public employment and the welfare state in sweden this is a nontechnical summary of a much longer study which will appear with the same title in richard freeman birgitta swedenborg and robert topel eds forthcoming i am especially indebted to henry ohlsson and birgitta swedenborg and to stan engerman vic fuchs assar lindbeck stephen lundgren and agnar sandmo for comments on initial drafts i alone am responsible for the views expressed here

return migration uncertainty and precautionary savings this paper presents a life cycle model where migrants determine re migration and consumption simultaneously in a stochastic environment whether precautionary savings of migrants are above or below those of natives is ambiguous in general the sign depends on the risk in host and home country labor markets and on the correlation of labor market shocks furthermore the effect of an uncertain environment on migration and re migration plans cannot be unambiguously signed for the general case it depends on the size of the wage differential as well as the relative risk the migrant exhibits in the two labor markets

the gender gap fertility and growth changes in fertility have long been recognized as important correlates of economic growth with the relationship between the level of fertility and the level of income per capita being one of the strongest observable correlations in cross country data this paper examines the linkages between fertility and growth theory the structure of the model is presented in sections on production couples decision making system dynamics and steady state equilibria the first component of the model is that increases in capital per worker raise womens relative wages since capital is more complementary to womens labor input than to mens the second component is that increasing womens relative wages reduces fertility by raising the cost of children more than household income finally lower fertility raises the level of capital per worker a positive feedback loop generates demographic transition a rapid decline in fertility accompanied by accelerated output growth

durable goods theory for real world markets the early 1970s witnessed three major advances in durable goods theory swan 1970 1971 and sieper and swan 1973 on optimal durability coase 1972 on time inconsistency and akerlof 1970 on adverse selection this paper surveys durable goods theory starting with these three contributions where much of the focus is on recent literature and on models that explain real world phenomena in addition to the ideas found in the contributions of swan coase and akerlof topics covered include why producers sometimes practice planned obsolescence the role of adverse selection in new car leasing and reasons for aftermarket monopolization

innovation and the durable goods monopolist the optimality of frequent new version releases when an improvable durable good such as packaged software saturates the market the seller could be tempted to release new versions too frequently hurting her profit a novel contractual device which i term as a free new version rights warranty free nvr warranty can help the seller overcome this temptation in a two period game theoretic model involving a monopolist firm facing heterogeneous consumers i derive conditions under which a rational monopolist can act suboptimally she could face a commitment problem and offer the new version even if doing so lowers her overall profit profit is hurt because when consumers expect a new version a fewer consumers buy the initial version and b the monopolist is forced to charge a lower price for the initial version i show how the free nvr warranty which requires the monopolist to offer consumers the right to receive the new version for free for a limited period can solve her commitment problem this is a new surprising finding by bundling new version rights with the initial version the monopolist at first appears to be denying herself future revenue i derive conditions under which this apparently unprofitable action is optimal which is my main contribution when free nvr is offered consumer surplus decreases and social surplus increases this work extends prior literature on durable goods and the coase conjecture to innovative durable goods with network externalities the findings have important practical implications for firms selling new versions of innovative durable goods subject to network effects as well as for their consumers

dynamic pricing in the presence of social learning and strategic consumers when a product of uncertain quality is first introduced consumers may choose to strategically delay their purchasing decisions in anticipation of the product reviews of their peers this paper investigates how the presence of social learning affects the strategic interaction between a dynamic pricing monopolist and a forward looking consumer population within a simple two period model our analysis yields three main insights first we find that the presence of social learning has significant structural implications for optimal pricing policies in the absence of social learning decreasing price plans are always preferred by the firm by contrast in the presence of social learning we find that i if the firm commits to a price path ex ante preannounced pricing an increasing price plan is typically announced whereas ii if the firm adjusts price dynamically responsive pricing prices are initially low and may either rise or decline over time second we establish that under both preannounced an

the economics of forced migration abstract this article reviews the economics literature on the impacts of forced migration the literature is divided into two parts impacts on forced migrants and impacts on host communities studies exploring the impact of forced migration due to wwii suggest that the long term impact is often positive the literature for developing countries suggests that there are serious consequences of forced migration for those forced to migrate these consequences range from worse labour market outcomes to less consumption smoothing the impact on host communities seems to be mixed and there are winners and losers the article provides suggestions for future research

