collective bargaining in the public sector the effect of legal structure on dispute costs and wages this paper examines the impact of collective bargaining legislation on dispute costs and wages using a panel of canadian public sector contracts the authors results suggest that policymakers designing collective bargaining legislation face a trade off between reducing dispute costs and increasing wages dispute costs are lower under compulsory arbitration than under the right to strike or when no collective bargaining legislation exists hence a switch to compulsory arbitration could potentially make both the union and the employer better off by reducing dispute costs however the authors find that wages are higher under compulsory arbitration than under other legal structures copyright 1991 by american economic association

double dividend effectiveness of energy tax policies and the elasticity of substitution a cge appraisal there is a considerable body of literature that has studied whether or not an adequately designed tax swap whereby an ecotax is levied and some other tax is reduced while keeping government income constant may achieve a so called double dividend that is an increase in environmental quality and an increase in overall efficiency arguments in favor and against are abundant our position is that the issue should be empirically studied starting from an actual non optimal tax system structure and by way of checking the responsiveness of equilibria to revenue neutral tax regimes under alternate scenarios regarding technological substitution with the use of a cge model we find that the most critical elasticity for achieving a double dividend is the substitution elasticity between labor and capital whereas the elasticity that would generate the highest reduction in carbon dioxide emissions is the substitution elasticity among energy goods

does competition for capital discipline governments decentralization globalization and public policy competition among countries or regions within them to attract mobile capital is often thought to discipline their governments motivating them to invest more in infrastructure reduce waste and corruption and spend less on non productive public goods the result should be convergence on business friendly policies we argue that this requires an assumption units start out very similar that is often unrealistic if units are heterogeneous in natural resources geographical location inherited human capital or infrastructure capital mobility often weakens discipline on the poorlyendowed units this may help explain disappointing results of liberalizing capital flows within russia and sub saharan africa jel f36 h73 h87

why small centrist third parties motivate policy divergence by major parties plurality based elections between two major parties or candidates sometimes feature small cen trist third parties we modify the standard two party spatial model of policy seeking parties to incorporate a centrist third party and we show that the presence of such a party even if it has no chance of winning motivates the major parties to propose policies that are much more divergent than without the third party we derive explicit formulas for party locations at a three party equilibrium and provide necessary and sufficient conditions for existence ofthat equilibrium we show that over time the major parties can be expected to shift their policies in the same direction relative to each other but in the opposite direction relative to the minor party the predictions of this model are compared with estimates of party policy locations during appropriate periods in postwar britain for the past half century a small british party first the liberals now the liberal demo crats has occupied a policy position in between the two major british parties labour and the con servatives during much of the same period the free democrats in germany have held a similar posi tion between the social democrats and the christian democrats in addition recent american presidential elections have featured the candidates john anderson in 1980 and ross perot in 1992 and 1996 who had no realistic chance of winning and who were arguably located between the democratic and republican nom inees 1 what are the policy consequences of the existence of such small centrist parties or candidates on what political institutions do these consequences depend do these consequences benefit the policy aspirations of the centrist party or do they undermine these goals under proportional representation it is well known that a small centrist party such as the free democrats in germany may hold the balance of power bargaining with each of the major players as they attempt to form governing coalitions but in a plurality based system as in britain or the united states the consequences are far

employment factors for wind and solar energy technologies a literature review abstract in this paper we present an up to date literature review on employment opportunities associated with the deployment of renewable energy technology we identified approximately 70 studies and data sources published over the past decade that report analysed or observed employment impacts of renewable energy growth these publications cover many different countries and several technology options and present widely varying results derived from distinct methodological approaches our first overall conclusion is that there is clear lack of authenticity of findings in this literature since recursive referencing abounds and relatively few studies yield truly original research when we omit non authentic analyses as well as those that aggregate results in a way that does not allow us to calculate employment factors defined as the number of jobs or amount of work generated per unit of electricity production capacity the total list of references is brought to 31 independent items of these only 14 references provide separate estimates of the employment factors for the stages of manufacturing and installation respectively as opposed to employment factors for these two activities combined a total of 23 items provide values for operation and maintenance o m employment factors we observe significant uncertainties in quoted figures for job creation both across and within publications

an analysis of the selection of arbitrators this paper analyzes alternative mechanisms for the selection of arbitrators the authors review key institutional features of the threemost prevalent mechanisms for selecting arbitrators rank veto alternate strike and rotating panel they present a more formal analysis in which these mechanisms are treated as economic games andanalyze the alternative mechanisms in terms of the incentives they provide for strategic behavior and the efficiency of any equilibrium strategies that exist some implications of varying selected parametersof each mechanism are derived and the general role of arbitrator selection mechanisms in the process of bargaining under the threat ofarbitration are considered copyright 1986 by american economic association

political partisanship and welfare state reform in advanced industrial societies in this article we evaluate two claims made in recent studies of the welfare states of advanced industrial societies first that welfare states have remained quite resilient in the face of demands for retrenchment and second that partisan politics have ceased to play a decisive role in their evolution addressing the first claim we present analysis from a new data set on unemployment insurance and sickness benefit replacement rates for 18 countries for the years 1975 99 we find considerably more evidence of welfare retrenchment during the last two decades than do recent cross national studies second we examine the end of partisanship claim by estimating the effects of government partisanship on changes in income replacement rates in sickness and unemployment programs our results suggest that contrary to claims that partisanship has little impact on welfare state commitments traditional partisanship continues to have a considerable effect on welfare state entitlements in the era of retrenchment

are green hopes too rosy employment and welfare impacts of renewable energy promotion in view of pressing unemployment problems policy makers across all parties jump on the prospects of renewable energy promotion as a job creation engine which can boost economic well being our analytical model shows that initial labor market rigidities in theory provide some scope for such a double dividend however the practical outcome of renewable energy promotion might be sobering our computable general equilibrium analysis of subsidized electricity production from renewable energy sources res e in germany suggests that the prospects for employment and welfare gains are quite limited and hinge crucially on the level of the subsidy rate and the financing mechanism if res e subsidies are financed by labor taxes welfare and employment effects are strictly negative for a broad range of subsidy rates the use of an electricity tax to fund res e subsidies generates minor benefits for small subsidy rates but these benefits quickly turn into significant losses as the subsidy rate exceeds some threshold value

