risk aversion in contests in a contest participants spend money or effort to increase their chances of winning a prize the authors examine primarily the following question could the timid the more risk averse have a better chance of winning in contests under limited liability the answer is always positive in the absence of limited liability there is no single answer whereas when the prize is shared as a function of effort the outcome is independent of the contestants risk aversion the authors also relate their results to self protection and examine some other implications of risk aversion copyright 1995 by royal economic society

inflation and the informativeness of prices this paper studies the welfare effects of the relative price variability arising from inflation if customers and suppliers form long term relationships prices have an informational role a potential customer uses current prices as signals of future prices inflation reduces the informativeness of current prices causing customers to make costly mistakes about which relationships to enter in addition the reduced informativeness of prices makes demand less price elastic thereby increasing markups both effects can be quantitatively significant at moderate inflation rates

risk aversion and prudence in rent seeking games this paper considers a common n agent symmetric rent seeking game it derives conditions so that risk aversion and risk always decrease rent seeking efforts these conditions hold for any regular contest success function when risk averse rent seekers are also prudent under n 2 prudence is a necessary and sufficient condition for risk aversion to decrease rent seeking efforts compared to risk neutrality an intuition for this result is given based on a self protection model

not all price endings are created equal price points and asymmetric price rigidity abstract we document an asymmetry in the rigidity of 9 ending prices relative to non 9 ending prices consumers have difficulty noticing higher prices if they are 9 ending or noticing price increases if the new prices are 9 ending because 9 endings are used as a signal for low prices price setters respond strategically to the consumer heuristic by setting 9 ending prices more often after price increases than after price decreases 9 ending prices therefore remain 9 ending more often after price increases than after price decreases leading to asymmetric rigidity 9 ending prices are more rigid upward than downward these findings hold for both transaction prices and regular prices and for both inflation and no inflation periods

contests as selection mechanisms the impact of risk aversion abstract we investigate how individual risk preferences affect the likelihood of selecting the more able contestant within a two player tullock contest our theoretical model yields two main predictions first an increase in the risk aversion of a player worsens her odds unless she already has a sufficiently large advantage second if the prize money is sufficiently large a less able but less risk averse contestant can achieve an equal or even higher probability of winning than a more able but more risk averse opponent in a laboratory experiment we confirm both the non monotonic impact and the compensating effect of risk aversion on winning probabilities our results suggest a novel explanation for the gender gap and the optimality of limited monetary incentives in selection contests

on high inflation and the allocation of resources abstract this paper formalizes some of the disruptive effects of inflation on the organization of markets rapid inflation induces buyers to speed up purchases which thus inhibits the selection of more adequate trading partners through search this blurs distinctions across firms of different productivities and leads to resource misallocations as inflation causes efficient and inefficient firms to be less distinguishable the incentives to engage in cost reduction are dampened and lower growth results the model could provide a rationale for the large number of bankruptcies and large turnover rates following successful inflation stabilization programs like those of israel bolivia and argentina

distributional preferences in probabilistic and share contests we analyze nash equilibria of probabilistic and share contests where players have distributional preferences if players are sufficiently similar distributional preferences create multiple equilibria for the case of only mildly heterogeneous players equilibrium effort can be lower as well as higher than effort exerted by players with selfish preferences these findings can explain the following three anomalies observed in empirical tests of probabilistic and share contests the large variance of effort levels overspreading individual spending that exceeds the nash equilibrium prediction overspending and aggregate spending that exceeds the value of the prize overdissipation if players are sufficiently heterogeneous the game has a unique equilibrium that is more egalitarian than the selfish nash equilibrium it turns out that the less talented competitor may win the larger share of the prize if his inequality aversion is sufficiently strong we analyze how the equilibria evolve if the number of players becomes larger and how sequential moves influence behavior two new insights follow from the analysis of the sequential move game first sequential moves act as a coordination device in case of multiple simultaneous equilibria and second inequality aversion of the more egalitarian player can be used as a commitment device for low effort this effect can reverse the conventional wisdom that the underdog should lead

