interfering with secondary markets we present a model to address in a unified manner four ways in which a monopolist can interfere with secondary markets in the model consumers have heterogeneous valuations for quality so that used good markets play an allocative role our results are the following 1 in contrast to swan s famous independence result a monopolist does not provide socially optimal durability 2 allowing the monopolist to rent does not restore socially optimal durability and increases the monopolist s market power in the used market however forcing the monopolist to sell the goods may be a bad policy because it would lead to either lower output or lower durability 3 the manufacturer benefits from a well functioning used good market despite the fact that used goods provide competition for new goods 4 the monopolist prefers to restrict consumers abilities to maintain the good

assessing the effects of wives earnings on family income inequality we argue that the effect of wives earnings can be assessed meaningfully only by comparing the observed distribution of income with a reference distribution the components of the standard decomposition of the gini coefficient have no implicit reference distribution and therefore should not be interpreted as a measure of the effect of an income source on inequality we suggest several intuitive counterfactual reference distributions and illustrate their use with 1979 and 1989 u s data we conclude that wives earnings reduced inequality in that the income distribution would have been less equal in their absence alternative measures of the impact have mixed results

incomplete wage posting we consider a directed search model in which workers differ in productivity productivity becomes observable to firms after assessing their workers on the job but it is not verifiable firms with vacancies choose between posting a noncontingent wage and leaving wages subject to bargaining with the worker under wage bargaining firms cannot optimize the trade off between paying higher wages and having a larger probability of filling vacancies but wage bargaining makes wages increasing in worker productivity and so may allow firms to attract better workers into the vacancy when workers heterogeneity is large and bargaining powers come close to satisfying hosios s rule firms opt for bargaining yet equilibria with bargaining fail to maximize aggregate net income and sometimes are not constrained pareto optimal

multiple applications competing mechanisms and market power abstract we consider a labor market with search frictions in which workers make multiple applications and firms can post and commit to general mechanisms that may be conditioned both on the number of applications received and on the number of offers received by the firm s candidate when the contract space includes application fees there exists a continuum of symmetric equilibria of which only one is efficient and it has a posted wage equal to match output in the inefficient equilibria the wage is below match output and the value of a worker s application depends on whether he or she receives another offer this allows individual firms to free ride on one another and gives firms market power when we endogenize the number of applications and allow for general mechanisms only the efficient equilibrium survives by allowing for general mechanisms we are able to examine the sources of inefficiency in the multiple applications literature

limits of exact equilibria for capacity constrained sellers with costly search abstract this paper studies finite versions of competitive matching models in which sellers announce prices and buyers understand the relationship between price and probability of trade two equilibrium concepts are studied for finite games subgame perfect equilibrium and rational expectations equilibrium it is shown that the distribution of prices offered by sellers under both equilibrium concepts converges weakly to the same competitive equilibrium distribution of prices furthermore the payoffs that sellers face in both kinds of equilibrium have the market utility property in the limit journal of economic literature classification numbers c78 d41 d45

competitive search equilibrium in monetary economies abstract competitive search was recently introduced in monetary economics by rocheteau and wright money in search equilibrium in competitive equilibrium and in competitive search equilibrium econometrica 73 2005 175 203 we extend their work by eliminating the restriction that the fees market makers charge to enter a submarket must be either non negative or identical for buyers and sellers without this restriction buyers pay a positive fee to enter the submarket they visit and nothing else when they meet a seller sellers are remunerated by the market makers from the entry fees collected from the buyers this trading arrangement allows buyers to perfectly predict their expenses so the opportunity cost of holding idle money balances is eliminated

durable goods theory for real world markets the early 1970s witnessed three major advances in durable goods theory swan 1970 1971 and sieper and swan 1973 on optimal durability coase 1972 on time inconsistency and akerlof 1970 on adverse selection this paper surveys durable goods theory starting with these three contributions where much of the focus is on recent literature and on models that explain real world phenomena in addition to the ideas found in the contributions of swan coase and akerlof topics covered include why producers sometimes practice planned obsolescence the role of adverse selection in new car leasing and reasons for aftermarket monopolization

