fully absorbing dynamic compromise abstract i consider a repeated divide the dollar voting model with rejections leading to the implementation of the previous period s allocation see kalandrakis 14 i show that if proposals can be non exhaustive then equal division can be achieved as an absorbing steady state from any initial allocation given a large enough discount factor as a part of a markov perfect equilibrium this result is robust to changes in voting thresholds and persistence in proposal power outside of unanimity or total persistence

the dynamics of individuals fat consumption consumers are increasingly aware of the link between their lifestyle choices and the risk of noncommunicable diseases a dynamic approach incorporating this linkage in food demand is developed where consumers maximize utility over time by choosing fat intake to control their cumulative fat level the resulting dynamic indirect utility function and household data on meat fish and dairy consumption are used to estimate a censored demand system results show that consumers consciously adjust but not instantaneously their cumulative fat level highly educated households have a faster rate of adjustment of cumulative fat when cumulative fat level increases consumers shift to dairy or white meat from red meat products

consumer knowledge food label use and grain consumption in the us responding to mounting evidence of the association between whole grain consumption and a reduced risk of heart problems and other diseases as well as an increased probability of body weight maintenance the us government has strongly encouraged its citizens to increase consumption of whole grains however compared against the 2005 federal dietary recommendations in 1994 1996 only 6 of americans met the current recommended whole grain consumption to narrow this huge gap between actual and recommended consumption of whole grains considerable changes in consumer behaviour will be needed a demand system with two censored consumption equations and endogenous food label use and nutrition knowledge variables is estimated to investigate the factors that affect the consumption of whole and refined grains food label use and nutrition knowledge are found to play important roles in the consumption of refined and whole grain products as are sociodemographic variables the results can be used to help develop

measuring the value of life saving from consumer reactions to new information abstract past studies have relied on cross section patterns of risky behavior to generate estimates of the value of life saving this approach is colored by several problems that affect the reliability of the results in potentially serious ways it is difficult to separate the risk components from the dis utility attributes of work or consumption to avoid selectivity biases and to disentangle user costs e g wearing a face mask from the risk premium paid for accepting risk to circumvent some of these difficulties this paper uses a different approach one which exploits the information about the value of risk reduction that is provided by changing consumption patterns over time brought about by changes in available information about risks this approach makes it possible to more reliably estimate the pure effects of risks on behavior and to generate unbiased distributions of the value of life saving the case of cigarette consumption over time provides an ideal setting to illustrate this methodology

legislated protection and the world trade organization tariff bindings and administered protection are two characteristics of the world trade organization wto that are little understood tariff bindings place a ceiling on tariffs that is not always reached whereas administered protection provides all industries with some minimum import protection effectively creating a floor for protection how do these policies affect applied most favored nation mfn tariff rates that are enacted through the legislature i model tariffs determined by a dynamic legislative process and show that low applied mfn tariffs are less likely with tariff bindings and more likely with administered protection than under purely legislated protection

flexible demand systems with serially correlated errors fat and oil consumption in the united states a flexible demand system proposed by lewbel is used to estimate u s fat and oil demand from 1950 to 1986 results suggest that the lewbel model outperforms the translog and aids and that correction for serial correlation is important findings also suggest that price and income effects together with increasing public health concerns primarily determine u s fat and oil demand

effect of government quality grade labels on consumer demand for pork chops in the short and long run abstract despite ample evidence of pork quality variability at present there are few signals that would incentivize growers to produce higher quality pork using split sample choice experiment data from a nationwide online survey of u s pork chop eaters this research determines changes in pork chop demand in response to a potential change in u s government policy that would introduce a new pork quality grading system based on color scores our simulations include novel short run projections in which the conditional and latent class logit models are inverted to yield inverse demand curves the inverse demand curves are used to calculate equilibrium prices and pork revenue given a fixed supply of different pork qualities we supplement these calculations with a more traditional long run analysis in which prices are fixed and quantities of different qualities adjust compared to the status quo control of no quality grades we find that two grading systems based on alternative nomenclatures select choice prime vs good better best both have the potential to increase pork chop sales and revenue to the pork industry however we also find that if only the highest quality is labeled revenue could fall as the increase in demand for the higher quality is offset by the fall in demand for the lower qualities results also highlight important heterogeneity in consumer preferences and although sensory studies strongly suggest redder pork chops are more highly preferred there remains a non trivial share of consumers who prefer whiter pork even after quality grade labeling overall this study offers several insights that can help inform labeling and quality grading policies

