the effect of the food stamp program on nutrient intake i introduction one of the goals of the food stamp program as stated in the preamble of the law is to ensure that low income households have the opportunity to attain a nutritionally adequate diet previous economic studies evaluating the effects of food stamp income on nutrient intake have typically found a positive usually small correlation between the receipt of food stamps and nutrition two recent papers by devaney and moffitt 1991 and horton and campbell 1991 reach very positive conclusions concerning the effect of income in general papers from the nutrition literature generally find positive but weak and often insignificant effects of income on nutrition we employ information on two groups of low income people and find slightly different results for the two groups but very different results from many of the other studies for a sample of rural families taken from data from the rural income maintenance experiment we find almost no effect of food stamp income or evidence of selection bias 1 however for a sample of elderly people from the food stamp cashout project we find strong evidence that self selection into the food stamp program is highly correlated with attaining nutritional adequacy and that controlling for the self selection food stamp income and other income have a negative effect on nutrition we re examine the relationship between food stamp income and the nutrient intake of the poor and improve upon the existing literature in several important ways first it is possible that the positive correlation between the receipt of food stamps and nutrition is not a direct causal link but rather is the result of other factors affecting both for example in one of the samples examined in this paper only 50 percent of those eligible actually apply for and receive food stamps it could be the case that those who care more about nutrition are at the same time more likely to apply for and receive food stamps and more likely to maintain a nutritionally adequate diet these possible self selection problems can be disentangled from possible direct effects of food stamp income on nutrition using estimation procedures which correct for selection bias another issue which our research addresses is that the level of one nutrient may be correlated with the levels of other nutrients this may occur either because individuals who care about nutrition may be more likely to attain adequate levels of all nutrients or because combinations of nutrients occur naturally in foods we posit a multi equation model of the levels of nutrients and allow the disturbances in each equation to be correlated none of the previous studies considered this correlation finally we recognize the fact that above some level extra nutrients are superfluous if an individual has attained a nutritionally adequate diet then whether or not food stamp income allows him or her to consume more nutrients is irrelevant we are primarily interested in therefore whether or not an individual attains an adequate level of a nutrient rather than the absolute amount of a nutrient consumed in previous studies devaney and moffitt 1991 had addressed simultaneously the issues of selection bias and the superfluity of nutrients above some level the finding that food stamp income actually lowers nutrient intake ceteris paribus is a novel result for studies of the food stamp program but it would not be novel in the literature on nutrition in less developed countries pitt and rosenzweig 1985 behrman and deolalikar 1987 it is reasonable to believe that as income increases households employ relatively more money than time in household production this is silberberg s 1985 explanation for decreased efficiency in producing pure nutrients in other words as income increases people spend less time preparing meals and more money on foods which are easier to prepare if as is often the case foods which are more convenient to prepare are less nutritious than foods which require a lot of time to prepare then our result is not surprising

eductive stability in real business cycle models we reexamine issues of coordination in the standard rbc model is the unique rational expectations equilibrium attainable by rational agents who contemplate the possibility of small deviations from equilibrium surprisingly we nd that coordination cannot be expected even with strong common knowledge assumptions rational agents anticipating small but persistent deviations are led to take actions that eventually contradict the common knowledge assumption this impossibility theorem for eductive learning is not fully overcome when adaptive learning is incorporated into the framework

uniform vs discriminatory auctions with variable supply experimental evidence in the variable supply auction considered here the seller decides how many customers with unit demand to serve after observing their bids bidders are uncertain about the seller s cost we experimentally investigate whether a uniform or a discriminatory price auction is better for the seller in this setting exactly as predicted by theory it turns out that the uniform price auction produces substantially higher bids and consequently yields higher revenues and profits for the seller furthermore again as predicted by theory the uniform price auction yields a higher number of transactions which makes it also the more efficient auction format

social investing mainstream or backwater social investing though not yet fully mainstream has the potential to obtain such status questions relating to the future of social investing include the following 1 what properly falls within the ambit of social investing assuming that no single definition of social responsibility is feasible what then are the limits 2 what do we need to know about investor psychology concerning social investing what motivates people to buy socially screened investments and why do they sometimes act inconsistently 3 how can we improve the measures of social performance is it possible to develop gaap and gaas equivalents for social reporting 4 should social reports by firms be audited if so how 5 what sorts of public policies are necessary to support the social screening of investments

agricultural export subsidies as a tool of trade strategy before and after the federal agricultural improvement and reform act of 1996 if the main justification for agricultural export subsidies is that they reduce government costs of deficiency payments then the 1996 farm legislation would make u s export subsidies largely unnecessary an additional argument advanced in favor of export subsidies is that their aggressive use by one country will cause competing countries to reduce or discontinue their own subsidies this argument is explored by means of a nash equilibrium in which countries choose both a base subsidy level and a response to competitors and by a consistent conjectures equilibrium little support is found for the argument during the period of the mid 1980s to the mid 1990s export subsidies became an increasingly important part of u s farm policy in fact expenditures on the export enhancement program eep exceeded 1 billion in fy 1993 the enduring popularity of export subsidies has been a source of puzzlement to economists see r paarlberg for example economists argue that governments could provide more assistance to farmers at the same cost to consumers if the money spent on export subsidies were spent instead on direct subsidies to farmers anania bohman and carter present a strong argument along these lines several papers have found circumstances under which export subsidies might be justified abbott paarlberg and sharples show that export subsidies can improve welfare in the exporting country if they are implemented in a discriminatory way reducing prices in countries with relatively elastic demands abbott and kallio show how export subsidies may complement other policies intended to support producers when the exporting country has market power in the world market another possible explanation for the popularity of export subsidies is advanced by alston carter and smith 1993 1995 they show that export subsidies may be justified because they reduce the budgetary costs of the price support program there is an additional argument which is frequently heard in debates about agricultural export subsidies but which has not been fully analyzed by economists supporters of the eep program argue that to discontinue its use would be tantamount to unilateral disarmament in the war for international market share in agricultural trade in other words export subsidies are a useful tool of

