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

marriage market divorce legislation and household labor supply this paper provides a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply in our approach the sex ratio in the marriage market and the rules governing divorce are examples of distribution factors these factors are defined as variables that affect the household members bargaining position but not preferences or the joint budget set we extend the collective labor supply model developed by chiappori to allow for distribution factors we show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intrahousehold decision process the model is estimated using psid data for the year 1988 our results do not reject the restrictions imposed by the model also the sex ratio and divorce laws deemed favorable to women are found to affect labor supply behavior and the decision process in the directions predicted by the theory and to have sizable effects

strategic buyers and exclusionary contracts this paper characterizes equilibrium exclusionary contracts between buyers an incumbent firm and a potential entrant when buyers can either vertically integrate or contract with the outside entrant in this setting exclusionary contracts are generally shown to be efficient and to deter inefficient entry that would otherwise occur with multiple unorganized buyers equilibrium contracts are shown to take a divide and conquer form and in some cases to deter some efficient entry in such cases efficient contracting can be restored by a policy that prohibits price discrimination and gives agents free reign to sign exclusionary agreements copyright 1994 by american economic association

collective labor supply a single equation model and some evidence from french data in chiappori s 1988 collective model of labor supply hours of work are supposed flexible in many countries however male labor supply does not vary much in that case the husband s labor supply is no longer informative about the household decision process and individual preferences to identify structural components of the model additional information is needed we thus consider an approach in which the wife s labor supply is expressed as a function of the household demand for one specific good we demonstrate that the main properties of chiappori s initial model are preserved and apply our results on french data

collective labor supply and household production this paper emphasises the importance of incorporating household production into the collective model of the household and considers how and to what extent the results of chiappori 1992 can be extended to this case this abstract was borrowed from another version of this item

contracts as a barrier to entry it is shown that an incumbent seller who faces a threat of entry into his or her market will sign long term contracts that prevent the entry of some lower cost producers even though they do not preclude entry completely moreover when a seller possesses superior information about the likelihood of entry it is shown that the length of the contract may act as a signal of the true probability of entry

exclusive contracts and protection of investments we consider the effect of a renegotiable exclusive contract restricting a buyer to purchase from only one seller on the levels of noncontractible investments undertaken in their relationship contrary to some informal claims in the literature we find that exclusivity has no effect when all investments are fully specific to the relationship i e are purely internal exclusivity does matter when investments affect the value of the buyer s trade with other sellers i e have external effects we examine the effects of exclusivity on investments and aggregate welfare and the private incentives of the buyer seller coalition to use it

dynamic spillover effects among crude oil precious metal and agricultural commodity futures markets abstract this paper examines spillover effects among six commodity futures markets gold silver west texas intermediate crude oil corn wheat and rice by employing the multivariate deco garch model and the spillover index specifically we investigate the dynamics of return and volatility spillover indices to reveal the intensity and direction of transmission during the recent global financial and european sovereign debt crises our empirical results are as follows first we estimate a positive equicorrelation between commodity futures market returns and find that it increased sharply during the crises this effect can persist during periods of economic and financial turmoil diminishing the benefits of international portfolio diversification for investors second we identify bidirectional return and volatility spillovers across commodity futures markets and find more pronounced trends in their levels in the post crisis period this indicates the strong impact of spillovers during crisis periods third both gold and silver are information transmitters to other commodity futures markets while the remaining four commodity futures investigated were receivers of spillovers during recent periods of financial stress finally we analyse the optimal portfolio weights and time varying hedge ratios between metal and other commodities futures markets overall our findings provide new insights into channels of information transmission which may improve investment decisions and inform portfolio investors trading strategies

risk spillovers between oil and stock markets a var for var analysis abstract this article investigates the risk spillover effect between oil and stock markets using a novel multivariate quantile model i e the var for var approach and pseudo impulse response functions we explore the risk spillover at different quantiles using daily data over the period from january 4 2000 through august 31 2018 our results indicate the asymmetry in spillover effect which is significant at upside quantiles but not significant at downside quantiles based on subsample analysis we find that the risk spillover becomes stronger after 2008 financial crisis while before the crisis the spillover effect is very weak the international evidence shows that the asymmetric risk spillover can also be found in other six major stock indices of the g7 group

introducing household production in collective models of labor supply in a recent paper chiappori 1992 i proposed a model of labor supply based on a collective representation of household behavior in this framework each household member is characterized by his or her own utility function and decisions are only assumed to result in pareto efficient outcomes i showed that these simple assumptions were sufficient to i generate testable restrictions on labor supply functions and ii recover individual preferences and the outcome of the decision process from observed behavior for the sake of simplicity the results were derived in the simplest possible case namely a static labor supply model with private consumptions such a framework was appropriate only for the purpose of the paper that is a preliminary exploration of the properties of collective models of labor supply the next step is to evaluate the robustness of the results to various extensions of the basic model this opens a general research program and generates a wide range of particular problems that it is hoped will be considered in the future among the most serious shortcomings of the 1992 model is the absence of household production as in most labor supply models agents were assumed to divide their time between market activities and leisure as apps and rees 1997 in this issue very rightly point out in their comment the absence of domestic production is far from innocuous as soon as welfare issues are considered for instance a low level of market labor supply will automatically be interpreted as a large consumption of leisure whereas it may in fact reflect the specialization of one of the members in domestic

index investment and financialization of commodities the authors found that concurrent with the rapidly growing index investment in commodity markets since the early 2000s prices of non energy commodity futures in the united states have become incr

