information disadvantage in linear cournot duopolies with differentiated products abstract we focus on a class of linear cournot duopolies with differentiated products and prove that whether there is an information advantage or disadvantage depends on firms information setup specifically we show that when the cross effects are common value the uninformed firm that commits to quantity will not have lower ex ante profits than a firm that has complete information about its cross effects this result contrasts to the information advantage that holds in the same duopolies with independent cross effects

exploration and extraction in a duopoly exhaustible resource market exploration for an exhaustible natural resource is valuable because it produces information about the resource stock i model a duopoly exhaustible resource industry with imperfect information about stock size as a two period game where each period is made up of an exploration stage and an extraction stage i derive the value of gaining information about stock size prior to committing to an extraction plan both for the exploring firm and for the rival i show that an exploring firm would prefer on average to keep exploration information private but that industry profit is higher when information is made public le processus d e xploration et d extraction dans un marche de ressource naturelle non renouvelable oui il y a un duopole le processus d exploration est utile parce qu il permet de produire des renseignements quant a la taille du stock d une ressource naturelle non renouvelable l auteur examine un modele de duopole dans un jeu a deux p6riodes pour une industrie de ressource naturelle non renouvelable l information est imparfaite quant a la taille du stock de resource et chacune des deux p6riodes a un stage d exploration et un stage d extraction l auteur d6rive la valeur de l information additionnelle qujant a la taille du stock de ressource avant de s etngager dans un plan d extraction a la fois pour l entreprise exploratrice et pour l entreprise rivale on montre que l enterprise exploratrice va pr6f6rer en moyenne garder l information priv6e mais que les profits dans l industrie sont plus 6lev6s quand l information est rendue publique

information advantage in cournot oligopoly abstract consider an oligopolistic industry where firms have access to the same technology but are asymmetrically informed about the environment even though it is commonplace to think that in this context superior information leads to higher profits we find that under cournot competition this is not generally the case it holds when firms technology exhibits constant returns to scale but it does not necessarily hold otherwise journal of economic literature classification numbers c72 d43 l13

information acquisition as business strategy information acquisition activities such as accounting disclosure financial analysis and marketing research are major concerns in moder business administration business enterprises often invest enormous amounts of time and money in obtaining information for the various tasks of decision making a growing literature is devoted to addressing the role of information in the production decision and the market structure however little effort has been devoted to understanding information acquisition as an essential part of business strategy the purpose of this paper is to analyze information gathering as a competition strategy of manufacturing firms and to examine its implications for the welfare of society li mckelvey and page 13 and vives 20 use a two stage game model to study the information acquisition of oligopolistic firms however these authors ignore the strategic aspect of information acquisition in both 13 and 20 firms are symmetric and produce a homogenous good therefore the equilibrium is also symmetric all firms gather the same amount of industrywide information we generalize 13 in several ways we allow firms to produce differentiated products and to use the information they acquire to contest the product market moreover the information in our model can be partly firm specific and partly industry wide we adopt a convex information cost function more general than that of 13 therefore 13 can be interpreted as a special case of the model presented here novshek and sonnenschein 14 gal or 6 vives 19 and li 12 study the possibility of trading or sharing the exogenous industry wide information about demand okada 15 fried 4 li 12 shapiro 18 and seidmann 17 examine the incentive for disclosing exogenous firm specific information about costs in an oligopoly 2 we extend the analysis in this literature

second mover disadvantages in a three player stackelberg game with private information abstract i consider a three player stackelberg game where each player has its private signal concerning stochastic demand i show that at a perfectly revealing equilibrium the second mover earns the lowest and the third mover the highest expected profit of the three i characterize this result by the strategic substitutes or complements relationships among three firms at the equilibrium journal of economic literature classification numbers c72 d82 and l13

strategic transparency and informed trading will capital market integration force convergence of corporate governance dominant investors can influence the publicly available information about firms by affecting the cost of information collection under strategic competition transparency results in higher variability of profits and output thus lenders prefer less transparency since this protects firms when in a weak competitive position while equity holders prefer more market interaction creates strategic complementarity in gathering information on competing firms thus entry by transparent competitors will improve price informativeness moreover as the return to information gathering increases with liquidity increasing global trading may undermine the ability of bank control to keep firms opaque