does the per se rule deter vertical price fixing i introduction beginning with the wide scale introduction of branded goods in the late nineteenth century manufacturers have often tried to dictate minimum resale prices to the retail outlets carrying their products and since roughly the same time antitrust experts have debated why they would do so 1 less attention has focused on what manufacturers do when they can not impose minimum prices even though legal obstacles have forced them to look for alternatives so what do manufacturers do when they cannot legally set the prices their outlets charge 2 many antitrust officials believe they go right on setting prices either flaunting the law or finding some means to circumvent it barrett 1991 quotes former new york state antitrust chief lloyd constantine as saying that the practice is ubiquitous but based upon winks and nods rather than written agreements that could be used in court new york attorney general robert abrams 1991 argues that vertical price fixing is endemic claiming that antitrust officers can recount scores of tales of retailers calling our offices too scared to give their names telling of coercion and intimidation by manufacturers representatives and rival dealers because their prices were too low former ftc commissioner terry calvani argues that a manufacturer practicing resale price maintenance would have to have an i q two points lower than a carrot to get caught 3 the prospects for wink and nod resale price maintenance are not hard to appreciate for example suppose a manufacturer wants to impose a 500 sanction on any discount outlet if it cannot do so overtly it may instead impose a lump sum charge of 500 on all outlets and ex post reward non discount outlets with a 500 rebate given this scheme s transparency courts legislators and antitrust officials should not be fooled yet the rebates could be indirect and discreet they could be spread over several periods and parceled out in small quantities as compensation for point of sale services to defray overhead to pay for advertising or training and so forth hence it may be hard for outsiders to prove a link between what the manufacturer pays each retailer and that retailer s price moreover in some instances antitrust officials may want an excuse to loosen the legal restrictions on resale price maintenance and may themselves wink and nod at these practices finally antitrust officials cannot always and perhaps not often distinguish legitimate cost sharing arrangements from maneuvers to influence resale prices as such they must proceed carefully manufacturers can employ two other legal means to fix resale prices first manufacturers can coordinate retailers meet the competition guarantees antitrust experts have long believed that on occasion retailers can independently offer meet the competition guarantees to their customers to discourage price competition 4 here a manufacturer coordinates retailers efforts by financing some or all of the meet the competition related rebates they make so in equilibrium all retailers adopt the suggested price while previous models of meet the competition guarantees focus on tacit horizontal price fixing this paper examines explicit vertical price fixing second the manufacturer can persuade retailers to charge its suggested price by guaranteeing the margins of those victimized by price cutting rivals in equilibrium no outlet wants to cut price first so discounting does not occur at all manufacturers have various other means to influence their dealers resale prices in addition to such well known instruments as consignment sales and exclusive territories manufacturers can agree to buy back dealers unsold inventories or parcel out merchandise only as demand for it materializes they can also use devices such as markdown allowances to influence when and by how much dealers discount if demand turns out low presumably this list does not exhaust the possibilities for innovative manufacturers seeking to subsidize dealers that cooperate and to discriminate against those that do not

women prefer larger governments female labor supply and public spending the increase in income per capita is accompanied in virtually all countries by two changes in the structure of the economy an increase in the share of government spending in gdp and an increase in female labor force participation this paper suggests that these two changes are not just overlapping in time they are causally related this paper develops a growth model with endogenous fertility labor force participation and government size that illustrates this causal link economic development is accompanied by an increase in the female market wage thus increasing the opportunity cost of staying at home if government spending decreases the time cost of performing household chores including but not limited to child rearing and child care it makes sense for women to enter the labor market and demand higher government spending financed by increased taxation as women make the decision to work outside the home they increase their demand for services typically provided by the government such as education and health care which in turn decrease the cost of home and family activities that are overwhelmingly performed by women using a wide cross section of data for developed and developing countries we show that higher rates of female participation in the labor market are indeed positively associated with larger governments furthermore we investigate the causal link between the two variables using as instrumental variables for female labor force participation newly collected data on the relative price of home appliances as well as the fertility rate we find evidence of a causal link between female labor force participation and government size a 10 percent rise in female participation in the labor market leads to a 7 to 8 percent rise in government size this effect is robust to the country sample time period and a set of controls in the spirit of rodrik 1998

most favored customer protection versus price discrimination over time how should a seller price capacity that has no salvage value to heterogeneous customers whose valuations are private information there are two periods and the seller cannot precommit to prices in the later period one option is price discrimination first price high then discount later if excess capacity remains by offering most favored customer protection the seller can charge more in advance but will leave capacity unsold with positive probability she favors the mfc protection when capacity is large and leans toward price discrimination when customers are more uncertain about the degree of excess demand in the first period