volatility spillovers between oil prices and stock sector returns implications for portfolio management abstract in this article we take a recent generalized var garch approach to examine the extent of volatility transmission between oil and stock markets in europe and the united states at the sector level the empirical model is advantageous in that it typically allows simultaneous shock transmission in the conditional returns and volatilities insofar as volatility transmission across oil and stock sector markets is a crucial element for portfolio designs and risk management we also analyze the optimal weights and hedge ratios for oil stock portfolio holdings with respect to the results our findings point to the existence of significant volatility spillover between oil and sector stock returns however the spillover is usually unidirectional from oil markets to stock markets in europe but bidirectional in the united states our back testing procedures finally suggest that taking the cross market volatility spillovers estimated from the var garch models often leads to diversification benefits and hedging effectiveness better than those of commonly used multivariate volatility models such as the ccc garch of bollerslev 1990 the diagonal bekk garch of engle and kroner 1995 and the dcc garch of engle 2002

on the links between stock and commodity markets volatility this paper investigates the links between price returns for 25 commodities and stocks over the period from january 2001 to november 2011 by paying a particular attention to energy raw materials relying on the dynamic conditional correlation dcc garch methodology we show that the correlations between commodity and stock markets evolve through time and are highly volatile particularly since the 2007 2008 financial crisis the latter has played a key role emphasizing the links between commodity and stock markets and underlining the financialization of commodity markets at the idiosyncratic level a speculation phenomenon is highlighted for oil coffee and cocoa while the safe haven role of gold is evidenced

index investment and the financialization of commodities the authors found that concurrent with the rapidly growing index investment in commodity markets since the early 2000s prices of non energy commodity futures in the united states have become increasingly correlated with oil prices this trend has been significantly more pronounced for commodities in two popular commodity indices this finding reflects the financialization of the commodity markets and helps explain the large increase in the price volatility of non energy commodities around 2008

time allocation within the family welfare implications of life in a couple a collective model of leisure demand generalised to the production of a household public good is estimated on the british household panel survey the sharing rule is identified by using an original parametric framework based on the change of family status from single living to couple or from couple to single living womens ratios of private household expenditures are 40 on average the level of intra household inequality appears highly dependent on the intra household wage gap omitting household production in the model would overestimate the ratio by 7 percentage points on average

oil shocks and external balances abstract we provide estimates of the effects of demand and supply shocks in the global crude oil market on several measures of oil exporters and oil importers external balances including the oil trade balance the non oil trade balance the current account capital gains and changes in net foreign assets nfa first we show that the effect of oil demand and supply shocks on the merchandise trade balance and the current account which depending on the source of the shock can be large depends critically on the response of the non oil trade balance our results provide evidence of an intermediate degree of international financial integration second we document the presence of large and systematic valuation effects in response to these shocks valuation effects overall tend to cushion the effect of oil demand and supply shocks on the nfa positions of oil exporters and oil importers third we quantify the overall importance of global business cycle demand shocks as well as oil market specific demand and supply shocks for external balances

bargaining and distribution in marriage the standard economic model of the family is a common preference model that assumes that a family maximizes a single utility function and implies that family behavior is independent of which individuals receive income or control resources in recent years this model has been challenged by game theoretic models of marriage that do not impose pooling and are therefore consistent with empirical evidence that income controlled by husbands and wives does have different effects on family behavior in this paper the authors review a number of simple bargaining models and relevant empirical evidence and discuss their implications for distribution within marriage

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

do husbands and wives pool their resources evidence from the united kingdom child benefit common preference models of family behavior imply income pooling a restriction on family demand functions such that only the sum of husband s income and wife s income affects the allocation of goods and time testing the pooling hypothesis is difficult because most family income sources are not exogenous to the allocations being analyzed in this paper we present an alternative test based on a natural experiment a policy change in the united kingdom that transferred a substantial child allowance to wives in the late 1970s using family expenditure survey data we find strong evidence that a shift toward greater expenditures on women s clothing and children s clothing relative to men s clothing coincided with this income redistribution

dynamic connectedness between oil prices and stock returns of clean energy and technology companies abstract this study employs wavelet coherency phase differences and spillover analysis to examine the dynamic connectedness between oil prices and stock returns of clean energy and technology companies multivariate generalised auto regressive conditional heteroscedasticity models are used to examine the conditional correlations hedging performance and to make a portfolio strategy the wavelet coherency analysis shows a weak degree of association between oil prices and clean energy stock returns and between oil prices and technology companies stock returns in time and frequency scales the phase differences study shows that all series move cyclically with technology stock returns leading oil prices and stock returns of clean energy companies furthermore the volatility spillovers findings reveal that the overall connectedness of the system is 0 43 while the degree of connectedness is greater at lower frequencies 1 4 days than at higher frequencies more than 4 days the results also suggest that the volatility is transmitted from technology companies to oil and clean energy markets at all frequencies and over the whole period policy implications and hedging and portfolio options are discussed

on the taxation of trade within and between households abstract tax reform proposals affect individual welfares in ways which strongly depend on the nature of specialisation in household production and the pattern of trade within households variation in the degree of specialisation in domestic production across households strongly influences the impacts on individual tax burdens of a given tax reform the standard models of the economics literature cannot be used to analyse these issues because they ignore the two person nature of households and the existence of household production and trade this paper proposes a simple and tractable model to remedy this and uses it to analyse the impacts of the types of tax reform that have been the subject of recent policy debate