the tale of the tails canadian income inequality in the 1980s and 1990s we present new evidence on levels and trends in after tax income inequality in canada between 1980 and 2000 we argue that existing data sources may miss changes in the tails of the income distribution and that many of the changes in the income distribution have been in the tails for this reason we turn to an alternative source in particular we construct data on after tax and transfer income using census files augmented with predicted taxes based on information available from administrative tax data using these data we find that canadian after tax inequality levels are substantially higher than has been previously recognized primarily because income levels are lower at the bottom of the distribution than in commonly used survey data we also find larger long term increases in after tax income inequality and far more variability over the economic cycle this raises interesting questions about the role of the tax and transfer system in mitigating both trends and fluctuations in market income inequality les auteurs presentent de nouveaux resultats sur les niveaux et tendances de l inegalite des revenus apres impots au canada entre 1980 et 2000 on suggere que les donnees existantes peuvent avoir ignore des changements dans les extremites de cette distribution alors que le gros des changements y etait concentre pour cette raison les auteurs se sont tournes vers une autre source de donnees ils ont construit une base de donnees sur les revenus apres impots et les paiements de transfert en utilisant les donnees du recensement ainsi que des donnees additionnelles sur les impots prevus a partir de renseignements disponibles dans les dossiers administratifs on decouvre que les niveaux d inegalite des revenus apres impots sont beaucoup plus eleves que ce qu on a suggere jusqu ici d abord parce que les niveaux de revenus sont plus bas au pied de la distribution que ne le suggerent les donnees d enquetes on decouvre aussi un accroissement plus grand a long terme de l inegalite des revenus apres impots et une plus grande variabilite au cours du cycle economique voila qui souleve des questions interessantes a propos du role de la fiscalite et du systeme de paiements de transfert dans la modulation de la tendance et des fluctuations dans l inegalite des revenus du marche

durable goods monopolists durable goods monopolists face special problems because the sale of their products creates a secondhand market not controlled by the monopolist to the extent the monopolist is able to rent his product rather than sell it or to make binding promises about his future production such problems are ameliorated given the inability to do the above the monopolist is led to producing goods less durable than those produced by either competitive firms or monopolist returns a reverse averch johnson result that monopolist sellers may invest less in fixed costs including plant modernization and research and development than would the renters is shown it is also shown that even though sellers have less monopoly power than renters and nondurable goods monopolists it is possible that the seller will cause a greater deadweight loss than the other types of monopolies

wage vacancy contracts and coordination frictions abstract we consider a directed search model with risk averse workers and risk neutral entrepreneurs who can set up firms that post wage vacancy contracts i e contracts where firms can make payments to more than one applicant and where the payments can be different for each applicant and be contingent on the number of applicants we establish that the type of contracts the literature focuses on are not offered if firms can post wage vacancy contracts we show that there exists an equilibrium satisfying a monotonic expected utility property which is efficient furthermore we investigate the role of wage vacancy contracts on welfare and competition

labor supply responses and welfare effects of tax reforms during the late 1 980s and early 1 990s taxation of wage income has undergone a change towards a proportional tax regime in many countries our analysis shows that gradual tax reforms in norway may have removed some of the distortions on worker behavior moreover we find that proportional taxes may reduce the inequality in the distribution of disposable household income yet when the distributional consequences are related to changes in individual welfare we find that rich households may benefit far more than households at the other tail of the income distribution because they earn more without any significant increase in effort

rising u s earnings inequality and family labor supply the covariance structure of intrafamily earnings this paper studies the labor supply contributions to individual and family earnings inequality during the period of rising wage inequality in the early 1980 s working couples have positively correlated labor market outcomes which are almost entirely attributable to permanent factors an intertemporal family labor supply model with this feature is used to estimate labor supply elasticities for husbands of 0 05 and wives of 0 40 this implies that labor supply explains little of the rising annual earnings inequality for married men but over 20 percent of the rise in family inequality and 50 percent of the modest rise in female inequality

competitive search equilibrium in this paper i construct an equilibrium for markets with frictions which is competitive in the sense that all agents are price takers and maximize utility subject to a set of market parameters i show that the equilibrium allocation is socially optimal i also show how the competitive search equilibrium can be achieved if employers with vacancies can advertise publicly the wages they pay

