factors in the adoption of industial development incentives by states the continued proliferation of state indusrial development incentive programmes in the absence of any evidence of their effectiveness raises several interesting policy questions first why do states continue to adopt new incentive programmes and secondly what factors determine the type of new incentives that are adopted these questions are investigated through the use of a set of empirical logit models of states decisions to adopt new industrial development incentive programmes in these models the decisions are hypothesized to be influenced by the states s economic and fiscal condition the state s relative advantages and disadvantages with respect to important industrial location factors and the incentive packages of the subject state and its neighbours the results provide limited support for the frequently advanced but previously untested hypothesis that a primary determinant of a state s incentive adoption decision is the recent adoption of similar incentivies in neighbouring states the dec

strategic behavior in contests comment almost by definition contests involve strategy this is especially true in contests between unevenly matched contenders in a recent article avinash dixit 1987 explored strategic commitment in contests between a favorite and an underdog the favorite is defined as the player whose chance of victory exceeds one half at the nash equilibrium an underdog s chance is less than one half dixit concludes that if the favorite has the opportunity to move first then he will overcommit effort compared with the nash equilibrium an important implication of the favorite overcommitting effort is that strategic behavior leads to greater social costs see gordon tullock 1980 the opposite holds if the underdog has the opportunity to move first this paper demonstrates that the favorite will never overcommit effort given endogenous order of moves the favorite finds it advantageous to wait until the underdog moves surprisingly the underdog s best strategy is not to wait but to make the first move throwing the first punch the equilibrium order of play is for the underdog to move before the favorite in this equilibrium one never observes overcommitment of effort consequently extending dixit s model to allow for endogenous order of moves suggests that strategic behavior in contests will lead to undercommitment compared with nash behavior

strategic behavior in contests reply in my 1987 paper i modeled contests where the probability of each player winning a prize depends on all players efforts and examined the first order benefits to one player of making a commitment to a strategy slightly different from his nash equilibrium strategy in the special case of a two player symmetric contest i found that this first order effect was zero michael r baye and onsong shin 1999 have taken the useful further step of finding the second order conditions which ensure that the local stationary point is a local maximum they also find an example where such a commitment has a third order benefit whether this is of any substantive economic interest remains to be seen i used the phrase no local effect to mean zero first order effect which was clearly a sloppy use of language but some such restriction on the use of local is essential if the phrase x has no local effect on f x at x 5 a were to mean that all derivatives f a are zero then a taylor series expansion would show that f x 5 f a for all x and no local effect would be the same as no global effect most importantly symmetric contests were only a very special case of my model the focus was on the much more interesting and more general situation of asymmetry among the players where one player s commitment to a strategy different from his nash equilibrium strategy does bring him a first order benefit the favorite benefits by committing to excessive effort and the underdog from committing to too little others for example kyung h baik and jason f shogren 1992 have extended the analysis to endogenize the order of moves and found that it can be in the interests of both contestants to let the underdog make the commitment in my view these are the more interesting economic issues to do with contests than are third order effects in the symmetric case

caps on political lobbying the cost of political campaigns in the u s has risen substantially in recent years for example real spending on congressional election campaigns doubled between 1976 and 1992 steven d levitt 1995 there are many reasons why increased campaign spending might be socially harmful first increased spending means increased fund raising which may keep politicians from their legislative duties 1 second a lobbyist who makes a large campaign contribution may have undue influence on electoral outcomes on the shaping of legislation or on the outcome of regulatory proceedings 2 that is the socially preferred candidate or legislation may not prevail likewise a lobbyist involved in a regulatory matter or a competition for a government contract may benefit unduly from a legislator s intervention 3 third a perception that campaign contributions purchase influence may lead to increased tolerance of corruption in the private sector a desire to control campaign spending has spawned many initiatives to limit both campaign contributions and spending beginning with the passage of the federal election campaign act feca political action committees pacs can contribute at most 5 000 per election to a candidate while individuals can contribute at most 1 000 restrictions have also been put on in kind contributions making it more difficult to circumvent these limits 4 while direct restrictions on campaign spending have proven difficult to implement recent initiatives aim to impose voluntary spending limits and stricter limits on contributions 5 despite the existing legislation and the proposals to limit contributions little is known about the impact of contribution limits on aggregate expenditures while it is intuitively appealing that aggregate expenditures would drop we challenge that intuition here we study a lobbying game and show that a cap on individual lobbyists expenditures may have the perverse effect of increasing aggregate expenditures and loweri this abstract was borrowed from another version of this item