keeping the public purse an experiment in windfalls taxes and the incentives to restrain government it is widely believed that natural resource wealth foreign aid and other types of windfall revenue increase corruption and undermine accountability a predominant claim in political science is that windfalls free politicians from the need to tax resulting in a more politically quiescent population yet there is surprisingly little evidence to substantiate not only whether taxation has this eect but also why i use novel experiments to provide the rst micro level causal test of claims that 1 taxes motivate citizens more than windfalls to hold politicians accountable and 2 citizens care more about wasted revenue when they pay taxes the experiments were embedded in a public awareness campaign conducted with 1 863 citizens in a resource rich district in indonesia the results measured through a survey and a postcard campaign show that taxes made participants more willing to monitor government and hold politicians accountable than windfalls primarily because of a stronger sense of ownership over public funds yet when better information on government spending is made available the windfall group proved just as intolerant of misspent revenue these ndings have important implications for understanding not only how taxation motivates political action but also how revenue shapes the ways in which citizens acquire and process information on government spending

political regimes and the extractive capacity of governments taxation in democracies and dictatorships recent political and economic transformations in latin america africa asia and eastern europe have brought about a renewed interest in the incentives and capabilities of different types of political regimes to implement policies that are deemed necessary for economic development in particular policies aimed at increasing tax revenue one central question is whether democracies can collect as much in taxes as dictatorships this article addresses this question by examining whether regime type classified as democracy or dictatorship has a causal impact on a government s capacity to mobilize resources through taxation on the basis of data gathered for 108 countries for the period between 1970 and 1990 the article concludes that observed differences across countries regarding the level of taxes collected by the government are not due to the fact that some are under a democracy and others under a dictatorship concerns about the inability of democratic regimes to collect taxes are therefore unfounded

information use and acquisition in price setting oligopolies asymmetric price setting multi product suppliers have access to multiple sources of information about demand conditions where the publicity of each source corresponds to the cross industry correlation of signals received from it a signal s influence on suppliers prices is increasing in its publicity as well as in its precision the emphasis on relatively public information is stronger for smaller suppliers who control narrower product portfolios when information is endogenously acquired suppliers listen to only a subset of information sources this subset is smaller when products are less differentiated and when the industry is less concentrated smaller suppliers focus attention on fewer information sources the inefficiencies arising from information acquisition and use are identified the associated externalities depend upon the extent of product differentiation the concentration of the industry and the degree of decreasing returns to scale

the strategic peril of information sharing in a vertical nash supply chain a note abstract conventional wisdom suggests that information sharing benefits at least one of the participants however we find that information sharing can be strategically detrimental to both members in a vertical nash supply chain comparative statics show that each supply chain member s beneficial areas are smaller when its information source becomes more variable and larger as its signal is less accurate furthermore the pareto inferior areas in which both supply chain members get worse are non monotonic in exogenous parameters

information sharing information free riding and capital structure in oligopolies we study the effect of capital structure decisions on the incentives for firms in a duopoly to share information through a trade association focusing on the case of cournot competition with demand uncertainty we find that the standard result for all equity firms that information will not be shared may be reversed when one firm has better access to information than the other leverage may be a way for the latter firm to free ride on the former firm s information with ex ante symmetric firms a trade association will be formed even if information sharing does not occur

author s gender affects rating of academic articles evidence from an incentivized deception free laboratory experiment even though women s position in academia has changed dramatically over the last few decades there is still some evidence that when it comes to evaluation of scientific achievements gender may play a significant role gender bias is particularly likely to take the form of statistical discrimination in this study we sought to verify the hypothesis that researcher s gender affects evaluation of his or her work especially in a field where women only represent a minority towards this end we asked a sample of subjects mostly economics majors to evaluate a paper written by mixed gender couples indicating that it was co authored by a female economist male economist young female economist or young male economist or giving no information about the author at all while age factor played no role female authors appeared to be seen as less competent than males in that subjects being incentivized to give their best judgment less often believed that their papers have been published this effect did not interact strongly with the gender of the subject

imperfect information and dynamic conjectural variations this article analyzes oligopoly interaction in an environment where firms are imperfectly informed about the evolution of the market demand curve the analysis develops a two period cournot framework under the assumptions that demand shifts are positively serially correlated that firms never directly observe the demand curve and that firms never observe the previous quantity decisions of rivals firms do draw inferences about the position of the demand curve from past observations on prices consequently the current output of a firm will influence the current market price which will then influence rivals inferences about future demand the future output decisions of rivals will respond accordingly the theory predicts negative dynamic conjectural variations essentially a firm perceives that an increase in its output will lower the current market clearing price which will cause rival firms to think that the demand curve has shifted down and hence induce them to lower their outputs in the future