agricultural production amid conflict separating the effects of conflict into shocks and uncertainty abstract this paper examines the effect of conflict on agricultural production of small farmers first an inter temporal model of agricultural production is developed in which the impact of conflict is transmitted through violent shocks and uncertainty brought about by conflict we test the model using a unique household survey applied to 4800 households in four micro regions of colombia our findings suggest households learn to live amid conflict albeit at a lower income trajectory when presence of non state armed actors prolongs farmers shift to activities with short term yields and lower profitability from activities that require high investments if violence intensifies in regions with presence of non state armed actors farmers concentrate on subsistence activities

why would a durable good monopolist also produce a cost inefficient nondurable good abstract we develop both commitment and time consistent stationary policies for a monopolist who produces a mixture of goods distinguished by production costs and degree of durability under commitment only the cost efficient durable good is produced and the monopoly output is realized each period for the time consistent stationary case there is an interval for the degree of durability where only the durable good is produced and a higher non overlapping interval where both the cost efficient durable and the cost inefficient nondurable good are produced for any period length when the degree of durability is such that both durable and nondurable goods are provided combined output is less than the competitive output and decreases in the degree of durability approaching the single period monopoly output when both goods are produced the coase conjecture does not hold

no lease is short enough to solve the time inconsistency problem the author provides a model of endogenous lease duration determination in the context of the durable goods monopolist problem he shows that infinitely many leases per finite unit of time are required to solve completely the time inconsistency problem thus suggesting that leasing may not provide a practical solution the author also provides a warning regarding the results that can be derived by exogenously setting lease durations equal to one period by resolving a paradoxical result in the literature copyright 1994 by blackwell publishing ltd

the effect of the expansion of the voting franchise on the size of government this paper examines the claim that expansion of the voting franchise has been an important factor in the growth of government state government spending and state and local spending are explained using a panel of 46 states for 1950 88 elimination of poll taxes and literacy tests led to higher turnout particularly among the poor and a poorer pivotal voter as predicted we find that these changes a fall in the income of voters relative to state income and the ouster of republicans from state government led to a sharp rise in welfare spending but no change in other spending

the intertemporal consequences of unauthorized reproduction of intellectual property in an intertemporal framework the harm to firms from unauthorized reproduction of their products may be significantly greater than that predicted by most static models copying by some consumers reduces the appropriable surplus from all consumers including those consumers lacking any propensity to copy somewhat paradoxically however the commitment value of copies may also imply that profits are higher with copying than without copying it is therefore suggested that firms may prefer differential copyright enforcement and that the commitment value of copies may offer a strategic explanation for free giveaways of abridged versions of intellectual property and vertical product differentiation more generally

optimal best price policy abstract a best price policy bp is a promise by a seller to give her customer a refund if she reduces her price after the customer has already purchased the product we characterize the optimal bp policy as when the seller can control both the policy length when the promise expires and the refund scale what portion of the price difference is refunded we explain why the policy length is finite and varies across industries in a setting where consumers valuations decline over time we show that a finite length bp allows the seller to commit to not lowering her price too soon while at the same time letting her capture some of the benefits of intertemporal price discrimination however because the decline in consumers valuations is uncertain a bp does not allow the monopolist to achieve the profit she could earn with a full commitment

the baby boom and baby bust what caused the baby boom and can it be explained within the context of the secular decline in fertility that has occurred over the last 200 years the hypothesis is that a the secular decline in fertility is due to the relentless rise in real wages that increased the opportunity cost of having children b the baby boom is explained by an atypical burst of technological progress in the household sector that occurred in the middle of the last century this lowered the cost of having children a model is developed in an attempt to account quantitatively for both the baby boom and bust

emissions taxation in durable goods oligopoly this paper examines the use of taxation to control external damage due to pollution when product durability is endogenously determined a special form of the emissions function is also examined which is equivalent to an excise tax on output the dynamic oligopoly model indicates that many conventional results in the durability and taxation literature need not hold when durability is endogenously determined in particular the analysis shows durability may not be independent of industry structure nor will firms minimize their manufacturing costs of providing service in addition the second best tax on imperfectly competitive firms is not necessarily less than the tax on a competitive firm when firms choose their product s durability