the logic of political violence this paper offers a unified approach for studying political violence whether it emerges as repression or civil war we formulate a model where an incumbent or opposition can use violence to maintain or acquire power to study which political and economic factors drive one sided or two sided violence repression or civil war the model predicts a hierarchy of violence states from peace via repression to civil war and suggests a natural empirical approach exploiting only within country variation in the data we show that violence is associated with shocks that can affect wages and aid as in the theory these effects are only present where political institutions are non cohesive

the value of commitment in contests and tournaments when observation is costly we study the value of commitment in contests and tournaments when there are costs for the follower to observe the leader s behavior in a contest the follower can pay to observe the leader s effort but cannot observe the effectiveness of that effort in a tournament the follower can pay to observe the effectiveness of the leader s effort but not the effort itself we show that this distinction matters significantly when observation is costly the value of commitment vanishes entirely in sequential and endogenous move contests regardless of the size of the observation cost by contrast in tournaments the value of commitment is preserved completely provided that the observation costs are sufficiently small

a mechanism design approach to ranking asymmetric auctions i propose a new mechanism design approach to the problem of ranking standard auctions with two heterogeneous bidders a key feature of the approach is that it may be possible to rank two auctions even if neither dominates the other for all combinations of types the approach simplifies the analysis and unifies results in the existing literature roughly speaking the first price auction is more profitable than the second price auction when the strong bidder s distribution is flatter and more disperse than the weak bidder s distribution applications include auctions with one sided externalities moreover contrary to previous work reserve prices are easily handled finally the method can be extended to some environments with many bidders

economic growth in a cross section of cities abstract we examine the relationship between urban characteristics in 1960 and urban growth between 1960 and 1990 income and population growth move together and both types of growth are 1 positively related to initial schooling 2 negatively related to initial unemployment and 3 negatively related to the initial share of employment in manufacturing racial composition and segregation are uncorrelated with urban growth across all cities but in cities with large nonwhite communities segregation is positively correlated with population growth government expenditures except for sanitation are uncorrelated with growth government debt is positively correlated with later growth

on the origins of property rights conflict and production in the state of nature i analyse the emergence of property rights in a model of conflict and production in the absence of institutions of enforcement the population of agents evolves dynamically through conflicts for possession of factor goods among pairs of randomly matched agents conflicts are incomplete information wars of attrition with an agent s type consisting of his or her independently drawn valuation of the prize and cost of competing for it i prove equilibrium existence and show that in the steady state of the game the population sorts into two stable groups resource haves and have nots in accordance with a known function of their primitive types

asymmetric contests with conditional investments rent seeking scenarios competitions for promotions and research and development r d races are examples of competitions in which participants expend resources regardless of whether they win or lose although similar in their all pay feature such competitions often differ in important dimensions these include the type of technologies employed in competition the type of asymmetries among competitors the degree to which expenditures are sunk and the number of prizes consider lobbying settings in which firms expend resources in order to influence a policymaker if expenditures take the form of monetary outlays and all firms have the same cost of capital then it is reasonable to think of firms marginal cost of influence as linear but if a firm has a reputational advantage and high costs of capital its lobbying technology may be more reasonably thought of as having convex costs relatively low marginal costs up to a moderate level of influence due to the reputational advantage and relatively high marginal costs at higher levels of influence due to the high costs of capital similarly the lobbying technology of a firm that is relatively unknown and has low costs of capital may be characterized by concave costs lobbying restrictions geographic location or preferential treatment by the policymaker further impact firms lobbying technologies inducing additional nonlinearities and asymmetries among firms in some lobbying settings firms also commit to expenditures conditional on a favorable outcome for example a firm may commit to building factories and creating new jobs if it is granted one of a limited number of manufacturing licenses thus the specification of firms lobbying technologies the type of asymmetries among firms the combination of unconditional and conditional investments and the number of eventual winners may change according to the lobbying setting studied the same is true for other competitions with an all pay feature in a competition for promotions workers often differ in their abilities experience and social skills more than one prize

using a metropolitan area econometric model to analyse economic development proposals this paper shows how an integrated input output and econometric model has been developed and used by a municipal government to evaluate economic development proposals the model simulates the impact of attracting or retaining various types of new businesses and calculates fiscal impacts for state and local governments it can be used to determine a government s bottom line tax concession or how much it is witting to give up to attract new businesses into the community we present examples of proposals evaluated using our louisville metropolitan area econometric model and suggest that the methodology is readily adaptable to other urban areas