communication in cournot oligopoly abstract this paper studies communication in a static cournot duopoly model under the assumption that the firms have unverifiable private information about their costs we investigate the conditions under which the firms cannot transmit any information through cheap talk and show that when these conditions are violated it may be possible to construct informative cheap talk equilibria if the firms can communicate through a third party communication can be informative even when informative cheap talk is impossible we exhibit a simple mediated mechanism that ensures informative communication and interim pareto dominates the uninformative equilibrium for the firms

first mover disadvantages with private information we consider a leader follower game with output quantities as strategies so as to demonstrate the reduced advantages of the stackleberg leader in a stochastic environment with private information at the equilibrium the strategy of the leader reveals to the follower information about the demand in an attempt to signal low demand the leader contracts his output nevertheless unless the leader s information is infinitely noisy the follower can always correctly infer his signal we find a wide range of parameter values over which the follower is better off compared to the leader

the impact of asymmetric information on entry deterrence an example abstract a simple non pathological example demostrates that when an incumbent firm has private information about the state of demand an entrant s profits and the likelihood of entry may be decreasing in the state of demand

endogenous price leadership and the strategic acquisition of information we model a differentiated bertrand duopoly in which a firm s earlier knowledge of market demand than its competitor results in endogenous price leadership with the information advantaged firm leading in such a setting with second mover advantage we then study the firms incentives to acquire information and analyze an information acquisition game both i neither firm acquiring information and ii one firm acquiring information can arise as subgame perfect equilibrium but both firms acquiring information is never an equilibrium outcome even if information is free information may have a negative value if it causes a change in the timing of price competition

exchange of cost information in oligopoly when do oligopolists gain by sharing their private information about their costs with one another what are the social welfare effects of such information exchange i study these questions by comparing the oligopolists expected profits under a cost sharing agreement with their expected profits in the bayesian equilibrium that would arise without cost sharing i also analyse the firms decisions to form a trade association to share their cost data under conditions of linear demand and cournot behaviour industrywide information exchange is the unique point in the core of the trade association membership game the exchange of cost data increases expected profits and welfare but reduces expected consumer surplus cost sharing increases efficiency by raising the market shares of lower cost firms and reducing the variability of aggregate output consumer surplus is diminished however because the variance of output is reduced and consumer surplus is a convex function of output

trade association disclosure rules incentives to share information and welfare in this article i propose a monopolistic competition framework to analyze the effects of different disclosure rules used by trade associations on the incentives to share information and on the welfare of consumers firms and society this framework is appropriate whenever a single firm cannot influence aggregate market magnitudes and serves as a benchmark for the analysis of information pooling agreements abstracting from strategic considerations i report two main results first a policy of nonexclusionary disclosure destroys the incentives to share information while exclusionary disclosure preserves them second information sharing increases expected total surplus with cournot competition but decreases it with bertrand competition in the context of a quadratic normal model with demand uncertainty

licensing a non drastic innovation under double informational asymmetry this paper deals with the problem faced by a patentee owning a new production process whose value is unknown ex ante the patentee must license the new technology to users in order to profit from it and each potential licensee has production costs using the technology that are unknown to everyone until after contracting at which point each licensee gets private information about her own costs moreover the patentee cannot observe outputs of potential licensees and therefore must use lump sum rather than per unit royalty schedules to license the technology in this setting the optimal licensing scheme from both the industry and the innovator viewpoints is defined as well as the socially optimal dynamic industrial structure to market the technology welfare aspects of regulation on patents length are also discussed in this context

