the second best core an economy with a single output and input is considered for the case of economies of scale in production equilibria are studied for a cooperative game of joint production in which goods are allocated by a price system the paper proposes a second best core in which allocations that are feasible for a coalition must be attainable by a price system existence is examined and properties of second best core allocations are analyzed copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

workers remittances and the equilibrium real exchange rate theory and evidence economic integration in the early twenty first century is coninternational ventionally thought of in terms of increased openness to trade in goods and services as well as a dramatic increase in the volume of capital flows the twenty first century experience is sometimes contrasted with that of the last wave of globalization at the end of the nineteenth century when increased integration in both of those dimensions was also accompanied by large waves of international migration however this contrast is probably overdrawn as increases in international flows of labor services have also been characteristic of the current wave of globalization and the impact of these factor movements is increasingly being felt in the international economy a particularly dramatic manifestation of this fact is the sharp recorded increase in flows of worker remittances to the large number of developing countries that have been the source of these flows of labor services in recent years many such countries have witnessed significant increases in remittance flows to the point that their scale has come to dwarf that of other types of resource inflows whether development assistance foreign direct investment or other types of capital flows in 2007 remittance flows to sub saharan africa were equal in magnitude to flows of official development assistance for example remittance flows now account for some 17 percent of gdp and 77 percent of exports in el salvador and over 20 percent of gdp and nearly 50 percent of exports in honduras in these countries remittance flows are more than five times larger than foreign direct investment flows unlike capital flows remittances do not entail the creation of external debt with future repayment obligations unlike foreign development assistance they do not come encumbered with a variety of political and economic conditions with which the recipient country must comply despite these virtues however large inflows of worker remittances have been perceived as posing 45

optimal two part tariffs in a model of discrete choice abstract in this paper we study welfare optimal two part tariffs in a model of discrete choice the determinants of the sign and magnitude of the fixed and variable tax are analysed in terms of the nature and degree of consumer heterogeneity the price sensitivities of participation probabilities and conditional demands and the nature of distributional concerns in the absence of distributional concerns the model generalises the corrected ramsey rule for the variable tax and it shows that in the absence of collection or fixed participation costs the fixed fee may be negative the conditions that determine the sign of the participation fee turn out to have an intuitive economic interpretation finally the implications of distributional concerns for the optimal fixed and variable taxes are analysed

remittances financial development and growth abstract despite the increasing importance of remittances in total international capital flows the relationship between remittances and growth has not been adequately studied this paper studies one of the links between remittances and growth in particular how local financial sector development influences a country s capacity to take advantage of remittances using a newly constructed dataset for remittances covering about 100 developing countries we find that remittances boost growth in countries with less developed financial systems by providing an alternative way to finance investment and helping overcome liquidity constraints this finding controls for the endogeneity of remittances and financial development does not depend on the particular measure of financial sector development used and is robust to a number of robustness tests including threshold estimation we also provide evidence that there could be an investment channel trough which remittances can promote growth especially when the financial sector does not meet the credit needs of the population

optimal non linear pricing with regulatory preference over customer type abstract in this paper we characterize the pareto optimal set of non linear pricing schedules when non negative weights are assigned to each customer type our analysis first compares general non linear tariff schedules and sets of self selecting two part tariffs when there are two customer types and the cost function is linear we then derive optimal sets of two part tariffs for arbitrary numbers of customer types and general cost functions we also consider the sustainability of non linear pricing schedules under the threat of entry of rival firms

remittances and the real effective exchange rate we examine the long run relationship between remittances and the real exchange rate for less developed countries in a key departure from the literature we employ a panel cointegration approach using an innovative method for the measurement of the multilateral real effective exchange rate and we focus on high remittance economies we find a small inelastic but significant long run relationship which confirms a dutch disease type effect the short run relationship is explored using a panel vector error correction model which confirms that short run causality is unidirectional running from remittances to the exchange rate potential asymmetries in this relationship are identified using quantile regression analysis

