follower payoffs in symmetric duopoly games this paper compares the leader and follower payoff in a duopoly game as they arise in sequential play with the nash payoff in simultaneous play if the game is symmetric has a unique symmetric nash equilibrium and players payoffs are monotonic in the opponent s choice along their own best reply function then the follower payoff is either higher than the leader payoff or even lower than in the simultaneous game this gap for the possible follower payoff had not been observed in earlier duopoly models of endogenous timing

the long term effects of forcible assimilation policy the case of indian boarding schools for decades in north america and australia indigenous children were forcibly removed from their homes and placed in boarding schools these schools had the stated goal of cultural assimilation and are perceived as educational failures i offer the first causal evidence on the long run effects of these schools i identify these effects using the interaction of changes in canadian national policy and regional variation in the power of the catholic church i find that the average boarding school had substantial effects on both cultural and economic assimilation however i find suggestive evidence this is not true for highly abusive schools

checkerboards and coase the effect of property institutions on efficiency in housing markets abstract in the late 1800s palm springs california was evenly divided into 1 mile square blocks like a checkerboard and property rights were assigned in alternating blocks to the agua caliente tribe and a non indian landowner by the u s federal government the quasi experimental nature of land assignment holds land quality constant across the two types of landowners sales mortgaging and leasing restrictions on the agua caliente reservation land created large transaction costs to development on those lands consequently there was very little housing investment the non indian blocks which were extensively developed provide a benchmark for efficient outcomes for the agua caliente lands once the restrictions on agua caliente lands were relaxed in 1959 the number of homes and real estate values converged to those of non indian owned lands as predicted by the coase theorem

an economic analysis of acting white this paper formalizes a widely discussed peer eect entitled acting white acting white is modeled as a two audience signaling quandary signals that induce high wages can be signals that induce peer group rejection without peer eects equilibria involve all ability types choosing dierent levels of education acting white alters the equilibrium dramatically the possibly empty set of lowest ability individuals and the set of highest ability individuals continue to reveal their type through investments in education ability types in the middle interval pool on a common education level only those in the lower intervals are accepted by the group the model s predictions t many stylized facts in the anthropology and sociology literatures regarding social interactions among minority group members

who benefits from local job growth migrants or the original residents bartik t j 1993 who benefits from local job growth migrants or the original residents reg studies 27 297 311 this paper surveys research on whether the new jobs resulting from growth in a local economy e g a metropolitan area go to inmigrants or the original local residents the empirical evidence suggests that around one quarter of the new jobs from local growth increases the labour force participation rates of local residents in the long run these long run effects may occur because local growth provides residents with valuable employment experience research also suggests that minorities benefit most from growth and that higher wage industries provide greater employment benefits for local residents bartik t j 1993 qui est ce qui beneficie de la croissance d emploi locale les migrants ou la population autochtone reg studies 27 297 311 cet article etudie la recherche effectuee dans le but d evaluer si les nouveaux emplois dus a la croissance d une economic locale par exemple une

cournot duopoly with two production periods and cost differentials abstract saloner 1987 analyzes a cournot model with two production periods before the market clears if costs do not vary across periods any point on the outer envelope of the reaction functions between the firms stackelberg outputs is attainable with a subgame perfect nash equilibrium spne saloner s analysis is generalized by allowing for cost differences across periods the continuum of equilibria vanishes for any cost differential if costs fall slightly over time there are multiple leader follower equilibria otherwise the model generates a unique spne where both firms produce their single period cournot outputs in the period when production is cheaper

challenges of existing in a market as a small low quality producer this paper explores the strategy of a small firm entering a monopolist s market thereby creating a duopoly market the small firm avoids competing with the larger incumbent firm by producing a lower quality product at a lower price the model here establishes an equilibrium under a specific set of assumptions and examines how exogenous factors affect prices qualities and profits although the strategy might allow the firm to enter and earn a profit the market conditions may make this position much less desirable to that of the large firm for several reasons in the case explored here where tastes for the product are uniformly distributed the small firm s profit is about six percent of that of the larger firm the smaller firm is more severely threatened by the entrance of a third firm furthermore even if the smaller firm can cut costs its position is not well suited for exploiting such increases in efficiencies

stackelberg and marshall this paper advocates a generalized n firm stackelberg model as a plausible testable alternative description of oligopoly a pure strategy equilibrium must exist for this model the main result is that efficiency obtains in the limit as the scale of each firm is shrunk relative to demand this is demonstrated for the case of u shaped average cost and also for that of natural monopoly copyright 1990 by american economic association