partisan governments the international economy and macroeconomic policies in advanced nations 1960 93 this article examines the impact of parties domestic institutions and the international economy on the conduct of monetary and fiscal policies using time series cross section data from nineteen oecd countries for the years between 1960 and the mid 1990s the results are as follows partisan governments have affected alone and in interaction with the organization of labor markets the pattern of macroeconomic management still their impact has varied over time partly as a function of economic conditions but fundamentally as a function of the degree of financial liberalization and the exchange rate system in place after following broadly similar macroeconomic policies in the 1960s oecd governments pursued divergent monetary and fiscal policies in response to the economic slowdown of the 1970s even when they initially adopted countercyclical measures conservative governments quickly favored tight monetary policies and strove to achieve fiscal discipline by contrast taking advantage of generalized capital controls and floating exchange rates socialist cabinets embraced demand management policies in a systematic fashion mostly through budget deficits in corporatist countries and through both loose monetary and loose fiscal measures in noncorporatist settings as financial liberalization progressed in the early 1980s partisan and institution led differences in macroeconomic policies waned across countries

who uses interest arbitration the case of british columbia s teachers 1947 1981 several researchers have attempted to identify the circumstances under which parties subject to compulsory interest arbitration will actually push a contract dispute to arbitration in this paper a simple model that incorporates elements of the leading hypotheses is tested using a unique data set spanning 35 years of compulsory conventional arbitration experience among teachers in british columbia the strongest empirical finding is that bargaining units that used arbitration in the previous round of negotiations were at least ten percent more likely than other units to use it in the current round on the other hand variables intended to capture attitudes toward risk changes in the degree of uncertainty associated with arbitral outcomes differing beliefs about likely arbitral outcomes and principal agent problems were found to have little impact on the estimated probability of using arbitration

comparative productivity the ussr eastern europe and the west this paper compiles comparative measures of output per worker in 1975 in four socialist and seven western market economy wme countries and explores sources of observed differences between the two groups of countries in that regard such differences seem explicable only partially by reference to differences in per worker capital stock and farm land a residual disparity of 25 to 34 percent in favor of wme countries appears to testify to superior efficiency in the latter copyright 1987 by american economic association

reliant behavior in the united states and japan yoshiharu mataga japanese economic success is often attributed to culturally reinforced psychological conditioning that promotes interpersonal reliance cooperation and a group interest orientation this article provides direct experimental evidence on differences in behavior among future businesspeople in the united states and japan utilizing a simple two person extensive form game of perfect information introduced by selten 1975 we provide evidence that contrary to some views the japanese can be less reliant on the behavior of others and are more likely to take actions at variance with group welfare in some settings thus popular explanations of japanese economic achievements may require further exploration jel a14 f00 m14 p52 i introduction the role of culture in economic behavior is an important but controversial topic although it is widely believed that cultural influences affect economically relevant behavior such effects can present difficulties for conventional economic theory discussions of the differences between the united states and japan in the business sphere provide a good example of both the high degree of academic and popular interest in this topic and the complexities involved in obtaining useful characterizations a common popular conclusion in the japan versus united states debate is that japanese business practices differ fundamentally from united states practices and that these differences stem from dissimilar sociological conditioning in the two countries while united states or western culture stresses individualism personal initiative and risk taking the japanese are said to place a higher value on consensus cooperation favoritism toward within group peers and stability 1 therefore a citizen in japan may be more interested in how he or she fits into the social context and his or her relationship with others 2 these contrasting orientations are assumed to manifest themselves in different patterns of behavior having economic implications this article offers a direct controlled experimental test of potentially significant differences in behavior between future japanese and american businesspeople utilizing a simple two person game of perfect information we examine the degree to which united states and japanese business students make differing assessments of the reliability of the behavior of their compatriots and we provide evidence on the implications of these assessments for observed behavior our simple game template introduced by selten 1975 was the focus of a study by beard and beil 1994 and allows comparison of a kind of behavior reliance on maximizing play by others that may have important economic implications in our usage reliance means merely that one player assigns a sufficiently high probability to self interested behavior by other players to induce the first player to take actions that are desirable only when others maximize their own monetary payoffs thus reliance differs from trust as usually defined in gam e theory and the former appears considerably weaker our experiments use as subjects business students in roughly comparable american and japanese universities and we offer nontrivial immediate money payoffs to participants in order to solicit serious efforts on their parts several versions of the basic experiment are conducted to establish payoff dominance and evaluate hypotheses on subject behavior our findings are quite surprising first subjects in both the united states and japan are loath to rely on others maximizing behavior even when that behavior is as in the united states highly reliable second contrary to the assumptions underlying some analysis of japanese business practices subjects in japan appear less reliant than their united states counterparts the article is divided into five sections section ii provides a literature review on the role of culture in u

final offer arbitration with uncertainty averse parties abstract final offer arbitration foa is a widely used binding dispute resolution mechanism where an impartial arbitrator is constrained to choose one of the two final offers proposed by two disputing parties we build an equilibrium model of foa with players averse to arbitral uncertainty to study three important issues the role of foa in incentivizing negotiated settlements the convergence of final offers and the normative effect of diversity of arbitrator opinion we show that increase in arbitral uncertainty increases the likelihood of negotiated agreements and make the final offers converge to each other risk aversion is not necessary for convergence of offers precision and mean of arbitral uncertainty matter differently and can be controlled separately moreover as also argued by the industry practitioners carefully selected level of diversity of opinion in the arbitrator roster increases the welfare of negotiating parties

does globalization affect growth evidence from a new index of globalization the study develops an index of globalization covering its three main dimensions economic integration social integration and political integration using panel data for 123 countries in 1970 2000 it is analysed empirically whether the overall index of globalization as well as sub indexes constructed to measure the single dimensions affect economic growth as the results show globalization indeed promotes growth the dimensions most robustly related with growth refer to actual economic flows and restrictions in developed countries although less robustly information flows also promote growth whereas political integration has no effect