acquisition and dissemination of information in imperfectly competitive markets i introduction does the market mechanism always generate incentives for the acquisition and dissemination of information about market conditions the efficiency of prices in aggregating and disseminating information has been extensively studied in competitive models of financial markets 1 an important result is the so called information paradox described by grossman and stiglitz 1980 according to which a revealing competitive equilibrium may fail to exist when the costs of acquiring information are small information problems are however as prevalent in product markets as they are in financial markets firms continually act to acquire information on market conditions such information is generally not solely of firm specific value but also of relevance to other firms hence there is a problem in how incentives for information acquisition among firms interact considering this problem naturally leads us to consider situations of imperfect competition rather than the competitive markets which might be more relevant for financial markets whether or not prices fully reflect the state of the market also has implications for macroeconomic models built on the presumption that prices do not fully adjust to all potentially available information recent attempts to explain why prices would not fully adjust to market conditions have focused on explicit costs either of acquiring information about market conditions see e g eden 1981 or adjusting prices see rotemberg 1986 we show here that information problems have significant effects on price adjustment due to the role prices play in disseminating information to illustrate the effects of strategic information transmission on the information content of prices we consider a static stackelberg model with two price setting firms producing a differentiated good this is the simplest conceivable setting where the price of one firm the leader may be used as an informative signal by another firm the follower and thus create a strategic problem of information dissemination to focus on the strategic interaction in the acquisition of information we disregard the explicit costs of adjusting prices once firms are assumed to possess market power it is possible that a firm will try to influence the information revealed by its actions and hence the information content of its prices in an attempt to distort the information being disseminated a firm may bias its price decision which may not only affect profits but also its decisions regarding information acquisition we consider here an information problem created by demand conditions which are subject to random shocks we endogenize the information structure by allowing both firms to acquire information on demand conditions prior to any price decisions information costs are fixed and possibly zero in so far as the leader s price decision is based on private information the follower may be able to infer information about demand for its good from the price chosen by the leader if the follower attempts to infer information from the price of the leader the leader has an incentive to mislead the follower by its choice of price 2 if the follower is rational it understands the leader s incentives and in the unique separating equilibrium is able to unravel the bias and correctly infer the information because the leader is rationally expected to bias its price relative to the price chosen if the firms shared the private information it cannot choose the unbiased price to avoid this bias the leader essentially has to be able to announce its information credibly at the same time as its price an action for which there is no obvious mechanism hence when information is private the leader has a biased price but the follower still infers the private information correctly considering pure strategy equilibria of the information acquisition game in the case of costless information we find that a pure strategy nash equilibrium need not exist although if one does exist only the leader acquires information

first versus second mover advantage with information asymmetry about the profitability of new markets is it better to move first or second to innovate or to imitate we show that if one player s information about the profitability of new markets is only modestly superior the possibility of foreclosing the market can lead to a first mover advantage on the other hand more extreme information superiority can reverse this leading to a second mover advantage knowing more surely what is the best choice the better informed player wants to delay to keep his information private and the less informed player wants to delay to learn because of this more accurate information can actually lead to inefficiency by increasing the incentive to delay and exogenous costs of delay can aid efficiency by neutralizing that strategic incentive in fact in some circumstances a player may purposely coarsen his information to deter imitation

a two stage model of research and development with endogenous second mover advantages this paper describes a simple two stage model of research and development in which the winner of the research stage has the option of moving first in the development stage some unexpected results emerge in equilibrium the leader in the development stage invests less than each follower and is consequently least likely to collect the patent moreover the leader receives a lower expected payoff than each of the followers thus there are endogenous second mover advantages using a game of timing in which the identity of the stackelberg leader is determined to link the two stages i find that firms face quite different incentives in the research stage although the leader invests less than each follower in the research stage as well the leader enjoys higher expected revenue from the complete two stage game than does each follower the equilibrium is inefficient because there is a lag between the time at which research is completed and the time at which development is begun and because aggregate investment is inefficiently asymmetrically distributed across firms

asymmetric demand information and foreign direct investment we examine the fdi versus exports decision of firms competing in an oligopolistic quantitysetting market under demand uncertainty and asymmetric information compared to a firm that chooses to export a firm that chooses to set up a plant in the host market has superior information about local market demand in addition to the well known tension between the fixed set up costs of investment the additional variable costs of exports and oligopoly sizes the incentive to invest abroad is explained by the strategic learning effect fdi may be observed even if trade costs are zero the analysis is robust to price competition and to the possibility that a foreign firm can engage in both fdi and exports

glass ceilings or sticky floors statistical discrimination in a dynamic model of hiring and promotion i show that when two groups differ in i their average skill level ii the precision with which they can signal their skill prior to entering the labour market and or hi the frequency with which they have the opportunity to signal their skill prior to entering the labour market then even if firms become increasingly informed regarding each worker s skill over time equally skilled workers from different groups will have different likelihoods of making it to top jobs in the economy even though there is no discrimination when it comes to promotion to these top jobs in 1995 95 of senior level managers in the top fortune 1000 industrial and 500 service companies in the us were male 97 of whom were also white federal glass ceiling commission 1995 in the uk females make up just 8 3 of the senior judi ciary 9 7 of top business leaders and 9 1 of newspaper editors eoc 2005 at the end of the 2004 american football season only 5 of the 32 nfl head coaches were black and only 2 of the 117 division i college football teams had black head coaches rosenburg 2004 in 1999 there were only 68 female full professors at the 120 phd granting economics departments in the us cswep 1999 this severe underrepre sentation of females and minorities at the highest levels of occupational achievement throughout a wide range of occupations has often been referred to as the glass ceiling 1