the competitive effects of exclusive dealing evidence from the u s beer industry abstract several recent theoretical articles have modeled the effects of exclusive dealing contracts that restrict dealers to selling a single brand yet detailed empirical analysis of the impact of exclusivity on actual market outcomes has been lacking i analyze a unique set of firm level data on nearly 400 beer distributors in the united states the impacts of economies of scale and restrictions on distributor promotional activities on the use of exclusive dealing are measured as well as the effects of exclusivity on costs prices and output the results support the view that exclusive dealing serves to minimize manufacturer dealer incentive conflicts and enhances social welfare

naked exclusion efficient breach and downstream competition previous papers by eric b rasmusen j mark ramseyer and john s wiley jr 1991 and ilya r segal and michael d whinston 2000 argue that exclusive contracts can inefficiently deter entry in the presence of scale economies and multiple buyers we first show that these results no longer hold when buyers are final consumers who can breach these contracts and pay expectation damages we then show however that exclusive contracts can inefficiently deter entry if buyers are downstream competitors even in the absence of scale economies and even if breach is possible

exclusive dealing and entry when buyers compete rasmusen et al 1991 and segal and whinston 2000 show that an incumbent monopolist might prevent entry of a more efficient competitor by exploiting externalities among buyers we show that their results hold only when downstream competition among buyers is weak under fierce downstream competition if entry took place a free buyer would become more competitive and increase its output and profits at the expense of buyers that sign an exclusive deal with the incumbent anticipating that orders from a single buyer would trigger entry no buyer will sign the exclusive deal and entry will occur this result is robust across different specifications of the game jel k21 l12 l42

tax reform and collective family decision making abstract traditional analysis of tax reform treats market behaviour as arising out of individual utility maximisation in this paper behaviour is modelled as the pareto efficient outcome of a family decision process conditions for the existence of a feasible pareto improving tax change are presented and contrasted with those that obtain in the individualistic case the consequences of treating households as a single individual are also discussed

long term memories of developed and emerging markets using the scaling analysis to characterize their stage of development the scaling properties encompass in a simple analysis many of the volatility characteristics of financial markets that is why we use them to probe the different degree of markets development we empirically study the scaling properties of daily foreign exchange rates stock market indices and fixed income instruments by using the generalized hurst approach we show that the scaling exponents are associated with characteristics of the specific markets and can be used to differentiate markets in their stage of development the robustness of the results is tested by both monte carlo studies and a computation of the scaling in the frequency domain

measuring strategic uncertainty in coordination games this paper proposes a method to measure strategic uncertainty by eliciting certainty equivalents analogous to measuring risk attitudes in lotteries we apply this method by conducting experiments on a class of one shot coordination games with strategic complementarities and choices between simple lotteries and sure payoff alternatives both framed in a similar way despite the multiplicity of equilibria in the coordination games aggregate behaviour is fairly predictable the pure or mixed nash equilibria cannot describe subjects behaviour we present two global games with private information about monetary payoffs and about risk aversion while previous literature treats the parameters of a global game as given we estimate them and show that both models describe observed behaviour well the global game selection for vanishing noise of private signals offers a good recommendation for actual players given the observed distribution of actions we also deduce subjective beliefs and compare them with objective probabilities

naked exclusion an experimental study of contracts with externalities this paper reports the results of an experiment designed to assess the ability of an incumbent seller to profitably foreclose a market with exclusive contracts we use the strategic environment described by rasmusen ramseyer and wiley 1991 and segal and whinston 2000 where entry is unprofitable when sufficiently many downstream buyers sign exclusive contracts with the incumbent when discrimination is impossible the game resembles a stag hunt coordination game in which the buyers payoffs are endogenously chosen by the incumbent seller exclusion occurs when the buyers fail to coordinate on their preferred equilibrium two way non binding pre play communication among the buyers lowers the power of exclusive contracts and induces more generous contract terms from the seller when discrimination and communication are possible the exclusion rate rises divide and conquer strategies are observed more frequently when buyers can communicate with each other exclusion rates are significantly higher when the buyers payoffs are endogenously chosen rather than exogenously given finally secret offers are shown to decrease the incumbent s power to profitably exclude

buyers miscoordination entry and downstream competition this article shows that buyers coordination failures might prevent entry in an industry with an incumbent firm and a more efficient potential entrant if there were a single buyer or if all buyers formed a central purchasing agency coordination failures would be avoided and efficient entry would always occur more generally exclusion is less likely the lower the number of buyers for any given number of buyers exclusion is less likely the more fiercely buyers compete in the downstream market first intense competition may prevent miscoordination equilibria from arising second in cases where miscoordination equilibria still exist it lowers the maximum price that the incumbent can sustain at such exclusionary equilibria buyers have experienced increased concentration in many sectors in particular grocery retailing 1 2 this trend has triggered a wide debate on the effects of buyer power 3 we contribute to this debate by studying how concentration and competition among buyers affect the possibility of entry by a new upstream supplier in an industry characterised by scale economies in our model buyers fragmentation may lead to a situation where a new upstream firm does not manage to enter a market although endowed with lower marginal costs than an incumbent firm when several buyers decide independently from which supplier to purchase miscoordination equilibria may arise where all buyers buy from the incumbent even if the entrant sets a lower price if all buyers address the incumbent none of them has an incentive to deviate that is to switch to the entrant anticipating that a single order would not allow the

non linear taxation of bequests equal sharing rules and the tradeoff between intra and inter family inequalities this paper studies the design of the tax and regulatory regime applied to bequests bequests are observable while parent s wealth and children s earning abilities are not parents know their children s earning abilities parents are altruistic their utility depends on their children s utilities but weights may differ between children the optimal tax schedule strikes a balance between the often conflicting incentive and corrective effects when parents attach identical weights to their children an estate taxation is sufficient equal sharing rules appear to be appropriate only in extreme cases such as in presence of the so called cinderella effect