salary arbitration and pre arbitration negotiation in major league baseball two assumptions in this analysis of baseball salary arbitration are that 1 players and clubs to serve their interests in pre arbitration negotiation submit final offers to maximize and minimize

the impact of clean energy investments on the greek economy an input output analysis 2010 2020 the aim of this paper is twofold first to calculate the green energy investments by industrial sector that greece would need in order to satisfy a number of energy and environmental targets adopted in the context of the european commission s energy and climate change package and second to calculate the macro economic impacts of these green investments on production and employment in the greek economy to this end the input output analysis has been exploited for estimating the direct indirect and induced macroeconomic effects associated with the implementation of selected energy conservation measures the promotion of renewable energy technologies etc our findings show that the required investments would reach the amount of 47 9 billion over the period 2010 2020 these investments will result in an average annual increase of the national product by 9 4 billion creating simultaneously 108 000 full time equivalent jobs for the entire period under consideration the employment generated per 1 million investment is relatively higher in energy saving projects in buildings and transport in comparison with the development of res in power generation sector

production functions for climate policy modeling an empirical analysis abstract quantitative models for climate policy modeling differ in the production structure used and in the sizes of the elasticities of substitution the empirical foundation for both is generally lacking this paper estimates the parameters of 2 level ces production functions with capital labour and energy as inputs and is the first to systematically compare all nesting structures using industry level data from 12 oecd countries we find that the nesting structure where capital and labour are combined first fits the data best but for most countries and industries we cannot reject that all three inputs can be put into one single nest these two nesting structures are used by most climate models however while several climate policy models use a cobb douglas function for part of the production function we reject elasticities equal to one in favour of considerably smaller values finally we find evidence for factor specific technological change with lower elasticities and with factor specific technological change some climate policy models may find a bigger effect of endogenous technological change on mitigating the costs of climate policy

final offer arbitration in final offer arbitration the two parties to a dispute submit final offers to an arbitrator the arbitrator then chooses as the binding solution that offer which is closest to his own view of the appropriate outcome because the disputants are imperfectly informed about the arbitrator s preferences final offer arbitration can be modeled as a game of imperfect information interesting questions arise concerning the nature of the optimal strategies and how they are affected by different characteristics of the arbitrator and the disputants we provide conditions for an equilibrium to exist in a final offer arbitration game when there are k issues the probability function is not specified and the disputants are either risk averse or risk neutral furthermore the players may have differing beliefs about the arbitrator s probability function we demonstrate that increased risk aversion by one of the parties will result in both players choosing positions farther away from the more risk averse party we also discover the affect of bias as well as the effect of increased sensitivity by the arbitrator on the positions taken by the players

arbitrator behavior and the variances of arbitrated and negotiated wage settlements the variance of arbitrated wage settlements is significantly lower than the variance of negotiated wage settlements in a sample of teachers contracts even when possible selection of contracts into arbitration is accounted for this result is consistent with the hypothesis that arbitrated settlements do not incorporate all of the information that is reflected in negotiated settlements

insurance fraud and optimal claims settlement strategies abstract we examine the optimal claims settlement strategy for a liability insurer when claimants can permanently misrepresent their losses by engaging in costly claims falsification in this environment claims auditing is not a possible deterrent to fraud and the settlement strategy consists of an indemnification profile that relates the insurance payment to the claimed amount of loss the optimal indemnification profile is shown to involve systematic underpayment of claims at the margin as a means to deter loss exaggeration with the extent of underpayment limited by expected litigation costs and potential bad faith claims the key testable implication of the theory is that the extent of underpayment should be greater for classes of claims for which loss exaggeration is easier empirical analysis of insurance settlements for bodily injury liability in automobile accidents confirms this prediction this suggests that liability insurers optimally choose claims payment strategies to lessen a claimant s i

what moves parties the role of public opinion and global economic conditions in western europe do western european political parties adjust their ideological positions in response to shifts in public opinion and to changing global economic conditions based on a time series cross sectional analysis of parties ideological dynamics in eight western european democracies from 1976 1998 the authors conclude that both factors influence parties ideological positions but that this relationship is mediated by the type of party specifically they find that parties of the center and right react to both public opinion and the global economy whereas parties of the left display no discernible tendency to respond to public opinion and also appear less responsive to global economic conditions the findings on leftist parties distinctiveness support arguments about these parties long term policy orientations as well as about their organizational structures the authors also find little support for neoliberal convergence arguments

redistribution by insurance market regulation analyzing a ban on gender based retirement annuities we illustrate how equilibrium screening models can be used to evaluate the economic consequences of insurance market regulation we calibrate and solve a model of the united kingdom s compulsory annuity market and examine the impact of gender based pricing restrictions we find that the endogenous adjustment of annuity contract menus in response to such restrictions can undo up to half of the redistribution from men to women that would occur with exogenous social security like annuity contracts our findings indicate the importance of endogenous contract responses and illustrate the feasibility of employing theoretical insurance market equilibrium models for quantitative policy analysis

final offer arbitration and risk aversion in bargaining negotiations are often conducted under the stipulation that an impasse is to be resolved using final offer arbitration foa in fact foa frequently is not needed in major league baseball for instance more than 80 of the salary negotiations that could go to arbitration instead reach a bargained agreement we show that the risk aversion of at least one side explains this phenomenon we then model pay negotiation in baseball by applying a bargaining solution with a variable disagreement outcome representing foa studying the existence of pure nash equilibrium initial offers and their effects on the player s eventual pay and considering the nash solution as a special case

perfect equilibria in a model of bargaining with arbitration abstract we consider an alternating offer bargaining model in which the players may agree to call in an arbitrator in case of disagreement the main message of our study is that the mere presence of an arbitrator who can only become active with the consent of both parties in the background of negotiations may entirely drive their outcome we compare our results with those obtained in models with outside options journal of economic literature classification number c78