inequality and personal income taxation the origins and effects of legislative malapportionment why does personal income taxation pit remain relatively low in many developing countries despite a period of democratic advancement and rapid economic growth this stylized fact is hard to reconcile with standard political economy models of taxation that expect democratic regimes to bring about redistribution in countries that suffer from high inequality this article argues that the details of political institutions are key to understand why pit remains low in many developing and unequal countries in particular we show how legislative malapportionment may prevent the use of personal income taxes as a major revenue source by skewing the distribution of political power across groups malapportionment is usually not exogenous but the result of design by those with political power at the transition or reform moment as such it depends on the structure of political and economic power in society based on a sample of more than 50 countries between 1990 and 2007 this article finds that a countries with

resource intensity institutions and development summary we examine the relationship between resource abundance and several indicators of human welfare consistent with the existing literature on the relationship between resource abundance and economic growth we find that given an initial income level resource intensive countries tend to suffer lower levels of human development while we find only weak support for a direct link between resources and welfare there is an indirect link that operates through institutional quality there are also significant differences in the effects that resources have on different measures of institutional quality these results imply that the resource curse is a more encompassing phenomenon than previously considered and that key differences exist between the effects of different resource types on various aspects of governance and human welfare 2005 elsevier ltd all rights reserved

putting up or shutting up on the individual level relationship between taxpaying and political interest in a developmental context abstracthistorical research mainly focused on early modern europe has suggested a positive link between taxation and democracy this study approaches the connection in a present day developmental context by looking at differences between taxpayers and non taxpaying citizens in terms of political interest a precondition for accountability demands using survey data from sub saharan africa a multilevel analysis shows that taxpaying increases political interest the causal direction of this finding is confirmed through an instrumental variable analysis the results support the existence of the mechanisms underlying the theory of taxation working as a generator of political engagement and democracy

mergers and investments in cost reduction with private information abstract we present a model of cost reducing r d investments where the marginal cost realization is private information of the innovating firm the main contribution is the conclusion according to which with merger anticipations the innovating firm does not have ex ante incentives to reveal its cost realization prior to the takeover interestingly we also find the expected consumer surplus to be higher for the regime characterized by incomplete information as compared to a regime based on information sharing

information sharing between vertical hierarchies abstract when do principals independently choose to share the information obtained from their privately informed agents information sharing affects contracting within competing organizations and induces agents strategies to be correlated through the distortions imposed by principals to obtain information we show that the incentives to share information depend on the nature of upstream externalities between principals and the correlation of agents information with small externalities principals share information when externalities and correlation have opposite signs and do not share information when externalities and correlation have the same sign in this second case principals face a prisoners dilemma since they obtain higher profits by sharing information

too much information sharing welfare effects of sharing acquired cost information in oligopoly by using general information structures and precision criteria based on the dispersion of conditional expectations we study how oligopolists information acquisition decisions may change the effects of information sharing on the consumer surplus sharing information about individual cost parameters gives the following trade off in cournot oligopoly on the one hand it decreases the expected consumer surplus for a given information precision as the literature shows on the other hand information sharing increases the firms incentives to acquire information and the consumer surplus increases in the precision of the firms information interestingly the latter effect may dominate the former effect

information sharing with capacity uncertainty the case of coffee when faced with uncertain capacity constraints coumot oligopolists face two problems should they share information once it becomes known to them and can quantity collusion be sustained this paper shows that agreeing to reveal information does not always increase expected profits as it does in previous models in which the uncertainty is a constant marginal cost parameter this paper also demonstrates that when collusion is not enforceable and information cannot be reliably shared trigger strategies can support equilibrium profits greater than cournot profits when demand is known and supply is uncertain a situation found in agricultural markets such as coffee partage de l information quand la capacite de production est incertaine le cas du cafe quand ils sont en face de contraintes incertaines sur la capacite de production les oligopoleurs a la coumot font face a deux problemes devraient ils partager l information quand elle devient connue et est ce que la collusion via les quantites est viable ce memoire montre que se mettre d accord pour partager l information n augmente pas toujours les profits anticipes comme c est le cas dans des modeles anterieurs oiu l incertitude est un parametre constant du couft marginal on montre aussi que quand la collusion n est pas vigoureusement policee et que l information ne peut pas etre fiablement partagee des strategies gachettes peuvent enclencher des profits plus grands que ceux que produisent la strategie cournot quand la demande est connue et que l offre est incertaine une situation que l on retrouve justement dans des marches de produits agricoles comme le cafe