welfare impacts of intellectual property protection in the seed industry we examine the welfare impact of different intellectual property protection ipp regimes in private sector seed research and development r d we take into account the period after expiration of legal ipp and require simultaneous equilibrium in markets for r d seeds and final product optimal ipp is remarkably insensitive to alternative parameterizations except for r d productivity results suggest that optimal ipp is greater than ipp in the u s seed corn market but lower than the ipp that could be attained with genetic use restriction technologies optimal ipp is much higher than ipp achieved under open pollinated crops or where legal ipp is limited

marry your like assortative mating and income inequality has there been an increase in positive assortative mating does assortative mating contribute to household income inequality data from the united states census bureau suggests there has been a rise in assortative mating additionally assortative mating aects household income inequality in particular if matching in 2005 between husbands and wives had been random instead of the pattern observed in the data then the gini coe cient would have fallen from the observed 0 43 to 0 34 so that income inequality would be smaller thus assortative mating is important for income inequality the high level of married female labor force participation in 2005 is important for this

foundations of dynamic monopoly and the coase conjecture subgame perfect equilibria are characterized for a market in which the seller quotes a price each period assume zero costs positive interest rate continuum of buyers and some technical conditions if buyers valuations are positive then equilibrium is unique buyers strategies are stationary and the price sequence is determinant along the equilibrium path but possibly randomized elsewhere otherwise a continuum of stationary equilibria can exist but at most one with analytic strategies coase s conjecture is verified for stationary strategies reducing the period length drives all prices to zero or the least valuation connections to bargaining models are described journal qf economic literature classification

the intertemporal consequences of unauthorized reproduction of intellectual property in an intertemporal framework the harm to firms from unauthorized reproduction of their products may be significantly greater than that predicted by most static models copying by some consumers reduces the appropriable surplus from all consumers including those consumers lacking any propensity to copy somewhat paradoxically however the commitment value of copies may also imply that profits are higher with copying than without copying it is therefore suggested that firms may prefer differential copyright enforcement and that the commitment value of copies may offer a strategic explanation for free giveaways of abridged versions of intellectual property and vertical product differentiation more generally

directed search and the bertrand paradox i study a directed search model of oligopolistic competition extended to incorporate general capacity constraints congestion effects and pricing based on ex post demand in the presence of any one of these ingredients the bertrand paradox fails to hold hence despite the emphasis that has been placed by the literature on sellers capacity constraints as a resolution to the paradox the existence of such constraints is only a subcase of a general class of environments where the paradox fails specifically bertrand s paradox will not arise whenever the buyers expected utility from visiting a seller is decreasing in that seller s realized demand

earnings inequality and the changing association between spouses earnings increases in the association between spouses earnings have the potential to increase inequality as marriages increasingly consist of two high earning or two low earning partners this article uses log linear models and data from the march current population survey to describe trends in the association between spouses earnings and estimate their contribution to growing earnings inequality among married couples from 1967 to 2005 the results indicate that increases in earnings inequality would have been about 25 30 lower than observed in the absence of changes in the association depending on the inequality measure used three components of these changes and how they vary across the earnings distribution are explored

accounting for inequality trends decomposition analyses for the uk 1971 86 eight explanations for uk income inequality trends between 1971 and 1986 are assessed by pooling evidence from inequality index decompositions by population sub group and by income source the principal causes of the aggregate trends were a mixture of changes in earnings inequality employment structure and unemployment but this mixture changed over time the impact of wage inequality changes on income inequality changes fell during the 1970s and 1980s reflecting the secular decline in the importance of employment earnings for household income packages unemployment changes had their largest impact at the start of the 1980s between 1981 and 1986 self employment income changes appear to have had the largest influence

an economic theory of planned obsolescence planned obsolescence is the production of goods with uneconomically short useful lives so that customers will have to make repeat purchases however rational customers will pay for only the present value of the future services of a product therefore profit maximization seemingly implies producing any given flow of services as cheaply as possible with production involving efficient useful lives this paper shows why this analysis is incomplete and therefore incorrect monopolists are shown to desire uneconomically short useful lives for their goods oligopolists have the monopolist s incentive for short lives as well as a second incentive that may either increase or decrease their chosen durability however oligopolists can generally gain by colluding to reduce durability and increase rentals relative to sales some evidence is presented that appears to be generally consistent with the predictions of the theory