learning by doing and product durability many durable goods industries are industries that have significant learning affects i examine a monopolist s and social planner s cost minimizing durability choice in both the short and the long run when learning effects are present the model indicates that the relationship between durability and learning depends crucially upon whether or not knowledge decays and on learning s impact on the marginal cost of durability in particular this model demonstrates that swan s 1970 1971 independence result will hold in the long run if knowledge does not decay but will not hold if knowledge does decay thus whether or not monopolists will manufacture products with the same durability or quality as a social planner depends to a large extent on the type of learning process in the industry and on whether or not quality and durability directly influence this learning process

durable good monopoly and best price provisions best price provisions guarantee buyers that the prices they pay are the lowest available if the seller subsequently cuts price then each previous buyer is entitled to a refund a durable good monopolist who offers certain forms of these provisions can construct a consistent plan yielding the same profits as rental agreements and contracts with explicit quantity commitments the provisions require special circumstances to be practical but they are simple and effective and appear in a variety of economic settings three applications are discussed international commodity agreements markets for electric turbogenerators and markets for financial claims copyright 1990 by american economic association

price guarantee for advance selling in the presence of preorder dependent social learning abstract in this paper we study the price guarantee policies of a seller practicing the advance selling strategy in the presence of preorder dependent social learning there are two types of consumers in the market in the advance selling period the high type consumers arrive and make the preorder decision based on their valuation of the product in the regular selling period the low type consumers arrive and make the purchase decision based on their valuation which is a result of the preorder dependent social learning with a price guarantee policy the preorder consumers are compensated fully or partially for the difference between the advance selling price and the regular selling price we model the seller and two types of consumers sequential decision game within the framework of rational expectation we investigate two price guarantee policies 1 the full price refund policy in which the refund always covers the full price difference and 2 the constant refund policy in which the refund is a fixed constant we show that while the advance selling model with constant refund policy is always better or at least not worse than the base model without price guarantee the model with full price refund policy is better than the base model if and only if the high type consumers valuation exceeds a threshold we find that the dominance relationship between the full price refund policy and the constant refund policy is determined by the segment size of the high type consumers and their valuation of the product through numerical study we find that such dominance relationship also depends on the high type consumers belief of the rational risk our findings provide important managerial insights for managers in the practice of advance selling

adjusting the labor supply to mitigate violent shocks evidence from rural colombia this paper studies the use of labor markets to mitigate the impact of violent shocks on households in rural areas in colombia it examines changes in the labor supply from on farm to off farm labor as a means of coping with the violent shock and the ensuing redistribution of time within households it identifies the heterogeneous response by gender because the incidence of violent shocks is not exogenous the analysis uses instrumental variables that capture several dimensions of the cost of exercising terror as a response to the violent shocks households decrease the time spent on on farm work and increase their supply of labor to off farm activities non agricultural ones men carry the bulk of the adjustment in the use of time inasmuch as they supply the most hours to off farm non agricultural work and formal labor markets labor markets do not fully absorb the additional labor supply women in particular are unable to find jobs in formal labor markets and men have increased time dedicated to leisure and household chores additional off farm supply does not fully cover the decrease in consumption the results suggest that in rural colombia labor markets are a limited alternative for coping with violent shocks thus policies in conflict affected countries should go beyond short term relief and aim at preventing labor markets from collapsing and at supporting the recovery of agricultural production

leasing lemons and moral hazard abstract a number of recent papers have analyzed leasing in the new car market as a response to the adverse selection problem in the used car market originally explored in the seminal 1970 paper by george akerlof in this paper we consider a model characterized by both adverse selection as in these earlier papers and moral hazard concerning the maintenance choices of new car drivers we show that this approach provides explanations for a number of empirical findings concerning real world new and used car markets including that leasing has become more popular over time very high income new car drivers lease more and used cars that were leased when new sell for more than used cars that were purchased when new we also compare and contrast our approach to new car leasing with alternative approaches

durability choice under demand uncertainty this paper examines the impact of demand uncertainty on a monopolist s durability choice within a simple two period framework the analysis shows that the firm will produce the socially optimal durability if its output is rented and demand uncertainty is small but that it may produce units with inefficiently short life spans if output is sold however the model reveals that this planned obsolescence may be reduced from certainty levels depending upon the impact of uncertainty on future demand thus uncertainty may actually increase the firm s product durability relative to certainty levels