a dynamic duopoly model with asymmetric information this paper investigates the impact of asymmetric information on the set of equilibria of a two period duopoly game with price competition it turns out that all admissible sequential equilibria of this game share a collusive character i e ex ante expected profits for a firm of any type are higher than in the complete information case for small uncertainties the results are asymmetric a small probability of a good type firm does not make much difference on the set of equilibrium payoffs but a small probability of a bad type firm does these results survive the introduction of kohlberg and martens 1986 stability concept copyright 1990 by blackwell publishing ltd

information value under demand uncertainty and endogenous market leadership in an oligopoly model with firms choosing to produce in one of two periods we identify the circumstance under which a firm s having early information regarding stochastic demand results in market leadership high demand volatility leads to stackelberg competition with the information advantaged firm leading in the n firm case an equilibrium with multiple leaders and multiple followers emerges endogenously in a duopoly information acquisition game we identify conditions that determine whether neither one or both firms will pay to acquire early information and note that one firm s obtaining early information may generate a positive externality benefitting its competitor both symmetric and asymmetric outcomes are possible and stackelberg market leadership may occur in equilibrium but only when firms have different costs of information our finding that an information advantage may convey leadership which then affects the value of information to the players applies to other settings exhibiting first mover advantage such as certain public good provision games jel c72 d82 l13

duopoly information exchange the case of unknown slope abstract we model information exchange between duopolists facing a common random demand the slope of the common demand curve facing the firms is assumed unknown and firms observe private signals about this slope we show that for sufficiently large variation in the demand slope firms earn strictly higher profit when they share their information rather than keeping it private even with constant marginal costs and homogeneous goods in this case it is a nash equilibrium for the duopolists to share their information in a quid pro quo information exchange consistent with earlier models information exchange raises welfare

contestable markets an uprising in the theory of industry structure presents a transcript of the presidential address delivered at the 94th meeting of the american economic association on december 29 1981 discussion of developments in the theory of industry structure welfare attributes of contestable markets behavior characteristics of oligopoly equilibrium intertemporal vulnerability to inefficient entry ebsco

tax me if you can ethnic geography democracy and the taxation of agriculture in africa it is typically assumed that african leaders enact policies that benefit their ethnoregional group using all types of patronage crop production and political power are geographically concentrated in many african countries and this paper exploits this overlap to cast doubt on this conventional wisdom it shows using data on 50 country crop combinations that cash crop farmers who are ethnically identified with the head of state face higher taxes furthermore democratic regimes impose lower taxes this paper shows that farmers who have few alternatives face higher taxes african leaders have used local intermediaries to exert control over the countryside and to ensure that farmers do not support alternative candidates it suggests that as leaders are better at selecting and monitoring these intermediaries in their home areas they can extract more from the majority at home than abroad using taxes on cash crops which are regionally but not individually targetable

incentives for information production and disclosure in a duopolistic environment this paper examines the nature of the equilibrium solution to the duopoly problem under various incomplete information structures and the incentives to produce and disclose information attention is focused on the duopolists cost functions the results indicate that disclosure of such information is generally beneficial to the duopolists

competitive pricing in markets with different overhead costs concealment or leakage of cost information this paper experimentally investigates how leaders and followers in a duopoly set prices for two product markets that have different overhead costs in a fully crossed two by two design we manipulate the participants private cost report quality as either low or high representing the extent to which these reports reveal that product markets have different overhead costs we show that when only the leader is given a high quality cost report private cost information of higher quality is better incorporated into market prices that are observable to participants both the leader and follower improve in profits and their prices better reflect the differences in overhead costs because the follower infers information from the leader s prices information leakage in contrast when only the follower receives a high quality cost report the leader s profits and prices do not improve this occurs because the follower conceals cost information when the leader has a low quality cost report

does firm investment respond to peers investment we study whether how and why the investment of a firm depends on the investment of other firms in the same product market using an instrumental variable based on the presence of local knowledge