what will consumers pay for social product features the importance of ethical consumerism to many companies worldwide has increased dramatically in recent years ethical consumerism encompasses the importance of non traditional and social components of a company s products and business process to strategic success such as environmental protectionism child labor practices and so on the present paper utilizes a random utility theoretic experimental design to provide estimates of the relative value selected consumers place on the social features of products

cournot oligopoly reconsidering cournot the cournot equilibrium is consistent this article uses an infinite regress model of firm level decisions to find a rational expectations equilibrium for a duopoly and to relate concepts of conjectural variations and consistency to the cournot equilibrium the model derives a conjectural variation instead of assuming it in particular the cournot equilibrium is shown to be consistent in the usual sense of the literature the conflict between notions of consistent conjectures and the cournot equilibrium results from a compounding problem inherent in the earlier models we extend these results to the n firm problem alternatively the article can be viewed as providing a purely static model that generates the cournot equilibrium without reference to conjectures or quasi dynamics

measuring investors socially responsible preferences in mutual funds the aim of this study is to analyze investor behavior towards socially responsible mutual funds the analysis is based on an experimental study where a sample of individuals takes investment decisions under different parameters of information about the investment alternatives and expected returns in the experiment each participant decides how to distribute an investment budget between two funds returns on which are uncertain and change over time two treatments are conducted each providing a different degree of information on the socially responsible sr character of one of the two investment alternatives the results obtained suggest that although individuals criteria for investment are essentially guided by returns and diversification participants invest significantly more in a fund when they are explicitly informed about its sr nature in particular participants who declare being concerned about sr actually invest significantly more in the sr alternative furthermore the level of sr faithfulness among a small group of investors is such that they invest the main share of their budget in the sr fund even when the return differential is highly unfavorable providing clear information about the sr characteristics of an investment is crucial to help investors express their preferences

the effect of income and food programs on dietary quality a seemingly unrelated regression analysis with error components this article employs new food guide pyramid servings data to measure how food intake is affected by income and two food programs the analysis uses a maximum likelihood estimator that combines the seemingly unrelated regression and one way error component models to account for two types of intrahousehold correlations participation in the food stamp program is associated with higher intake of meats added sugars and total fats participation in the special supplemental nutrition program for women infants and children is associated with lower intake of added sugars

child allowances and allocative decisions in romanian households in this paper it is tested whether increasing child allowances will affect the intra household allocation of consumption measured by child and adult goods holding total household resources constant the analysis is based on household survey data collected in romania where cash payments are made to families according to the number and age of children selectivity is controled for since there is the potential for self selection bias in terms of the level of child allowances received the findings suggest that holding total household resources constant child allowances increase demand for child goods and calories and reduce demand for adult goods

perfection the infinite horizon and dominance abstract consideration of time and independence brought into focus by the example of perfection in the infinite horizon leads the author to a modified contraction by dominance solution for game theory

exploring factors that influence social retail investors decisions evidence from desjardins fund most studies on the choices motivations and behavior of investors consist of segmentations focused on socio demographic characteristics such as age income education level etc such approaches seem to simplify even mutilate reality by aggregating data about observable variables and considering investors as homogeneous groups these perspectives are inspired by a scientific approach that consists of separating in order to better understand the observed phenomena by considering individual as a homo economicus that is to say a rational and autonomous individual who makes decisions motivated by material gains these studies fail to recognize all the complexity that shapes human behavior this paper argues that to understand the behavior and choices of investors in regards to socially responsible investing sri we must consider social investors as complex individuals in addition we should take into account influence that the institution may exercise throughout the role of advisors and sri promotion strategies our research builds on a multidimensional approach that explores to what extent demographic environmental social and governance esg issues the trade offs between financial return and social values the attitudes and the role of the institution throughout the role of the advisor and sri promotion strategies influence the decisions of individual social investors moreover it adopts a more open approach by exploring the characteristics and behaviors of individual social investors in relation to those of conventional investors our research provides evidence from the desjardins fund qualitative and quantitative data gathered by desjardins from online surveys are subjected to bivariate and multivariate analyses and are complimented by ten semi structured interviews with managers analysts and advisors who provided further insight into sri investment behavior and choice the results show that while demographic characteristics still remain important in understanding the behavior and attitudes of social investors it is their social values esg issues financial return considerations and the role played by the institution in mediating investment decisions that are significantly associated with sri portfolios our research highlights the complexity surrounding the phenomenon of sri and has several implications both in terms of theory and practice

rational behaviour in extensive form games it is argued that subgame perfect equilibrium behavior is not an inevitable consequence of common belief of rationality among players in noncooperative extensive form games the argument centers around a particular extensive form game with perfect information in the context of this game it is argued that if rationality is not common belief throughout play of the game then it can be perfectly rational to play contrary to subgame perfection even if rationality is common belief at the beginning of the game it is then shown that it is impossible for rationality to be common belief throughout every play of the game

is there a hold up problem most literature on the hold up problem starts from the assumption that ex post bargaining outcomes are insensitive to prior investment costs we argue that this approach is unsatisfactory if the bargaining procedure is relatively symmetric it typically admits multiple perfect equilibria some of which give the investor a high enough payofi to sustain e cient investment even if the bargaining procedure is asymmetric and rigged against the investor there may be investment if agents are driven by moral concerns or if communication creates commitment laboratory experiments indicate that communication is necessary and su cient for agents to coordinate on e cient outcomes when the bargaining game is symmetric when the bargaining game is rigged against the investor the hold up problem is mitigated but not eliminated by moral behavior communication is quite credible and we flnd that promises are more believable than threats

shareholder value stakeholder management and social issues what s the bottom line we test the relationship between shareholder value stakeholder management and social issue participation building better relations with primary stakeholders like employees customers suppliers and communities could lead to increased shareholder wealth by helping firms develop intangible valuable assets which can be sources of competitive advantage on the other hand using corporate resources for social issues not related to primary stakeholders may not create value for shareholders we test these propositions with data from s p 500 firms and find evidence that stakeholder management leads to improved shareholder value while social issue participation is negatively associated with shareholder value copyright 2001 john wiley sons ltd

