rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

labor supply of husbands and wives a simultaneous equations approach labor supply functions for married men and women are formulated as a dynamic simultaneous equations system which is estimated using panel data controlling for fixed individual effects allows marginal labor supply responses to be disentangled from permanent patterns in hours worked due to assortative mating the results suggest that the labor supply of husbands and wives without pre school children is not jointly determined in the short run while families with young children exhibit strong interactions in work hours and negative cross earnings effects neither the joint utility model of family labor supply nor an ad hoc traditional family model is supported by these results the data are for the united states and concern 381 couples from the denver income maintenance experiment excerpt

shipwrecks and treasure hunters we examine dynamic search as a game in which two rivals explore an island for a hidden prize of known value in every period until its discovery the players decide how much of the unsearched area to comb if a player finds the prize alone he wins it and the game ends players have a per period discount factor and costs proportional to the area they search first as a benchmark for efficiency we solve the one player search problem second in the two player setting we show that typically there is inefficient over search a result akin to the tragedy of the commons however for players with intermediate levels of patience there is the possibility of inefficient under search as players incorporate the expected future payoffs in their current search decisions finally with patient players several counterintuitive results can arise for example players might be better off searching a larger island or looking for a less valuable prize

the direction of innovation abstract how do innovation policies affect the direction of research is market based innovation too radical or too incremental we construct a novel and tractable model of the direction of innovation firms pursue inefficient research directions because they race to discover easy yet less valuable projects and because they work on difficult inventions where they can appropriate a larger portion of the social value fixing these inefficiencies requires policy to condition on properties of inventions that could have been discovered but were not policies which do not do so like patents and prizes may fail to encourage firms to research in the efficient direction even if they obtain the optimal quantity of r d

allocation inflexibilities female labor supply and housing assets accumulation are women working to pay the mortgage this article uses data from the 1986 canadian family expenditures survey to estimate a life cycle consistent model of household labor supply and commodity demand that incorporates a mortgage qualification constraint based on earnings both the parametric and nonparametric implications of the model suggest that the labor supply of a nontrivial percentage of married women is constrained by mortgage commitments the results of generalized selectivity models of female labor force participation and labor supply show that the positive effect of a high debt service ratio exceeds the negative effect of young children

search duplication in research and design spaces exploring the role of local competition a lack of sufficient diversification in research strategies has been identified as an important problem for delegated research we show that this problem can be solved by local competition such as bribery lobbying rent seeking competition at the patent office among players who apply the same search strategies or develop the same design such competition can restore full efficiency in the non cooperative equilibrium local competition interacts with the choice of whether to cluster or diversify and rather than adding a further inefficiency to the existing ones it eliminates inefficiency the results are robust and hold under simultaneous search strategy choices as well as for sequential choices

gender differences in housing demand this study examines the effect of gender differences in household formation tenure choice housing expenditure and location in vancouver and toronto it shows that the continuing increase in women s income prospects and career orientation will reduce family formation fertility and divorce rates and change housing demand in ways that will affect the growth and character of large canadian cities without in migration the demand for rental housing will decline while the demand for inner city condominiums will grow substantially as women s income prospects approach those of men s the proportion of non family households will continue to increase but the demand for single family suburban houses will continue to grow as the increase in income raises the propensity of both men and women family and non family to buy suburban houses the main reduction will be in the demand for higher density suburban housing the elimination of differences in employment opportunity and career outlook between men and women

considering environmental implications of distribution channel choices a comparative study based on game theory abstract recently with the rapid development of e commerce in the world the total scale of online shopping has reached a notably high level the environmental benefits of online retailing have been highlighted in many studies but many factors could have contributed to opposing results motivated by the new sharp expansion of online shopping in china we employ a game theoretic based model to make a comparative study of the environment impacts of single channel traditional retail channel and dual channel online direct channel and traditional retail channel supply chains by taking product characteristics customers distribution range and propensities into account to the best of our knowledge no previous researchers have considered these factors simultaneously numerical analyses are applied to illustrate the model and demonstrate the influences of these factors on channel selection decisions and their resulting effects on the environment our results provide a reference for companies to decide whether to add an online direct channel for a specific product the conclusions can also benefit the government in guiding companies to distribute products in more eco friendly ways

the simple economics of research portfolios this article identifies biases in market portfolios of parallel research projects arising from the noncongruence of social goals and private aspirations occasioned by those circumstances where the market rewards only the winner and where the winner is awarded the entire social surplus it is shown that under risk neutrality this noncongruence implies that t he market encourages the development of too many discoveries too lar ge a spread in the distribution of the quality of discoveries and an excessive occurrence of multiple discoveries copyright 1987 by royal economic society