a theoretical and empirical comparison of free agent and arbitration eligible salaries negotiated in major league baseball this paper presents a theoretical and empirical comparison of determination of negotiated salaries in baseball s free agent market to that in its final offer arbitration foa system the theoretical bargaining model of each system is based on nash 1950 it is argued that farber s 1980 model of foa is not fully applicable in explaining baseball s foa process the free agent market and the arbitration system each determine negotiated salaries that are dependent on the different disagreement outcomes of the negotiators in the respective systems it is thus concluded theoretically that the two systems will determine salaries differently the theoretical analysis also suggests that there may be selection bias present when one empirically analyzes only negotiated settlements using a straightforward regression model that controls for productivity playing experience and the potential selection bias the empirical analysis substantiates the theory s results a method is then developed to estimate the effect that free agent salaries have on salaries for arbitration eligible players it is found that there is a significant positive relationship between them but the systems do not determine equal salaries for comparable players

the politics of inequality voter mobilization and left parties in advanced industrial states why is it that some countries have witnessed significant increases in inequality since the 1960s while at the same time experiencing very little change in the way politics is conducted and why is it that in other countries where inequality has increased much less the left has become substantially more redistributive the answer the authors argue has to do with the interaction between inequality and political mobilization of low income voters the authors make two points in this article first high levels of inequality move left parties to the left second although increasing inequality pushes the core constituencies of left parties to the left it also makes some individuals less likely to be involved in politics the authors argue that left parties will respond to an increase in inequality only when low income voters are politically mobilized they explore these claims through a comparative analysis of left party programs in 10 organisation for economic cooperation and development countries over the period 1966 to 2002

arbitration and bargaining across the pacific this paper reports laboratory experiments comparing arbitration behavior between and across two countries with extensive trade relations the united states and japan besides comparing disputes in both locations we evaluate disputes between them while we find nominal differences between the countries we observe significant changes in both groups behavior when facing someone from the other country specifically americans seek larger profits when facing a japanese counterpart and japanese subjects settle more frequently with an american counterpart our results suggest that the literature on bargaining behavior across cultures paints an incomplete picture of international comparisons by failing to consider bargaining interactions

the causes of bargaining failure evidence from major league baseball abstract final offer arbitration in major league baseball provides an ideal setting for examining the empirical regularities that are associated with bargaining failure since final offers salaries and player statistics which provide the fundamental facts for the case are all readily available using data for players eligible for arbitration for 1990 93 we conduct a wide variety of empirical tests regarding the relationship between aggressive offers and arbitration outcomes we find that aggressive offers by players trigger arbitration and that more aggressive offers are associated with inferior financial outcomes in arbitration overall clubs appear to outperform players in arbitration unexpectedly high or low offers are less common for players who have previously been through arbitration which suggests that learning occurs our results are inconsistent with simple one sided asymmetric information models of arbitration the results are more consistent with an optimism model or a model in which so

the causes of welfare state expansion deindustrialization or globalization an influential line of argument holds that globalization causes economic uncertainty and spurs popular demands for compensatory welfare state spending this article argues that the relationship between globalization and welfare state expansion is spurious and that the engine of welfare state expansion since the 1960s has been deindustrialization based on cross sectional time series data for fifteen oecd countries the authors show that there is no relationship between globalization and the level of labor market risks in terms of employment and wages whereas the uncertainty and dislocations caused by deindustrialization have spurred electoral demands for welfare state compensation and risk sharing yet while differential rates of deindustri alization explain differences in the overall size of the welfare state its particular character in terms of the share of direct government provision and the equality of transfer payments is shaped by government partisanship the argument has implications for the study and the future of the welfare state that are very different from those suggested in the globalization literature

the impacts of removing energy subsidies on economy wide rebound effects in china an input output analysis abstract facing with the increasing contradiction of economic growth energy scarcity and environmental deterioration energy conservation and emissions abatement have been ambitious targets for the chinese government improving energy efficiency through technological advancement is a primary measure to achieve these targets however the existence of energy rebound effects may completely or partially offset energy savings associated with technological advancement this paper adopted a modified input output model to estimate the economy wide energy rebound effects across china s economic sectors with the consideration of energy subsidies the empirical results show that the aggregate rebound effect of china is about 1 9 in 2007 2010 thus technological advancement significantly restrains energy consumption increasing removing energy subsidies will cause the aggregate rebound effect declines to 1 53 specifically removing subsidies for coal and nature gas can reduce the rebound effects signifcantly while removing the subsidies for oil products has a small impact on rebound effect the existence of rebound effects implies that technological advancement should be cooperated with energy price reform so as to achieve the energy saving target in addition the government should consider the diversity of economic sectors and energy types when design the reform schedule

equilibrium strategies for final offer arbitration there is no median convergence final offer arbitration is a procedure for settling disputes between two parties in which an arbitrator chooses the final offer of the party closest to what he considers a fair settlement this procedure is modeled as a two person zero sum game of imperfect information in which the parties are assumed to know the probability distribution of the arbitrator s fair settlements and to make bids in an infinite strategy space that maximize their expected payoffs necessary and sufficient conditions for there to be local and global equilibria in pure strategies are derived and necessary conditions for mixed strategies in a particular case are found such equilibria when they exist in pure strategies represent bids which are symmetric about the median and for most common distributions are separated from one another by two or more standard deviations this finding suggests that final offer arbitration may not accomplish its avowed purpose of inducing the two parties to converge on what they perceive to be t

political economy at any speed what determines traffic citations can speeding tickets be explained solely by a driver s excessive speed or could they be seen as serving as supplemental local revenue or reflecting officer preferences theory suggests that the levels of enforcement and punishment for traffic violations are based on the degree of infringe ment by the offending party and the marginal returns to local safety gary s becker 1968 isaac ehrlich 1996 a mitchell polinsky and steven shavell 1992 this view neglects other potential objectives for the police police officers are agents of the local or state government these prin cipals may be concerned about total revenues raised and about voter satisfaction furthermore officers may have personal preferences with regards to characteristics such as race or gender which may motivate differential issuance of traffic tickets the imposition of traffic fines to increase revenues is reminiscent of william a niskanen s 1971 long standing hypothesis that bureaucrats maximize their agency s budget evidence has been scarce however and the hypothesis has been called into question because bureaucrats may not receive any direct benefit when their agency s budget size is enlarged ronald n johnson and gary d libecap 1994 the budget maximizing hypothesis however has not been applied to the behavior of police officers engaged in the enforcement of traffic laws although anecdotal evidence abounds1 more frequent and larger fines may lead to favorable employee evaluations and contribute to a larger budget for the police department higher officer salaries and improved amenities as police officers monitoring superiors are elected officials those officials may also encourage police officers to disproportionately raise revenues from nonvoters as opposed to local voting citizens