measuring the effects of regulation with stock price data this article examines the usefulness of stock returns in measuring the effects of regulation when the dates on which market expectations change are not known and standard sources e g the wall street journal are used to choose announcement dates twenty major changes in regulatory constraint since 1887 are considered tests using either monthly or daily data are found to have surprisingly little ability to detect the effects of regulation the evidence shows that formal regulatory announcements are generally anticipated in cases where it is unclear when expectations change

information health risk beliefs and the demand for fats and oils mean and variance measures of health information about cholesterol and saturated fat are included in a demand system for fats and oils a bayesian model of health risk belief and consumer awareness surveys are the basis for computing these measures the empirical demand model shows that health information has resulted in significant increases in consumption for corn cottonseed and soybean oils and decreased consumption for butter and lard the predicted demand effects based on the bayesian information model are more reasonable than predictions from using either a time trend or a simple cumulative cholesterol information index copyright 1995 by mit press

bargaining in legislatures bargaining in legislatures is conducted according to formal rules specifying who may make proposals and how they will be decided legislative outcomes depend on those rules and on the structure of the legislature although the social choice literature provides theories about voting equilibria it does not endogenize the formation of the agenda on which the voting is based and rarely takes into account the institutional structure found in legislatures in our theory members of the legislature act noncooperatively in choosing strategies to serve their own districts explicitly taking into account the strategies members adopt in response to the sequential nature of proposal making and voting the model permits the characterization of a legislative equilibrium reflecting the structure of the legislature and also allows consideration of the choice of elements of that structure in a context in which the standard institution free model of social choice theory yields no equilibrium

dynamic bargaining and stability with veto players this note examines the structure of stationary bargaining equilibria in the finite framework of anesi 2010 the main result establishes a tight connection between the set of equilibrium absorbing points and the von neumann morgestern solutions assuming that players are patient that the voting rule is oligarchical and that there is at least one veto player with positive recognition probability a set of alternatives corresponds to the absorbing points of an equilibrium if and only if it is a von neumann morgenstern solution we also apply our analysis of ergodic properties of equilibria to the persistent agenda setter environment of diermeier and fong 2012 we show that all equilibria are essentially pure and we extend their characterization of absorbing sets to allow an arbitrary voting rule and by removing the restriction to pure strategy equilibira

bargaining in standing committees with an endogenous default committee voting has mostly been investigated from the perspective of the standard baron ferejohn model of bargaining over the division of a pie in which bargaining ends as soon as the committee reaches an agreement in standing committees however existing agreements can be amended this article studies an extension of the baron ferejohn framework to a model with an evolving default that reflects this important feature of policymaking in standing committees in each of an infinite number of periods the ongoing default can be amended to a new policy which is in turn the default for the next period the model provides a number of quite different predictions i from a positive perspective the key distinction turns on whether the quota is less than unanimity in that case patient enough players waste substantial shares of the pie each period and the size principle fails in some pure strategy markov perfect equilibria in contrast the unique markov perfect equilibrium payoffs in a unanimity committee coincide with those in the corresponding baron ferejohn framework ii if players have heterogeneous discount factors then a large class of subgame perfect equilibria including all markov perfect equilibria are inefficient

dynamic legislative policy making abstract we prove existence of stationary markov perfect equilibria in an infinite horizon model of legislative policy making in which the policy outcome in one period determines the status quo for the next we allow for a multidimensional policy space and arbitrary smooth stage utilities and we assume preferences and the status quo are subject to arbitrarily small shocks we prove that equilibrium continuation values are differentiable and that proposal strategies are continuous almost everywhere we establish upper hemicontinuity of the equilibrium correspondence and we provide weak conditions under which each equilibrium of our model determines an aperiodic transition probability over policies we establish a convergence theorem giving conditions under which the invariant distributions generated by stationary equilibria must be close to the core in a canonical spatial model finally we extend the analysis to sequential move stochastic games and to a version of the model in which the proposer and voting rule are determined by play of a finite perfect information game

bank foreign lending mandatory disclosure rules and the reaction of bank stock prices to the mexican debt crisis this paper examines the effects of the mexican debt mora torium in august 1982 on bank valuation the mexican default resulted in the passage of regulations requiring public disclosure of bank fo reign lending exposure the authors find that even in the absence of public disclosure regulations investors were able to discriminate a mong banks with different levels of exposure copyright 1987 by the university of chicago