search sticky prices and inflation this paper examines equilibrium in a deflationary environment in a market with free entry where consumers search and firms set prices on individual units of the commodity prices attached to newly produced goods are continuously adjusted prices attached to previously produced goods can only be changed at a cost deflation cuts into the market power created by the need to search for the good thus consumers welfare is inverse u shaped in deflation

technological regimes catching up and leapfrogging findings from the korean industries abstract this paper examines the experiences of selected industries in korea to identify the stylized facts in the process of technological capability building and thereby to sort out the conditions for the catching up to occur to explain the process we have built a model of technological and market catching up a special attention has been given to the question of whether there has been a case of leapfrogging in any industry in korea and if so what are the conditions for its incidence in our framework we first measure the degree of catching up in terms of market shares in the world then we focus on catching up in technological capabilities in explaining the different record and prospects of korean industries in market catching up in the model technological capability is determined as a function of both technological effort and the existing knowledge base as determinants of technological effort we look at the technological regimes of the industries such as cumulativeness of technical advances fluidity predictability of technological trajectory and the properties of knowledge base using this model we explain the different technological evolution of the selected industries in korea including the d ram automobile mobile phone consumer electronics personal computer and machine tool industries we find three different patterns of catching ups path creating catching up cdma mobile phone path skipping catching up d ram and automobile and path following catching up consumer electronics personal computers and machine tools we interpret the first two case of catching up as leapfrogging unlike the argument by perez and soete perez c soete l 1988 catching up in technology entry barriers and windows of opportunity in dosi et al eds technical change and economic theory pinter publishers london we find that important r d projects except automobiles where only private r d was involved involved both private and public capacities and that entry was not driven by endogenous generation of knowledge and skills but by collaboration with foreign companies

on the granger causality between median inflation and price dispersion the granger causal relationship between the size and dispersion of fluctuations in sub components of the us consumer price index cpi is examined using both in sample and out of sample tests and data from january 1968 to december 2008 strong in sample evidence is found for feedback between median inflation and price dispersion the evidence for granger causation from median inflation to price dispersion remains strong in out of sample testing but is less strong for granger causation in the opposite direction the implications of these results for the variety of price level determination models in the literature are discussed

intergroup conflict and intra group punishment in an experimental contest game we study how conflict in a contest game is influenced by rival parties being groups and by group members being able to punish each other our main motivation stems from the analysis of socio political conflict the relevant theoretical prediction in our setting is that conflict expenditures are independent of group size and independent of whether punishment is available or not we find first that our results contradict the independence of groupsize prediction conflict expenditures of groups are substantially larger than those of individuals and both are substantially above equilibrium towards the end of the experiment material losses in groups are 257 of the predicted level there is however substantial heterogeneity in the investment behaviour of individual group members second allowing group members to punish each other after individual contributions to the contest effort are revealed leads to even larger conflict expenditures now material losses are 869 of the equilibrium level and there is much less heterogeneity in individual group members investments these results contrast strongly with those from public goods experiments where punishment enhances efficiency and leads to higher material payoffs

gradual catch up and enduring leadership in the global wine industry the wine industry is an extremely interesting sector from a catch up point of view because the latecomers in the international market have changed how wine is produced sold and consumed and in doing so they have challenged the positions of incumbents until the end of the 1980s the european countries and particularly france and italy dominated the international market for wine subsequently significant changes in the market namely decreases in consumption by traditional consuming countries the entry of new inexperienced consumers and the increasing importance of large distribution have threatened this supremacy initially the usa and australia and later emerging countries such as chile and south africa gained increasing market shares in both exported volumes and value at the expense of incumbents however some of these newcomers e g australia have shown slower growth opening opportunities for newer entrants such as argentina and new zealand at the same time some of the incumbents especially italy have innovated challenging the leadership of france in key markets such as the usa in this article we investigate the different catch up cycles in the global wine sector that occurred between the 1960s and 2010 through a detailed analysis of export volumes values and unit prices we address issues related to the increasing share in the global market of latecomer countries and the relative decline of the incumbents as well as possible changes in the market leadership within these two groups