mispriced equity regulated rates for auto insurance in massachusetts from the santa monica freeway to the new jersey turnpike drivers are unhappy about the cost of automobile insurance and are asking government to do something about it california voters approved proposition 103 in 1988 it requires that all rates be approved by the state insurance commissioner attempts to reduce rates by 20 percent and dramatically limits the criteria that can be used to rate drivers for premium purposes new jersey enacted an insurance reform law that seeks to charge insurers for a deficit burdened state underwriting pool and prohibits the use of age sex and marital status in rating drivers for premiums other states enacting or considering significant rate rollbacks or reform since 1988 include arizona florida michigan nevada and pennsylvania this article describes the current consequences of similar policies adopted in massachusetts more than a decade ago the experience suggests that recent moves by other states in the same direction will ultimately prove quite expensive as the proportion of high cost drivers increases and as insurers lose the incentive to write policies and control costs the trend away from insurance premiums based on expected cost also reduces incentive effects for drivers since insurance premiums provide a link between tort judgments and consumer decisions

the impact of doe building technology energy efficiency programs on u s employment income and investment abstract the u s department of energy s office of energy efficiency and renewable energy eere analyzes the macroeconomic impacts of its programs that are designed to increase the energy efficiency of the u s residential and commercial building stock the analysis is conducted using the impact of sector energy technologies imset model a special purpose 188 sector input output model of the u s economy designed specifically to evaluate the impacts of energy efficiency investments and saving for the analysis described in the paper imset was amended to provide estimates of sector by sector capital requirements and investment in the scenario of the fiscal year fy 2005 building technologies bt program the technologies and building practices being developed and promoted by the bt program have the potential to save about 2 9 10 15 btu in buildings by the year 2030 about 27 of the expected growth in building energy consumption by the year 2030 the analysis reported in the paper finds that by the year 2030 these savings have the potential to increase employment by up to 446 000 jobs increase wage income by 7 8 billion reduce needs for capital stock in the energy sector and closely related supporting industries by about 207 billion and the corresponding annual level of investment by 13 billion and create net capital savings that are available to grow the nation s future economy

ideology and voter preferences as determinants of financial globalization we propose that the global spread of ideas affects international economic openness policies and that to omit ideology as an explanatory variable for economic globalization is to risk omitted variable bias using voting data we create measures of global ideology regarding economic openness and propose that changes in both global and domestic ideology influence how open or closed to international finance an economy is we also test other influences on liberalization including proposed state centered diffusion mechanisms using pcsts and system gmm models we estimate the determinants of change in international capital account regulation for 82 countries 1955 to 1999 we thereby examine diffusion of both liberalizations 1950s and 1990s and closures 1960s and 1970s changes in both global and domestic ideology robustly influence liberalization and closure the capital account policies of neighboring countries positively and of the leading economies negatively also influenced a country s capital account liberalization

rewards experience and decision costs in first price auctions consistent with a model of asymmetric risk aversion subjects in first price auctions consistently bid above the risk neutral nash prediction it has been argued that this is due to low opportunity cost of deviating from the risk neutral bid we increase opportunity cost and payoff levels by factors of 0 1 5 10 and 20 from the normal levels generating payoffs up to 250 for risk neutral subjects and observe an insignificant increase in the slope of individual bid functions the rmse of bids declines significantly this is consistent with a reward decision cost model of bidding behavior

globalization party positions and the median voter the authors argue that the effects of economic globalization on social democratic parties in western europe are conditional on the position of the median voter if the median is far enough to the right such parties will adopt business friendly policies because they are required to win office only when the median is relatively far to the left will globalization constrain social democratic parties forcing them to adopt policies further to the right in order to retain credibility it is on this basis the authors argue that empirical studies are misspecified unless they include an interaction between measures of globalization and the position of the median in addition to presenting formal theoretical arguments the article reports empirical findings from fifteen countries in the period from 1973 to 2002 that support the conclusion that the effects of globalization are indeed contingent on the median the authors find that the effects of globalization are significant for social democratic parties only in circumstances in which the median is relatively far to the left

the expansion of renewable energies and employment effects in germany the promotion of electricity produced from renewable energy is a high priority of the european union as well of its member states the german government wants to increase the share of renewable energies from about 5 to 12 by 2010 to attain this goal the german government has introduced compulsory compensation schemes for electricity produced from renewable energy fed into the public grid this paper examines the economic impact of this policy employing an econometric model particular emphasis was given to employment effects in general we distinguish two effects 1 an expansive effect resulting from additional investments and 2 a contractive effect resulting from an increase in the production cost of power the first effect will dominate during the first years and lead to an increase in employment of approximately 33 000 new jobs however the contractive effect will offset these gains and lead to a slightly negative employment balance by 2010

arbitration procedures with multiple arbitrators abstract we consider two final offer arbitration procedures in the case where there is more than one arbitrator two players labeled 1 and 2 and interpreted here as labor and management respectively are in dispute about an increase in the wage rate they submit final offers to a referee there are n arbitrators each of the arbitrators has her own assessment and selects the offer which is closest to her assessment after that each arbitrator informs the referee about her decision the referee counts the votes and declares the player obtaining the most votes to be the winner under the second arbitration scheme the referee takes into account only the assessments which lie between the players offers the game is modeled as a zero sum game the nash equilibrium in this arbitration game is derived