how to price discriminate when tariff size matters firms that serve a large market with many diverse consumer types use discriminatory or nonlinear pricing to extract higher revenue inducing consumers to separate by self selecting from a large number of tariff options but the extent of price discrimination must often be tempered by the high costs of devising and managing discriminatory tariffs including costs of supporting consumers in understanding and making selection from a complex menu of choices these tariff design trade offs occur in many industries where firms face many consumer types and each consumer picks the number of units to consume over time examples include wireless communication services other telecom and information technology products legal plans fitness clubs automobile clubs parking healthcare plans and many services and utilities this paper evaluates alternative ways to price discriminate while accounting for both revenues and tariff management costs the revenue maximizing menu of quantity price bundles can be very or infinitely large and hence not practical instead two part tariffs 2pts which charge a fixed entry fee and a per unit fee can extract a large fraction of the optimal revenue with a small menu of choices and they become more attractive once the costs of tariff management are factored in we show that three part tariffs 3pts which use an additional instrument the free allowance are an even more efficient way to price discriminate a relatively small menu of 3pts can be more profitable than a menu of 2pts of any size this 3pt menu can be designed with less information about consumer preferences relative to the menu of two part tariffs which in order to segment customers optimally needs fine grained information about preferences our analysis reveals a counterintuitive insight that more complex tariffs need not always be more profitable it matters whether the complexity is from many choices or more pricing instruments

a bertrand model of pricing and entry abstract we analyze an oligopolistic pricing and entry model in which there is a sunk cost of entry and in which firms outputs are homogeneous firms pure strategies consist of a binary entry decision and conditional on entry a uniform or non linear price schedule there does not exist a pure strategy nash equilibrium in this model so we analyze the symmetric mixed strategy equilibrium the main result is that if there exists a positive sunk cost of entry then an increase in the number of potential competitors puts more probability weight on higher prices this result is counter to the usual intuition that underlies current antitrust policy

workers remittances and the real exchange rate a paradox of gifts abstract we test the impact of workers remittances on the real exchange rate using a panel of 13 latin american and caribbean countries the analysis reveals that workers remittances have the potential to inflict economic costs on the export sector of receiving countries by reducing its international competitiveness our findings raise concerns parallel to those raised by dutch disease or resource boom models where resource discoveries result in real exchange rate appreciation and shifting of resources from the traded to the nontraded sectors of the economy

monopoly with incomplete information recent theoretical research on principal agent relationships has emphasized incentive problems that arise when the parties involved are constrained by either asymmetric information or their inability to monitor each other s actions here we concentrate on the former constraint and consider the case of a single principal the monopolist the main contribution is to show that under a separability assumption strong conclusions can be drawn about the nature of optimal incentive schemes although the primary focus is on optimal quantity discounts in a monopolized market the results also shed light on related topics such as optimal income taxation and commodity bundling

optimal nonuniform prices we consider optimal nonuniform pricing schedules where the price depends upon the amount purchased such schedules are regularly used by public utilities and other services welfare optimal nonuniform prices are related to the theory of optimal uniform prices developed by ramsey we characterize situations in which upward or downward discontinuities in pricing schedules are optimal our results are applicable to a number of related problems including optimal taxation insurance and incentives economic theory has confined most of its attention to markets with uniform prices in which the price per unit charged is invariant to the level of a customer s purchases this focus is warranted when goods are resellable since any attempt to charge nonuniform prices could be circumvented by reselling amongst customers but when goods are not resellable nonuniform prices are not only possible but common public utilities have declining block pricing with lower unit charges for large levels of consumption many agencies providing services including communications transportation even education use two part pricing with a fixed entry or retainer charge and a further charge per unit consumption nonuniform price schedules can be expected to be ever more common as services become a larger fraction of total output the increasing prevalence of nonuniform pricing policies have made them the focus of recent public and economic attention oi 1971 feldstein 1972 and ng and weisser 1974 have examined optimal two part pricing policies leland and meyer 1976 examine block pricing and show by example that optimal welfare policies may require nonuniform prices if zero profit constraints are binding in this paper we consider arbitrary nonuniform pricing policies using variational techniques two part and block pricing schedules are of course special cases of the environment we consider the work most closely related to our examination is the seminal paper by spence 1978 and subsequent analysis by roberts 1979 spence however does not pay explicit attention to the key role played by constraints on optimal pricing schedules roberts considers upward price discontinuities which lead to bunching of consumers at a given level of consumption but not downward price discontinuities which lead to regions in which no consumer chooses to consume gaps bunching or gaps may appear in the optimal price schedule even when underlying demand and cost functions are smooth and well behaved the prevalence of discontinuous pricing schedules e g the block pricing structures of public utilities argues that these questions are of practical as well as theoretical interest