exit with multiplant firms using an extension of ghemawat and nalebuff s 1985 model i analyze the outcome of industry decline when firms have multiplant operations the analysis reveals that no natural generalization of their strong empirical prediction that the larger of two single plant duopolists exits first holds in a multiplant setting the results also highlight a number of factors that affect the pattern of capacity removal during industry decline and lead to a discussion of the strategic implications of firms plant size choices in general the factors determining the pattern of capacity reduction can be quite complex and prediction in such settings often requires intimate knowledge of industry structure

sectoral patterns of technical change towards a taxonomy and a theory abstract the purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in britain since 1945 most technological knowledge turns out not to be information that is generally applicable and easily reproducible but specific to firms and applications cumulative in development and varied amongst sectors in source and direction innovating firms principally in electronics and chemicals are relatively big and they develop innovations over a wide range of specific product groups within their principal sector but relatively few outside firms principally in mechanical and instrument engineering are relatively small and specialised and they exist in symbiosis with large firms in scale intensive sectors like metal manufacture and vehicles who make a significant contribution to their own process technology in textile firms on the other hand most process innovations come from suppliers these characteristics and variations can be classified in a three part taxonomy based on firms 1 supplier dominated 2 production intensive 3 science based they can be explained by sources of technology requirements of users and possibilities for appropriation this explanation has implications for our understanding of the sources and directions of technical change firms diversification behaviour the dynamic relationship between technology and industrial structure and the formation of technological skills and advantages at the level of the firm the region and the country

real wages profit margins and inflation in turkish manufacturing under post liberalization this article reports investigations into the behaviour of gross profit margins mark ups in turkish manufacturing industries for the post 1980 liberalization period in relation to price inflation trade liberalization openness and real wage costs panel data econometrics over 29 subsectors of turkish manufacturing are used over the period 1980 1996 results suggest that profit margins are positively and significantly related both to price inflation and real wage costs however openness is found to have very little impact on profit margins

risk attitudes and heterogeneity in simultaneous and sequential contests we prove existence and uniqueness of equilibrium in rent seeking contests in which players are heterogeneous in both risk preferences and production technology given identical linear production technology if the number of risk loving players is large enough the aggregate investment in equilibrium will exceed the rent and all risk neutral and risk averse players will exit the contest in simultaneous and sequential contests with two players we can identify the favorite and underdog based on both players preference parameters our theoretical results suggest that subjects in some recent contest experiments behaved as if they were risk loving

sequential lottery contests with multiple participants abstract we apply aggregative games techniques in a novel fashion in the analysis of sequential lottery contests with n players to show that there exists a unique subgame perfect equilibrium in pure strategies

prize sharing in collective contests the characteristics of endogenously determined sharing rules and the group size paradox are studied in a model of group contest with the following features i the prize has mixed private public good characteristics ii groups can differ in marginal cost of effort and their membership size iii in each group the members decide how much effort to put without observing the sharing rules of the other groups it is shown that endogenous determination of group sharing rules completely eliminates the group size paradox i e a larger group always attains a higher winning probability than a smaller group unless the prize is purely private in addition an interesting pattern of equilibrium group sharing rules is revealed the group attaining the lower winning probability is the one choosing the rule giving higher incentives to the members