estimating the benefits of job creation from local investment subsidies this paper reviews the application of project appraisal techniques to analysing the cost effectiveness of local investment subsidies advance factory building cost per job measures are shown to be dependent upon the method of assessing the number of jobs created and the assumptions used in evaluating exchequer as well as social costs and benefits if realistic probabilities are adopted about the likelihood of previously unemployed persons obtaining a job other than in the advance factories then such local investment subsidies are not economically viable in exchequer terms local investment subsidies may be justified on cost benefit grounds but even by this criterion the number of subsidy created relative to subsidy diverted jobs is crucial to the decision

dissipation of contestable rents by small numbers of contenders the theory of rent seeking with its origins in the observations of gordon tullock 1967 or to use jagdish bhagwati s 1982 proposed term the theory of directly unproductive profit seeking activities is concerned with the potentially adverse effects on resource allocation of incentives to cap ture and defend artificially contrived rents and transfers the scope for so cial loss proposed by the theory derives from the relation between the value of a contestable prize and the value of the resources attracted into the con test to determine the beneficiary of the prize underlying this social loss is a specification of how rational behavior by optimizing agents links the value of the prize sought to the resources expended it has been traditional to assume competitive behavior in describing the activities of lobbying and influence seeking then if some further condi tions are satisfied l the total value of the resources expended precisely equals the value of the prize sought so dissipation is complete 2 conse quently the social cost associated with contestability of a rent can be in ferred from the value of the rent itself and the detailed and hard to come by information on individual outlays made in the course of the contest be comes unnecessary by basing their analyses on competitive dissipation contributors to the rent seeking literature see the review by robert tollison 1982 have been able to presume that the observed value of a contested rent is an exact measure of the associated social cost of monopoly power or regu lation similarly in the trade theoretic literature where the rights contested are to quota premia or revenues from trade taxes krueger 1974 bhagwati

do political parties matter evidence from u s cities are cities as politically polarized as states and countries no is the answer from our regression discontinuity design analysis which shows that whether the mayor is a democrat or a republican does not affect the size of city government the allocation of local public spending or crime rates however there is a substantial incumbent effect for mayors we investigate three mechanisms that could account for the striking lack of partisan impact at the local level and find the most support for tiebout competition among localities within metropolitan areas

favoritism in asymmetric contests head starts and handicaps abstract i examine a contest with identity dependent rules in which contestants are privately informed and ex ante heterogeneous a contestant may suffer from a handicap or benefit from a head start the former reduces the contestant s score by a fixed percentage the latter is an additive bonus although total effort increases if the weak contestant is favored with a head start the optimal use of handicaps is not as clear cut depending on the nature of the asymmetry it may or may not be optimal to handicap the strong contestant moreover it is generally optimal to combine the two instruments for instance when contestants are sufficiently heterogeneous the weak contestant should be given both a head start and a handicap it may also be possible to induce higher effort and at the same time make both contestants better off ex ante

dynamic multi activity contests in many contests players can influence the outcome through efforts in multiple activities several of which can be chosen before others in this paper we develop a model of dynamic multi activity contests players simultaneously choose efforts in long run activities observe each other s efforts in these activities and then simultaneously choose efforts in short run activities a player s long run and short run efforts complement each other in determining the player s probability of winning we compare the outcomes of this two stage model to those of the corresponding model in which players do not observe each other s first stage efforts before the second stage and thus effectively choose efforts in all activities simultaneously interestingly effort expenditures are always lower in the sequential multi activity contest than in the simultaneous multi activity contest the implications of this result for the organization of military litigation innovation academic and sporting contests are highlighted