the learning curve predation antitrust and welfare an economic definition of predation is applied to a dynamic model of duopoly competition with learning curves it is shown that rational predation occurs in equilibrium although below cost pricing is neither a necessary nor a sufficient indicator of predation a conceptual framework for antitrust analysis of predation shows that a prohibition of predation might help or harm consumer welfare depending on details of market structure although the informational requirements of fashioning an effective legal rule against harmful predation are formidable

equilibrium binding agreements abstract we study equilibrium binding agreements the coalition structures that form under such agreements and the efficiency of the outcomes that result we analyze such agreements in a context where the payoff to each player depends on the actions of all other players thus a game in strategic form is a natural starting point unlike the device of a characteristic function explicit attention is paid to the behavior of the complementary set of players when a coalition blocks a proposed agreement a solution concept and its applications are discussed journal of economic literature classification numbers c70 c71

nutrient availability food costs and food stamps nutrient consumption patterns of low income households were analyzed using data from the special low income component of the 1977 78 nationwide food consumption survey a system of simultaneous equations for estimating food cost and diet component availability levels in home food supply was applied the derived reduced form showed that food stamp program participation had a positive impact on diet component availability levels impacts of other socioeconomic variables examined for diet component availability were generally larger than those for program participation and income diet component availability levels were relatively constant across households with different income and food stamp program bonus levels

monotonicity and rationalizability in a large first price auction this paper proves that the monotonicity of bidding strategies together with the rationality of bidders implies that the winning bid in a first price auction converges to the competitive equilibrium price as the number of bidders increases wilson 1977 instead of analysing the symmetric nash equilibrium we examine rationalizable strategies bernheim 1984 pearce 1984 among the set of monotonic bidding strategies to prove that any monotonic rationalizable bidding strategy must be within a small neighbourhood of the truthful valuation of the object conditioned on the signal received by the bidder we obtain an information aggregation result similar to that of wilson 1977 while dispensing with almost all symmetric assumptions and using a milder solution concept than the nash equilibrium in particular if every bidder is ex ante identical then any rationalizable bidding strategy must be within a small neighbourhood of the symmetric nash equilibrium in a symmetric first price auction the symmetry of outcomes is implied rather than assumed copyright 2005 wiley blackwell

eductive learning and the rationalizability of oligopoly games abstract this paper extends the eductive learning approach in settings with non atomistic agents it shows the connection between the characterization of rationalizable sets by basu 1991 and the seminal result by guesnerie 1992 in the context of cournot oligopoly models

on adjustment costs and the stability of equilibria in practice one does not expect conflicting agents to move instantaneously to an equilibrium instead the final equilibrium is often the consequence of disequilibrium dynamics this paper through the use of local game theory introduces a general framework for disequilibrium dynamics based on the existence of adjustment costs the analysis is presented within the context of oligopoly theory and shows that the existence of adjustment costs will in many cases result in a unique equilibrium at which market shares are inversely proportional to these costs this paper also introduces two new solution concepts for n person normal form games

partial identification methods for evaluating food assistance programs a case study of the causal impact of snap on food insecurity we illustrate how partial identification methods can be used to provide credible inferences on the causal impacts of food assistance programs focusing on the impact that the supplemental nutrition assistance program snap formerly known as the food stamp program has on food insecurity among households with children recent research applies these methods to address two key issues confounding identification missing counterfactuals and nonrandomly misclassified treatment status in this paper we illustrate and extend the recent literature by using data from the survey of income and program participation sipp to study the robustness of prior conclusions the sipp confers important advantages the detailed information about income and eligibility allows us to apply a modified discontinuity design to sharpen inferences and the panel nature allows us to reduce uncertainty about true participation status we find that snap reduces the prevalence of food insecurity in households with children by at least six percentage points

auctions with variable supply uniform price versus discriminatory abstract we examine an auction in which the seller determines the supply after observing the bids we compare the uniform price and the discriminatory auction in a setting of supply uncertainty where uncertainty is caused by the interplay of two factors the seller s private information about marginal cost and the seller s incentive to sell the profit maximizing quantity given the received bids in every symmetric mixed strategy equilibrium bidders submit higher bids in the uniform price auction than in the discriminatory auction in the two bidder case this result extends to the set of rationalizable strategies as a consequence we find that the uniform price auction generates a higher expected revenue for the seller and a higher trade volume

using game theory to model competition the article is an exposition of the basic concepts of noncooperative game theory and their application to advertising product and price competition

recent advances in oligopoly theory from a game theory perspective abstract this paper surveys the contribution that recent developments in game theory have made to the understanding of oligopoly theory it is argued that conventional models suffer from the problem that there are a number of solution concepts offered with little guidance as to which should be selected and this is related to the static nature of the models employed one important development in game theory has been the analysis of repeated games and when applied to oligopoly theory this suggests that outcomes may be more cooperative than conventional theory suggests related to this is the requirement that firms employ credible threats to punish cheating from cooperative outcomes and the paper examines the extent to which imperfect information may restrict the scope of firms to employ such punishments one way in which firms may seek to make threats credible is through strategic investments for example in production capacity and the paper explores how competition over price or output is integrated with competition over instruments for strategic investment

dietary effects of the food stamp program based on data from the 1979 80 survey of food consumption in low income households this paper estimates the effects of changes in cash income and the food stamp benefit on household nutrient availability while controlling for two potential sources of selection bias the major finding of the empirical analysis is that the estimated dietary effects of changes in food stamp benefits are considerably larger than those resulting from changes in cash income with estimates of the ratios of the mpc for the food stamp benefit to the cash income mpc ranging from three to seven across nutrients no significant evidence of selection bias was found and the estimated dietary effects of food stamp benefits from the selection bias models are similar to those from the basic model estimated by ordinary least squares regression