directed search and firm size standard directed search models predict that larger firms pay lower wages than smaller firms contrary to the data this article proposes one way to obtain this positive size wage differential in a directed search setting i posit that there is an optimal size associated with a firm a firm suffers a penalty by not operating at its optimal size i show that if this penalty is sufficiently large the size wage differential will be obtained my model also gives a new way to look at the data because it highlights the importance of the distinction between intended and realized firm sizes

equilibrium wage dispersion and interindustry wage differentials this paper develops a search theoretic explanation of interindustry wage differentials given coordination problems in the labor market the probability of filling a vacancy is an increasing function of the wage offered in equilibrium firms that find vacancies more costly will offer higher wages the model thus explains the persistence of interindustry wage differentials and their correlation with industry average capital labor ratio and profitability additionally the model predicts that high wage firms will receive more applications per job opening and that wages in the labor market will behave as strategic complements

mechanism design by competing sellers a dynamic model with many sellers and buyers is constructed agents failing to trade may trade in the next period an equilibrium is found where sellers hold identical auctions and buyers randomize over the sellers they visit the distribution of buyer valuations is endogenous an auction with efficient reserve is an optimal mechanism from each seller s point of view in spite of the ability of any seller to alter the distribution of buyer types participating in the seller s mechanism by altering the mechanism copyright 1993 by the econometric society

incentive to reduce crop trait durability to reduce the competition from farmers who self produce seed an inbred line seed producer can switch to nondurable hybrid seed in a two period model we investigate the impact of crop durability on self production pricing and switching decisions and we examine the impact of license fees paid by self producing farmers first in an inbred line seed monopoly model we find that the monopolist may produce technologically dominated hybrid seed in order to extract more surplus from farmers further the introduction of license fees improves efficiency second we study how the monopolist s behavior is affected by the entry of a nondurable hybrid seed producer we show that the inbred line seed producer might benefit from competing with a technologically dominated hybrid seed producer as this allows for consumers discrimination

bidding for money we analyze monetary exchange in a model that allows for directed search and multilateral matches we consider environments with divisible goods and indivisible money and compare the results with those in models that use random matching and bilateral bargaining two different pricing mechanisms are used ex ante price posting and ex post bidding auctions also we consider settings both with and without lotteries we find that the model generates very simple and intuitive equilibrium allocations that are similar to those with random matching and bargaining but with different comparative static and welfare properties

frictional assignment i efficiency abstract this paper examines the two sided matching problem where the agents on each side of the market are heterogeneous and the matching process is time consuming this is cast in a labor market setting where workers of different skills match with different machine qualities i characterize the efficient allocation and then show that it can be decentralized by a market mechanism the efficient assignment is not always positively assortative despite the fact that machine qualities and skills are complementary in production to decentralize the efficient allocation the market mechanism requires the firms to post wages and commit each machine quality to a particular skill implications on wage inequality are briefly examined journal of economic literature classification numbers j31 e24 j64

planned obsolescence and the r d decision by investing in rd i e the r d choice that maximizes current profitability does not maximize overall profitability the result is that if output is sold rather than rented then in its r d decision the monopolist has an incentive to practice a type of planned obsolescence that lowers its own profitability

structural models of family labor supply a discrete choice approach a static neoclassical structural model is presented explaining labor supply of both spouses in two adult households in the netherlands family preferences are described with a direct translog utility function with the husbands leisure the wifes leisure and family income as its arguments we assume that the choice set of each family is finite account is taken of the dutch tax and benefits system we allow for hours restrictions and random preferences and account for unobserved wages of nonworkers the models are estimated using smooth simulated maximum likelihood results based upon dutch cross section data from 1987 are illustrated by confidence intervals for elasticities and by several policy simulations excerpt

sorting versus screening search frictions and competing mechanisms in a market where sellers compete by posting trading mechanisms we allow for a general search technology and show that its features crucially affect the equilibrium mechanism price posting prevails when meetings are rival i e when a meeting by one buyer reduces another buyer s meeting probability under price posting buyers reveal their type by sorting ex ante only if the meeting technology is sufficiently non rival price posting is not an equilibrium multiple buyer types then visit the same sellers who screen ex post through auctions