equilibrium selection in sequential games with imperfect information abstract games with imperfect information often feature multiple equilibria which depend on beliefs off the equilibrium path standard selection criteria such as passive symmetric or wary beliefs rest on ad hoc restrictions on beliefs we propose a new selection criterion that imposes no restrictions on beliefs we select the action profile that is supported in equilibrium by the largest set of beliefs we conduct an experiment to compare the predictive power of the existing and our novel selection criteria in an application on vertical multi lateral contracting we find that our criterion outperforms the other selection criteria

exclusive dealing and entry when buyers compete comment in this paper fm s equilibrium analysis is shown to contain some errors fixing these errors changes their conclusions for some of the cases they consider exclusive deals written between an incumbent and competitive downstream buyers will still often arise in equilibrium thereby block ing efficient entry inefficient exclusion arises to protect industry profits from competition the issue centers on how competition works when upstream firms sell to consumers through two com peting downstream buyers in the case upstream firms can offer downstream buyers two part tariffs the analysis of competition in this setting turns out to be surprisingly subtle and the analysis here should be of more general interest to those modeling competition in vertical settings the particular model fm consider is based on the cost specification in segal and whinston 2000 sect iv in which the incumbent faces a potential entrant that has a lower cost of production but faces some fixed cost of entry two identical downstream buyers compete in prices for final consum ers exclusive deals involve the incumbent offering buyers a fixed compensation for agreeing not to purchase from the entrant fm derive their results under two different assumptions on wholesale pricing upstream firms are required to set linear wholesale prices section i and upstream firms are allowed to offer two part tariff contracts section ii since restricting upstream firms to charge linear wholesale prices to buyers seems inconsistent with assuming the incumbent can offer exclu sive contracts with a fixed compensation in the initial stage and since linear wholesale prices can lead to double marginalization problems the focus in this paper is on the less restrictive case consid ered by fm where upstream firms are allowed to offer downstream buyers two part tariffs 1 in this setting correcting fm s analysis shows that entry arises only when scale economies are not too important and the entrant s efficiency advantage is sufficiently large when either

how serious is the neglect of intrahousehold inequality in this report the authors develop a framework for assessing the consequences of ignoring intrahousehold inequality in the measurement and analysis of poverty and inequality they apply this framework to data for the philippines and conclude that 1 the result of neglecting intrahousehold inequality will probably be considerable understatement of the levels of poverty and inequality with the philippine data measured levels of inequality and poverty were off 30 percent as a result of ignoring intrahousehold variation and 2 patterns of inequality revealed by household level data are somewhat different from patterns revealed by individual level data but the differences seem not to be dramatic to confirm these results the exercise should be repeated with data from other countries

the theory of reform and indian indirect taxes abstract given a set of value judgements an initial state and a model of the economy one can ask whether some feasible tax change would increase welfare we do this by defining the marginal cost in terms of welfare of raising an extra rupee from the i th good the inverse optimum problem is the calculation of non negative welfare weights on households which imply that the initial state is optimum if no such welfare weights exist then a pareto improvement is possible we illustrate the concepts and results using data from the indian economy for 1979 1980 directions of tax reform for a number of specific social welfare functions and for pareto improvements are presented

consumption technology and the intrafamily distribution of resources adult equivalence scales reexamined adult equivalence scales are supposed to measure differences in the needs of households of different demographic composition formally they purport to measure the change in the cost of attaining a certain welfare level when the family composition varies this paper shows that the definition and the measurement of these scales depend crucially on the concept of welfare used when welfare is the utility parents derive from their own consumption one has to assume separability of parents and children s consumption this assumption implies that the only way of imputing the intrafamily allocation of resources is by observing the consumption patterns of adult goods regardless of the definition used one cannot separate the factors reflecting home technology i e needs from those determining the intrafamily distribution rule i e wants out of consumption data

taxation and the household abstract previous analyses of demand systems and the welfare effects of taxing male and female labour supplies suppress the analysis of household resource allocation by assuming a household utility function to analyse the implications of assuming this is not the case we construct a simple but fairly general model of household resource allocation and use the properties of the equilibrium of this model to characterise the effects of tax policy on individual utilities as determined by the household resource allocation process

naked exclusion with minimum share requirements we consider a class of contracts in which buyers commit to giving a seller some minimum share of their total purchases we show that such contracts can be used by an incumbent seller to reduce the probability of entry by a rival seller when the incumbent can commit to its selling price as part of the contract we further show that such contracts can be profitable for the incumbent even when exclusive dealing would not be and even when buyers can coordinate their accept or reject decisions the average price paid by the buyers will be higher and welfare will be lower whether or not the incumbent s exclusionary conduct turns out to be successful in preventing entry

oil price shocks and stock markets in the u s and 13 european countries abstract oil price shocks have a statistically significant impact on real stock returns contemporaneously and or within the following month in the u s and 13 european countries over 1986 1 2005 12 norway as an oil exporter shows a statistically significantly positive response of real stock returns to an oil price increase the median result from variance decomposition analysis is that oil price shocks account for a statistically significant 6 of the volatility in real stock returns for many european countries but not for the u s increased volatility of oil prices significantly depresses real stock returns the contribution of oil price shocks to variability in real stock returns in the u s and most other countries is greater than that of interest rate an increase in real oil price is associated with a significant increase in the short term interest rate in the u s and eight out of 13 european countries within one or two months counter to findings for the u s and for norway there is little evidence of asymmetric effects on real stock returns of positive and negative oil price shocks for oil importing european countries