overbidding and overspreading in rent seeking experiments cost structure and prize allocation rules we study experimentally the effects of cost structure and prize allocation rules on the performance of rent seeking contests most previous studies use a lottery prize rule and linear cost and find both overbidding relative to the nash equilibrium prediction and significant variation of efforts which we term overspreading we investigate the effects of allocating the prize by a lottery versus sharing it proportionally and of convex versus linear costs of effort while holding fixed the nash equilibrium prediction for effort we find the share rule results in average effort closer to the nash prediction and lower variation of effort combining the share rule with a convex cost function further enhances these results we can explain a significant amount of non equilibrium behavior by features of the experimental design these results contribute towards design guidelines for contests based on behavioral principles that take into account implementation features of a contest

a theory of exit in duopoly we develop a duopoly model in which exit occurs because of the existence of fixed costs or opportunity costs each firm enters the market knowing its own cost but not that of its opponent as times goes on each firm becomes increasingly pessimistic about the cost of its remaining rival the time of exit is the only strategic variable so that our model is a war of attrition in contrast to the classic war of attrition however we assume that with positive probability each firm s costs may be low enough that staying in forever is a dominant strategy thus our model unlike the classic one has a unique equilibrium

the strategic marshallian cross we prove existence and uniqueness of non autarkic equilibria in bilateral oligopoly assuming only that preferences are binormal and satisfy a weakened version of gross substitutes we permit complete heterogeneity of preferences and our analysis exploits the fact that payoffs depend only on own strategy and two universal aggregates this allows us to define strategic versions of supply and demand curves such that non autarkic nash equilibria are in 1 1 correspondence with intersections of these curves the same approach can be used to establish comparative statics under the assumptions above as examples we focus on adding players and changing endowments this competitive approach also allows us to conclude that much of conventional marshallian analysis is robust to strategic manipulation strategic marshallian cross strategic manipulation imperfect competition

mixed oligopoly cost reducing research and development and privatisation abstract we develop a mixed oligopoly model to examine the role of r d subsidies and evaluate the welfare effects of privatisation in solving the oligopoly model we propose a novel use of aggregative games techniques our analysis reveals that privatisation reduces the optimal r d subsidy furthermore privatisation improves social welfare but only when the number of firms is sufficiently large implementing solely a subsidy to r d does not lead to a privatisation neutrality theorem or irrelevance result

sticky prices new evidence from retail catalogs this paper presents new results on the size frequency and synchronization of price changes for twelve selected retail goods over the past 35 years three basic facts about the data are uncovered first nominal prices are typically fixed for more than one year although the time between changes is very irregular second prices change more often during periods of high overall inflation third when prices do change the sizes of the changes are widely dispersed both large and small changes occur for the same item and the sizes of these changes do not closely depend on overall inflation

risk lovers and the rent over investment puzzle in this paper we prove existence and uniqueness of equilibrium in a rent seeking contest given a class of heterogeneous risk loving players we explore the role third order risk attitude plays in equilibrium and find that imprudence is sufficient for risk lovers to increase rent seeking investment above the risk neutral outcome moreover we show that rent can be fully dissipated in a standard tullock contest played by a large number of risk lovers

rent seeking incentives in share contests abstract this article investigates share contests in our framework we allow contestants to have more general preferences than have been used in the literature previous approaches have the unfortunate characteristic that contestants marginal rates of substitution between the rent share allocated by the contest and their effort is constant regardless of the size of the rent share this results in a conventional wisdom larger rents command more effort by providing a more general framework we show the reverse may also be true and we derive the conditions under which this is the case our approach then allows us to rationalize within a standard contest framework observations that rents might be more hotly contested when they become scarcer as has evidently been the case with the recent global contraction of public funds available for public policy