competitive price matching guarantees equilibrium analysis of the availability verification clause under demand uncertainty price matching guarantees involve a retailer matching the lower price of a competitor for an identical product in reality retailers often make such guarantees contingent on the verification of product availability at the competitor s location and decline a price match request if the product is not available there this creates certain consternation on the part of customers in this paper we investigate the availability contingency strategy from the perspectives of both the retailers and the customers our analysis shows that availability contingency clauses intensify inventory competition between retailers and reinstitutes price competition which is otherwise eliminated by unconditional price matching guarantees consequently despite what customers may think about the availability verification it actually increases their surplus on the other hand such a clause reduces profits and hence is not the equilibrium strategy for retailers subsequently we discuss how a likely customer behaviour pattern may be a plausible explanation regarding the use of the clause by the retailers in practice this paper was accepted by yossi aviv operations management

dynamic monopoly with nondurable goods abstract a nondurable good monopolist who posts a single price will generally achieve an inefficient outcome but is it possible that the monopolist would achieve efficiency by repeatedly posting prices before delivery if buyers recognize the effect of current purchases on future prices then under complementary ideal conditions the answer is yes on the other hand traditional concerns about monopoly are viable if the seller bears a small cost per buyer of market reopening journal of economic literature classification numbers d42 l12

strategic waiting for consumer generated quality information dynamic pricing of new experience goods in this paper we study the impact of consumer generated quality information e g consumer reviews on a firm s dynamic pricing strategy in the presence of strategic consumers such information is useful not only to the consumers that have not yet purchased the product but also to the firm the informativeness of the consumer generated quality information depends however on the volume of consumers who share their opinions and thus depends on the initial sales volume hence via its initial price the firm not only influences its revenue but also controls the quality information flow over time the firm may either enhance or dampen the quality information flow via increasing or decreasing initial sales the corresponding pricing strategy to steer the quality information flow is not always intuitive compared to the case without consumer generated quality information the firm may reduce the initial sales and lower the initial price interestingly the firm may get strictly worse off due to the consu

durable goods monopoly with limited choice of commitment strategy when should the monopolist precommit consider a firm a monopolist offering a unique product to a fixed number of potential customers suppose that no consumer desires more than one unit of the good within a given period or across periods that is there is no value to repeat purchases in addition suppose that customers vary with respect to their initial reservation prices which decline over time a natural interpretation is that the monopolist is selling a good that is durable alternatively the firm is providing an entertainment or fashion good consumers may place a premium on obtaining the product quickly before it becomes less useful less stylish or less novel coase 7 conjectured that this firm s ability to extract surplus is limited because the firm has to compete with itself across time periods high valuation customers would be unwilling to pay a high initial price because they would anticipate that over time the firm will be reducing the price in order to sell to lower valuation customers subsequent literature formalizes this as a time inconsistency problem faced by a monopolist unable to make intertemporal commitments a separate strand of the literature proceeds from the polar assumption that the monopolist can precommit to any multiperiod pricing strategy comparison to coase s monopolist is simple higher profits are obtainable under precommitment because more surplus is extracted from high valuation customers an important proposition due to stokey 22 is that it will be optimal for the monopolist to precommit to a declining intertemporal price schedule if consumers with higher initial valuations have a higher rate of time preference 2 otherwise the optimal strategy is to hold price constant at the static monopoly level and to sell no more than the static monopoly quantity 3

the new economics of labor migration this paper reviews selected theoretical and empirical developments in the field of labor migration economics the migration behavior of individuals differs in accordance with their perceived relative deprivation those who are relatively more deprived tend to have stronger incentive to migrate than those who are relatively less deprived moreover a reference group characterized by more income inequality is likely to generate more relative deprivation highly skilled workers are also more likely to migrate migration decisions are often made jointly by the migrant and nonmigrant with a contractual arrangement regarding the sharing of costs and returns the exchange of commitments to share income provides coinsurance of particular interest are the determinants of the speed of adoption of migration as an innovation and the characteristics associated with the delay in the adoption of innovation new econometric techniques including techniques for the analysis of qualitative dependent variables techniques that correct for sample selection bias and those for the analysis of longitudinal data have substantially benefited empirical research in this area new methods that can correct for the biased estimate of the wages particular individuals would receive at 2 or more locations at the same point in time allow researchers to test locational decsion making models estimates of these structural models of labor migration support the hypothesis that individuals respond to income incentives in making the decsion to migrate further research is needed on the pazzling observation that migrant workers earn less than native born workers with similar characteristics during the 1st few years after migration but more thereafter other topics that need further research include the macroeconomic effects of migration the microeconomic and macroeconomic relationships between aging and labor migration and the migration behavior of dual earner families