rationalizable strategic behavior the notion of equilibrium proposed by nash 19 has come to play a dominant role in economic applications of noncooperative games while analyses of nash equilibria have unquestionably contributed to our understanding of economic behavior it would be unreasonably optimistic to maintain that nash solved the problem of noncooperative strategic choice there is a small literature beginning with ellsberg 6 and a much larger oral tradition which argues that nash behavior is neither a necessary consequence of rationality nor a reasonable empirical proposition in this paper i take the view that although there may be various reasons why an agent might select a nash strategy the notion of an equilibrium has little intrinsic appeal within a strategic context when an agent reaches a decision in ignorance of the strategies adopted by other players rationality consists of making a choice which is justifiable by an internally consistent system of beliefs rather than one which is optimal post hoc this point of view is not original indeed most serious justifications of the nash hypothesis embrace such an approach arguing that agents will expect the game to yield a nash outcome and consequently will choose their equilibrium strategies nevertheless when we think in terms of maximizing utility subject to expectations rather than realizations it becomes clear that the nash hypothesis far from being a consequence of rationality arises from certain restrictions on agents expectations which may or may not be plausible depending upon the game being played we are then quite naturally led to ask are there any restrictions of individuals expectations and hence choices which are required by rationality alone rather than by subjective plausibility this paper is concerned with defining justifying characterizing and refining a criterion for rational strategic choice which i label rationalizability

advance production and cournot outcomes an experimental investigation abstract an experiment designed to assess the effects of advance production decisions on posted offer market performance is reported six of the twelve triopolies were conducted under standard posted offer rules in the remaining markets sellers made binding production commitments prior to posting prices an alteration that shifts the unique stage game nash equilibrium from the competitive to the cournot outcome as predicted advance production decisions raised prices and lowered output nevertheless stable cournot outcomes were never observed

testable implications of subjective expected utility theory abstract i show that the predictive content of the hypothesis of subjective expected utility maximization critically depends on what the analyst knows about the details of the problem a particular decision maker faces when the analyst does not know anything about the agent s payoffs or beliefs and can only observe the sequence of actions taken by the decision maker any arbitrary sequence of actions can be implemented as the choice of an agent that solves some intertemporal utility maximization problem under uncertainty

the food stamp program and food insufficiency food stamp participants have higher food insufficiency rates than eligible nonparticipants even after controlling for other factors given the food stamp program s prominent role in the alleviation of hunger this is a counterintuitive result we conjecture that these higher rates are due to adverse selection insofar as households more likely to be food insufficient are also more likely to receive food stamps we establish a theoretical framework to address this adverse selection using a simultaneous equation model with two probits we show that once one controls for this adverse selection food stamp recipients have the same probability of food insufficiency as nonrecipients copyright 2001 oxford university press

what good does doing good do the effect of bond rating analysts corporate bias on investor reactions to changes in social responsibility in this study we explore how investors reconcile information on firms social responsibility with analysts assessments of future firm risk in the pricing of long term bonds we ask whether investors pay attention to small strides toward and or small slips away from socially responsible behavior arguing that analysts corporate bias toward gains and against losses influences investor reactions to corporate social responsibility we hypothesize that analysts notice and reward improvements in social responsibility yet excuse lapses we find support for this hypothesis using a unique dataset of long term bonds that combines lagged measures of firm level financial and social performance with bond specific data pertaining to risk of default and pricing the empirically robust asymmetry in investor responses to small but often cumulative increases versus decreases in corporate social responsibility reveals an under examined root cause of longer term larger scale distortions in financial market returns regarding corporate social performance our findings elaborate earlier behavioral research on how corporate bias influences analysts short term assessments of economic risk by theorizing why this corporate bias may influence long term assessments of social risk our work also motivates more critical scrutiny of the role analysts play in revising the future risk of today s social action versus inaction

tight revenue bounds with possibilistic beliefs and level k rationality mechanism design enables a social planner to obtain a desired outcome by leveraging the players rationality and their beliefs it is thus a fundamental but yet unproven intuition that the higher the level of rationality of the players the better the set of obtainable outcomes in this paper we prove this fundamental intuition for players with possibilistic beliefs a model long considered in epistemic game theory specifically we define a sequence of monotonically increasing revenue benchmarks for single good auctions g0 g1 g2 where each gi is defined over the players beliefs and g0 is the second highest valuation i e the revenue benchmark achieved by the second price mechanism we 1 construct a single interim individually rational auction mechanism that without any clue about the rationality level of the players guarantees revenue gk if all players have rationality levels k 1 and 2 prove that no such mechanism can guarantee revenue even close to gk when at least two players are at most level k rational

rationalizable strategic behavior and the problem of perfection this paper explores the fundamental problem of what can be inferred about the outcome of a noncooperative game from the rationality of the players and from the information they possess the answer is summarized in a solution concept called rationalizability strategy profiles that are rationalizable are not always nash equilibria conversely the information in an extensive form game often allows certain unreasonable nash equilibria to be excluded from the set of rationalizable profiles a stronger form of rationalizability is appropriate if players are known to be not merely rational but also cautious what constitutes rational behavior in a noncooperative strategic situation this paper explores the issue in the context of a wide class of finite noncooperative games in extensive form the traditional answer relies heavily upon the idea of nash equilibrium nash 17 the position developed here however is that as a criterion for judging a profile of strategies to be reasonable choices for players in a game the nash equilibrium property is neither necessary nor sufficient some nash equilibria are intuitively unreasonable and not all reasonable strategy profiles are nash equilibria the fact that a nash equilibrium can be intuitively unattractive is well known the equilibrium may be imperfect introduced into the literature by selten 20 the idea of imperfect equilibria has prompted game theorists to search for a narrower definition of equilibrium while this research some of which will be discussed here has been extremely instructive it remains inconclusive theorists often agree about what should happen in particular games but to capture this intuition in a general solution concept has proved to be very difficult if this paper is successful it should make some progress in that direction the other side of the coin has received less scrutiny can all non nash profiles really be excluded on logical grounds i believe not the standard justifications for considering only nash profiles are circular in nature or make gratuitous assumptions about players decision criteria or beliefs the following discussion of these points is extremely brief due to space constraints more detailed arguments may be found in pearce 18