a simple solution to the identification problem in detailed wage decompositions i introduction oaxaca and ransom 1999 show that the oaxaca decomposition suffers from one nagging conceptual problem the detailed oaxaca decomposition of wage differentials is not invariant to the choice of reference group when dummy variables are used 1 that is if one uses dummy variable s then the detailed coefficients effect attributed to dummy variables is not invariant to the choice of the omitted group s 2 this invariance or identification problem is well known to labor economists and has plagued decomposition and discrimination analysis for a long time 3 this article proposes a simple and practical solution to this identification invariance problem the solution is based on the intuitive idea that if alternative reference groups yield different estimates of the characteristics and coefficients effects for each individual variable then it is natural to obtain estimates of the two effects for every possible specification of the reference groups and take the average of the estimates of the two effects with various reference groups as the true contributions of individual variables to wage differentials a close inspection shows that averaging the two effects in the decomposition equation with varying reference groups the averaging approach is equivalent to finding average estimates of constant and dummy variables in wage equations with varying reference groups and then using the average estimates to calculate the oaxaca decomposition equation researchers may react a bit negatively to this suggestion because it could be quite cumbersome and tedious to estimate wage equations permuting the choice of reference groups this article shows that there is no need to estimate multiple wage equations one set of regression estimates is sufficient to resolve the identification problem in the detailed decompositions that is the average of the estimates with varying reference groups can be easily calculated by using only one set of regression estimates with any specific reference group s the identification problem for the detailed decomposition disappears once the contribution of the dummy variables and the constant in the regression equations are identified 4 ii identification problem and invariant decomposition an illustration to understand what the identification problem in the detailed wage decomposition is i will first illustrate the problem with a simple example suppose that there are three categories and the regression equation has only a constant and two dummy variables on the right hand side where the reference group is the first category 5 that is 1 y sub i alpha sub i 3 summation over k 2 d sub ki beta sub ki e sub i where y is log wages and i a or b for two comparison groups coefficients for two dummy variables taking category one as the reference group are estimated using ordinary least squares ols regression and are reported in the second column of table 1 for sample a and for sample b note that the coefficient of the reference group category 1 is restricted to zero similarly i may change my reference group specification and estimate the wage equation two more times the estimates taking category 2 or 3 as the reference group are reported on the next two columns because i have three sets of estimates with varying reference groups i may decompose the wage differentials 0 15 0 76 0 61 into characteristics and coefficients effects three times the characteristics effect delta sub x 1 and coefficients effects delta sub beta 1 are specified as follows when category 1 is the reference group delta sub x 1 summation sup 3 sub k 2 bar d sub ka bar d sub kb beta sub kb and delta sub beta 1 alpha sub a alpha sub b summation sup 3 sub k 2 bar d sub ka beta sub ka beta sub kb

being a leader or a follower this paper deals with the analysis of conflicts in duopoly situations in particular with the distribution of roles in the von stackelberg framework which firm will be the leader which firm the follower under what circumstances will firms find a mutually advantageous distribution of roles will they fight for leadership or followship in von stackelberg s analysis of duopoly either firms do not choose their respective roles or they fight for leadership this situation is due to the particular strategy space namely the quantity to produce of an homogeneous good we extend here the strategy space to price quantity pairs we show that if costs are identical or similar then both firms will prefer the role of follower if there is a significant cost differential between the firms then the non cooperative equilibrium can only be of two types either the less efficient firm will act as the leader selling a limited quantity at a low price and the more efficient firm as the follower selling to the residual demand at a higher price or the more efficient firm acting as leader will drive the less efficient firm out of the market by adopting a limit pricing strategy but in so doing that firm makes less profits than if it acts as follower we suggest that it is not unreasonable to expect that firms in a duopoly framework will tend to coordinate on their mutually advantageous role distribution even if they compete in a non cooperative strategic way in terms of both prices and quantities

social structure and development a legacy of the holocaust in russia we document a statistical association between the severity of the persecution displacement and mass murder of jews by the nazis during world war ii and long run economic and political outcomes within russia cities that experienced the holocaust most intensely have grown less and both cities and administrative districts oblasts where the holocaust had the largest impact have worse economic and political outcomes since the collapse of the soviet union we provide evidence that the lasting impact of the holocaust may be attributable to a permanent change it induced in the social structure across different regions of russia