the real thing nominal price rigidity of the nickel coke 1886 1959 we report that the price of a 6 5 oz coca cola was 5c from 1886 until 1959 thus we are documenting a nominal price rigidity that lasted more than 70 years the case of coca cola is particularly interesting because during the 70 year period there were substantial changes in the soft drink industry as well as two world wars the great depression and numerous regulatory interventions and lawsuits which led to substantial changes in the coca cola market conditions the nickel price of coke nevertheless remained unchanged we find that this unusual rigidity is best explained by 1 a contract between the company and its parent bottlers that encouraged retail price maintenance 2 a single coin vending machine technology which limited the company s price adjustment options due to limited availability and unreliability of the existing flexible price adjustment technologies and 3 a single coin monetary transaction technology which limited the company s price adjustment options due to the customer inconvenience cost we show that these price adjustment costs are of a different nature than the standard menu cost and their estimates exceed the existing estimates by an order of magnitude a possible broader relevance of the nickel coke phenomenon is discussed in the context of nickel and dime stores which were popular in the us in the late 1800s and the early 1900s

interior matching equilibria in a public good economy an aggregative game approach abstract if the equilibrium generated by a matching mechanism is to be the desired pareto optimal outcome it is necessary for every player to be at an interior solution at that equilibrium using the aggregative game approach developed by cornes and hartley 2003 2007 this paper analyzes the conditions under which matching mechanisms in a public good economy lead to interior matching equilibria at which all agents make strictly positive flat contributions to the public good in particular we show that the distribution of income among the agents is crucial for both the existence of interior matching equilibria and warr neutrality in the case of matching

the consequences of price instability on search markets toward understanding the effects of inflation real price variability depreciates the information about future prices contained in current ones repeat purchase customers have then less incentive to acquire price information the fact that consumers are less well informed allows firms to increase their markups and permits inefficient producers to increase their sales production gets reallocated toward higher cost firms given the well documented correlation between inflation and relative price variability these results help explain some of the costs of inflation copyright 1994 by american economic association

the magnitude of menu costs direct evidence from large u s supermarket chains we use store level data to document the exact process of changing prices and to directly measure menu costs at five multistore supermarket chains we show that changing prices in these establishments is a complex process requiring dozens of steps and a nontrivial amount of resources the menu costs average 105 887 year per store comprising 0 70 percent of revenues 35 2 percent of net margins and 0 52 price change these menu costs may be forming a barrier to price changes specifically 1 a supermarket chain facing higher menu costs due to item pricing laws that require a separate price tag on each item changes prices two and one half times less frequently than the other four chains 2 within this chain the prices of products exempt from the law are changed over three times more frequently than the products subject to the law in principle fixed costs of changing prices can be observed and measured in practice such costs take disparate forms in different firms and we have no data on their magnitude so the theory can be tested at best indirectly at worst not at all alan blinder 1991 p 90

price adjustment costs and the output inflation trade off when prices are costly to adjust there is a trade off between the rate of inflation and the firm s average level of output this trade off is the result of fully optimizing behaviour by the firm sufficient conditions are developed for inflation to have no effect on output however these conditions are unlikely to be met in practice this suggests that the superneutrality of money hypothesis is incompatible with the type of demand and cost curves normally encountered in economic theory if the discount rate is positive moderate rates of inflation will always lead to higher levels of output

the uniqueness of pure strategy nash equilibrium in rent seeking games with risk averse players this article proves that if each player s measure of absolute risk aversion is nonincreasing in his her wealth then there exists a unique pure strategy nash equilibrium in the general rent seeking game where risk averse players can coexist with risk neutral players attitude toward risk can differ among players and concave production functions for lotteries are not necessarily the same among players

risk averse rent seekers and the social cost of monopoly power there is now quite general recognition that the social cost of monopoly power encompasses the resources expended by individuals seeking to become the beneficiaries of monopoly rents however since the activity of rent seeking is generally not observable direct estimates of resources expended in quests to acquire monopoly power are usually impossible to come by 1 as a consequence the indirect approach of taking the observed value of monopoly rents as indicative of the unobserved value of the resources expended in rent seeking is quite generally adopted in approaches to evaluation of the social cost of such activity