rent seeking firms consumer groups and the social costs of monopoly i introduction when a positive monopoly rent is secured under government protection firms compete with one another to win the monopoly by expending resources the opportunity costs of such rent seeking activities the values of goods and services that could be produced with resources expended on such rent seeking activities are part of the social costs of monopoly many economists have examined the social costs of monopoly defining them as the sum of the deadweight loss and the firms rent seeking costs examples include tullock 1967 krueger 1974 posner 1975 rogerson 1982 and fisher 1985 1 recently several economists such as wenders 1987 ellingsen 1991 and schmidt 1992 have pointed out that consumers do not always allow government protection of a monopoly rather consumers often seek government protection of themselves they try to defend their consumer surplus against a monopoly by spending resources for example consumers often lobby politicians for government regulation that requires a natural monopolist to set its price below the unregulated profit maximizing level the opportunity costs of such consumer surplus defending henceforth cs defending activities are also part of the social costs of monopoly an interesting question then becomes whether consumers cs defending activities increase or decrease the social costs of monopoly as compared with those incurred in the case of inactive consumers wenders 1987 argues that consumers cs defending activities lead to higher social costs of monopoly on the other hand ellingsen 1991 and schmidt 1992 show that consumers participation to defend their consumer surplus lowers the social costs of monopoly this paper also addresses the question of whether consumers cs defending activities increase or decrease the social costs of monopoly but differs from previous research by analyzing a model in which the government decides first whether or not to regulate a monopoly and then decides which firm to be the monopolist 2 we compare the social costs of monopoly in the case of active consumers with those incurred in the case of inactive consumers we demonstrate that given just one rent seeking firm consumers cs defending activities generally increase the social costs of monopoly but given two or more rent seeking firms such activities generally reduce the social costs of monopoly section ii sets up the basic model we consider a rent seeking and cs defending henceforth rcs contest with one consumer group it has two stages in the first stage firms and the consumer group compete by expending outlays to win their prizes 3 the prize for each firm is an unregulated monopoly and that for the consumer group is a regulated monopoly each firm and the consumer group choose their outlays simultaneously and independently in the second stage after knowing the government s decision on the form of the monopoly the firms compete against each other to win the monopoly they expend their outlays simultaneously and independently at the end of the second stage the government chooses the winning firm ellingsen 1991 argues that his sequential move framework is more realistic than his simultaneous move framework since in most cases consumers compete against existing monopolists rather than potential ones over the forms of monopolies in his sequential move framework potential monopolists first compete to win the monopoly and then the winner and consumers compete over the form of the monopoly however consider a situation in which the government periodically reassigns a monopoly in this situation consumers compete against potential monopolists including the incumbent monopolist over the form of the monopoly and the firms periodically compete to be the monopolist the sequential move game in this paper is more appropriate for this situation than the sequential move game of ellingsen 1991

local decentralization and local economic growth a cross sectional examination of us metropolitan areas this paper builds on the growing empirical literature that explores the relationship between government structure and economic growth it uses a new data set of 314 us metropolitan areas to examine the relationship between local decentralization and local economic growth the results indicate a negative relationship between the central city share of metro area population and economic growth and a positive relationship between both the number of municipalities per 100 000 residents and the number of counties per 100 000 residents and economic growth those findings provide support for the hypothesis that decentralization enhances economic growth

corruption and allocation efficiency abstract in this paper we investigate the possibility of allocation inefficiencies associated with corrupt practices specifically we consider the case in which two firms compete via bribery of a corrupt government official for a to be awarded project the economy may suffer allocation inefficiencies whenever there is some degree of discrimination given additional assumptions it is shown that the possibility of inefficient allocations increases as the degree of discrimination increases although empirical verification of discrimination is difficult due to the observational equivalence of an alternative imperfect knowledge model two possible explanations for the determination of discrimination coefficients indicate that it is a general phenomenon in competitive bribery games

the optimal allocation of prizes in contests we study a contest with multiple not necessarily equal prizes contestants have private information about an ability parameter that affects their costs of bidding the contestant with the highest bid wins the first prize the contestant with the second highest bid wins the second prize and so on until all the prizes are allocated all contestants incur their respective costs of bidding the contest s designer maximizes the expected sum of bids our main results are 1 we display bidding equlibria for any number of contestants having linear convex or concave cost functions and for any distribution of abilities 2 if the cost functions are linear or concave then no matter what the distribution of abilities is it is optimal for the designer to allocate the entire prize sum to a single first prize 3 we give a necessary and sufficient conditions ensuring that several prizes are optimal if contestants have a convex cost function

poker player behavior after big wins and big losses we find that experienced poker players typically change their style of play after winning or losing a big pot most notably playing less cautiously after a big loss evidently hoping for lucky cards that will erase their loss this finding is consistent with kahneman and tversky s kahneman d a tversky 1979 prospect theory an analysis of decision under risk econometrica47 2 263 292 break even hypothesis and suggests that when investors incur a large loss it might be time to take a vacation or be monitored closely

can local incentives alter a metropolitan city s economic development cities in the us and europe have chosen increasingly to offer incentives designed to attract and retain local economic development the increased use of local incentives has occurred with little or

a dynamic theory of resource wars we develop a dynamic theory of resource wars and study the conditions under which such wars can be prevented our focus is on the interaction between the scarcity of resources and the incentives for war in the presence of limited commitment we show that a key parameter determining the incentives for war is the elasticity of demand our first result identifies a novel externality that can precipitate war price taking firms fail to internalize the impact of their extraction on military action in the case of inelastic resource demand war incentives increase over time and war may become inevitable our second result shows that in some situations regulation of prices and quantities by the resource rich country can prevent war and when this is the case there will also be slower resource extraction than the hotelling benchmark with inelastic demand our third result is that because of limited commitment and its implications for armament incentives regulation of prices and quantities might actually precipitate war even in some circumstances where wars would not have arisen under competitive markets copyright 2012 oxford university press