money burning and multiple equilibria in bargaining abstract this paper synthesizes recent work on delay and multiple equilibria in complete information rubinstein bargaining we identify a general principle money burning underlying prior results and develop a general model of the phenomena money burning is a threat by one player to destroy surplus which can serve to enhance that player s bargaining power if it is credible our results show that the uniqueness and efficiency properties of the subgame perfect equilibrium of rubinstein bargaining are vulnerable to players ability to burn money journal of economic literature classification number 026

market evidence on the effective maturity of bank assets and liabilities the recent years increase in interest rate volatility has intensified concern over the exposure of commercial banks to interest rate or funding risk since the effect of interest rate changes on the equity value of a bank depends on the maturity or duration of the bank s assets and liabilities assessing an individual bank s interest rate risk exposure requires information about the maturity composition of its portfolio it is difficult however to assess a bank s risk exposure from balance sheet data because several important asset and liability items have theoretically ambiguous effective maturities in a frictionless market a security s effective maturity will equal its stated maturity or time to repricing with market imperfections e g depositors transaction or information costs however the equilibrium cost of some deposit items may respond sluggishly or incompletely to market rate changes see hester and pierce 1975 or flannery 1982 such liabilities market values discounted at market rates would therefore fluctuate with the level of interest rates these liabilities are sometimes called core deposits which manifest sticky responses to market rate changes we define an asset or liability s effective maturity as the maturity of a fixed rate perfectly elastically supplied security with the same market value elasticity as the bank balance sheet item under consideration naturally a balance sheet item s effective maturity is the relevant determinant of its contribution to the bank s overall interest rate risk sensitivity

impossibility of collusion under imperfect monitoring with flexible production we show that it is impossible to achieve collusion in a duopoly when 1 goods are homogenous and firms compete in quantities 2 new imperfect information arrives continuously without sudden events and 3 firms are able to respond to this new information quickly the result holds even if we allow for asymmetric equilibria or monetary transfers the intuition is that the flexibility to respond to new information quickly unravels any collusive scheme and that signals about the aggregate behavior only cannot be used effectively to provide individual incentives via transfers our result applies both to a simple stationary model and a more complicated one with prices following a mean reverting markov process

nesting the aids and translog demand systems this paper shows that there exists a relatively simple demand model that is consistent with utility maximization and has nested within it both the almost ideal demand system and translog models this model is exactly aggregated then estimated using aggregate u s demand data the results are used to test the relative adequacy of the almost ideal demand system and translog models copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

consumer knowledge and meat consumption at home and away from home we investigate the roles of consumer knowledge and sociodemographic factors in the consumption of meat products at home and away from home censored dependent variables and endogenous dietary knowledge are accommodated by developing and estimating a simultaneous equations system results suggest endogeneity of knowledge and support the system approach to demand functions for meat products dietary knowledge decreases consumption of beef and pork at home and away from home but does not affect poultry or fish consumption in either location men eat more meat and fish than women meat consumption declines with age and regional and racial ethnic differences are present published by elsevier ltd

household demand for fats and oils two step estimation of a censored demand system a censored system of household fat and oil demand equations is estimated with a two step procedure using cross sectional data from the 1987 1988 us nationwide food consumption survey own price and total expenditure elasticities are close to unity and there is no evidence of gross substitutability compensated elasticities suggest net substitution among the products considered

durable coalitions and communication public versus private negotiations abstract we present a laboratory experiment to study the effect of communication on durable coalitions coalitions that support the same allocation from one period to the next we study a bargaining setting where the status quo policy is determined by the policy implemented in the previous period our main experimental treatment is the opportunity for subjects to negotiate with one another through unrestricted cheap talk communication before a proposal is made and comes to a vote we compare committees with no communication committees where communication is public and messages are observed by all committee members and committees where communication is private and any committee member can send a private message to any other committee member we find that the opportunity to communicate has a significant impact on outcomes and coalitions when communication is public there are more universal coalitions and fewer majoritarian coalitions with private communication there are more majoritarian coalitions and fewer universal coalitions with either type of communication coalitions occur more frequently and last longer than with no communication the volume and content of communication is correlated with coalition type these findings suggest a coordination role for communication that varies with the mode of communication

factors affecting the timing of purchasing of butter margarine and blends a competing goods analysis the purchase dynamics of a subset of food fats and oils are investigated using event history analysis applied to a panel of u s households the consumer behavior examined is the switching between purchases of butter margarine and butter margarine blends across purchase occasions we find that price previous purchases seasonality and household size and composition affect product switching probability