comparing labor supply elasticities in europe and the united states new results we suggest the first large scale international comparison of labor supply elasticities for 17 european countries and the united states using a harmonized empirical approach we find that own wage elasticities are relatively small and more uniform across countries than previously considered nonetheless such differences do exist and are found not to arise from different tax benefit systems wage hour levels or demographic compositions across countries suggesting genuine differences in work preferences across countries furthermore three other findings are consistent across countries the extensive margin dominates the intensive margin for singles this leads to larger responses in low income groups and income elasticities are extremely small

one is almost enough for monopoly it has been argued that two factors product durability and potential entry may force a monopolist to price at marginal cost this article shows that when these two forces coexist the tendency toward competition may be negated first we prove that durable goods oligopolists without commitment powers may attain joint profits arbitrarily close to those of a monopolist with perfect commitment power second we demonstrate that the presence of a potential entrant may enable a durable goods monopolist to act as if he had commitment power thus potential as well as actual entry may restore monopoly power

wage vacancy contracts and multiplicity of equilibria in a directed search model of the labour market this paper studies a directed search model of the labour market which is standard in all aspects except two first we allow firms to post wage vacancy contracts advertising the number of workers they would pay as well as the payment all will receive second we consider two cases one where workers are risk neutral and one where workers are risk averse both in finite and large economies our paper shows that when firms post wage vacancy contracts whether workers are modelled as risk neutral or risk averse matters the types of symmetric equilibria and the nature of multiplicity of equilibria are different somewhat surprisingly when there are finite numbers of risk neutral workers and firms we obtain a finite number of symmetric equilibria but when workers are risk averse we obtain a continuum of equilibria furthermore our paper sounds a cautionary note on using large economies as an approximation of finite economies when workers are risk neutral the nature of equilibrium is preserved going from a finite to a large economy but the nature of equilibrium is different when workers are risk averse les contrats salaire emploi et la multiplicite des equilibres au sein d un modele de recherche dirigee applique au marche du travail cet article etudie un modele de recherche dirigee applique au marche du travail qui differe du modele standard en deux points premierement les entreprises peuvent proposer des contrats dits salaire emploi qui en plus du salaire indiquent le nombre de travailleurs qu un employeur est dispose a recruter deuxiemement nous considerons deux cas un ou les travailleurs ne presentent pas d aversion au risque et l autre ou ils sont averses au risque a chaque fois pour des economies avec une nombre fini puis infini d agents l article demontre que la presence ou non d aversion au risque a de l importance quand les entreprises peuvent proposer des contrats salaire emploi car les types d equilibres symetriques et la nature des multiplicites different dans les deux cas par exemple si l on considere une economie avec un nombre fini de travailleurs il existe un nombre fini d equilibres symetriques lorsque les travailleurs ne presentent pas d aversion au risque alors qu il en existe un continuum lorsque les travailleurs sont averses au risque qui plus est l article invite a la prudence en utilisant une economie a nombre infini d agents comme approximation d une economie peuplee d un nombre fini d agents car en allant de l une a l autre la nature des equilibres est preservee dans le cas de travailleurs ne presentant pas d aversion au risque alors qu elle change lorsque les travailleurs sont averses au risque

market power and efficiency in a search model we build a theoretical model to study the welfare effects and resulting policy implications of firms market power in a frictional labor market our environment has two main characteristics wages play a role in allocating labor across firms and there is a finite number of agents we find that the decentralized equilibrium is inefficient and that the firms market power results in the misallocation of workers from the high to the low productivity firms a minimum wage forces the low productivity firms to increase their wage leading them to hire even more often thereby exacerbating the inefficiencies moderate unemployment benefits can increase welfare because they limit firms market power by improving the workers outside option

inequality and poverty in united states the effects of rising dispersion of men s earnings and changing family behaviour using semiparametric density estimation techniques we analyse the effect of rising dispersion of men s earnings and related changes in family behaviour on increasing inequality in the distribution of family income in the united states for the period 1969 1989 the growing dispersion of men s earnings and changing family structure can account for most of the rise in family income inequality by contrast the increase in labour force participation by women offset this trend inequality grew at a slower rate in the 1990s than in earlier decades largely because of stabilization in the relative earnings of men from low income families

copying and indirect appropriability photocopying of journals creators and owners of intellectual properties are alarmed by the growth of technologies that ease the tasks of copying these properties this paper however shows that the unauthorized copying of intellectual properties need not be harmful and actually may be beneficial the empirical impact of photocopying on publishers of journals is examined in an attempt to discover if publishers can indirectly appropriate revenues from users who are not original purchasers the evidence indicates that publishers can indirectly appropriate revenues from users who do not directly purchase journals and that photocopying has not harmed journal publishers 18 references 1 table