two aggregate games demonstration using a production appropriation model we expand the scope of the two aggregate method by applying it to a situation where many heterogeneous players are free to contribute to both aggregates such situations naturally arise in various resource allocation problems hence our method is useful in many applications a production appropriation model is employed to illustrate how the problem of establishing the nash equilibrium can be reduced from solving n 2 best response functions in n unknowns to solving two consistency conditions in two unknowns we then conduct a comparative static exercise that the conventional approach could not handle easily if at all to demonstrate the power of our method this article is protected by copyright all rights reserved

inflation and efficiency in a search economy we present a model in which purely monetary inflation systematically affects efficiency welfare and relative prices the model focuses on the microeconomics of trade in search markets under inflation inflation by increasing the cost of holding money undermines the market s ability to sustain long term customer relationships because those relationships generate the most efficient transactions patterns overall welfare unambiguously declines

search price setting and inflation a model of monopolistic competition in an inflationary environment is developed which embodies optimal sequential search price dynamics and entry on the part of consumers and firms respectively equilibrium price strategies are s s these bounds increase continuously with consumer search costs and so does price dispersion indeed the whole equilibrium varies smoothly from the competitive bertrand to the monopolistic diamond 1971 end of the spectrum the latter s paradoxical result is explained as a limiting case where frictions on firms side of the market price adjustment costs but not on buyers search costs tend to zero a positive relationship between smooth and perfectly anticipated inflation and price dispersion or uncertainty is established

contests with an unknown number of contestants this paper studies rent seeking contests where the contestants do not know the number of actively competing contestants two models are compared in the first all players are risk neutral in the second all have constant absolute risk aversion if the expected fraction of active contestants is low an increase in the number of potential contestants increases individual rent seeking efforts this effect is in contrast to the complete information case where individual rent seeking efforts decrease in the number of contestants the effect is more likely under risk neutrality but also possible under risk aversion equilibrium rent seeking efforts are lower under risk aversion if and only if the expected fraction of active contestants is low

fully aggregative games abstract a game is fully aggregative if payoffs and marginal payoffs depend only on a player s own strategy and a function of the strategy profile which is common to all players we characterize the form which this function must take in such a game and show that the game will be strategically equivalent to another game in which the function is the simple sum of strategies

risk aversion heterogeneity and contests we introduce a novel method of modellingcontests that avoids the complexitiesencountered by the best response function approach we analyse contests in which i there are many risk averse players ii attitudes to risk may differ acrossindividuals and iii the technology thattransforms rent seeking effort intoprobability of winning may also differacross individuals we establish that ifevery player has a constant degree ofabsolute risk aversion a uniqueequilibrium exists we also establishcomparative static results and examine howthe level of rent dissipation is affectedby the heterogeneity of attitudes towardsrisk and the precise nature of the technology

sectoral systems of innovation and production the concept sectoral system of innovation and production provides a multidimensional integrated and dynamic view of sectors it is proposed that a sectoral system is a set of products and the set of agents carrying out market and non market interactions for the creation production and sale of those products a sectoral systems has a specific knowledge base technologies inputs and demand agents are individuals and organizations at various levels of aggregation they interact through processes of communication exchange co operation competition and command and these interactions are shaped by institutions a sectoral system undergoes change and transformation through the co evolution of its various elements 2002 elsevier science b v all rights reserved

inflation and efficiency in search markets this paper examines how inflation affects efficiency and output in monopolistically competitive search markets it formalizes the conventional wisdom linking higher inflation price dispersion and increased resources devoted to search it also brings to light the induced exit of arms which reduces rent dissipation but the most important effect of inflation is how it alters the distribution of real transactions prices whether this reduces or promotes efficiency and output is shown to depend critically on preferences and market structure and especially on whether search costs are large or small relative to consumer surplus

on inflation and output with costly price changes a simple unifying result we analyze the effect of inflation on the average output of monopolistic firms facing a small fixed cost of changing nominal prices using taylor expansions we derive a general closed form solution for the slope of the long run phillips curve this very simple unifying formula allows us to evaluate and clarify the role of three key factors the asymmetry of the profit function the convexity of the demand function and the discount rate these partial equilibrium effects remain important components of any general equilibrium model with s s pricing this abstract was borrowed from another version of this item