simple tests of distributional effects on macroeconomic equations the presence of distributional effects in macroeconomic equations is shown to coincide with nonlinearity in micro behavioral relationships parameters estimated with aggregate data as in representative agent models contain distributional biases that are not measurable using aggregate data alone tests for distributional effects and other measures of the extent of aggregation problems are derived using distributional data observed over time significant distributional effects are noted for a model of annual aggregate u s commodity expenditure data a static model that accommodates individual heterogeneity is found to be statistically equivalent to a simply dynamic model that accommodates first order autocorrelation

a three player dynamic majoritarian bargaining game this file contains two sets of calculations first we report the calculations of demands and continuation values of proposition 1 second the mixing probabilities of proposition 1 are shown to be well defined

on dynamic compromise abstract most legislatures require the consent of only a simple majority to pass a proposal so why don t legislative outcomes favor only a bare majority we show that compromise can be achieved if legislators are neither too impatient nor too patient and initial allocations are not too unequal the compromise is only sustainable if starting from the unequal allocations there is a possibility of spiraling towards a complete absence of compromise we find that the range of discount factors for which the equilibrium exists increases as the number of legislators increases in this sense compromise is easier in larger legislatures

the brady plan the 1989 mexican debt reduction agreement and bank stock returns in the united states and japan the authors investigate the impact of the menu approach to debt rescheduling on the market value of two major creditors u s and japanese banks they try to understand how major creditor banks are affected by debt reschedulings and the menu choices they make so that debt deals can be structured in a way that appeals to both creditors and debtor countries they measure the stock market s reaction to the announcement of the brady plan and the mexican debt reduction agreement the brady plan was implemented through the menu approach which acknowledges creditor heterogeneity and provides financing packages that meet the country s financing requirements while still allowing the banks to reduce their exposure the mexican agreement provides an opportunity to test the impact of the brady plan s implementation by examining individual bank s menu choices exposure levels and the market s reaction they explore whether banks were able to make optimal portfolio choices when confronted with the obligation to participate they show that stock prices for different groups of banks reacted quite differently to focal events among all banks u s multinationals showed the strongest positive reaction to the brady announcement and the mexican agreement u s non multinationals do not appear to have been significantly affected by these international debt related events the reaction experienced by all japanese banks was much weaker than that of u s multinationals and was negative for the brady announcement and the initial mexico announcement the authors contend that the lack of a strong reaction was because of the japanese banks relatively low exposure to developing country risk they see the negative market reaction as a reflection of the expectation that a u s initiated debt reduction strategy would not be favorable for japanese banks indeed after the menu choices were announced the market recognized that the japanese banks were treated fairly and corrected itself they do not find that banks that made different choices were treated differently by the market so banks were able to negotiate menu choices in their best interest and to make portfolio choices consistent with their business objectives the results here confirm that the menu approach to debt restructuring may benefit both the creditor banks and the debtor countries

getting consumers to eat more whole grains the role of policy information and food manufacturers the 2005 dietary guidelines were unique because they offered quantitative recommendations for consumption of whole grains this case study examines the hypothesis that the changed recommendations were responsible for the recent increase in retail sales and consumption of whole grain food products we find that release of the dietary guidelines and related media attention did increase availability and sales of whole grain foods a large impact on consumption occurred through reformulation of existing products induced by competition among food suppliers this study reveals the key role product reformulation plays in inter firm competition and in realization of dietary changes recommended by public

heterogeneous creditors and the market value of bank ldc loan portfolios abstract a standard proposition used in many empirical studies is that the value of an ldc loan does not depend on the identity of the lender i test this proposition using bank securities prices and prices for ldc loans trading in the secondary market i find significant cross sectional differences in the sensitivity of bank stocks to changes in the price of ldc loans differences in sensitivity appear to be related to changes in bank exposure to ldcs i also find evidence consistent with the hypothesis that cds are implicitly insured

brand inertia in u s household cheese consumption to analyze u s consumers brand choices for cheese purchases we derive a set of discrete choice models from dynamic utility maximization acnielsen homescan survey data on u s households is used to estimate a dynamic probit model for each of the top brands for cheddar shredded and sliced cheese in four u s regions we find that households have strong brand inertia a result robust across alternative specifications predicted probabilities confirm greater inertia in the top brands and consumers are more likely to switch into them brand inertia is relatively larger in cheddar and sliced cheese especially in the central and southeast regions copyright 2008 oxford university press