sharing rule identification for general collective consumption models we propose a method to identify bounds i e set identi cation on the shar ing rule for a general collective household consumption model unlike the eects of distribution factors it is well known that the level of the sharing rule cannot be uniquely identi ed without strong assumptions on preferences across households of dierent compositions our new results show that though not point identi ed without these assumptions narrow bounds on the sharing rule can be obtained we get these bounds by applying revealed preference restrictions implied by the collective model to the household s continuous aggregate demand functions we obtain informative bounds even if nothing is known about whether each good is public private or assignable within the household though having such infor mation tightens the bounds we apply our method to us 1999 2009 psid data this application obtains tight sharing rule bounds that yield useful conclusions regarding the eects of income and wages on intrahousehold resource sharing and on the prevalence of individual as opposed to household level poverty

the optimal income taxation of couples this paper analyzes the general nonlinear optimal income tax for couples a multidimensional screening problem each couple consists of a primary earner who always participates in the labor market but makes an hours of work choice and a secondary earner who chooses whether or not to work if second earner participation is a signal of the couple being better worse off we prove that optimal tax schemes display a positive tax subsidy on secondary earnings and that the tax subsidy on secondary earnings decreases with primary earnings and converges to zero asymptotically we present calibrated microsimulations for the united kingdom showing that decreasing tax rates on secondary earnings is quantitatively significant and consistent with actual income tax and transfer programs

what happened to the oil price macroeconomy relationship abstract strong evidence is found that oil prices no longer granger cause many u s macroeconomic indicator variables in data after 1973 a number of potential explanations are explored that sample stability issues are responsible that oil prices are now endogenous and that linear and symmetric specifications misrepresent the form of the oil price interaction none of these hypotheses are supported by the data the opec price increases do appear to have had significant impacts while the effects of the price declines of the 1980s are smaller and harder to characterize these results have potentially important implications for the large body of research which utilizes oil prices as an instrumental or explanatory variable

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

married with children a collective labor supply model with detailed time use and intrahousehold expenditure information we propose a collective labor supply model with household production that generalizes an original model of blundell chiappori and meghir 2005 in our model adults individual preferences not only depend on own leisure and individual private consumption of market goods they also depend on the consumption of domestic goods which are produced by combining goods bought on the market with individuals time we apply our model to new and unique data on dutch couples with children the data contains detailed information about the spouses time use and the intrahousehold allocation of all expenditures our application uses a novel estimation strategy that builds upon the familiar two stage allocation representation of the collective model we obtain interesting and plausible empirical results spouses preferences depend on the consumption of domestically produced goods including children s welfare in addition pareto weights depend on variables like the individual wages and the share in the household s nonlabor income finally and perhaps surprisingly we do not nd evidence that mothers care more for their children than fathers this paper draws on data of the liss panel of centerdata special thanks go to marika de bruijne and arthur van soest who helped to construct the questionnaire and to guillaume schollier

this is what happened to the oil price macroeconomy relationship abstract many of the quarterly oil price increases observed since 1985 are corrections to even bigger oil price decreases the previous quarter when one looks at the net increase in oil prices over the year recent data are consistent with the historical correlation between oil shocks and recessions

gender agricultural production and the theory of the household virtually all models of the household assume that the allocation of resources is pareto efficient within many african households agricultural production occurs on many plots controlled by different members of the household pareto efficiency implies that factors should be allocated efficiently across these plots i find in contrast that plots controlled by women are farmed much less intensively than similar plots within the household controlled by men the estimates imply that about 6 percent of output is lost because of inefficient factor allocation within the household the paper suggests a new approach to modeling intrahousehold allocation consistent with the empirical results

efficient intra household allocations a general characterization and empirical tests the neoclassical theory of demand applies to individuals yet in empirical work it is usually taken as valid for households with many members this paper explores what the theory of individuals implies for households that have more than one member we make minimal assumptions about how the individual members of the household resolve conflicts all we assume is that however decisions are made outcomes are efficient we refer to this as the collective setting we show that in the collective setting household demands must satisfy a symmetry and rank condition on the slutsky matrix we also present some further results on the effects on demands of variables that do not modify preferences but that do affect how decisions are made we apply our theory to a series of surveys of household expenditures from canada the tests of the usual symmetry conditions are rejected for two person households but not for one person households we also show that income pooling is rejected for two person households we then test for our collective setting conditions on the couples data none of the collective setting restrictions are rejected we conclude that the collective setting is a plausible and tractable next step to take in the analysis of household behavior

signalling and adaptive learning in an entry limit pricing game in an experimental investigation of milgrom and roberts 1992 model play consistently converges to a unique equilibrium providing evidence of sophisticated strategic behavior that the theory predicts play starts with monopolists at their myopic maxima followed by an attempt to pool and then if no pooling equilibrium exists separation suggesting myopia rather than a forward looking process when both pure strategy equilibria and separating equilibria exist equilibrium selection is a function of the past history of play an adaptive learning model characterizes the major features of the data and provides predictions of intermediate term behavior that is otherwise lacking in the theory

consumption dominance curves testing for the impact of indirect tax reforms on poverty abstract a new tool is presented to test for the robustness of the impact on poverty of marginal tax reforms for pairs of commodities consumption dominance curves exist for every order of stochastic dominance an illustration is provided with bolivian data

collective household labor supply nonparticipation and income taxation in this paper we adopt the usual assumptions of the collective approach i e individualism and efficiency to study household labor supply the theoretical innovation is 2 fold first we incorporate the decision to participate in the labor market in the initial setting second we abandon the assumption of linearity of the budget constraint we show that i structural elements such as preferences or the outcome of the decision process can be recovered and ii testable restrictions are generated from the observation of the household labor supplies we also examine for this model how to simulate the incidence of fiscal reforms