ex ante price offers in matching games non steady states a matching problem is considered in which sellers can publicly commit to a trading price that differs from the price at which buyers expect to trade elsewhere in the market when demand and supply are nearly equal the equilibrium ex ante price offer lies below the price associated with the nash bargaining split this relationship reverses when the level of excess demand is large sellers always have an incentive to make ex ante offers when prices elsewhere are determined by nash bargaining this can be interpreted to mean that nash bargaining is an unstable pricing institution copyright 1991 by the econometric society

marital sorting inequality and the role of female labor supply evidence from east and west germany this paper examines to what extent marital sorting affects cross sectional earnings inequality in germany over the past three decades while explicitly taking into account labor supply choices using rich micro data the observed distribution of couples earnings is compared to a counterfactual of randomly matched spouses hypothetical earnings are predicted based on a structural model of household labor supply for west germany a positive effect of marital sorting on inequality is found after adjusting for labor supply behavior while the effect is limited when earnings are taken as given this means that there is positive sorting in earnings potential which is veiled by relatively low female labor force participation in east germany the impact of marital sorting on inequality is highly disequalizing irrespective of adjusting for labor supply choices this is mainly due to the fact that east german women are much more attached to the labor market

effects of growing wage disparities and changing family composition on the u s income distribution abstract u s income inequality soared after 1979 the present paper estimates the contribution of increased earnings inequality to the surge in overall income inequality between 1979 and 1996 the direct contribution of increased earnings inequality is surprisingly modest even if male and female earnings inequality had remained unchanged at their 1979 levels about two thirds of the observed increase in overall u s inequality would have occurred other factors contributing to higher overall inequality include the growing correlation of husband and wife earned incomes and the increasing percentage of americans who live in single adult families families that typically have much more unequal incomes than husband wife families

the assignment of workers to jobs in an economy with coordination frictions this paper studies the assignment of heterogeneous workers to heterogeneous jobs owing to the anonymity of a large labor market workers use mixed strategies when applying for jobs this randomness generates coordination frictions two workers may apply for a particular job whereas an identical job gets no applications the model generates assortative matching with a positive but imperfect correlation between matched workers and firms types it predicts that a worker s wage is increasing in her job s productivity and a firm s profit is increasing in its employees productivity the model also yields a version of the welfare theorems

directed search and optimal production abstract i consider a model of directed search where strategic sellers advertise general trading mechanisms a mechanism determines the number of buyers that will get served and the side payments as a function of ex post realized demand buyers observe these advertisements and visit one seller without being able to coordinate their visiting strategies despite the oligopolistic nature of the model all symmetric equilibria are constrained efficient in small markets multiple equilibria exist that are not payoff equivalent this indeterminacy vanishes as the market grows large i provide closed form solutions for equilibrium prices profits and the matching function under any parameter values

pricing and matching with frictions suppose that n buyers each want one unit and m sellers each have one or more units of a good sellers post prices and then buyers choose sellers in symmetric equilibrium similar sellers all post one price and buyers randomize hence more or fewer buyers may arrive than a seller can accommodate we call this frictions we solve for prices and the endogenous matching function for finite n and m and consider the limit as n and m grow the matching function displays decreasing returns but converges to constant returns we argue that the standard matching function in the literature is misspecified and discuss implications for the beveridge curve

changes in relative wages and family labor supply the large changes in relative wages that occurred during the 1980s provide fertile ground for studying the behavioral responses of married couples to the wage changes of husbands and wives i find estimates of own wage and cross wage elasticities for men that are very small the own wage elasticity for women is positive and the cross wage elasticity for women suggests a strong negative response of female labor supply to changes in their husband s wages family labor supply behavior determines how changes in individual wage rates translate into family earnings changes the responses of women to changes in their husband s wages attenuated somewhat the increases in individual wage inequality at the family level the results suggest that the earnings of the wives of low income men would actually have fallen over the decade if women s labor supply did not respond to changes in their husbands wages however assortative mating implies that wage changes of husbands and wives are correlated and so family earnings inequality still grew during the decade of the 1980s