market diffusion with two sided learning we analyze the diffusion of a new product of uncertain value in a duopolistic market both sides of the market buyers and sellers learn the true value of the new product from experiments with it buyers have heterogeneous preferences over the products and sellers compete in prices the pricing policies and market shares in the unique markov perfect equilibrium are obtained explicitly the dynamics of the equilibrium market shares display excessive sales of the new product relative to the social optimum in early stages and too low sales later on the diffusion path of a successful product is s shaped

what do facilitating practices facilitate an empirical investigation of most favored nation clauses in natural gas contracts long term contracts often include most favored nation clauses mfns which are nondiscrimination guarantees that obligate a buyer or seller to treat all trading partners symmetrically in pricing decisions recent theoretical work has shown that such clauses can facilitate tacit collusion by increasing the cost of selective price changes aimed at attracting new business an alternative view is that mfns serve to facilitate efficient price adjustment in extended exchange relationships we test these competing hypotheses using data from long term natural gas contracts many of which employ mfns our conclusion is that the pattern of mfn adoption in conjunction with the structure of the nondiscrimination regions and the parallels with other nonstrategic price escalation provisions lends strong support to the efficiency rationale

on migration and risk in ldcs the authors develop the hypothesis that aversion to risk rather than expectations of higher income is the primary motivation for rural urban migration in developing countries this hypothesis maintains that an optimizing risk averse small farmer family will try to place a family member in the urban sector in order to diversify its income portfolio an additional hypothesis related to risk is also considered at the individual rather than the family level annotation

multi period pricing in the presence of competition and social influence abstract this paper examines single and dynamic pricing policies of two competing firms over two periods in the presence of social influence assuming two firms adopt the same pricing policy we find that under either pricing policy firm profits always decrease with the degree of social influence firms prefer dynamic pricing policy when social influence is either relatively weak or sufficiently strong for firms under dynamic pricing policy to set zero prices in the first period otherwise single pricing policy is more preferable the conclusions are similar when the market size varies over periods except that dynamic pricing policy is always more profitable if the market size in period 2 is sufficiently large we have further compared the two pricing policies with posted pricing policy the results show that dynamic pricing policy dominates when social influence is relatively weak while posted pricing policy dominates when social influence is sufficiently strong because of the synergy between social influence and the reference price effect finally when each firm freely chooses either single or dynamic pricing policy we find that if the degree of social influence is relatively small two asymmetric equilibria exist where two firms adopt different pricing policies if the degree of social influence is very large however the unique equilibrium is both firms adopting dynamic pricing policy these findings provide important implications for firms to make more informed pricing decisions in an increasingly competitive environment with strong social influence

bilateral most favored customer pricing and collusion in a two period differentiated products duopoly model most favored customer mfc pricing policies allow firms to commit to prices above the bertrand prices it is shown here however that unless a restrictive and unappealing assumption is made about demand there is no equilibrium in which both firms adopt mfc policies the restrictive assumption is that at least one firm s demand is more responsive to changes in its opponent s price than to changes in its own price otherwise firms have an incentive to deviate from a greater than bertrand price in the first period

the effects of child bearing on married women s labor supply and earnings using twin births as a natural experiment we use exogenous variations in fertility due to twin births to measure the impact of an unplanned child on married women s labor supply and earnings although the overall effects of an unplanned birth on labor supply are small we find significant effects in the years immediately following the unplanned birth especially in 1970 we estimate that declining fertility explains between 6 and 13 percent of the increase in married women s labor supply between 1970 and 1980 twin births are also associated with a substantial short run loss in earnings this effect persists longer than the labor supply effects though it does eventually disappear

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

displacement due to violence in colombia a household level analysis abstract civil wars and ethnic conflicts have resulted in an estimated number of approximately 35 million refugees and internally displaced persons worldwide understanding the determinants of forced migration is an important prerequisite for the definition of appropriate policies of prevention assistance and relocation we develop a conceptual framework for the empirical analysis of displacement decisions at the household level while similarities to conventional migration theories exist there are also important differences implied by the presence of violent conflict for example risk aversion and lack of information may hamper conventional migration but enhance displacement factors such as landholdings and social capital at the place of origin may not only reduce displacement in the conventional sense of raising opportunity costs but may also spur displacement indirectly by increasing the household s likelihood of becoming the victim of direct threats for the case of colombia we conduct an econom