comparing features of convenient estimators for binary choice models with endogenous regressors abstract we discuss the relative advantages and disadvantages of four types of convenient estimators of binary choice models when regressors may be endogenous or mismeasured or when errors are likely to be heteroscedastic for example such models arise when treatment is not randomly assigned and outcomes are binary the estimators we compare are the two stage least squares linear probability model maximum likelihood estimation control function estimators and special regressor methods we specifically focus on models and associated estimators that are easy to implement also for calculating choice probabilities and regressor marginal effects we propose the average index function aif which unlike the average structural function asf is always easy to estimate

the performance of immigrants in the canadian labor market in this article we examine the economic assimilation of immigrants to canada we provide new evidence on immigrants who arrived in the 1970s and document an increase in the dispersion of labor market outcomes across immigrants of different vintages over time our results confirm u s evidence of permanent differences across immigrant cohorts what distinguishes the canadian experience is small or negative rates of assimilation for most cohorts over the sample period finally we test the overidentification of the assimilation process specified in previous studies and fail to reject the usual cohort fixed effect specification

stackelberg versus cournot a differential game approach abstract we propose an infinite horizon differential oligopoly game where at each point in time m stackelberg leaders and n m stackelberg followers exploit a common pool renewable resource and sell their harvest in the marketplace at a price that depends on total harvest we derive a feedback generalized stackelberg nash cournot equilibrium a generalization of the feedback stackelberg equilibrium nesting feedback stackelberg and feedback cournot as special cases we proceed with a comparison between the feedback stackelberg and the feedback cournot equilibria and find a number of interesting results in contrast with static oligopoly theory as to the relative efficiency of the two equilibria we show that the cournot equilibrium can be more efficient than the stackelberg equilibrium this holds true in the short run at the steady state and in terms of discounted welfare

oligopolistic competition for market share via voluntary excess supply an oligopoly model is developed in which firms produce a homogeneous good but there is no automatic price adjustment mechanism to ensure that the market clears though market demand is certain firm demand becomes random if producers oversupply the market because consumers are indifferent as to which firm s output they purchase firms may have the private incentive to oversupply the market in effect competing for market share equilibrium with excess supply is shown to exist in models in which price is determined exogenously and in which firms choose price in the latter case equilibrium price is invariant to entry and cost decreases the normative aspects of the equilibria are discussed

second mover advantage and price leadership in bertrand duopoly we consider the issue of first versus second mover advantage in differentiated product bertrand duopoly with general demand and asymmetric linear costs we generalize existing results for all possible combinations where prices are either strategic substitutes and or complements dispensing with common extraneous and restrictive assumptions we show that a firm with a sufficiently large cost lead over its rival has a first mover advantage for the linear version of the model we invoke a natural endogenous timing scheme coupled with equilibrium selection according to risk dominance the analysis yields as the unique equilibrium outcome sequential play with the low cost firm as leader

the long term effects of africa s slave trades can part of africa s current underdevelopment be explained by its slave trades to explore this question i use data from shipping records and historical documents reporting slave ethnicities to construct estimates of the number of slaves exported from each country during africa s slave trades i find a robust negative relationship between the number of slaves exported from a country and current economic performance to better understand if the relationship is causal i examine the historical evidence on selection into the slave trades and use instrumental variables together the evidence suggests that the slave trades have had an adverse effect on economic development

stackelberg versus cournot equilibrium we reconsider stackelberg s classical critique of the cournot duopoly in the framework of endogenous timing for two player games for quantity duopoly we provide different sets of minimal conditions directly on the demand and cost functions yielding respectively the simultaneous and the two sequential modes of play while our findings essentially confirm the predominance of the former they also indicate that the latter is natural under some robust but restrictive conditions no extraneous assumptions such as concavity existence or uniqueness of equilibria are needed and the analysis makes crucial use of the basic results from the theory of supermodular games classification numbers b21 c72 d43 l13 c 1999 academic press

the veteran wage differential there is debate in the literature as to whether military service is rewarded in the economy and the extent to which veterans receive either a wage premium or penalty in this paper we take a new a

military experience and training effects on civilian wages 1990 military experience and training effects on civilian wages applied economics vol 22 no 1 pp 69 81

matching as a tool to decompose wage gaps abstract this paper presents a methodology that uses matching comparisons to explain gender wage differences the approach emphasizes gender differences in the supports of the distributions of observable characteristics and provides insights into the distribution of unexplained gender pay differences this nonparametric alternative to the blinder oaxaca bo decomposition does not require the estimation of earnings equations and divides the gap into four additive elements two of these are analogous to the elements of the bo decomposition but computed only over the common support of the distributions of characteristics while the other two account for differences in the supports