a comparison of conventional final offer and combined arbitration for dispute resolution two widely used forms of arbitration are conventional arbitration in which the arbitrator makes an unconstrained settlement choice and final offer arbitration in which the arbitrator must choose between disputants final offers under an innovative as yet unused approach called combined arbitration if the arbitrator s notion of a fair settlement lies between the disputants final offers final offer arbitration rules are used otherwise conventional arbitration rules are used theoretically by combining the risks that the two standard forms of arbitration pose for disputants who do not voluntarily settle combined arbitration should generate convergent final offers the results of this controlled laboratory study show however that dispute rates are highest in combined arbitration and lowest in conventional arbitration these results challenge the theoretical predictions for combined arbitration as well as claims that final offer arbitration should reduce disputes compared to conventional arbitration the results are however consistent with a simple theory of disputant optimism

estimating welfare in insurance markets using variation in prices we provide a graphical illustration of how standard consumer and producer theory can be used to quantify the welfare loss associated with inefficient pricing in insurance markets with selection we then show how this welfare loss can be estimated empirically using identifying variation in the price of insurance such variation together with quantity data allows us to estimate the demand for insurance the same variation together with cost data allows us to estimate how insurers costs vary as market participants endogenously respond to price the slope of this estimated cost curve provides a direct test for both the existence and the nature of selection and the combination of demand and cost curves can be used to estimate welfare we illustrate our approach by applying it to data on employerprovided health insurance from one specific company we detect adverse selection but estimate that the quantitative welfare implications associated with inefficient pricing in our particular application are small in both absolute and relative terms

globalization and capital taxation in consensus and majoritarian democracies this article contributes to the growing literature on the role that domestic political institutions play in mediating globalization pressures by arguing that the capital tax constraints arising from international economic integration are the most severe for countries with majoritarian political institutions in doing so the author solves a tax puzzle that challenges conventional thinking about how institutions condition the relationship between economic globalization and domestic politics he presents a formal game theoretic model to sharpen the basic logic of his argument and then tests some of the model s predictions empirically using both quantitative and qualitative evidence

green jobs economic impacts of renewable energy in germany abstract the labor market implications of large investment into renewable energy re are analyzed in this text although a growing re industry can be observed in germany the overall effect of large increases of re based electricity and heat generating technologies on the german economy require a careful model based analysis the applied model panta rhei has been used among others to evaluate the german energy concept in 2010 it takes positive and negative impacts of re into account the paper shows the overall effects under different assumptions for fossil fuel prices domestic installations and international trade the results are sensitive to assumptions on the development of re world markets and german exports to these markets almost all of these scenarios exhibit positive net employment effects under medium assumptions net employment of re expansion will reach around 150 thousand in 2030 only with assumptions for german re exports below today s level net impacts are slightly negative gross employment will increase from 340 thousand in 2009 to between 500 and 600 thousand in 2030

economic globalization and the welfare state in affluent democracies 1975 1998 prior scholarship is sharply divided on how or if globalization influences welfare states globalization s effects may be positive causing expansion negative triggering crisis and reduction curvilinear contributing to convergence or insignificant we bring new evidence to bear on this crucial debate with a pooled time series analysis of two measures of the welfare state and 16 indicators of economic globalization for 17 affluent democracies from 1975 to 1998 the analysis suggests that 1 state of the art welfare state models warrant revision in the globalization era 2 most indicators of economic globalization do not have significant effects 3 the few significant globalization effects are in different directions and often inconsistent with extant theories 4 the globalization effects are far smaller than the effects of domestic political and economic factors and 5 these effects are not systematically different for liberal vs nonliberal welfare state regimes european vs non european countries or with four alternative dependent variables increased globalization and a modest convergence of the welfare state have occurred but globalization does not unambiguously cause welfare state expansion crisis and reduction or convergence bisherige befunde der sozialwissenschaftlichen forschung zum kausalen verhaltnis von globalisierung und wohlfahrtsstaat sind nicht eindeutig danach kann globalisierung positive effekte haben und zu einem ausbau an wohlfahrtsstaatlichkeit fuhren eine krise des wohlfahrtsstaates oder leistungsreduktionen herbeifuhren kurvilineare wirkungen aufweisen und zu konvergenz beitragen als auch vollkommen insignifikant sein unsere gepoolte zeitreihenanalyse von wohlfahrtsstaatlichkeit und globalisierung in 17 reichen demokratien 1975 1998 hat folgende befunde zu tage gefordert 1 im zeitalter der globalisierung erscheinen bestehende wohlfahrtsstaatsmodelle revisionsbedurftig 2 die mehrzahl der okonomischen globalisierungsindikatoren weist keine signifikanten effekte auf 3 die wenigen signifikanten effekte zeigen in unterschiedliche richtungen und stimmen haufig nicht mit bestehenden theoretischen annahmen uberein 4 die globalisierungseffekte sind deutlich kleiner als die effekte binnenpolitischer variablen und okonomischer faktoren 5 diese effekte unterscheiden sich in liberalen und nicht liberalen wohlfahrtsregimen bzw europaischen und nicht europaischen landern nicht systematisch von einander im analysezeitraum konnen wir sowohl einen anstieg der verschiedenen globalisierungsindikatoren sowie eine moderate konvergenz der verschiedenen wohlfahrtsstaaten konstatieren jedoch kann der prozess der globalisierung nicht eindeutig als kausale ursache fur die unterschiedlichen entwicklungsrichtungen in den verschiedenen wohlfahrtsstaaten identifiziert werden

how shifting investment towards low carbon sectors impacts employment three determinants under scrutiny abstract the threat of climate change requires redirecting investment towards low carbon sectors and this shift generates heated debates about its impact on employment many studies exist most of which use cge or input output io models however the economic mechanisms at play remain unclear this paper disentangles the channels of job creation and studies to what extent the results of simpler io models diverge from cge results using stylized models we show that a shift in investment creates jobs in io if it promotes sectors with a higher share of labour in value added lower wages or a lower import rate in cge the first two channels also yield job creation but there is no positive impact of targeting low imports sectors unless these do not export then we undertake a numerical analysis of two policies the installation of solar panels and weatherization in france both policies have a positive effect on employment in both models due to the high share of labour and low wages in these sectors io results provide a good approximation of cge results for solar 14 to 34 and are slightly higher for weatherization 22 to 87 our findings challenge the idea that renewables boost employment by reducing imports but they also suggest that a double dividend can be achieved by encouraging low carbon labour intensive sectors

