfunding than has livestock research

optimal unemployment insurance in search equilibrium should unemployment benefits be paid indefinitely at a fixed rate or should the rate decline or increase over a worker s unemployment spell we examine these issues using an equilibrium model of search unemployment the model features worker firm bargaining over wages free entry of new jobs and endogenous search effort among the unemployed the main result is that an optimal insurance program implies a declining benefit sequence over the spell of unemployment numerical calibrations of the model suggest that there may be nontrivial welfare gains associated with switching from an optimal uniform benefit structure to an optimally differentiated system

unemployment benefits and search effort in the uk labour market in this paper the impact that receipt of unemployment benefit has on job search effort is investigated utilizing data drawn from the 1984 labor force survey reduced form search effort equations are estimated conditional on the decision to seek work after controlling for potential selectivity bias personal characteristics and demand conditions those claiming benefit are shown to search more extensively than nonclaimants benefit claimants maintain a clear attachement to the labor market and appear more able to prolong search effort receipt of unemployment benefit increases the likelihood of contacting a job vacancy copyright 1991 by the london school of economics and political science

time varying effects of recall expectation a reemployment bonus and job counseling on unemployment durations a simple search model that includes the possibility of recall provides predictions as to the changing effects of recall expectations a bonus offer and job counseling on new job finding rates over time using data from the new jersey unemployment insurance reemployment demonstration project njuirdp i find evidence for an initial positive effect of the bonus offer which diminishes over time new job finding rates are found to be negatively affected by higher initial recall expectations this effect also diminishes over time and evidence suggests that job counseling is successful in speeding up this process

reported vs actual job search by unemployment insurance claimants this study compares self reported job search contacts of unemployment insurance recipients with independently verified job search contacts for the total sample reported contacts averaged 2 61 per week compared with actual contacts of only 1 78 per week nearly one fifth of the sample made no job contacts for the single weeks analyzed the separate equations estimated for reported and actual job contacts suggest that systematic misreporting may distort the conclusions particularly for the impact of unemployment insurance benefits on search intensity that would result from analyzing reported rather than actual contacts some implications of the findings for reported unemployment rates also are explored

income leisure tradeoffs of animal workers results of recent empirical and theoretical research have shown the applicability of consumer demand theory in describing and predicting choices of nonhuman consumers see a covich d rapport and j turner battalio et al kagel et al 1975 1980 commodities used in these studies have been largely limited to different kinds of edibles food grains water and sweet tasting preferred fluids a natural extension of the commodity choice model is to consider leisure as a good this paper presents results of experiments showing that nonhuman workers pigeons are willing to trade off income for leisure if the price is right more specifically our results show that the slutsky substitution effect is positive for exactly compensated wage decreases and that leisure is a normal good at all points in the choice space in addition to demonstrating the pervasiveness of income leisure tradeoffs the experiments show strong regularities in the size of the substitution and income effects at varying wage rates with increases in real wages both income and substitution effects get smaller but the substitution term decreases more rapidly than the income term resulting in a backward bending labor supply curve at higher wages the plan of the paper is as follows in section i we characterize the procedures employed in the laboratory for studying labor supply and summarize well established characteristics of this behavior as it is relevant to the present experiments sections ii and iii describe the hypotheses tested and the experimental procedures employed in the tests results of the experiments are given in section iv some of the implications of these results are discussed in a brief concluding section space considerations do not permit a detailed discussion of the reasons why economists should take seriously the investigation of economic theories using nonhuman subjects see kagel and battalio for this argument for the more skeptical reader we simply note that if one defines economics as the study of the allocation of scarce resources among unlimited and competing uses albert rees 1968 p 472 then animal psychologists ecologists and biologists have been involved in studying economic behavior for some time now rapport and turner jack hirschleifer h rachlin it is but a small step to take the technologies of these related disciplines and apply them to behavior of interest to economists for example labor supply behavior at a minimum such studies expand considerably the scope for comparative economic analysis at a maximum they provide a laboratory for identifying testing and better understanding general laws of economic behavior use of this laboratory is predicated on the fact that behavior as well as structure vary continuously across species and that principles of economic behavior would be unique among behavioral principles if they did not apply with some variation of course to the behavior of nonhumans

constrained output maximization and us agriculture this paper presents a framework for estimating an indirect production function and then applies it to aggregate us agriculture issues addressed include tests of standard hypotheses about the underlying technology homotheticity neutral technical change etc as well as examination of consistency in aggregation and the effects of changes in the level of aggregate expenditure on farm output since there already exist several studies empirically describing agricultural production technologies with indirect objective functions one might fairly ask whether this paper really breaks any new ground we feel that it does one reason is that existing studies e g binswanger 1974 lopez 1980 ball and chambers 1982 ray 1982 and weaver 1983 all rely on either profit or cost functions to date there appears to be only one study using an indirect production appelbaum 1979 and it is not in agriculture this seems unfortunate because there are many instances in agriculture for which an indirect productio

commodity choice behavior with pigeons as subjects starting from an initial baseline budget line income compensated price changes always resulted in substitution effects consistent with the slutsky hicks theory this behavior cannot be explained by a simple random behavior model similar changes in relative prices that did not originate from the initial baseline budget line resulted in undersubstitution effects the composition of consumption changed in the expected direction but the magnitude of change was not large enough to be consistent with the initial commodity bundle chosen these undersubstitution effects are not explainable by shifting preference patterns or anchoring effects found in inconsistent choice sequences with human subjects