the 1 5th mover advantage there has been much discussion about the timing of moves in games however one assumption usually goes unquestioned namely that of an irrevocable commitment of the first mover in many cases this is not realistic since final commitments are often preceded by actions that are binding only to a limited degree partial commitments an example is the announcements of price changes i analyze a game in which the degree of a partial commitment is endogenized in the case of strategic complements a player profitably makes use of the possibility to commit partly she chooses a role somewhere between first and second mover which gives her a 1 5th mover advantage

pre commitment and flexibility abstract this paper considers several related strategic duopoly settings in which uncertainty creates an option value from retaining flexibility by delaying investment or output decisions until after uncertainty is resolved this value of flexibility must be weighed against the strategic value of pre commitment yielding a trade off between flexibility and pre commitment we obtain a simple characterization of the timing of output decisions as a consequence of the degree of uncertainty particular attention is paid to the implications for entry deterrence by an incumbent firm and to the possible flexibility enhancing effects of investment in capital

asymmetric information acquisition and behavior in role choice models an endogenously generated signaling game the authors employ a static homogeneous good duopoly model wherein firms can choose to produce in one of two periods the model allows agents to acquire information and then traces the impact of the information pattern on subsequent production behavior asymmetric information acquisition leads to a unique production role choice pattern the informed uninformed firm chooses to assume the leader s follower s role moreover if information is costly the typical equilibrium involves only one firm acquiring information thus identical firms with identical opportunities choose to become asymmetrically informed and produce sequentially this is the unique refined equilibrium outcome copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

assimilation changes in cohort quality and the earnings of immigrants this paper reexamines the empirical basis for two facts that seem to be found in most cross section studies of immigrant earnings 1 the earnings of immigrants grow rapidly as they assimilate into the united states and 2 this rapid growth leads to many immigrants overtaking the earnings of the natives within 10 15 years after immigration using the 1970 and 1980 u s censuses this paper studies the earnings growth experienced by specific immigrant cohorts during the period 1970 80 it is found that within cohort growth is significantly smaller than the growth predicted by cross section regressions for most immigrant groups this differential is consistent with the hypothesis that there has been a secular decline in the quality of immigrants admitted to the united states

price vs quantity in oligopoly games abstract price setting and quantity setting oligopoly games lead to extremely different outcomes in the market one natural way to address this problem is to formulate a model in which some firms use price while the remaining firms use quantity as their decision variable we introduce a mixed oligopoly game of this type and determine its equilibria in addition we consider an extension of this mixed oligopoly game through which the choice of the decision variables can be endogenized we prove the emergence of the cournot game

the causes and consequences of distinctively black names in the 1960s blacks and whites chose relatively similar first names for their children over a short period of time in the early 1970s that pattern changed dramatically with most blacks particularly those living in racially isolated neighborhoods adopting increasingly distinctive names but a subset of blacks actually moving toward more assimilating names the patterns in the data appear most consistent with a model in which the rise of the black power movement influenced how blacks perceived their identities among blacks born in the last two decades names provide a strong signal of socioeconomic status which was not previously the case we find however no negative relationship between having a distinctively black name and later life outcomes after controlling for a child s circumstances at birth

endogenous price leadership we consider a linear price setting duopoly game with differentiated products and determine endogenously which of the players will lead and which one will follow while the follower role is most attractive for each firm we show that waiting is more risky for the low cost firm so that consequently risk dominance considerations as in harsanyi and selten a general theory of equilibrium selection in games mit press cambridge ma 1988 allow the conclusion that only the high cost firm will choose to wait hence the low cost firm will emerge as the endogenous price leader

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

price and quantity competition in homogeneous duopoly markets abstract a noncooperative duopoly game is formulated in which the quantity player sells its entire amount up to consumer demand while the price player supplies residual demand both firms transact at the same price depending on the ordering two stage subgame perfect equilibria are equivalent to simultaneous price and quantity nash equilibria or include also the stackelberg equilibrium in any case a firm prefers to be the quantity player

forced coexistence and economic development evidence from native american reservations there are large differences in economic development across native american reservations today this paper asks whether these differences can be in part explained by the forced integration of historically autonomous sub tribal bands in the 19th century to measure forced integration i combine anthropological data on intra tribal political integration in pre reservation times with historical information on the constituent bands of each reservation exploring variation in how politically integrated tribes were before reservations and variation in how politically integrated reservations were at the time of their formation i find that forced integration lowers per capita incomes today by about 30 percent to account for potential selection into forced integration i exploit historical mining rushes as a source of exogenous variation in the government s incentive to combine bands onto reservations the iv strategy confirms the baseline results i also provide quantitative evidence on the channels through which forced integration affects incomes today