tenable strategy blocks and settled equilibria when people interact in familiar settings social conventions usually develop so that people tend to disregard alternatives outside the convention for rational players to usually restrict attention to a block of conventional strategies no player should prefer to deviate from the block when others are likely to act conventionally and rationally inside the block we explore two set valued concepts coarsely and finely tenable blocks that formalize this notion for finite normal form games we then identify settled equilibria which are nash equilibria with support in minimal tenable blocks for a generic class of normal form games our coarse and fine concepts are equivalent and yet they differ from standard solution concepts on open sets of games we demonstrate the nature and power of the solutions by way of examples settled equilibria are closely related to persistent equilibria but are strictly more selective on an open set of games with fine tenability we obtain invariance under the insertion of a subgame with a unique totally mixed payoff equivalent equilibrium a property that other related concepts have not satisfied

understanding socially responsible investing the effect of decision frames and trade off options over the past two decades the phenomenon of socially responsible investing has become more widespread however knowledge about the individual socially responsible investor is largely limited to descriptive and comparative accounts the question of why do some investors practice socially responsible investing and others don t is therefore still largely unanswered to address this shortcoming in the current literature this paper develops a model of the decision to invest socially responsibly that is grounded in the cognition literature the hypotheses proposed in the model are tested with an experimental survey the results indicate that the framing of the investing situation influences the likelihood of engagement in socially responsible investing and how much return the individuals are willing to sacrifice when choosing socially responsible over conventional investments the study does not find support for a relationship between expectations about corporate social responsibility and the likelihood of engagement in socially responsible investing

admissibility in games suppose that each player in a game is rational each player thinks the other players are rational and so on also suppose that rationality is taken to incorporate an admissibility requirement that is the avoidance of weakly dominated strategies which strategies can be played we provide an epistemic framework in which to address this question specifically we formulate conditions of rationality and mth order assumption of rationality rmar and rationality and common assumption of rationality rcar we show that i rcar is characterized by a solution concept we call a self admissible set ii in a complete type structure rmar is characterized by the set of strategies that survive m 1 rounds of elimination of inadmissible strategies iii under certain conditions rcar is impossible in a complete structure

equilibrium without independence abstract because players whose preferences violate the von neumann morgenstern independence axiom may be unwilling to randomize as mixed strategy nash equilibrium would require a nash equilibrium may not exist without independence this paper generalizes nash s definition of equilibrium retaining its rational expectations spirit but relaxing its requirement that a player must bear as much uncertainty about his own strategy choice as other players do the resulting notion equilibrium in beliefs is equivalent to nash equilibrium when independence is satisfied but exists without independence this makes it possible to study the robustness of equilibrium comparative statics results to violations of independence

bargaining in stationary networks we study an infinite horizon game in which pairs of players con nected in a network are randomly matched to bargain players who reach agreement are replaced by new players at the same positions in the network we show that all equilibria are payoff equivalent the payoffs and the set of agreement links converge as players become patient several new concepts mutually estranged sets partners and shortage ratios provide insights into the relative strengths of the positions in the network we develop a procedure to deter mine the limit equilibrium payoffs for all players characterizations of equitable and nondiscriminatory networks are also obtained jel c78 d85 competitive equilibrium theory assumes large and anonymous markets in which every buyer can trade with every seller underlying these assumptions are standard goods and services that may be traded at low transaction costs by agents who are not in specific relationships with one another however in many markets goods and services are heterogeneous e g cars apartments or need to be tailored to particular needs e g manufacturing inputs technical support furthermore trad ing opportunities may depend on transportation costs social relationships infor mation advertising trust technological compatibility joint business opportunities free trade agreements etc in such cases it is natural to model the market using a network where only pairs of connected agents may engage in exchange new theories are needed to explore the influence of the network structure on market outcomes many questions arise how does an agent s position in the net work determine his bargaining power and the local prices he faces who trades with whom and on what terms when are prices uniform in the network one possible conjecture is that an agent s bargaining power is determined by his relative number of connections in the network however this simple theory is implausible consider the network of four sellers located at the top nodes and nine buyers located at the bottom nodes depicted in figure 1 assume that each seller supplies one unit of a homogeneous indivisible good each buyer demands one unit of the good and all buyers have identical values for the good the buyer located in the middle has the largest number of links in the network as he is connected to each

common knowledge of rationality and market clearing in economies with asymmetric information abstract consider an exchange economy with asymmetric information what is the set of outcomes that are consistent with common knowledge of rationality and market clearing to address this question we define an epistemic model for the economy that provides a complete description not only of the beliefs of each agent on the relationship between states of nature and prices but also of the whole system of interactive beliefs the main result theorem 1 provides a characterization of outcomes that are consistent with common knowledge of rationality and market clearing henceforth ckrmc outcomes in terms of a solution notion ex post rationalizability that is defined directly in terms of the parameters that define the economy ckrmc manifests several intuitive properties that stand in contrast to the full revelation property of rational expectations equilibrium in particular for a robust class of economies 1 there is a continuum of prices that are consistent with ckrmc in every state of nature and hence these prices do not reveal the true state 2 the range of ckrmc outcomes is monotonically decreasing as agents become more informed about the economic fundamentals and 3 trade is consistent with common knowledge of rationality and market clearing even when there is common knowledge that there are no mutual gains from trade

an example of a dominance approach to rational expectations abstract dominance and independence produce an alternative approach to rational expectations in a simple stationary overlapping generations model dominance and independence delimit rational behaviour but predict a range of rational choice rather than a single rational choice in particular a coherent interpretation of multiple rational expectations equilibria is provided