negatively correlated bandits we analyse a two player game of strategic experimentation with two armed bandits either player has to decide in continuous time whether to use a safe arm with a known pay off or a risky arm whose expected pay off per unit of time is initially unknown this pay off can be high or low and is negatively correlated across players we characterize the set of all markov perfect equilibria in the benchmark case where the risky arms are known to be of opposite type and construct equilibria in cut off strategies for arbitrary negative correlation all strategies and pay offs are in closed form in marked contrast to the case where both risky arms are of the same type there always exists an equilibrium in cut off strategies and there always exists an equilibrium exhibiting efficient long run patterns of learning these results extend to a three player game with common knowledge that exactly one risky arm is of the high pay off type

economics and the well being of canadian children the basic argument of this paper is that as economists we need to pay more attention to how policy affects the well being of children as individuals not just as members of families except with reference to programs explicitly designed for children e g the child tax benefit the issue of how economic policy in general affects the well being of the children themselves is relatively missing in the economics literature though children constitute nearly 25 per cent of the canadian population for example discussions of monetary policy are unlikely to consider the impact of alternative choices for children s well being debates about the merits of labour market mobility do not pay much attention to the impact of mobility on children discussions of optimal tax structures do not look at the issue from the perspective of the child 2

auctionin entry into tournaments a research tournament model with heterogeneous contestants is presented for a large class of contests the optimal number of competitors is two this insight makes designing the tournament easier and highlights the importance of selecting highly qualified contestants while customary uniform price and discriminatory price auctions are intuitively appealing mechanisms for solving this adverse selection problem in practice they generally will not be efficient mechanism for selecting contestants instead we propose an alternative auction format that is equally simple to implement and efficiently selects the most qualified contestants to compete regardless of the form of contestant heterogeneity

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

why women work closer to home this paper analyzes the extent to which differences in labor force status in household composition and in household roles account for sex differences in workplace residence separation modelling work trip length as the outcome of the choice of household residential and individual job locations equilibrium work trip length is estimated empirically as a function of labor market housing and household characteristics for male and female employees in seven different household categories data from the 1976 panel survey of income dynamics are used the study concludes that while sex differences in job tenure work hours and wages are in themselves sufficient to fully account for observed sex differences in workplace residence separation sex differences in household roles i e responses to spouses characteristics are of even greater importance in influencing women to work closer to home

portfolio choice in research and development we analyze the effects of a winner take all patent mechanism on the riskiness of the research strategies chosen by competingfirms as well as on thefirms incentives to duplicate research projects nash equilibrium choices are compared with the social optimum in a oneshot simultaneous move game in which competitors choose the riskiness or correlation of their research performances we show that neither society nor firms have any preference for correlation per se while the divergence between social and privately optimal levels of risk depends on skewness characteristics of the probability distribution over discovery dates and on levels of risk aversion

rivals search for buried treasure competition and duplication in r d we model an r d race in which each fi rm decides in each period between two research projects only one of which has positive success probability and it is not known which there is symmetric information and hence scope for strategic search if the prize is shared when discovery is simultaneous there is too much duplication of projects if neither is rewarded in this event then equilibrium is efficient unless projects have asymmetric costs in which case there is a bias toward the high cost project or asymmetric success probabilities in which case too little duplication is possible if one firm is informed it may choose the wrong project to put the other off the scent

intra household resource allocation an inferential approach if household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand with survey data on family health and nutrition in brazil the equality of parental income effects is rejected unearned income in the hands of a mother has a bigger effect on her family s health than income under the control of a father for child survival probabilities the effect is almost twenty times bigger the common preference or neoclassical model of the household is rejected if unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same equality of the ratios cannot be rejected there is also evidence for gender preference mothers prefer to devote resources to improving the nutritional status of their daughters fathers to sons

testing the neoclassical model of family labor supply and fertility the mcelroy horney nash bargaining model of family demand behavior relaxes the restriction that nonearned income of husband and wife has the identical effect on family labor supply and commodity demands this restriction of the neoclassical model offamily behavior is tested for the determination of husband and wife labor supply andfertility based on the 1981 socioeconomic survey of thailand the neoclassical restriction is rejected for female labor supply andfertility another unexplored limitation offamily demand studies due to the sample self selection of intact marriages is empirically treated through alternative estimation strategies in this case a more sharply focused theory of marital behavior is needed to identify family demand models

learning by observation within the firm abstract this paper explores the implications of learning by observation on the production and wage decisions of a firm firms are viewed as collective arrangements that enable workers to share information this information takes the form of productivity enhancing innovations and is the product of research by workers some workers may choose to free ride on the research of others and the firm by its choice of wage profiles can affect the amount of research done the production function of a firm is then derived from the technology of learning as constrained by the incentives of workers the qualitative properties of the production function most importantly the nature of returns to scale and the incentives to limit firm size are shown to depend on the behaviour and objectives of the firm

