the strategy proof provision of public goods under congestion and crowding preferences we examine the strategy proof provision of excludable public goods when agents care not only about the level of provision of a public good but also the number of consumers we show that on such domains strategy proof and efficient social choice functions satisfying an outsider independence condition must be rigid in that they must always assign a fixed number of consumers regardless of individual desires to participate the fixed number depends on the attitudes of agents regarding group size being small when congestion effects dominate individuals prefer to have fewer other consumers and large when cost sharing effects dominate agents prefer to have more consumers a hierarchical rule selects which consumers participate and a variation of a generalized median rule to selects the level of the public good under heterogeneity in agents views on the optimal number of consumers strategy proof efficient and outsider independent social choice functions are much more limited and in an important case must be dictatorial

a joint product analysis of the adoption of modern cereal varieties in developing countries semi dwarf wheat varieties have been slow to diffuse in some regions despite their superior grain yield we analyze varietal differences in yields of the joint products of grain and straw the decision to adopt new varieties and nitrogen demand the low straw yield of semi dwarf varieties under low input conditions is shown to be a plausible explanation for their slow adoption in some regions first generation modern varieties induced a large increase in the derived demand for nitrogen but subsequent varietal development appears to have had little impact on nitrogen demand

animal breeding and productivity growth of dairy farms we introduce genetic based technical change into a malmquist productivity index and measure the growth in productivity caused by bovine breeding because breeding is likely to affect milk quality we adjust milk quantities for quality differences we use panel data on icelandic dairy farms from 1997 to 2006 to estimate an input distance function the malmquist productivity index shows that the average productivity growth rate is 1 6 scale effects are the most important source of this growth but 19 of the productivity growth rate is due to breeding if quality differences are ignored the average productivity growth rate is reduced by 83

institutionalizing end user demand steering in agricultural r d farmer levy funding of r d in the netherlands abstract the purpose of this paper is to critically examine the institutionalization of demand driven modes of working in the r d planning process and reveal possible weaknesses through an analysis of a system of collective r d funding by farmers the findings indicate that although end users have the opportunity to raise issues that lead to r d queries are influenced by several actors in the r d planning process in such a way that they do not adequately reflect farmers innovation needs conclusions are that more emphasis is required on joint demand articulation and involvement of end users and other stakeholders in the innovation process and on the institutional development of r d funding organizations in order to adopt a more inclusive view on innovation

bargaining with an agenda gradual bargaining is represented by an agenda a family of increasing sets of joint utilities parameterized by time a solution for gradual bargaining specifies an agreement at each time we axiomatize an ordinal solution i e one that is covariant with order preserving transformations of utility it can be viewed as the limit of step by step bargaining in which the agreement of the last negotiation becomes the disagreement point for the next the stepwise agreements may follow the nash solution the kalai smorodinsky solution or many others and still yield the ordinal solution in the limit

public education under capital mobility the paper considers a two country model of overlapping generations economies with intergenerational transfers motivated by altruism and investment in human capital we examine in a non stationary competitive equilibrium the optimal provision of education with and without capital market integration first we explore how regimes of education provision public private or mixed arise and how they affect the dynamics of autarkic economies second we study the effects of capital market integration in equilibrium on the optimal provision of education third we show that capital market integration enhances government intervention in the provision of public education to improve the welfare of its constituents and consider various solutions to such a competition

the importance of the agenda in bargaining abstract this paper discusses a multi issue bargaining game in which the players set up an agenda and negotiate on the issues sequentially according to this agenda we demonstrate that the agenda might play an important role in the bargaining and discuss the relationship between the agenda and the final outcome of the bargaining game assuming that players have conflicting evaluations regarding the importance of the issues under negotiation we identify the type of agenda each player prefers we also show that in such cases the outcome of the bargaining game need not to be efficient by demonstrating the strategic use of the agenda the paper explains the phenomenon of bargaining on the agenda

decomposition of productivity growth using distance functions the case of dairy farms in three european countries within an output distance function framework the total factor productivity growth index is decomposed into four components technical change technical and allocative efficiency and scale component we estimate stochastic translog output distance functions using panel data from dairy farms over the period 1991 94 for three european countries germany the netherlands and poland results indicate that the change in the productivity growth index in germany 6 and poland 5 are mainly dictated by the technical change component in contrast the productivity growth index in the netherlands 3 is influenced by allocative efficiency components