intergenerational mobility and marital sorting we use data from the german socio economic panel and the british household panel survey to estimate the extent of intergenerational economic mobility in a framework that highlights the role played by assortative mating we find that assortative mating plays an important role on average about 40 50 of the covariance between parents and own permanent family income can be attributed to the person to whom one is married this effect is driven by strong spouse correlations in human capital which are larger in germany than britain 2006 the authors journal compilation royal economic society 2006

implicit labor contracts and free entry the model investigated here is an adaptation of the free entry model introduced in kihlstrom laffont 1979 in that model the only labor market is one in which employers pay workers an ex ante guaranteed wage in the model of this paper there is also a spot market for labor in the earlier sections of the paper the existence of the equilibrium is established and its efficiency is investigated in this analysis it is assumed that all individuals are identical in the later sections we drop this assumption and investigate conditions under which employers are more risk averse than workers

efficient unemployment insurance this paper constructs a tractable general equilibrium model of search with risk aversion an increase in risk aversion reduces wages unemployment and investment unemployment insurance has the opposite effect insured workers seek high wage jobs with high unemployment risk an economy with risk neutral workers achieves maximal output without any unemployment insurance but an economy with risk averse workers requires a positive level of unemployment insurance to maximize output therefore moderate unemployment insurance not only improves risk sharing but also increases output

noncooperative collusion in durable goods oligopoly coase conjectured that a durable goods monopolist who can make offers to sell arbitrarily frequently will lose the ability to extract positive profits this result which has now been proved can be attributed to the inability of the monopolist to commit to maintaining sufficiently high prices in the near future for the case of durable goods oligopoly we show that letting the firms make offers arbitrarily frequently enhances their ability to commit to high prices and in the limit enables the firms to enjoy total market profits equal to the full commitment one shot monopoly profit

equilibrium long term labor contracts the paper presents a labor market equilibrium analysis of implicit contract theory a two period single good model is used to propose consistent notions of labor market equilibrium for long term employment contracts both when labor is specialized and cannot move in the second period and when there is free mobility without costs the result that long term contracts emerge in equilibrium even without mobility costs is novel and contrary to common beliefs the main features of equilibrium are that risk neutral firms will insure risk averse workers against downside risk yielding downward rigid wages wages are not fully rigid as in earlier work on contract theory because workers may quit and wages have to be bid up to retain them the firm gets its return of the insurance deal by paying less than marginal product in the first period the resulting equilibrium is second best and lies between productive efficiency and full insurance workers gain from long term contracts in comparison to spot markets whereas owners may not in the model with specialized skills there exist transfer payments such that both parties are better off within an equilibrium with long term contracts

eliminating the market for secondhand goods an alternative explanation for leasing there are a number of prominent specific instances in which a durable goods manufacturer with significant market power employed a lease only policy i united shoe in the market for shoe machinery ii ibm in the market for computers and iii xerox in the market for copiers the obvious question that arises is why would such a firm prefer leasing over selling in this article i argue that one role of the lease only policy was to eliminate the market for secondhand goods the article formally demonstrates the argument discusses the relationship between this article and earlier literature on secondhand markets and discusses the implications for antitrust policy

the effects of the us plant variety protection act on wheat genetic improvement in our model of partially appropriable invention if the us plant variety protection act pvpa of 1970 succeeded in strengthening intellectual property protection for plant breeders it should have led to increases in investment in varietal r d improved varietal quality and enhanced royalties these hypotheses are tested using data on us wheat we find that the pvpa may have stimulated public but not private sector investment in wheat varietal improvement but that the pvpa did not cause any increase in experimental or commercial wheat yields these findings indicate that the pvpa had little impact on excludability or appropriability in wheat varieties

on the equivalence of walrasian and non walrasian equilibria in contract markets the case of complete contracts this paper explores two models of an economy in which contracts are exchanged in the first model contracts are exchanged on a competitive market in which traders expectations concerning conditions that prevail within specific markets adjust until markets clear in the second model contract designers compete directly against one another by offering alternate contracts it is shown that walrasian allocations correspond with the equilibrium allocations in the model with direct competition when the number of traders is made large furthermore the expectational assumptions that drive the walrasian analysis coincide with off the equilibrium path conjectures in the problem with direct competition