revisiting the threshold effect of remittances on total factor productivity growth in south asia a study of bangladesh and india abstractboth bangladesh and india are among the top recipient of remittances in absolute terms however in relative terms remittances as a per cent of gdp the two countries stand at 6 1 and 2

the effect of air traffic delays on airline prices abstract a legislative change in takeoff and landing restrictions at laguardia airport provides an opportunity to study the effect of an exogenous shock to product quality on prices in the airline industry i test how the price response varies with the degree of competition in the market i find that prices fall by 1 42 on average for each additional minute of flight delay and that the price response is substantially larger in more competitive markets

booming sector and de industrialisation in a small open economy this paper presents a theoretical analysis of the dutch disease the phenomenon whereby a boom in one traded goods sector squeezes porfitability in other traded goods sectors both by directly bi

are the direct and indirect growth effects of remittances significant development economists believe that migrant workers remittances are an important source of funds for long run growth therefore recent studies have investigated the growth effects of remittances and reached different conclusions in many such studies the growth of output is simply regressed on both remittances and the channels through which remittances affect growth thus there is no distinction between the indirect and direct growth effects of remittances and such specifications may give unreliable estimates because of the correlation between the channels and remittances in this paper we make a distinction between the indirect and direct effects of remittances our model is estimated with panel data of 40 high remittance recipient countries and a system gmm panel data estimation method

nonlinear prices and the regulated firm this paper examines the problem of a regulated utility that sells output according to a nonlinear price schedule three results are obtained first rate of return regulation lowers the price schedule charged by the firm along its entire length second some units of output will always be sold at a marginal price below true marginal cost third a move from linear to nonlinear prices at a given fair rate of return can lead to an unambiguous increase in welfare

on allocative distortions in problems of self selection this article considers the general structure of self selection models by imposing conditions which permit the ordering of agents by their preferences we provide a characterization of the distortions inherent in the sorting process

international migration remittances and real incomes effects on the source country this article deals with the impact of remittances from emigrants on real incomes for different groups in their country of origin in a two by two model with one traded and one nontraded good it is shown that emigration does not necessarily raise the real income of the emigrants themselves if the traded good is capital intensive nonmigrant workers gain and capitalists lose whereas if it is labor intensive the outcome depends on what happens to the price of the nontraded good the result of a rise is that capitalists gain and workers lose while a fall has the opposite effect excerpt

the welfare economics of optional water metering a model of decentralised metering decisions that applies to the water industry is developed the social benefit of metering is higher the more sensitive demand is to the price allowing households to choose whether or not to have meters is efficient when only small households should have meters but does not work when the regulator does not know household characteristics and only larger households should have meters the policy of requiring meters to be provided free which has been adopted in england and wales is analysed

two part tariffs with quality degradation abstract this paper examines a firm s incentive to sell a service that is of lower quality when the firm offers a menu of two part tariffs each tariff is characterized by a fixed fee together with two screening instruments these being a uniform per unit charge and a quality restriction we find that allocation of quality is monotonic in type while per unit charge might be non monotonic the results thus contradict one of the most established insights in nonlinear pricing that the per unit charge should be monotonically decreasing over the type space we show that this practice increases welfare due to increased consumption efficiency

effect of remittances on poverty and financial development in sub saharan africa summary this paper assesses the effect of the steadily growing remittance flows to sub saharan africa though the region receives only a small portion of the total recorded remittances to developing countries and the volume of aid flows to sub saharan africa swamps remittances this paper finds that remittances which are a stable private transfer have a direct poverty mitigating effect and promote financial development these findings hold even after factoring in the reverse causality between remittances poverty and financial development the paper posits that formalizing such flows can serve as an effective access point for unbanked individuals and households

cross country evidence on the link between volatility and growth this paper presents empirical evidence against the standard dichotomy in macroeconomics that separates growth from the volatility of economic fluctuations in a sample of ninety two countries as well as a sample of oecd countries the authors find that countries with higher volatility have lower growth the addition of standard control variables strengthens the negative relationship the authors also find that government spending induced volatility is negatively associated with growth even after controlling for both time and country fixed effects copyright 1995 by american economic association