cost of delay and endogenous price leadership abstract we study the effects of discounting in a standard endogenous price leadership model we show that there will be occasional changes in the identity of the leader with any cost of delay or discounting however small by analyzing the incentives that induce a firm to take up the leader position we derive positive predictions about which firm will lead most price changes firms with shorter reaction times will be more likely to become the price leader as will firms with lower cost of delay if the firms reaction times are similar

dominant firms and their alleged decline abstract by way of a survey of recent literature on the theory of strategic competition this paper focuses on the question of whether dominant firms decline the traditional argument suggesting decline is found to be based on a rather unsatisfactory modelling of dominance and more acceptable conceptualizations suggest that such privileged positions will persist

production in advance versus production to order abstract we use a theoretical framework to compare production in advance type and production to order type environments carrying out our analysis in the framework of a symmetric capacity constrained bertrand edgeworth duopoly game we prove that the equilibrium profits are the same in case of production in advance and production to order in addition advance production results in higher prices than production to order if both games have an equilibrium in nondegenerated mixed strategies

the medium run effects of educational expansion evidence from a large school construction program in indonesia this paper studies the medium run consequences of an increase in the rate of accumulation of human capital in a developing country from 1974 to 1978 the indonesian government built over 61 000 primary schools the school construction program led to an increase in education among individuals who were young enough to attend primary school after 1974 but not among the older cohorts 2sls estimates suggest that an increase of 10 percentage points in the proportion of primary school graduates in the labor force reduced the wages of the older cohorts by 3 8 10 and increased their formal labor force participation by 4 7 i propose a two sector model as a framework to interpret these findings the results suggest that physical capital did not adjust to the faster increase in human capital

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

an empirical analysis of acting white abstract using a newly available data set which allows one to construct a novel measure of a student s social status we demonstrate that there are potentially important racial differences in the relationship between social status and academic achievement the effect is concentrated among students with a grade point average gpa of 3 5 or higher and more pronounced in schools with more interracial contact earlier studies showing a positive relationship between popularity and academic achievement for blacks are sensitive to the inclusion of more continuous achievement measures we argue that the data are most consistent with a model of acting white in which investments in education are taken as a signal of one s opportunity costs of peer group loyalty though imprecise estimates make definitive conclusions difficult

firm scale and the endogenous timing of entry a choice between commitment and flexibility abstract this paper presents a model of stochastic oligopoly with demand uncertainty where firms endogenously choose entry timing we examine two extreme types of market structure and show that the equilibrium correspondence that connects them is continous with two identically sized firms there are symmetric cournot type equilibria where the probability of early entry declines with greater uncertainty and for low uncertainty two asymmetric equilibria with one large firm with a continuum of nonatomic firms there is a unique stackelberg equilibrium we conclude that the behavior of a dominant firm with a finite fringe can be approximated by stackelberg equilibrium journal of economic literatureclassification numbers d21 l11

the growing importance of social skills in the labor market the labor market increasingly rewards social skills between 1980 and 2012 jobs requiring high levels of social interaction grew by nearly 12 percentage points as a share of the u s labor force math intensive but less social jobs including many stem occupations shrank by 3 3 percentage points over the same period employment and wage growth were particularly strong for jobs requiring high levels of both math skill and social skills to understand these patterns i develop a model of team production where workers trade tasks to exploit their comparative advantage in the model social skills reduce coordination costs allowing workers to specialize and work together more efficiently the model generates predictions about sorting and the relative returns to skill across occupations which i investigate using data from the nlsy79 and the nlsy97 using a comparable set of skill measures and covariates across survey waves i find that the labor market return to social skills was much greater in the 2000s than in the mid 1980s and 1990s

estimating average and local average treatment effects of education when compulsory schooling laws really matter the change to the minimum school leaving age in the united kingdom from 14 to 15 had a powerful and immediate effect that redirected almost half the population of 14 year olds in the mid twentieth century to stay in school for one more year the magnitude of this impact provides a rare opportunity to a estimate local average treatment effects late of high school that come close to population average treatment effects ate and b estimate returns to education using a regression discontinuity design instead of previous estimates that rely on difference in differences methodology or relatively weak instruments comparing late estimates for the united states and canada where very few students were affected by compulsory school laws to the united kingdom estimates provides a test as to whether instrumental variables iv returns to schooling often exceed ordinary least squares ols because gains are high only for small and peculiar groups among the more general population i find instead that the benefits from compulsory schooling are very large whether these laws have an impact on a majority or minority of those exposed