correlations and volatility spillovers between oil prices and the stock prices of clean energy and technology companies abstract in this paper multivariate garch models are used to model conditional correlations and to analyze the volatility spillovers between oil prices and the stock prices of clean energy companies and technology companies four different multivariate garch models bekk diagonal constant conditional correlation and dynamic conditional correlation are compared and contrasted the dynamic conditional correlation model is found to fit the data the best and generates results showing that the stock prices of clean energy companies correlate more highly with technology stock prices than with oil prices on average a 1 long position in clean energy companies can be hedged for 20 cents with a short position in the crude oil futures market

dynamic risk spillovers between gold oil prices and conventional sustainability and islamic equity aggregates and sectors with portfolio implications this paper investigates the time varying equicorrelations and risk spillovers between crude oil gold and the dow jones conventional sustainability and islamic stock index aggregates and 10 associated disaggregated islamic sector stock indexes basic materials consumer services consumer goods energy financials health care technology industrials telecommunications and utilities using the multivariate deco fiaparch model and the spillover index of diebold and yilmaz 2012 we also conduct a risk management analysis at the sector level for commodity islamic stock sector index portfolios using different risk exposure measures for comparison purposes we add the aggregate conventional dow jones global index and the dow jones sustainability world index the results show evidence of time varying risk spillovers between these markets moreover there are increases in the correlations among the markets in the aftermath of the 2008 2009 gfc further the oil gold energy financial technology and telecommunications sectors are net receivers of risk spillovers while the sustainability and conventional aggregate djim indexes as well as the remaining islamic stock sectors are net contributors of risk spillovers finally we provide evidence that gold offers better portfolio diversification benefits and downside risk reductions than oil

optimum taxation and the allocation of time abstract a theory of optimal taxation is presented building upon becker s 1965 theory of the allocation of time optimal commodity taxation is governed by factor shares in household activities any market good which requires little household time or even saves time should carry a relatively low tax rate this policy rule does not require the estimation of price elasticities and is therefore more applicable than traditional ramsey rule taxation

flexible multivariate garch modeling with an application to international stock markets this paper offers a new approach to estimating time varying covariance matrices in the framework of the diagonal vech version of the multivariate garch 1 1 model our method is numerically feasible for large scale problems produces positive semidefinite conditional covariance matrices and does not impose unrealistic a priori restrictions we provide an empirical application in the context of international stock markets comparing the new estimator with a number of existing ones

a test of the unitary and collective models of household labour supply this paper tests the unitary and the collective household labour supply models within a structural framework a nonlinear unrestricted household labour supply system is postulated and the set of parametric restrictions imposed by each model is derived our results generally reject the income pooling restrictions embodied in the unitary model also the symmetry of cross wage effects is rejected however the collective model is not rejected for groups with no pre school children

opportunism in multilateral vertical contracting nondiscrimination exclusivity and uniformity comment an input supplier selling to competing downstream firms would benefit from publicly committing at the outset to all contracts efficient commitment however would require complete contracts the authors study instead bilateral contracting without commitment regarding others terms each firm then fears that the supplier might opportunistically renegotiate another s contract to increase bilateral profit at the firm s expense the authors show that nondiscrimination clauses generally cannot curb such third party opportunism even with symmetric firms to reassure firms crude forms of commitment may be adopted this could explain the pervasiveness of exclusivity arrangements and the striking uniformity and intertemporal rigidity of franchise contracts copyright 1994 by american economic association

oil price shocks stock market economic activity and employment in greece abstract using a multivariate vector autoregression var approach this paper attempts to shed light into the dynamic relationship among oil prices real stock prices interest rates real economic activity and employment for greece the empirical evidence suggests that oil price changes affect real economic activity and employment oil prices are important in explaining stock price movements stock returns do not lead to changes in real activity and employment