ordinal cost sharing abstract we ask how the best known mechanisms for solving cost sharing problems with homogeneous cost functions the value proportional and serial mechanisms should be extended to arbitrary problems we propose the ordinality axiom which requires that cost shares should be invariant under essentially all increasing transformations of the measuring scales following thevalueapproach first we present an axiomatization of the shapley shubik rule based on ordinality next we define and axiomatize two extensions of theserialmechanism which contrary to the friedman moulin rule are ordinal finally we note that the aumann shapley extension of theproportionalmechanism is not ordinal we propose and defend an alternative proportional extension which does satisfy ordinality journal of economic literatureclassification numbers d63 c71

fiscal stress and the production of public safety a distance function approach abstract faced with increasing crime rates but nonincreasing budgets local governments are seeking cost saving means of providing public safety this paper investigates a bureaucracy s response to fiscal stress as well as its ability to efficiently substitute civilian for uniformed personnel exploiting duality theory a distance function is used to model technology retrieve information concerning substitutability and shadow prices of personnel and test for cost minimization morishima elasticities are adopted to allow for asymmetry in substitution between types of personnel it is found that the more adverse the public safety environment and budgetary condition the more efficiently resources are allocated

the nash program non convex bargaining problems we define and characterize an extension of the nash bargaining solution to non convex bargaining problems and in the spirit of the nash program of implementing cooperative solutions non cooperatively we show that this solution is supported by rubinstein s econometrica 50 1982 97 110 model of bargaining and its corresponding set of stationary subgame perfect equilibria

on the interpretation of the nash bargaining solution and its extension to non expected utility preferences the paper reexamines the foundations of the axiomatic nash bargaining theory more specifically it questions the interpretation of the nash bargaining solution and extends it to a family of non expected utility preferences a bargaining problem is presented as x d 2 where x is a set of feasible agreements described in physical terms d is the disagreement event and 1 and 2 are preferences defined on the space of lotteries in which the prizes are the elements in x and d the ordinal nash bargaining solution is defined as an agreement y satisfying for all p e 0 1 and for all x e x if px 1 y then py 2 x and if px 2 y then py x where px is the lottery which gives x with probability p and d with probability 1 p revisions of the pareto symmetry and iia axioms characterize the ordinal nash bargaining solution in the expected utility case this definition is equivalent to that of the nash bargaining solution however this definition is to be preferred since it allows a statement of the nash bargaining solution in everyday language and makes possible its natural extension to a wider set of preferences it also reveals the logic behind some of the more interesting results of the nash bargaining solution such as the comparative statics of risk aversion and the connection between the nash bargaining solution and strategic models

no profitable decompositions in quasi linear allocation problems abstract we study the problem of allocating a bundle of perfectly divisible private goods from an axiomatic point of view in situations where compensations can be made through monetary transfers the key property we impose on the allocation rule requires that no agent should be able to gain by decomposing the problem into sequences of subproblems combined with additional standard properties it leads to a characterization of the rule that shares the total surplus equally hence a traditional welfarist rule emerges as the unique consequence of our axioms phrased in a natural economic environment

beyond nash bargaining theory the nash set abstract we extend nash s bargaining theory to non convex and coalitional problems this paper investigates the implications of nash like axioms for bilateral problems and the properties of consistency and converse consistency over multilateral settings the result is a characterization of the nash set of ntu games defined as the solution concept where each pair of players is splitting the gains from trade at a point where the nash product of their utilities subject to efficiency is critical the intersection of the nash set and the core is also characterized with the same axioms for the class of games where the core is non empty journal of economic literatureclassification numbers c71 c78

a cardinal characterization of the rubinstein safra thomson axiomatic bargaining theory in a recent paper rubinstein safra and thomson rst have provided an interesting re examination of the widely applied nash solution for a two person bargaining problem they recast the usual nash bargaining problem into a more natural setting of feasible alternatives with a disagreement outcome the two players are then described by their risk preferences defined on the set of lotteries over the alternatives and the disagreement outcome this enables them to define an ordinal nash solution in terms of the agents risk preferences essentially their ordinal solution is an outcome that is immune against possible objections freeing the definition of the nash solution from utility naturally led rst to extending its scope to non expected utility neu preferences we contend however that the family of neu preferences considered by rst is unduly restrictive the assumptions imposed on the risk preferences by rst essentially exclude any members of the rank dependent expected utility rdeu and betweenness families that can accommodate the very choice paradoxes that stimulated the development of neu theory as these are two of the most extensively analyzed and widely applied neu models in the literature this seems to cast doubt on how broad an extension to neu preferences the rst approach affords we demonstrate however that rst s analysis can be modified so that their conclusion is valid in a wider class of preferences that can include examples of rdeu preferences this class consists of preferences that admit what we term a disagreement linear representation