the right of first offer abstract this paper examines the right of first offer which requires a seller to bargain with the contracted buyer before subsequent buyers arrive the contract also prevents the seller from selling his unique asset to subsequent buyers at a price below what he offers to the contracted buyer the right of first offer makes the seller less aggressive in bargaining with the contracted buyer who is privately informed about his valuation such a contract can reduce inter temporal misallocation in which a subsequent buyer gets the asset when the contracted buyer has higher valuation but it also may cause misallocation in which the contracted buyer gets the asset when subsequent buyers have higher valuations overall whether the right of first offer can increase the joint surplus for the seller and the contracted buyer as well as social welfare depends on the contracted buyer s renegotiation power and the distribution of the buyers valuations this paper also discusses the differences between the right of first offer and the most favored customer clause

cumulative causation and selectivity in labour market oriented migration caused by imperfect information maier g 1985 cumulative causation and selectivity in labour market oriented migration caused by imperfect information reg studies 19 231 241 the paper discusses the implications of job search models for migration the information assumption of the standard search model turns out to be too restrictive to permit insights into the migration decision process many hypotheses derived from these assumptions contradict empirical observations dropping the assumption of perfect information about the wage offer distribution leads to a more complex search model in this model information about the wage offer distribution is imperfect and accumulated through the search process when based on this search model the migration model is largely enriched and also more realistic strategies which are suboptimal or even absurd with perfect information about the wage offer distribution such as purchase of information can be preferable in a migration model when imperfect information is assumed although the model p

population technology and growth from malthusian stagnation to the demographic transition and beyond this paper develops a unied growth model that captures the historical evolution of population technology and output it encompasses theendogenous transitionbetween three regimes that have characterized economic development the economy evolves from amalthusianregime wheretechnologicalprogressis slow andpopulationgrowthprevents anysustainedriseinincomepercapita intoapost malthusianregime wheretechnological progress rises and population growth absorbs only part of output growth ultimately a demographic transition reverses the positive relationship between income and population growth andtheeconomyentersamoderngrowthregimewithreducedpopulationgrowth

durable goods monopoly increasing marginal cost and depreciation this paper combines increasing marginal cost and depreciation in a continuous time model of a durable goods monopolist in contrast to the case of increasing marginal cost but no depreciation analysed by kahn and the case of depreciation with constant marginal cost analysed by bond and samuelson steady state output in this model is less than in the competitive case a turnpike result shows that choice of a long enough time horizon can make the equilibrium path of output in a finite horizon game arbitrarily close to the path of the infinite horizon game

trends in the well being of american women 1970 1995 this paper examines the trends in the well being of american women over the last 25 years a time of significant changes in the relative economic status of women and in the labor market as a whole a broad range of indicators are considered to capture changes in women s well being in the family as well as in the labor market for virtually all age and education groups substantial evidence is obtained of rising gender equality in labor market outcomes notably labor force participation wages and occupational distributions broad evidence is also found of greater gender parity within married couple families as the housework time of husbands increased relative to wives and the relative wages of wives rose compared to their husbands however parallel to the recent evidence of the declining labor market position of lower skilled men there has been a similar deterioration in the economic status of less educated women especially high school dropouts their labor force participation rates and wages have risen at a much slower pace than those of more highly educated women while their incidence of single headship has increased much more rapidly these findings for less educated women serve to underscore the widening gap between more and less skilled americans of both sexes as well as to emphasize its broad dimensions

imperfect durability and the coase conjecture this article considers a market served by a monopolist who sells a durable good that depreciates stochastically over time we show that there exist three types of stationary equilibria a coase conjecture equilibrium a monopoly equilibrium and a reputational equilibrium when the depreciation rate is low the coase conjecture equilibrium is the unique equilibrium for intermediate values of the depreciation rate all three equilibrium types coexist when the depreciation rate is high the monopoly equilibrium is the unique equilibrium consequently when selling a good of sufficiently low durability the monopolist does not lose any of her monopoly power furthermore the steady state output in the reputational equilibrium falls below the monopoly quantity hence in durable goods markets welfare losses due to monopoly power may be larger than in markets for perishables

returning home after civil war food security and nutrition among burundian households abstractthis paper investigates the food security and nutritional status of formerly displaced households hhs using the 2006 core welfare indicator survey for burundi we compare their food intake and their level of expenses with that of their non displaced neighbours we test whether it is the duration of displacement that matters for current food security and nutritional status or the time lapsed since returning home we use log linear as well as propensity score matching and an instrumental variable approach to control for self selection bias we find that the individuals and hhs who returned home just before the time of the survey are worse off compared to those who returned several years earlier on average the formerly displaced have 5 per cent lower food expenses and 6 per cent lower calorie intake moreover we find evidence in favour of duration of displacement as the main mechanisms through which displacement affects hh welfare results are robust after controlling for self selection bias de