naked exclusion comment the ability of an incumbent firm to deter entry by writing exclusionary contracts with customers has been a subject of contention in the antitrust literature the courts concern with such exclusionary contracts has been challenged by those who argue that an incumbent faced with buyers whose interest is to promote entry and competition would have to pay buyers more for the inclusion of exclusionary provisions than it could possibly gain from exclusion in a provocative article eric b rasmusen et al 1991 henceforth rrw have argued that an incumbent may in fact be able to exclude rivals profitably using such contractual provisions because it can exploit buyers lack of coordination in essence if buyers expect other buyers to sign such provisions then they may see little reason not to do so themselves the rrw argument is potentially an important one because most alleged instances of entry deterrence through exclusionary contracts with customers occur in situations with multiple buyers unfortunately however rrw s two main results contain errors in this note we reconsider the rrw model providing correct characterizations of the likelihood and cost of exclusion for an incumbent firm our results indicate that while the intuition suggested by rrw is valid the equilibrium likelihood and cost of exclusion differ from what rrw derive moreover our analysis illuminates some further aspects of exclusionary contracting with multiple buyers among these issues we focus on how an incumbent can use discriminatory offers to exploit the externalities that exist among buyers in the provision of competition in section i we review the basic assumptions of the rrw model in sections ii and iii we then consider in turn the cases of simultaneous and sequential offers studied by rrw for the simultaneous model we distinguish between settings in which the incumbent can and cannot discriminate in its offers to different buyers this distinction is the source of the problem in rrw s analysis their simultaneous offer model assumes no discrimination but the proof of their proposition 2 assumes at times that discrimination is feasible we show that absent the ability to discriminate the incumbent can exclude profitably only when buyers fail to coordinate on their most preferred continuation equilibrium in contrast we show that when discrimination is possible the incumbent need not rely on a lack of buyer coordination to segal department of economics landau building stanford university stanford ca 94305 e mail ilya segal stanford edu whinston department of economics northwestern university 2003 sheridan road evanston il 60208 e mail mwhinston nwu edu we thank eric rasmusen john wiley and participants in the berkeley stanford iofest the university of copenhagen vertical restraints conference and a seminar at the antitrust division of the u s department of justice for helpful comments we thank federico echenique for excellent research assistance 1 for example a recent department of justice investigation concerned the use of exclusive contracts by the leading provider of computerized ticketing services ticketmaster most major cities have several large concert sports venues in many cities ticketmaster has exclusive contracts with a very large share of these venues 2 the other leading response to the argument that contracts with buyers cannot be a profitable method of exclusion is given in philippe aghion and patrick bolton 1987 section i one factor limiting the applicability of the aghion and bolton theory however is that it involves partial exclusion the contracts signed are not fully exclusionary they involve finite stipulated damages and the profitability of the strategy arises from extracting rents from an entrant when entry occurs indeed in the aghion and bolton model contracts that fully exclude offer no benefits over writing no contract at all in section iii of their paper aghion and bolton also discuss a two buyer version of their model in which externalities arise across buyers in contrast to the analysis here and in rrw they allow the incumbent to make an offer to a buyer i that is conditional on the acceptance decision of the other buyer 3 r innes and r j sexton 1994 also discuss the use of discriminatory offers in the context of a model in which buyers can form coalitions with the entrant

communication in vertical markets experimental evidence abstract an upstream monopolist supplying competing downstream firms may fail to monopolize the market because it is unable to commit not to behave opportunistically we build on previous experimental studies of this well known commitment problem by introducing communication allowing the upstream firm to chat privately with each downstream firm reduces total offered quantity from near the cournot level observed in the absence of communication halfway toward the monopoly level allowing all firms to chat together openly results in complete monopolization downstream firms obtain such a bargaining advantage from open communication that all of the gains from monopolizing the market accrue to them a simple structural model of nash in nash bargaining fits the pattern of shifting surpluses well using third party coders unsupervised text mining among other approaches we uncover features of the rich chat data that are correlated with market outcomes we conclude with a discussion of the antitrust implications of open communication in vertical markets

intra family distribution of paid work time this article analyses the intra family distribution of paid work time in five european countries france germany italy spain and the uk to that end we formulate a collective model which allows us to characterize the efficient labour supply decisions of each spouse this two equation model is then simultaneously estimated by using national panel data drawn from the european community household panel echp 1994 2001 empirical results clearly show that in all sample countries the labour supply of wives is affected by own wages household and own nonlabour incomes and the number of children whereas evidence for husbands differs across countries

oil and the macroeconomy when prices go up and down an extension of hamilton s results in an important paper hamilton 1983 demonstrated a strong correlation between oil price changes and gross national product growth in u s data however his study pertained to a period in which all the large oil price movements were upward and thus it left unanswered the question whether the correlation persists in periods of price decline moreover the price variable he used was somewhat distorted by price controls in the 1970s this note investigates whether hamilton s results continue to hold when the sample is extended to include the recent oil market collapse and the oil price variable is corrected for the effects of price controls particular attention is given to the possibility of asymmetric responses to oil price increases and decreases as suggested in the structural employment literature loungani 1986 davis 1987 hamilton 1988 like hamilton i based my investigation on the gnp equation in sims s 1 980b six variable quarterly vector autoregressive model

the relationships between petroleum and stock returns an asymmetric dynamic equi correlation approach in this paper we propose an asymmetric dynamic equi correlation adeco model to investigate the correlations between returns of petroleum futures and stock indices our adeco reveals the in sample significant asymmetric effect in oil stock correlations to evaluate out of sample performance we consider a portfolio with petroleum futures and stocks in which the weights are determined by forecasts of covariance matrix we find that adeco provides portfolios with better performances than existing popular deco dcc and adcc models in the minimum variance framework moreover energy price risk can be better hedged by stocks in oil exporting countries than stocks in oil importing countries our findings are further demonstrated to be robust to the change of futures maturity

behavioral identification in coalitional bargaining an experimental analysis of demand bargaining and alternating offers alternating offer and demand bargaining models of legislative bargaining make very different predictions in terms of both ex ante and ex post distribution of payoffs as well as in the role of the order of play the experiment shows that actual bargaining behavior is not as sensitive to the different bargaining rules as the theoretical point predictions whereas the comparative statics are in line with both models we compare our results to studies that attempt to distinguish between these two approaches using field data finding strong similarities between the laboratory and field data regardless of the underlying bargaining process