cournot competition and the social value of information in a differentiated product cournot model each supplier receives informative signals about demand the cross industry correlations of the signals differ more public signals have higher correlation coefficients in equilibrium information is used inefficiently from the industry s perspective information is over used and too much emphasis is placed on relatively public signals from the consumer s perspective information is under used and too much emphasis is placed on relatively private signals welfare is enhanced by increasing the use of information as desired by consumers but re balancing that use away from public signals as desired by the industry if information is costly and endogenously acquired then suppliers acquire too much new information but they use it too little

state retrenchment and the exercise of citizenship in africa what explains the varied ways that africans practice citizenship on an everyday basis and how does the extent of state building or neoliberal unbuilding in a particular context affect the way in

on the use of heuristics to approximate competitors private information abstract firms often lack knowledge of the nature of the uncertainty they or their opponents face and use heuristics or approximations to determine their strategy we define and analyze one type of heuristic strategy in which firms choose strategies based on the expectation of their opponents private information rather than the full information about the distribution of that private information we find that in equilibrium the degree to which the heuristic strategy differs from the bayesian strategy depends on 1 the convexity of a firm s marginal profits with respect to their opponents private information and 2 whether firm strategies are complementary or substitutable under certain conditions firms equilibrium profits are greater when all firms use heuristics than when all firms use the full information our results provide insight into incentives firms may have to either facilitate or impede access to industry information

why people pay taxes the case of the development levy in tanzania abstract this paper examines factors determining tax compliance behavior in local authorities in tanzania the case study is the poll tax locally named development levy the study finds support for the hypothesis that tax compliance is positively related to factors such as ability to pay the perceived probability of being prosecuted and the number of tax evaders known personally by the respondent oppressive tax enforcement harassment of taxpayers and discontent with public service delivery seem to increase tax resistance and may explain widespread tax evasion

second order statistical discrimination abstract the low representation of female workers in elite jobs is sometimes attributed to a tail effect if the human capital distribution exhibits less variation among females than among males then even with comparable average human capital there will be fewer females in the right tail than males this paper offers an explanation for why the human capital distribution might have this property we show that the belief that the female human capital distribution has a lower variance than the male distribution can be self fulfilling in that it provides individuals with incentives to invest in human capital such that the resulting distribution exhibits exactly this characteristic if this happens fewer females are employed in high end jobs a glass ceiling effect the average productivity of female workers may at the same time be higher than that of male workers

monopoly competition and information acquisition abstract an incumbent monopolist is uncertain about its linear demand but can acquire public information at a cost we determine how an entry threat affects the firm s information acquisition if returns to scale are constant and the state contingent demands become more dispersed as output increases then entry reduces information acquisition if however either the incumbent or entrant has increasing returns or if the state contingent demands are nonlinear or fail increasing dispersion then entry can increase information finally entry can hurt consumers although entry always increases output it can decrease information consumers sometimes prefer a better informed monopoly to a duopoly

fiscal capacity and the quality of government in sub saharan africa summary historical evidence from the industrialized world suggests that the expansion of the modern state s capacity to tax eventually led to more democratic and less corrupt governments using a dataset that covers 31 sub saharan african countries over the 1990 2005 period we study whether the positive effect of fiscal capacity on the quality of government prevails in contemporaneous sub saharan africa as well the results provide consistent evidence that within sub saharan africa fiscal capacity decreases corruption and increases democracy

tax morale in latin america in the tax compliance literature there is a lack of empirical evidence on the degree of tax morale in developing countries as a novelty this paper focuses thus on latin america analysing tax morale as a dependent variable and searching for factors that systematically affect tax morale working with the two data sets latinobarometro and world values survey our findings indicate that there is a significant correlation between tax morale and the size of shadow economy furthermore people who said they knew have heard about practised tax avoidance have a significantly lower tax morale than others looking at individuals perception of reasons for tax evasion we found that the tax burden lacking honesty and corruption are seen as the main factors we observed a significantly lower tax morale in south america mexico than in the central american caribbean area furthermore trust in the president and the officials the belief that other individuals obey the law and a pro democratic attitude have a significant positive effect on tax morale

endogenous diffusion of technology abstract this paper presents a positive theory of diffusion of technology it examines a two period model strategic firms are confronted by a process technology with an uncertain reduction in marginal costs the uncertainty is automatically resolved between the two periods adoption in the first period yields a leadership advantage relative to firms that do not adopt while simultaneous adoption by firms results in a cournot equilibrium the firms strategies are both production quantities and adoption timings these decisions are made at the same time thus firms face a trade off between early adoption and possibly reaping first mover advantages on one hand and deferring the adoption decision until after all the uncertainty is resolved but face the possibiity of being a follower in the market interestingly an endogenously determined diffusion rate is obtained as a pure strategy nash equilibrium of this game this means that while adoption and diffusion of technology results with probability one diffusion of a bad innovation is also possible it is also shown that in a market with one large firm and a nonatomic continuum of small firms there is a unique nash equilibrium in which the large firm adopts first and is a stackelberg leader and all the small firms decide whether or not to adopt after the uncertainty is resolved the implication of this result is simply that the diffusion of technology is to some extent determined by the relative size of firms in the industry