evolutionary selection against iteratively weakly dominated strategies abstract this paper provides sufficient conditions under which regular payoff monotonic evolutionary dynamics a class of imitative dynamics that includes the replicator dynamic select against strategies that do not survive a sequence of iterated elimination of weakly dominated strategies we apply these conditions to bertrand duopolies and first price auctions our conditions also imply evolutionary selection against iteratively strictly dominated strategies

valuing food store access policy implications for the food stamp program food stamp recipients may lack access to larger stores reducing the availability of nutritious food reliance on smaller stores may have undesirable impacts policy alternatives include limiting food stamp redemption to larger stores and subsidizing store development i estimate that limiting redemption to supermarkets and grocery stores or supermarkets alone results in losses ranging from 499 2 million to 1 05 billion or 1 17 billion to 2 44 billion respectively annual loss in food stamp recipient welfare nationwide the impact of improving access is also significant ranging from 333 6 million to 931 2 million

are investors willing to sacrifice cash for morality the paper uses questionnaire responses provided by a sample of ethical investors to investigate willingness to sacrifice ethical considerations for financial reward the paper examines the amount of financial reward necessary to cause an ethical investor to accept a switch from good ethical performance to poor ethical performance conjoint analysis is used to allow quantification of the utilities derived from different combinations of ethical and financial performance ethical investors are shown to vary in their willingness to sacrifice ethical for financial performance and hence to display more heterogeneity than the all encompassing ethical label implies because of the existence of sub groups of ethical investors with different attitudes towards financial reward an attempt has been made to associate observable investors characteristics with their level of willingness to trade off morality for cash one sub group of investors in particular appears highly resistant to the idea of accepting higher financial return as compensation for poor ethical performance this unwillingness casts doubt on jensen and meckling s widely reported claim that trade off behaviour is ubiquitous in all areas of life

axiomatic characterizations of rational choice in strategic environments for more than forty years economists have wrestled with the elusive notion of rational behavior in strategic environments generating a variety of competing approaches even for simple simultaneous move games four distinct solution concepts including the notions of nash equilibria correlated equilibria rationalizability and iterated dominance currently have some standing as theories of strategic rationality here i propose four axioms for rational choice in strategic environments and use these to characterize the sets of pure strategies that players may select under each of the solution concepts mentioned above my results underscore both the similarities and differences between the four concepts

the current state of the law and economics of predatory pricing it has been almost 20 years since phillip areeda and donald f turner introduced their proposals for antitrust policy toward predatory pricing their 1975 harvard law review article predatory pricing and related practices under section 2 of the sherman act sparked a lively debate among legal scholars and economists that continued mostly in law reviews for several years the controversy focused on the core areeda turner at test which put forward short run marginal cost as the appropriate but difficult to measure standard of a lawful price and recommended reasonably anticipated average variable cost as a surrogate the discussion included consideration of other cost based measures as well as alternative rules restricting dominant firm pricing and output policies and both structured and open textured rule of reason analyses the controversy also helped to illuminate the qualifications that areeda and turner imposed on their proposal one of the central issues in the debate concerning the at test was whether or not it gave sufficient weight to the dynamic and strategic character of predatory pricing all the participants in the discussion including areeda and turner themselves recognized that since the essence of predatory pricing is the predator s sacrifice of short run gains for longer run gains and consequent harm to the public the problem being addressed is inherently strategic the lawyers and economists engaged in the debate differed however about whether anything practical could be done to cope with the intertemporal strategic issues areeda and turner s reliance on a static model of dominant firm behavior to derive their test reflected their doubt that a sound legal rule could be fashioned to cope with the inherently speculative and indeterminate assessment of longrun considerations curiously enough just as the debate in the law reviews was winding down the market organization literature was beginning to see an infusion of contributions that used modern game theoretic concepts and techniques to analyze well specified models of strategic firm behavior in oligopolistic markets in particular several important contributions analyzed models of markets in which predatory pricing emerged as part of a set of equilibrium strategies these contributions effectively undermined the view that because of its costs to the would be predator predation is irrational and hence not likely to occur this work is well categorized and well surveyed in the chapter that janusz ordover and garth saloner 1989 contributed to the handbook of industrial organization a central feature of this class of models is some asymmetry of information between market actors the dominant incumbent firm is better informed than its smaller rival in models where the predator induces exit of competitors the incumbent is better informed than potential entrants in models where predation takes the form of entry deterrence and firms in general are better informed about their prospects than are their sources of financing the new market organization literature on predation offered three major types of models first there were well developed game theoretic analyses of the long purse or deep pocket theories of predation theories which lester g telser 1966 had analyzed earlier in a perfect information tdiscussants paul joskow massachusetts institute of technology joseph stiglitz stanford university

the choice architecture of sustainable and responsible investment nudging investors toward ethical decision making this paper applies insights from behavioral economics and nudge theory to foster sustainable and responsible investment sri sri provides an opportunity to express and promote ethical values via choice of financial instruments while policy makers have tried to encourage greater participation in sri the majority of retail investors retain a conventional approach to investment i develop a conceptual framework to improve the effectiveness of sri policy making the first part of the framework comprises a transmission mechanism which emphasizes the role of sri as a driver for sustainable development the second part is a model of the individual decision for or against sri the framework suggests that low sri demand is a case of behavioral market failure and that nudging is a suitable tool for dismantling behavioral barriers to sri a specific example of smart choice architecture is used to illustrate the framework s potential in the design of an sri nudge assuming the nudge stands up to the rigors of empirical testing it may well provide a feasible alternative for policy makers

opening up pandora s box the effect of gender targeting and conditionality on household spending behavior in mexico s progresa program summary this paper evaluates the behavioral impact of conditionality and gender targeting on spending behavior in the progresa conditional cash transfer cct program from rural mexico results indicate that transfer income is not spent differently from general income suggesting that transfers exert only an income effect in addition women who have increased control over their extra cash are not significantly more likely to spend it in a family friendly way than they do household earned income both features entail significant costs to beneficiaries and program budgets our results indicate that further evidence is needed to confidently advocate for their inclusion in cash transfer ct programs