the theory and econometrics of health information in cross sectional nutrient demand analysis understanding the role of health information in food and nutrient demand has become an important issue over the last decade endogeneity and measurement error are two empirical problems that are inherent in this type of analysis while some type of instrumental variables estimation would appear the obvious solution this article provides several theoretical and empirical reasons why this is not the case in cross sectional analysis an alternative estimation strategy is pursued an empirical example is given and the implications are discussed copyright 2001 oxford university press

getting rid of trans fats in the us diet policies incentives and progress artificial trans fats in foods increase chronic disease risk in the us population federal nutrition label regulation enacted in 2003 requires mandatory disclosure of trans fat content on packaged foods this action created incentives for the food industry to reduce trans fats both in response to consumer demand and through competition to maintain product reputation subsequent public actions include a ban on trans fat use in new york city restaurants and lawsuits against food companies which created further incentives to remove trans fats especially in the food service industry industry has reformulated packaged foods and found substitutes for restaurant fry oils and trans fats are disappearing from the us food supply market response extends throughout the supply chain and has spurred research to alter oilseed crop characteristics the widespread and relatively rapid industry response likely has improved the quality of us diets and demonstrates the potential for policy actions to spur such improvements

information endogeneity and consumer health behaviour application to dietary intakes due to heightened public health interest a growing number of consumer health behaviour studies are focusing on the effect of health information on the demand for health inputs and outcomes many of these studies however have overlooked the potential endogeneity of information variables stemming from unobserved individual heterogeneity due to simultaneity bias ignoring endogeneity may lead to inaccurate estimates of informational effects on health behaviour using dietary intake data for fat saturated fat cholesterol and fibre this paper illustrates the pitfalls of treating health information related to these nutrients as exogenous variables in their demand equations in most of the estimated models the exogeneity of information is statistically rejected when the information variables are treated as exogenous variables their effects on dietary intakes are underestimated the estimated effects of key intake determinants such as income education ethnicity and race are also different in such a

the reaction of bank stock prices to news of derivatives losses by corporate clients abstract from march through may of 1994 several large nonfinancial firms announced millions of dollars in losses from derivatives deals especially those arranged by bankers trust accompanying these announcements and related news stories were allegations that bankers trust had either misrepresented lied or deceived its clients using sur methods we investigate how these announcements affected bankers trust and three portfolios of banks dealers nondealers and nonusers our results indicate significant cumulative abnormal returns of 12 14 bankers trust 5 56 13 dealer banks and 2 45 32 nondealer user banks the evidence suggests an intra industry information transfer effect consistent with rational pricing the replacement cost of derivative contracts is an important factor in explaining the variation in abnormal returns across banks

official credits to developing countries implicit transfers to the banks this paper investigates the impact on the wealth of bank share holders on the transfer of official resources to the debtor countries the main aim was to derive actual estimates of increases in shareholder wealth following important news concerning future transfers from the multilaterals to the debtor nations the main result is that stock market expects virtually all additional resources provided to debtor countries to be used for debt service to commercial banks while the estimated magnitude of these effects are informative the emphasis should be on the direction of these effects as they are robust to overestimation problems clearly official resources provided to debtor countries do devolve to creditor banks however the debtor countries should at least gain in so far as the reduction of a debt overhang eliminates investment distortions the results stem from the fact that some of the monies provided by the multilaterals are specifically earmarked for debt service or are in the form of general balance of payments support that the developing countries can use for private debt service official creditor resources that are specially provided to finance development projects are less likely to be allocated to bank debt service

a new market for an old food the u s demand for olive oil while u s consumption of olive oil has tripled over the past two decades nearly all olive oil continues to be imported estimation of a demand system using monthly import data reveals that the income elasticity for virgin oils sourced from eu is above one but demand for nonvirgin oils is income inelastic the demand for olive oil as a single product is price inelastic differentiated by product characteristic and origin olive oils are highly substitutable with each other but not with other vegetable oils news about the health and culinary benefits of olive oil and the spread of mediterranean diet contribute significantly to the rising demand

infinitely repeated games with public monitoring and monetary transfers this paper studies infinitely repeated games with imperfect public monitoring and the possibility of monetary transfers it is shown that all public perfect equilibrium payoffs can be implemented with a simple class of stationary equilibria that use stick and carrot punishments a fast algorithm is developed that exactly computes the set of pure strategies equilibrium payoffs for all discount factors