risk aversion in rent seeking and rent augmenting games the effects of risk aversion are examined for two types of expenditures in rent seeking contests a rent seeking expenditures which improve the probability that the rent is obtained and b rent augmenting expenditures which increase the size of the rent to be awarded risk aversion is shown to reduce expenditures of type b unambiguously while having an indeterminate effect on those of type a these two contrasting results are shown to derive from the very different effects rent seeking and rent augmenting expenditures have on the riskiness of a player s position

prices inflation and smoking onset the case of argentina this article examines the effect of tobacco prices on the decision to start smoking in argentina argentina is an interesting case to explore given its high smoking rates its recent experience with periods of very high and hyperinflation and the mixed evidence of the effect of prices on smoking onset particularly in low and middle income countries we used data from four cycles of two large national surveys conducted between 2005 and 2011 and discrete time hazard models we found that tobacco prices had a statistically significant and fairly large impact on the hazard of smoking onset and these findings were robust to alternative specifications we also found that prices had little effect on the hazards of smoking onset during periods of hyper and very high inflation which provide some support for the notion that prices lose their informational role in such periods governments need to be cognizant that their most important policy tool to reduce tobacco use taxes that increase real tobacco prices is likely no longer effective during these times jel c41 h20 i12 i18

price points and price rigidity abstract we study the link between price points and price rigidity using two data sets weekly scanner data and internet data we find that 9 is the most frequent ending for the penny dime dollar and ten dollar digits the most common price changes are those that keep the price endings at 9 9 ending prices are less likely to change than non 9 ending prices and the average size of price change is larger for 9 ending than non 9 ending prices we conclude that 9 ending contributes to price rigidity from penny to dollar digits and across a wide range of product categories retail formats and retailers

learning and catching up in different sectoral systems evidence from six industries this article claims that catching up is a learning process that requires a long time and often differs significantly across economic sectors in the factors leading to success or failure we support these claims by examining the major factors affecting catching up by several countries in six industries india and brazil for pharmaceuticals korea china and brazil for autos india ireland israel china brazil and other countries for software korea and india for telecommunication equipment korea taiwan china and malaysia for semiconductors and china brazil costa rica and nigeria for some agricultural crops the article uses the framework of sectoral systems and argues that there are significant differences across these sectors in the variables and mechanisms involved in catching up the article identifies the common factors affecting catching up and the main differences across sectoral systems it then discusses the interplay between national systems and sectoral systems copyright 2011 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

potentially harmful international cooperation on global public good provision recent international climate negotiations suggest that complete agreements are unlikely to materialize instead partial cooperation between like minded countries appears a more likely outcome in this paper we analyze the effects of such partial cooperation between like minded countries in doing so we link the literature on partial cooperation with so called matching approaches matching schemes are regarded as providing a promising approach to overcome undersupply of public goods like climate protection the functioning of matching mechanisms in a setting with an incomplete agreement i e a contract where only a subset of the players participates has however not been investigated yet this paper fills this research gap by analyzing incomplete matching agreements in the context of international climate protection we analyse their effect on both welfare and the global climate protection level we show that matching coalitions may bring about a decline in global public good provision and a reduction in the welfare of outsiders

search with learning from prices does increased inflationary uncertainty lead to higher markups aggregate cost uncertainty arising from real shocks or unanticipated inflation reduces the informativeness of prices by scrambling relative and aggregate variations but when agents can acquire additional information such increased noise may in fact lead them to become better informed and price competition will intensify we examine these issues in a model of search with learning where consumers search optimally from an unknown price distribution while firms price optimally given consumers search rules we show that the decisive factor in whether inflation variability increases or reduces the incentive to search and thereby market efficiency is the size of informational costs