does it matter how we survey demand for food evidence from kenya and the philippines abstract this article examines the reliability of food quantity information collected from expenditure surveys and finds that measurement errors will very often be systematically correlated with income such that the response of food intakes to increases in income is seriously overstated this may be firstly because food quantities are not measured independently of income if total expenditures are the proxy used for income and secondly because food transfers in the form of guest and hired worker meals are under recorded these biases are illustrated using household surveys from kenya and the philippines

de stabilizing speculation on futures markets an alternative view point abstract this paper offers a new interpretation for possible destabilizing effects of opening futures markets in our model adapted from stein 1987 speculation on futures markets reduces the likelihood of occurrence of a rational expectations equilibrium although the equilibrium price is less volatile after the futures market is opened which is usually viewed as a stabilizing effect traders may find it more difficult or even impossible to coordinate their expectations in order to implement this equilibrium

support for investor activism among u k ethical investors an important goal of ethical investment is to influence companies to improve their ethical and environmental performance the principal means that many ethical funds employ is passive market signalling which may not on its own have a significant effect a much more promising approach may be active engagement this paper reports on a questionnaire study of a sample of 1146 ethical investors in order to assess whether u k ethical investors would support more activist ethical investment and whether they would be prepared to invest in companies which are failing ethically in order to do so the results show general support for the current practice of passive signalling accompanied by soft engagement in the form of lobbying and the development of dialogue in order to improve corporate practice the harder options of investing in companies that err in order to change them is however favoured by consistent minorities

identification and estimation of dynamic games when players beliefs are not in equilibrium this article deals with the identification and estimation of dynamic games when players beliefs about other players actions are biased that is beliefs do not represent the probability distribution of the actual behaviour of other players conditional on the information available first we show that an exclusion restriction typically used to identify empirical games provides testable non parametric restrictions of the null hypothesis of equilibrium beliefs in dynamic games with either finite or infinite horizon we use this result to construct a simple likelihood ratio test of equilibrium beliefs second we prove that this exclusion restriction together with consistent estimates of beliefs at two points in the support of the variable involved in the exclusion restriction is sufficient for non parametric point identification of players belief functions as well as useful functions of payoffs third we propose a simple two step estimation method we illustrate our model and methods using both monte carlo experiments and an empirical application of a dynamic game of store location by retail chains the key conditions for the identification of beliefs and payoffs in our application are the following 1 the previous year s network of stores of the competitor does not have a direct effect on the profit of a firm but the firm s own network of stores at previous year does affect its profit because the existence of sunk entry costs and economies of density in these costs and 2 firms beliefs are unbiased in those markets that are close in a geographic sense to the opponent s network of stores though beliefs are unrestricted and potentially biased for unexplored markets which are farther away from the competitors network our estimates show significant evidence of biased beliefs furthermore imposing the restriction of unbiased beliefs generates a substantial attenuation bias in the estimate of competition effects

cournot and the oligopoly problem cournot s recherches sw les principes mathpmatiques de la thiorie des richesses 1838 contribution to economic theory ranges from the formulation of the concept of demand function to the analysis of price determination in different market structures from monopoly to perfect competition he is credited for being the pioneer in the use of mathematics in economic analysis nevertheless cournot is most known for his theory of oligopoly cournot claimed that prices would also be determined under oligopolistic rivalry he envisioned firms the celebrated mineral water producers competing independently deciding about their production levels and bringing to the market the output where a price emerges from the interaction of supply and demand an equilibrium is reached when the output of any firm is a best response to the other firms outputs that is when each firm chooses an output level that maximizes profits given the outputs chosen by the rivals the equilibrium involves a price above the marginal cost of production cournot thought furthermore that this equilibrium would be stable in the sense that a departure from it would be self correcting through a series of reactions of the firms the disequilibrium dynamics would be governed by the best response functions of the firms that is by the functions that give the optimal output of a firm in terms of the outputs of the rivals cournot also evoked the question of why is it that firms do not come to an understanding and agree on sharing the market at the monopoly price the answer is that from the point of view of a firm if the rivals follow the agreement it is in the interest of the firm to depart from it since this way it can increase its profits in other words there is an incentive to cheat cournot thought that monopoly or cartel type agreements could only be maintained by means of a formal engagement p 83 our author also considered competition of

monotone equilibria in signaling games abstract we examine the monotonicity of the sender s equilibrium strategy with respect to her type in signaling games we show that when the sender s return from the receiver s action depends on her type the spence mirrlees condition cannot rule out equilibria in which a higher type sender chooses a strictly lower action than a lower type we provide sufficient conditions under which all equilibria are monotone which require that the sender s payoff is decreasing in her action is increasing in the receiver s action and has strictly increasing differences between her type and the action profile we apply our sufficient conditions to education signaling advertising and warranty provision

broad and narrow bracketing in gift certificate spending abstract we survey 1050 consumers who have just redeemed one or more open loop gift certificates to learn whether they view gift certificate income cash gifts and non gift income as substitutes we find that the majority 83 of recipients spend the certificates in the same way as cash the other respondents 17 bought an item they would not have bought otherwise but adjustments in their shopping pattern do not seem to result from constraints in redeeming the certificates 80 of all respondents in this group says they have used the certificate to buy an item they really love to have while inconsistent with standard microeconomic demand theory this behavior can be explained by narrow bracketing in spending gift certificates these consumers consider a limited choice set of nice personal items our data show that females are more likely to narrow bracket gift certificate income and that positive reciprocity towards the giver induces narrow bracketing in case the giver is a household member who suggests to buy a particular item using the certificate previous studies have found that both giving in kind gifts waldfogel 1993 as giving gift cards offenberg 2007 entail a welfare loss of 10 30 when compared to giving cash we find that the welfare effects of open loop gift certificates among users are limited the consumption of broad bracketing consumers is unaffected and narrow bracketing consumers seem to value the possibility to separate gift certificate income from other income sources