an empirical analysis of the commute to work patterns of males and females in two earner households the purpose of this paper is to empirically investigate the proposition that residential decisions are made with reference to the male head of household s job location disadvantaging females in the labor market a sample of approximately 50 000 adults in two earner households in urban areas distributed across the united states is selected from public use microdata from the 1980 census and used to estimate a simultaneous model to explain commute to work behavior of men and women the model is estimated separately for households that did and did not change residences in the past year the impacts of the new residences on the commute times of both male and female workers holding other variables constant are compared we conclude that residential selection does favor males relative to females although there is evidence that this advantage is eliminated as the ratio of female to male earnings in the same household narrows

sex differences in urban commuting patterns this paper takes a new look both theoretical and empirical at the general question of what determines the pattern of urban workers commuting journeys and at the specific question of how women workers commuting journeys differ from those of men commuting journey length for urban workers has proved difficult to model because it stands at the intersection of urban and labor economic theories concerning the spatial location patterns of jobs and housing urban economists view workers as having fixed job locations at the center of the city and being compensated for longer commuting journeys by lower housing prices in the suburbs labor economists in contrast tend

what s mine is yours the influence of male and female incomes on patterns of household expenditure this paper uses microdata from the 1992 statistics canada family expenditure survey to provide evidence that male and female incomes do not always exert identical influences on household expenditures the novelty of the paper lies in its demonstration that while incomes may be pooled for some categories of consumption e g housing the income pooling hypothesis must be rejected for others we also go beyond simply rejecting the pooling hypothesis to ask how male versus female income is used our results stress the on going importance of traditional gender roles for example we find that expenditures on child care increase only with women s incomes higher male income is not associated with higher expenditure on child care even when both spouses are full time full year paid workers

separate spheres bargaining and the marriage market this paper introduces the separate spheres bargaining model a new model of distribution within marriage it differs from divorce threat bargaining models e g manser brown mcelroy horney in that the threat point is not divorce but a noncooperative equilibrium within marriage this noncooperative equilibrium reflects traditional gender roles the predictions of our model thus differ from those of divorce threat bargaining models in the separate spheres model cash transfer payments to the mother and payments to the father can but need not imply different equilibrium distributions in existing marriages in the long run the distributional effects of transfer policies may be substantially altered by changes in the marriage market equilibrium

income and outcomes a structural model of intrahousehold allocation there is evidence from several sources that one cannot treat many person households as a single decision maker if this is the case then factors such as the relative incomes of the household members may affect the final allocation decisions made by the household we develop a method of identifying how incomes affect outcomes given conventional family expenditure data the basic assumption we make is that household decision processes lead to efficient outcomes we apply our method to a sample of canadian couples with no children we find that the final allocations of expenditures on each partner depend significantly on their relative incomes and ages and on the level of lifetime wealth

a dynamic game of r and d patent protection and competitive behavior a theory of dynamic optimal resource allocation to r and d in an n firm industry is developed using differential games this technique represents a synthesis of the analytic methods previously applied to the problem static game theory and optimal control the use of particular functional forms allows the computation and detailed discussion of the nash equilibrium in investment rules this paper addresses the problem of resource allocation to research and development among the important issues that a firm engaging in r and d must evaluate are uncertainty regarding the feasibility and profitability of a particular innovation the possibility of a protracted development period the possibility that a rival firm may innovate first capturing either a patent or a significant share of the new market the possibility that a rival firm may imitate the innovation and appropriate some of the profits in the new market in what follows we will develop a theory of optimal resource allocation to research and development which incorporates the aspects of r and d enumerated above we will use a dynamic game theoretic analysis determining the nash equilibrium strategies for n identical firms the availability of perfect patent protection is shown to accelerate development of the innovation and the effect of increasing rivalry is addressed the impact of increasing rivalry on nash equilibrium investment in r and d depends upon the degree of appropriability of rewards if patent protection is perfect then increasing the number of nash rivals results in increased r and d effort however when imitation is rewarded the opposite may be true finally some notions of competitive and perfectly competitive equilibrium are examined in the context of the model developed below

is the market biased against risky r d this article analyzes the riskiness of the r d strategies chosen by firms engaged in a winner takes all patent race in contradiction to dasgupta and stiglitz 1980 we show that when the distribution of invention times is symmetric the market equilibrium cannot be safer and may be riskier than is socially optimal we identify the economic reason for the emergence but only if there are few competitors

do two earner households base their choice of residential location on both incomes this article focuses on the role of individual incomes in the residential location decisions of two earner households conventional studies often treat households as a black box and describe them by a single utility function the article raises the question is the household utility paradigm an adequate framework for understanding the location decisions of two earner households it tests an implication of the household utility paradigm the income pooling hypothesis for location decisions the results provide evidence for rejecting the hypothesis among childless families but fail to provide evidence for rejecting it when children are present the results raise the need to address intrahousehold dynamics in modelling location decisions