eliminating the market for secondhand goods an alternative explanation for leasing there are a number of prominent specific instances in which a durable goods manufacturer with significant market power employed a lease only policy i united shoe in the market for shoe machinery ii ibm in the market for computers and iii xerox in the market for copiers the obvious question that arises is why would such a firm prefer leasing over selling in this article i argue that one role of the lease only policy was to eliminate the market for secondhand goods the article formally demonstrates the argument discusses the relationship between this article and earlier literature on secondhand markets and discusses the implications for antitrust policy

public schooling for young children and maternal labor supply as policy makers have sought to reduce the welfare rolls by increasing labor supply among single mothers much attention has been given to the possible role of expanded child care subsidies including direct provision of public preschool at the same time public interest in child care subsidies for two parent households is high for example former vice president gore not long ago proposed to make high quality pre school fully available to every family for every child in every community in america albert gore 1999 in this paper i use 1980 census data to estimate the effect of public school enrollment for a woman s five year old on measures of labor supply and public assistance receipt this approach has two advantages first i am able to estimate the effect of a large implicit child care subsidy 1 second because public kindergarten is universally available to all age eligible children where it is provided selection problems related to means testing do not arise a difficulty with public school enrollment arises because parents may choose to hold their children back a year or enroll them in private school i deal with this issue by using five yearold s quarter of birth qob variables as instruments for public school enrollment status this strategy works because parents ability to enroll a child in public kindergarten in the academic year when the child turns five typically depends on the calendar date of the child s birth 2 in most states children born in the second quarter april 1 june 30 of 1974 will have been eligible to start kindergarten in the fall of 1979 while children born in the first quarter january 1march 31 of 1975 generally will not eligibility for children born between july 1 and december 31 1974 depends on the rules where they live 3

why have women become left wing the political gender gap and the decline in marriage the last three decades have witnessed the rise of a pohtical gender gap in the united states wherein more women than men favor the democratic party we trace this development to the decline in marriage which we posit has made men richer and women poorer data for the united states support this argument first there is a strong positive correlation between state divorce prevalence and the political gender gap higher divorce prevalence reduces support for the democrats among men but not women second longitudinal data show that following marriage divorce women are less more likely to support the democratic party

damaged durable goods i analyze a durable goods monopolist s incentives to introduce a damaged good a stripped down version of the original good in an infinite horizon framework the damaged good helps the monopolist to mitigate the coasian time inconsistency problem however it may lead to a welfare reduction low valuation buyers are induced to purchase the low quality damaged good early rather than buy the high quality original good later and when the players are patient the surplus loss from quality reduction outweighs the gain from earlier consumptions this welfare result contrasts with the previous literature based on a static framework

purchasing pricing and quick response in the presence of strategic consumers we consider a retailer that sells a product with uncertain demand over a finite selling season the retailer sets an initial stocking quantity and at some predetermined point in the season optimally marks down remaining inventory we modify this classic setting by introducing three types of consumers myopic consumers who always purchase at the initial full price bargain hunting consumers who purchase only if the discounted price is sufficiently low and strategic consumers who strategically choose when to make their purchase a strategic consumer chooses between a purchase at the initial full price and a later purchase at an uncertain markdown price in equilibrium strategic consumers and the retailer make optimal decisions given their rational expectations regarding future prices availability of inventory and the behavior of other consumers we find that the retailer stocks less takes smaller price discounts and earns lower profit if strategic consumers are present than if there are no strategic consumers we find that a retailer should generally avoid committing to a price path over the season assuming such commitment is feasible committing to a markdown price or to not mark down at all is often too costly inventory may remain unsold even in the presence of strategic consumers the better approach is to be cautious with the initial quantity and then mark down optimally furthermore we discuss the value of quick response the ability to procure additional inventory after obtaining updated demand information albeit at a higher unit cost than the initial order we find that the value of quick response to a retailer is generally much greater in the presence of strategic consumers than without them on average 67 more valuable and as much as 558 more valuable in our sample in other words although it is well established in the literature that quick response provides value by allowing better matching of supply with demand it provides more value often substantially more value by allowing a retailer to control the negative consequences of strategic consumer behavior