stability with one sided incomplete information two notions of stability ex ante stability and bayesian stability are investigated in a matching model with non transferrable utility interdependent preferences and one sided incomplete information ex ante stable matching outcomes are unblocked for every belief on the blocking partner s type while bayesian stable matching outcomes are unblocked with respect to prior beliefs ex ante stability is a minimal requirement bayesian stability is a more selective desideratum with sound efficiency properties

stationarity rationalizability and bargaining strategies for the seller and the buyer which are weakly stationary we demonstrate that any initial offer from the seller induced by a strategy rationalized by a weakly stationary acceptance rule for the buyer must entail the coase property our result does not presume the selection of a particular equilibrium and follows directly from the weak stationarity assumption of the buyer s acceptance rule and the rational behaviour of the players

institutions and short run macroeconomic performance abstract this paper reviews the growing interest in institutions it argues that the explanation for this interest is a fresh awareness of how institutions affect economic performance this connection arises because many economic interaction take the form of one or other of three classic games prisoners dilemma coordination and chicken and the outcome in these games and hence performance of the economy is influenced by the institutional context of these interactions the paper provides a detailed illustration of this argument with a survey of the literature which relates unemployment performances to the institutions of wage setting in oecd countries

p dominance and perfect foresight dynamics abstract we investigate stability of p dominant equilibria under perfect foresight dynamics we show that a strict p dominant equilibrium with i p i 1 is globally accessible and absorbing in perfect foresight dynamics we also investigate robustness and extensions of this result we apply our proof method to games with u dominant equilibria and unanimity games

inferring strategic voting we estimate a model of strategic voting and quantify the impact it has on election outcomes because the model exhibits multiplicity of outcomes we adopt a set estimator using japanese general election data we nd a large fraction 75 3 80 3 of strategic voters only a small fraction 2 4 5 5 of whom voted for a candidate other than the one they most preferred misaligned voting existing empirical literature has not distinguished between the two estimating misaligned voting instead of strategic voting accordingly while our estimate of strategic voting is high our estimate of misaligned voting is comparable to previous studies

common beliefs and the existence of speculative trade abstract this paper shows that if rationality is not common knowledge the no trade theorem of milgrom and stokey fails to hold we adopt monderer and samet s notion of common p belief and show that when traders entertain doubts about the rationality of other traders arbitrarily large volumes of trade as well as rationality may be common p belief for a large p furthermore rationality and trade may simultaneously be known to arbitrary large but finite degree journal of economic theory classification numbers c70 d82 d84

who feels the calorie crunch and when the impact of school meals on cyclical food insecurity abstract monthly welfare programs such as the supplemental nutrition assistance program snap produce consistent cycles of expenditure and consumption among recipients food insecurity health status crime poor behavior and test scores track these cycles this paper leverages new data from the usda the foodaps survey to better understand these cycles in three ways first i find that expenditure and consumption cycles are correlated within households a fact not previously established second i study diet quality over the benefit month and find that it worsens potentially compounding the harmful consequences of cyclical food insecurity third i find that kids bear less of the burden of the consumption cycle than adults and that much of this difference may be driven by school meal programs this finding suggests large potential gains in child welfare from expanding summer meal programs

selection of socially responsible portfolios using hedonic prices this research presents a novel framework for selecting socially responsible investment sri portfolios the hedonic price method hpm is applied to obtain an evaluation of sri criteria that is integrated into a multi objective mathematical programming model this approach allows us to obtain a portfolio whose financial performance is similar to which the investor would have reached if he or she had not taken into account social ethical and environmental see characteristics when making his or her investment decisions this methodology is applied to portfolios composed of socially responsible and conventional mutual funds domiciled in spain

communication and superior cooperation in two player normal form games abstract in many games players may be able to cooperate for their collective benefit without jeopardizing individual rationality however attaining such superior cooperation requires that players conform to a specific axiom of behavior in this paper i demonstrate that pre play communication also stimulates superior cooperation

the impact of food stamps on food expenditures rejection of the traditional model for food stamp recipients whose normal food purchases exceed their coupon allotment the traditional economic model predicts that the impact of food stamps on food spending will be the same as for an equal cash transfer the tobit analysis in this study indicates that for these recipients food stamps have a substantially greater impact on at home food expenditures than an equal amount of cash income these results reject the traditional model several possible explanations of this behavior are discussed

rational deterrence in an imperfect world this chapter applies recent economic research on games with incomplete information to the calculus of deterrence 1 we do not attempt to provide a complete theory of rational deterrence the focus is on the role of reputation and signaling in establishing deterrence we show how strategic players signal a reputation for strength from the perspective of an internally consistent equilibrium model

rationalizable foresight dynamics abstract this paper proposes and studies the rationalizable foresight dynamics a normal form game is repeatedly played in a random matching fashion by a continuum of agents who make decisions at stochastic points in time a rationalizable foresight path is a feasible path of action distribution along which each agent takes an action that maximizes his expected discounted payoff against another path which is in turn a rationalizable foresight path we consider a set valued stability concept under this dynamics and compare it with the corresponding concept under the perfect foresight dynamics

rationality nash equilibrium and backwards induction in perfect information games we say that a player is certain of an event a if she assigns probability 1 to a there is common certainty cc of a if the event a occurred each player is certain of a each player is certain that every other player is certain of a and so forth it is shown that in a generic perfect information game the set of outcomes that are consistent with common certainty of rationality ccr at the beginning of the game coincides with the set of outcomes that survive one deletion of weakly dominated strategies and then iterative deletion of strongly dominated strategies thus the backward induction outcome is not the only outcome that is consistent with ccr in particular cooperation in rosenthal s 1981 centipede game and fighting in selten s 1978 chainstore game are consistent with ccr at the beginning of the game next it is shown that if in addition to ccr there is cc that each player assigns a positive probability to the true strategies and beliefs of the other players and if there is cc of the support of the beliefs of each player then the outcome of the game is a nash equilibrium outcome