law property and marital dissolution this paper challenges the view that legal rights are not important in affecting whether people divorce but it puts as much emphasis on property rights given for example by the law on alimony as on dissolution rights in the united states the paper sets out two stylised models of marriage and examines the consequences of fuller compensation for economic sacrifices made during marriage if the dominant economic issue in a marriage is who undertakes household tasks then a law giving fuller compensation makes divorce more likely if the dominant issue is child custody divorce is less likely excerpt

subgame perfect implementation this paper examines the use of stage mechanisms in implementation problems and provides a partial characterization of the set of subgam e perfect implementable choice rules it is shown that in many economic environments virtually an y choice rule can be implemented to illustrate the power of this approach the paper discusses a number of models in which it is possible to implement the first best although it wouldn t have been possible to do so without using stage mechanisms the diversity of these models suggests that subgame perfect implementation may find wide application copyright 1988 by the econometric society

bargaining and the value of money abstract search models of monetary exchange have typically relied on nash 1950 the bargaining problem econometrica 18 155 162 bargaining or strategic games that yield an equivalent outcome to determine the terms of trade by considering alternative axiomatic bargaining solutions in a search model with divisible money we show that the properties of the bargaining solutions do matter both qualitatively and quantitatively for questions of first degree importance in monetary economics such as i the efficiency of monetary equilibrium ii the optimality of the friedman rule and iii the welfare cost of inflation

bargaining under liquidity constraints unified strategic foundations of the nash and kalai solutions abstract we provide unified strategic foundations for the nash 1950 and kalai 1977 solutions in the context of negotiations under liquidity constraints we propose an n round game where in each round a seller and a buyer with limited payment capacity negotiate a bundle of divisible goods where bundle sizes can vary across rounds according to rubinstein s 1982 alternating offer game the game implements the nash solution if n 1 and the kalai solution if n and bundle sizes are infinitesimal if n is set by one player ex ante the buyer chooses n 1 while the seller chooses n we endogenize liquidity constraints and show they bind for all n even when there is no cost in holding liquidity

quality oriented technical change in japanese wheat breeding abstract the article presents a productivity analysis of japanese wheat breeding research we first estimate a hedonic function to determine the marginal implicit values of japanese wheat characteristics and find that protein contributes substantially to millers price offers to farmers induced innovation theory implies breeders thus should be responding to new protein oriented price policies by developing high protein wheat varieties we test this hypothesis by estimating a distance function relating breeding resources including what we call gene recharge rates to the yield and protein characteristics of discovered varieties new varieties indeed have been protein favoring and yield disfavoring suggesting government research programs have been market oriented

generalized raiffa solutions abstract we define a family of solutions for n person bargaining problems which generalizes the discrete raiffa solution and approaches the continuous raiffa solution each member of this family is a stepwise solution which is a pair of functions a step function that determines a new disagreement point for a given bargaining problem and a solution function that assigns the solution to the problem we axiomatically characterize stepwise solutions of the family of generalized raiffa solutions using standard axioms of bargaining theory

vintage nash bargaining without convexity i study nash bargaining when the utility possibility set of the bargaining problem is not convex a simple variation of nash s symmetry axiom is all that is necessary to establish a set valued version of nash s solution in non convex settings

the contribution of genetic resources and diversity to wheat production in the punjab of pakistan the ability to meet the world s growing food demand dramatically improved with the release of modern semidwarf or green revolution wheat varieties in the early 1960s despite initial and subsequent success in improving yield potential and yield stability maintaining disease resistance and improving other plant characteristics the green revolution has provoked criticism and debate a major issue in this debate concerns the effect of scientific plant breeding technology on crop genetic diversity which is believed to have important implications for global and national food security and producer welfare

centralized fiscal spending by supranational unions we study fiscal spending by supranational unions where participation is voluntary and countries bargain over contributions to and the allocation of a central budget since decisions are made by unanimity bargaining power over the allocation becomes a function of contributions which generically causes inefficiency in the presence of income asymmetry between member nations this link between the budget allocation and contributions explains patterns of inefficient spending in the eu e g why resources are diverted to low productivity projects in high income countries the option of veto creates a trade off between efficiency on the contributions margin and efficiency on the allocation margin