bilateral bargaining with endogenous status quo abstract we consider a non cooperative bargaining game where in each round if a proposal is rejected with a probability the allocation implemented in the previous round is implemented as a status quo and the game proceeds to the next round and with the complementary probability no allocations are implemented and the negotiations break down we show that there exists a unique stationary subgame perfect equilibrium such that in any round a proposer offers a proposal such that the responder is indifferent between accepting and rejecting it and an agreement is achieved if the probability of breakdown is close to zero the sequence of equilibrium allocations evolves from the initial status quo to an allocation near the equilibrium allocation of the rubinstein bargaining game over time the effect of the initial status quo on the equilibrium allocations vanishes over time

signaling future actions and the potential for sacrifice we consider extensions of games where some players have the option of signaling future actions by incurring costs the main result is that in a class of games if one player can incur costs then forwards induction selects her most preferred outcome surprisingly the player does not have to incur any costs to achieve this the option alone suffices however when all players can incur costs one player s attempt to signal a future action is vulnerable to a counter signal by the opponent this vulnerability to counter signaling distinguishes signaling future actions from signaling types

the economic effects of client losses on otc bank derivative dealers evidence from the capital market this paper investigates the economic impact of client derivatives losses on otc derivatives dealers its focus is on the capital marketers reaction to losses suffered by four end users of otc derivatives products arranged with bankers trust new york evidence is provided on the impact of these end user losses on bankers trust itself as well as whether these losses produced any systemic or contagion effects extending to other major bank otc derivatives dealers finally the paper investigates whether possible systemic effects may be associated with bank specific characteristics such as the level of derivatives exposure counterparty risk and reliance on trading income copyright 1996 by ohio state university press

mandatory versus discretionary spending the status quo eect do mandatory spending programs such as medicare improve eciency we analyze a model with two parties allocating a xed budget to a public good and private transfers each period over an innite horizon we compare two institutions that dier in whether public good spending is discretionary or mandatory we model mandatory spending as an endogenous status quo since it is enacted by law and remains in eect until changed mandatory programs result in higher public good spending furthermore they ex ante pareto dominate discretionary programs when parties are patient persistence of power is low and polarization is low

strategic bargaining with destructive power abstract this note studies a two player alternating offers bargaining model in which one of the agents has the ability to damage permanently the pie bargained over beside the rubinsteinian bilateral monopoly outcome i show that it is possible to select a harming equilibrium in which the sequence of damages to the pie is endogenously determined

can negotiations prevent fish wars abstract the standard alternating offer model is extended by integrating it with the levhari and mirman fish war model in order to investigate negotiations over fish quota the disagreement actions are endogenous the interior and linear markov perfect equilibrium mpe results in immediate agreement on an efficient path of fish quota this mpe is not analytically tractable numerical solutions show that patience is a disadvantage in this mpe and small differences in patience lead to large asymmetries in the bargaining outcome

economics food choices and nutrition abstract our goal in this paper is to examine the role and influence of economic factors defined rather broadly on consumer food choices and hence nutritional outcomes we attempt to do this in a non technical fashion we examine the role of prices especially as they relate to the affordability of food in the united states and as a policy lever income is analyzed as a driving force behind changes in eating habits in particular increasing the demand for convenience the role of time constraints as well as time preference are examined as links to healthy eating habits and as forces behind current trends in eating patterns information and knowledge are given prominent play as counter balances to economic forces driving eating habits we conclude with and examination into maternal nutrition knowledge and children s dietary quality

schooling health knowledge and obesity the connection between schooling and health is well documented an important empirical issue that needs to be examined however is whether schooling s effects are due to individual health knowledge differences this empirical study examines this issue with an increasingly important health indicator obesity since provision of health knowledge is a major tool of public agencies promoting health this empirical study uses a new direct measure of health knowledge to test this hypothesis the results show that knowledge is inversely related to the probability that an individual is obese schooling s effects on relative weight and the probability of being obese are explained by differences in knowledge this result may imply that schooling s effect on the allocative efficiency of the household production of health is the main reason schooling is linked to health behaviour the result also may imply that the most effective method of health education is to highlight the disease element of poor dietary habits a

dynamic collective choice with endogenous status quo we analyze a bargaining situation in which preferences evolve over time and the previous agreement becomes the next status quo the endogeneity of the status quo exacerbates the players conflict of interest players disagree more often than under exogenous status quo this leads to inefficiencies and status quo inertia under certain conditions the negotiations can come to a complete gridlock players never reach an agreement gridlock can occur between players with arbitrarily similar preferences provided they are sufficiently patient in legislative settings our model predicts polarization and explains why legislators may fail to react promptly to economic shocks