did globalization restrict partisan politics an empirical evaluation of social expenditures in a panel of oecd countries this paper evaluates empirically how in the course of globalization partisan politics affected social expenditures in a panel of oecd countries i introduce an updated indicator of government ideology and investigate its interaction with the kof index of globalization two basic results emerge first at times when globalization proceeded at an average pace partisan politics had no effect on social expenditures but leftist governments increased social expenditures when globalization was proceeding rapidly second policies differed in the 1980s and 1990s leftist governments pursued expansionary policies in the 1980s yet partisan politics disappeared in the 1990s but not because of globalization

renewable energy and employment in germany abstract the positive impacts of an increasing share of renewable energy on the mitigation of climate change as well as on the decrease of the dependency of energy imports are indisputable however one persistent problem for the german economy has been its high level of unemployment in the recent past therefore any policy strategy will be measured also by its net impact on the labor market the paper describes the results of a study that models this impact and is novel within three respects firstly an input output vector for the renewable energy sector was developed based on the results of more than 1000 interviews with an extensive questionnaire secondly gross and net effect of two different policy scenarios for germany until 2030 were calculated and thirdly the approach varies from earlier studies by its explicit modeling of export and foreign trade effects

reinterpreting arbitration s narcotic effect an experimental study of learning in repeated bargaining field evidence suggests that arbitration increases negotiation dispute rates we study repeated bargaining in a laboratory to understand the reasons why our results represent a reinterpretation of an explanation known as the narcotic effect the standard interpretation assumes that the probability of dispute without arbitration is constant across negotiations but field evidence suggests that experienced bargainers have fewer disputes to properly assess arbitration s impact we compare bargainer learning with and without arbitration under otherwise comparable laboratory conditions and develop a model to measure learning we find strong evidence that learning occurs in both cases but is slower with arbitration journal of economic literature classification numbers c78 c92 d77 j52 q 1998 academic press

arbitration and conflict resolution in labor management bargaining compulsory arbitration is frequently employed to resolve labor management bargaining disputes when the union is legally prohibited as are for example many public employees unions from striking in this form of arbitration an arbitrator is empowered to impose a settlement on the bargaining parties if their negotiations break down various compulsory arbitration schemes are now in use in many states including alaska connecticut iowa maine massachusetts michigan minnesota nebraska nevada new jersey new york oregon pennsylvania rhode island south dakota washington wisconsin and wyoming but there has been little formal analysis of the various schemes that are employed in these states and as a result the basis available for choice among them remains incomplete this paper classifies the theoretical problems that must be resolved before a more careful comparison of these compulsory arbitration schemes is possible provides a brief overview of the work that has been done on each of these problems and indicates what appear to be the most promising directions for future research along these lines four kinds of compulsory arbitration are considered here conventional ccmpulsory arbitration cca in which the arbitrator imposes a settlement of his unrestricted choice if negotiations break down finaloffer arbitration foa in which the arbitrator must choose without compromise between bargainers final offers if negotiations break down multiple foa a variant of foa originally suggested by donn and on occasion issue by issue foa which is like simple foa except that the arbitrator is permitted to fashion his settlement from the components of bargainers final offers cca simple foa and issue by issue foa are already in widespread use while multiple foa which is similar but not identical to a scheme used in eugene oregon has been suggested by donn and my 1979a article as an improvement on simple foa in the literature of industrial labor relations compulsory arbitration schemes have been judged primarily by three criteria the quality of the arbitral settlements they generate when negotiations break down their freedom from bias which is usually defined as the distortion of negotiated settlements away from what they would have been in ordinary bargaining with both strikes and lockouts permitted and the extent to which they create environments conducive to negotiated settlements an integrated analysis in which bargainers choosing their stategies consider the effects of their actions on negotiated and arbitral settlements as well as on the probabilities of these possibilities would be ideal but in beginning the study of the effects of arbitration schemes it is convenient and probably not misleading to simplify the problem by dividing it thus i shall propose separate analyses of the quality of arbitral settlements under noncooperative behavioral assumptions the bias of negotiated settlements under cooperative assumptions and the probability of a negotiated settlement under a blend of both noncooperative and cooperative assumptions each section of this paper in turn discusses existing work that is relevant to judging arbitration schemes by one of the above three criteria university of california san diego this research was supported by the national science foundation many of the observations made here evolved in discussions and correspondence with clifford donn who by no means agrees with all or even most of them i am grateful to him and to joel sobel and participants in a workshop presentation at the university of chicago who also made helpful comments

how flexible are wages in response to local unemployment in south africa it is commonly claimed that the south african labor market is unusually inflexible owing to the strength of the country s unions and the system of centralized collective bargaining one sign of labor market inflexibility is low responsiveness of wages to local unemployment analyzing data from the south african living standards survey the authors find that the elasticity of wages with respect to local unemployment rates in south africa in 1993 was about 0 1 the similarity of this elasticity to that found in other countries including the united states and the united kingdom is surprising given south africa s national unemployment rate of over 30 the wage curve elasticity persists over a much wider range of unemployment rates in south africa than in oecd countries implying that unemployment in south africa can have a large impact on wages

bargaining with random implementation an experimental study abstract we use a laboratory experiment to study bargaining with random implementation we modify the standard nash demand game so that incompatible demands do not necessarily lead to the disagreement outcome rather with exogenous probability q one bargainer receives his her demand with the other getting the remainder we use an asymmetric bargaining set favouring one bargainer and disagreement payoffs of zero and we vary q over several values our results mostly support game theory s directional predictions as with conventional arbitration we observe a strong chilling effect on bargaining for q near one extreme demands and low agreement rates increasing q reinforces the game s built in asymmetry giving the favoured player an increasingly large share of payoffs but also raising efficiency these effects are non uniform over sizable ranges increases in q have minimal effect but for some q small additional increases lead to sharp changes in results