negotiations in multi issue committees abstract we propose a non cooperative bargaining approach to the problem of collective decision making in committees by modelling this process as a sequential bargaining game the main objective of the paper is to discuss the formation of the agenda in multi issue committees and its relation to the importance of the issues we start by asserting that in the case of a single issue the set of all equilibrium outcomes of our game coincides with the set of coalitional stable outcomes we then consider multi issue committees to discuss the problem of forming agendas we argue that from the point of view of efficiency and stability the most important issues should be put first on the agenda we conclude with a sufficient condition on players preferences which guarantees the efficiency and stability of the bargaining outcomes for every possible agenda

a theory of gradual coalition formation we study noncooperative multilateral bargaining games based on underlying tu games in which coalitions can renegotiate their agreements we distinguish between models in which players continue to bargain after implementing agreements reversible actions and models in which players who implement agreements must leave the game irreversible actions we show that renegotiation always results in formation of the grand coalition if actions are reversible but that the process may otherwise end with smaller coalitions on the other hand we show that the grand coalition cannot form in one step if the core of the game is empty irrespective of the reversibility of actions agreements between players form the basis of much that game theory seeks to explain there are obviously many useful ways to categorize such agreements in multilateral negotiations that is with more than two participants it seems natural to distinguish between cases in which the coalition forms in one step and those in which the coalition grows to its eventual size by attracting new members thus recipients of marshall aid collectively agreed to american terms at the ceec in 1947 whereas a strict subset of these countries agreed to the schuman plan in 1950 with the other current members joining the eu over time similarly negotiations on climate change culminated in universal agreement at rio in 1992 whereas india and china only agreed to reduce cfc emissions in london in 1990 after other countries had signed up to the montreal protocol finally un security council resolution 242 urged that a multilateral conference be set up to establish a comprehensive settlement in the middle east whereas the process initiated by the oslo agreements and arguably camp david has consisted of a sequence of agreements between israel and its neighbours we will refer to cases in which the grand coalition forms in one step as involving immediate coalition formation or icf for short and cases in which a coalition grows as involving gradual coalition formation

pairwise trade asset prices and monetary policy abstract we construct a search theoretic model where fiat money coexists with real assets and all assets can be used as a media of exchange the terms of trade in bilateral matches are determined by a pairwise pareto efficient pricing mechanism we do not have to appeal to exogenous liquidity constraints to generate asset prices that are consistent with the following facts i fiat money can be valued despite being dominated in its rate of return ii real assets with identical dividend flows can have different rates of return and iii an increase in inflation raises asset prices lowers their returns and widens the rate of return differences between assets on the normative side we show that there is a range of inflation rates that implement the first best allocation

efficient and stable collective choices under gregarious preferences we consider collective choice problems where a set of agents have to choose an alternative from a finite set and agents may or may not become users of the chosen alternative an allocation is a pair given by the chosen alternative and the set of its users agents have gregarious preferences over allocations given an allocation they prefer that the set of users becomes larger we require that the final allocation be efficient and stable no agent can be forced to be a user and no agent who wants to be a user can be excluded we propose a two stage sequential mechanism whose unique subgame perfect equilibrium outcome is an efficient and stable allocation which also satisfies a maximal participation property

nash equilibrium and welfare optimality if is a set of social alternatives a social choice rule scr assigns a subset of a to each potential profile of individuals preferences over a where the subset is interpreted as the set of welfare optima a game form or mechanism implements the social choice rule if for any potential profile of preferences 1 any welfare optimum can arise as a nash equilibrium of the game form implying in particular that a nash equilibrium exists and 2 all nash equilibria are welfare optimal the main result of this paper establishes that any scr that satisfies two properties monotonicity and no veto power can be implemented by a game form if there are three or more individuals the proof is constructive

optimizing multi stage negotiations abstract we consider procedures where issues of varying importance and risk are negotiated in stages negotiation at any stage requires an agreement at each previous stage if negotiation terminates players realize the benefits from all earlier agreements we formalize this process by a strategic n stage negotiation game the expected subgame perfect equilibrium outcome is characterized by an intuitive compact formula which aggregates all the structural elements of the multi stage process we describe the optimal negotiation agenda for a given decomposition of the bargaining problem and we derive intuitive prescriptions for an optimal decomposition