information sharing and tax competition among governments abstract the residence based principle has been proposed as a second best measure to the full international coordination of capital tax policies this system requires that tax authorities have full information about the foreign investments of their residents however the degree of information transmission among governments can be considered as a strategic variable we show that under some features of the tax system there will not be any information sharing while there are institutional arrangements under which governments may transmit partial information for strategic purposes we also show that full information sharing is not necessarily a pareto optimum

the value of information in a simple duopoly model abstract this paper is concerned with the evaluation of information in a duopoly model in which the cost functions are subject to uncertainty it explores how changes in information about the costs available to either firm affects the welfare of both firms along with the welfare of consumers by comparing the ten possible types of information structures it is shown that information may be detrimental that improved information for one firm may or may not benefit the other firm and or the consumer and that it may be more desirable for a firm to gather information about the rival s cost rather than its own all of these irregular results depend on the values of the variances of the costs and their correlation coefficient

price versus production postponement capacity and competition this article presents a comparative analysis of possible postponement strategies in a two stage decision model where firms make three decisions capacity investment production inventory quantity and price typically investments are made while the demand curve is uncertain the strategies differ in the timing of the operational decisions relative to the realization of uncertainty we show how competition uncertainty and the timing of operational decisions influence the strategic investment decision of the firm and its value in contrast to production postponement price postponement makes the investment and production inventory decisions relatively insensitive to uncertainty this suggests that managers can make optimal capacity decisions by deterministic reasoning if they have some price flexibility under price postponement additional postponement of production has relatively small incremental value therefore it may be worthwhile to consider flexible ex post pricing before production postponement reengineering while more postponement increases firm value it is counterintuitive that this also makes the optimal capacity decision more sensitive to uncertainty we highlight the different impact of more timely information which leads to higher investment and inventories and of reduced demand uncertainty which decreases investment and inventories our analysis suggests appropriateness conditions for simple make to stock and make to order strategies we also present technical sufficiency and uniqueness conditions under price postponement these results extend to oligopolistic and perfect competition for which pure equilibria are derived interestingly the relative value of operational postponement techniques seems to increase as the industry becomes more competitive

voluntary disclosure and investment in environmental technology abstract i examine the role of voluntary disclosure programs in creating market incentives for competing firms to invest in environmentally cleaner technology in an industry subject to environmental regulation such as emission taxes such programs may allow firms to credibly disclose their progress in achieving compliance cost reduction through investments in internal rd the outcome of the investment is private information i show that the ex ante incentive to invest is always higher in the presence of the voluntary disclosure program than without it in particular the opportunity to credibly disclose progress in cost reduction allows a successful firm to convey its true position of competitive advantage to the rival firm and realize higher market share and profit thus voluntary disclosure programs increase the efficacy of traditional forms of environmental regulation in creating incentives for green technological change even when buyers have no preference for greener technology i show that such programs generally increase social welfare

revolution and state structure the bureaucratization of tax administration in early modern england and france1 this article explores the relationship between revolution and the bureaucratization of tax administration in early modern england and france revolution produces bureaucratization only when the monitoring capacity of states is developed enough to make bureaucratic organization more efficient than alternatives such as tax farming and collection by local notables as monitoring capacity varies across types of taxes and levels of administration states also bureaucratize at different paces and are differentially affected by revolution this explains why the revolutions in england and france had greater effects on indirect taxes than on direct taxes and at top levels of tax administration compared to lower levels thus revolution is neither a necessary nor a sufficient condition for bureaucratization but it contributes to the process by sweeping away impediments to reform

the value of commitment with imperfect observability and private information the idea that commitment is valuable plays a key role in many economic models however bagwell 1995 has shown that commitment may have no value if there is even a slight noise in the observation of the leader s action thus casting doubt on the notion that commitment has strategic value here i reconsider the commitment story in a model where the leader s action is imperfectly observed and the leader has private information and i examine how it is affected by uncertainty about the leader s type and by the observation noise