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

collective consumption and welfare in this paper we present a collective model of household demand based on pareto efficiency in addition we suppose that a each household member is egoistic and consumption is purely private b there is a set of distribution factors and c there is one exclusive good then we derive the testable restrictions that are implied by this theoretical setting and show how welfare comparisons at the individual level can be performed jel classification d11 consommation collective et bien etre dans cet article nous presentons un modele collectif de demande du menage fonde sur l efficacite au sens de pareto en plus nous adoptons les postulats suivants a chaque membre du menage est egoiste et la consommation est purement privee b il existe un ensemble de facteurs de distribution et c il existe un bien exclusif ensuite nous derivons les restrictions theoriques que les demandes du menage doivent satisfaire et nous montrons comment des comparaisons de bien etre au niveau individuel peuvent etre effectuees

the asymmetric effects of oil price and monetary policy shocks a nonlinear var approach in this paper we investigate the asymmetric effects of oil price shocks and monetary policy on macroeconomic activity using monthly data for the united states over the period from 1983 1 to 2008 12 in doing so we use a logistic smooth transition vector autoregression var as detailed in terasvirta and anderson 1992 and weise 1999 and make a distinction between two oil price volatility regimes high and low using the realized oil price volatility as a switching variable we isolate the effects of oil price and monetary policy shocks and their asymmetry on output growth and following koop et al 1996 and weise 1999 we employ simulation methods to calculate generalized impulse response functions girfs to trace the effects of independent shocks on the conditional means of the variables our results suggest that in addition to the price of oil oil price volatility has an impact on macroeconomic activity and that monetary policy is not only reinforcing the effects of oil price shocks on output it is also contributing to the asymmetric response of output to oil price shocks

do high frequency stock market data help forecast crude oil prices evidence from the midas models abstract extensive studies have used stock market information to forecast crude oil prices and stock market can more easily derive high frequency data than crude oil market due to no revisions which raises a question that whether high frequency stock market data can improve the forecast performance of crude oil prices therefore this paper employs the midas model and the high frequency data of four stock market indices to forecast wti and brent crude oil prices at lower frequency the results indicate that the high frequency stock market indices have certain advantage over the lower frequency data in forecasting monthly crude oil prices and the midas model using high frequency data proves superior to the ordinary model

equilibrium incentives for exclusive dealing in a differentiated products oligopoly we consider the incentives for oligopolistic manufacturers to adopt exclusive dealing manufacturers producing differentiated brands can choose to distribute through exclusive retail dealerships or nonexclusive dealerships with nonexclusive dealing manufacturers face an interbrand externality because brand enhancing investments made by one manufacturer may benefit the brands of other manufacturers although exclusive dealing eliminates this externality oligopolistic manufacturers may not choose exclusive dealing exclusive dealing enhances the incentive to invest but the promotional investments are a form of competition between manufacturers thus manufacturers might earn higher profits with nonexclusive dealing making lower promotional investments we find cases in which nonexclusive dealing is a dominant strategy we also find cases in which some but not all manufacturers adopt exclusive dealing moreover even if adoption of exclusive dealing by all manufacturers is the equilibrium it can arise from a prisoner s dilemma in that each manufacturer would prefer nonexclusive dealing

an experimental study of exclusive contracts abstract this paper reports results from a laboratory experiment based on exclusive contracts that may theoretically lead to inefficient naked exclusion of a potential rival the data indicate that changes in the number of buyers in the market have no significant effect on exclusion rates but the likelihood of inefficient exclusion is decreased both when a larger fraction of signed buyers are needed to deter a rival s entry and when buyers engage in non binding communication these results have antitrust implications both in terms of helping to identify at risk market characteristics and suggesting potential competition enhancing strategies a sub game of the experiment where buyers make signing decisions can be illustrated as a coordination game with the unique feature that payoffs are affected by a separate but interested party the incumbent seller i find that the height of the potential function and relevant basin of attraction especially when combined with quantal response estimation have larger predictive power in this sub game than several other equilibrium selection criteria

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

optimal commodity taxation and redistribution within households using a collective model of consumption we characterize optimal commodity taxes aimed at targeting specific individuals within the household the main message is that distortionary indirect taxation can circumvent the agency problem of the household essentially taxation should discourage less the consumption of a certain group of goods those for which the slope of the engel curves is larger for the targeted person

volatility forecasting and risk management for commodity markets in the presence of asymmetry and long memory abstract this paper explores the relevance of asymmetry and long memory in modeling and forecasting the conditional volatility and market risk of four widely traded commodities crude oil natural gas gold and silver a broad set of the most popular linear and nonlinear garch type models is used to investigate this relevancy our in sample and out of sample results show that volatility of commodity returns can be better described by nonlinear volatility models accommodating the long memory and asymmetry features in particular the fiaparch model is found to be the best suited for estimating the var forecasts for both short and long trading positions this model also gives for all four commodities the lowest number of violations under the basel ii accord rule given a risk exposure at the 99 confidence level several implications for commodity market risks policy regulations and hedging strategies can be drawn from the obtained results

naked exclusion in the lab the case of sequential contracting in the context of the naked exclusion model of rasmusen ramseyer and wiley 1991 and segal and whinston 2000b we examine whether sequential contracting is more conducive to exclusion in the lab and whether it leads to lower exclusion costs for the incumbent than simultaneous contracting we find that an incumbent who proposes exclusive contracts to buyers sequentially is better able to deter entry than an incumbent who proposes contracts simultaneously in contrast to theory this comes at a substantial cost for the incumbent

transfers to families with children as a principal agent problem abstract the relationship between government and parents is modelled as a principal agent problem with the former in the role of principal and the latter in that of agents we make four major points the first is that if the well being of the child depends not only on luck but also on parental actions that the government cannot readily observe the latter can influence parental behaviour by conditioning income transfers to families on child performance the second point is that if there are market inputs into the making of a happy or successful child which the government can observe but not ascribe to any particular parent or child because they are bought anonymously an income transfer policy can be usefully complemented by an indirect subsidy on the price of these inputs the third is that if parents care about their children incentive considerations may have to be tempered by the need to compensate those who have the misfortune of getting a child with low ability the fourth is that parents can be induced to have the socially desirable number of children by making the transfer conditional not only on child performance but also on number of children ways of making these findings operational and the effects of administrative costs are discussed in some detail