china s income gap and inequality under clean energy transformation a cge model assessment abstract to achieve nationally determined contribution ndc targets china has developed a series of low carbon development plans among them the clean energy transformation is very crucial this study evaluates the impact of a set of policies including the development of renewable energy upgrading heavy industry and energy efficiency improvement on china s income gap between 2012 and 2050 a dynamic computable general equilibrium cge model with detailed representations of economic activity an upgraded labor market and disaggregated labor types based on statistical and survey data is used our research provides support for the necessity of low carbon policies to achieve ndc targets results show some key findings first low carbon policies have the greatest impact on employment across all energy industries with negative impacts in most traditional energy sectors and positive impacts in most renewable power sectors second labor will continue to migrate from rural to urban areas with the transformation of the economic structure and the urbanization rate will further increase reaching a maximum of around 70 the reduction of the rural population will bring new opportunities for the modernization of agriculture increasing the income of rural residents and realizing the equitable development between urban and rural areas third the income gap among urban residents will widen due to the different level of labor demand for employees with different education levels

the effects of alternative power sharing arrangements do moderating institutions moderate party strategies and government policy outputs advocates of consensual political institutions i e institutions that promote compromise and powersharing among political parties claim that these institutions promote moderation in government policy outputs to date however there exists little research either theoretical or empirical that evaluates whether consensual institutions promote moderation in parties policy declarations we develop a multiparty spatial model with policy seeking parties operating under proportional representation in which we vary the extent to which government policies reflect power sharing among all parties as opposed to being determined by a single party we determine parties optimal nash equilibrium policy positions and conclude that power sharing does not typically motivate parties to moderate their policy declarations in fact policy positioning under power sharing appears to be similar to or more extreme than under single party dominance consistent with previous research however we find that power sharing does promote moderation in government policy outputs our results have implications for parties election strategies for the design of political institutions and for representative government

an experimental comparison of dispute rates in alternative arbitration systems this paper reports the results of a systematic experimental comparison of the effect of alternative arbitration systems on dispute rates the key to our experimental design is the use of a common underlying distribution of arbitrator fair awards in the different arbitration systems this allows us to compare dispute rates across different arbitration procedures where we hold fixed the amount of objective underlying uncertainty about the arbitration awards there are three main findings first dispute rates are inversely related to the monetary costs of disputes dispute rates were much lower in cases where arbitration was not available so that the entire pie was lost in the event of a dispute this confirms the empirical importance of the so called chilling effect on bargaining that has been conjectured is produced by the adoption of arbitration systems second the dispute rate in a final offer arbitration system is at least as high as the dispute rate in a comparable conventional arbitration system contrary to the usual argument we find no evidence that final offer arbitration eliminates the chilling effect third dispute rates are inversely related to the uncertainty costs of disputes dispute rates were lower in conventional arbitration treatments where the variance of the arbitration award was higher and imposed greater costs on risk averse negotiators our results can also be interpreted as providing tentative evidence that the negotiators were risk averse on average finally we find general agreement between the dispute rates in our experiment and dispute rates found in the field in comparable settings

compulsory arbitration arbitral risk and negotiated settlements a case study in bargaining under imperfect information the effect of conventional and final offer compulsory arbitration on negotiated settlements is characterized using nash s variable threats bargaining solution with particular attention to the interaction between arbitral risk and bargainers risk preferences when there is no arbitral risk both schemes are shown to have the same effect on negotiated settlements under very general conditions even when bargaining is over several issues whether or not there is arbitral risk negotiated settlements favour a bargainer more if his opponent is more risk averse on the other hand increases in arbitral risk need not improve the position of the less risk averse bargainer as a by product of the analysis kihlstrom roth and schmeidler s risk sensitivity results for the nash and raiffa kalai smorodinsky solutions are generalized from fixed threats to variable threats bargaining

the long term effect of renewable electricity on employment in the united kingdom abstract assessment of the employment impact of renewable electricity technologies is generally implemented through either complex and data intensive methods such as computable general equilibrium models or simplistic approaches normally focused on specific energy generation technologies such as employment factors in contrast this article proposes a transparent and easily reproducible econometric methodology based on the vector error correction model that uses aggregated and widely available data the model is applied to the power generation sector in the united kingdom using annual data from 1990 onwards and provides evidence that the long term employment impact of renewable technologies is much higher than the impact arising from deploying nuclear or natural gas technologies the impulse response function analysis indicates that a permanent 1 gigawatt hours increase in annual electricity supply generated by renewable technologies creates 3 5 jobs in the long term period finally this study derives the implications of the findings in the context of decarbonisation scenarios for the power sector in the united kingdom and assesses the extent to which decarbonisation pathways based on renewable electricity contribute to stimulating employment in the generation sector

effects of multiple arbitrators on final offer arbitration settlements abstract we examine final offer arbitration foa in the case where there is more than one arbitrator the two disputants submit final offers to a referee and each of the arbitrators submits an assessment to the referee the referee then aggregates the arbitrator input and declares one of the disputants the winner three aggregation schemes are considered average assessment median assessment and majority vote in all cases the gap between final offers becomes smaller as the number of arbitrators is increased moreover average aggregation gives a slightly smaller gap than does median aggregation and median aggregation is shown to be equivalent to majority vote aggregation

learning in equilibrium models of arbitration this paper analyzes strategic communication in equilibrium models of conventional and final offer interest arbitration both models emphasize the role of learning by the arbitrator from the parties offers about the state of the employment relationship which is known to the parties but not to the arbitrator in both models the arbitrators equilibrium behavior is identical to the reduced form decision rule typically assumed in the empirical literature the paper thereby provides a structural interpretation for the existing empirical work the paper also represents progress towards a complete theory of arbitration because it satisfies three conditions that will be required of any such theory first the models predictions match the existing empirical evidence second the models describe equilibrium behavior and third the models are built on a common set of assumptions about preferences information and commitment the paper therefore not only provides an equilibrium foundation for the intuition that the arbitrator might learn from the parties offers but also uses the idea of learning to develop a unified analytical treatment of the two major forms of interest arbitration this abstract was borrowed from another version of this item