the standard error of regressions statistical significance as used in economics has weak theoretical justification in particular it merges statistical and substantive significance the 182 papers using regression analysis in the american economic review in the 1980s were tested against 19 criteria for the accepted use of statistical significance most some three quarters of the papers did poorly likewise textbooks in econometrics do not distinguish statistical and economic significance statistical significance should not be the focus of empirical economics

a comparison of the economic development policies of county metropolitan and non metropolitan district councils local authorities in england and wales have become important participants in economic development policy this paper draws upon a comprehensive new date set covering the activities of the councils in the period 1990 92 the date set is unusual in that it allows the direct comparison of the activities of the three main groups of councils county councils metropolitan districts and non metropolitan districts the paper contrasts the degree of commitment to economic development policy and the range of initiatives of the three categories and compares the manner in which the three types of councils package their initiatives in order to develop conherent strategies the analysis reveals significant differences between the categories of councils and shows that despite the rapid spread of economic development policy amongst councils in more prosperous areas during the 1980s the policies operated still depend on the economic and political characteristics of the councils

territorial competition and globalisation scylla and charybdis of european cities policy makers in europe have been concerned with developing and sustaining the competitiveness of their cities this concern comes from the view that the determing parameter of urban regions is globalisation by engaging in a process of territorial competition the economic and social welfare of cities constituent territories can be maintained what this paper argues is that there is a danger that territorial competition is as much an abstraction as globalisation and its application to policy making will bring about distortions in economic development by examining the specification of globalisation and territorial competition and the relevant literature a debate may be initiated in which the consequences for the economic environment of european cities are addressed the discussion is given some context by drawing on the cursory examples one global and one local of london and lille

entry coordination and auction design with private costs of information acquisition i introduction in most auction literature bidders are passively endowed with private information about their valuations the analysis then focuses on optimal elicitation of private information on many occasions bidders may instead have to incur costs to collect this information 1 auction design in these cases has to balance between information acquisition and information elicitation which are interdependent the performance of an auction depends not only on the bidding equilibrium but also crucially on the information acquisition equilibrium 2 as a salient feature auction design with information acquisition costs has been complicated by entry coordination among bidders due to multiple entry equilibria issue in a symmetric independent private value ipv setting of mcafee and mcmillan 1987 with fixed information acquisition cost levin and smith 1994 note that the ex ante efficient and revenue maximizing auction a second price auction with no entry fee and no reserve induces many asymmetric entry equilibria other than the targeted symmetric one the existence of asymmetric entry equilibria in this setup fundamentally lies in bidders constant marginal cost of entry 3 information acquisition costs could be private information of bidders just as with their private information about values for example in the cases of construction procurements or u s timber auctions many aspects of prebid information acquisition and analyzation are private knowledge of bidders 4 clearly when information acquisition costs are private information of bidders auction design has to additionally take into account information elicitation at the information acquisition stage this aspect of analysis has yet to be reflected in the literature while the case with fixed information acquisition costs has been thoroughly studied by milgrom 1981 mcafee and mcmillan 1987 engelbrecht wiggans 1987 1993 harstad 1990 levin and smith 1994 mcafee quan and vincent 2002 ye 2004 2007 and cremer spiegel and zheng 2009 among others a widely recognized insight of these studies is that ex ante efficiency can be achieved through a second price auction while setting the reserve at the seller s valuation if ex ante entry fees can be used to extract all the expected surplus of bidders then there is a congruence between the revenue and total surplus 5 this article advances this line of research by studying the implications of private acquisition costs on auction design with an emphasis on bidders coordination at the information acquisition stage specifically we consider the ipv setting of mcafee and mcmillan 1987 and levin and smith 1994 while allowing the information acquisition costs to be bidders private information which follow a continuous distribution in light of our previous discussion this article attempts to answer the following questions 1 how are ex ante efficient and revenue maximizing auctions affected by this additional dimension of private information in other words how does information rent extraction at the entry stage affect the auction designs 2 can this private information alleviate rather than aggravate the problem of entry coordination with the dispersion in private information acquisition costs the multiplicity of entry equilibria arising from the constant marginal cost in levin and smith 1994 might be avoidable the types with higher information acquisition costs must have less incentive to enter which could reduce the number of entry equilibria the questions are will sufficient dispersion coordinate bidders and induce a unique entry if yes how much dispersion is enough due to the potential multiplicity of entry equilibria for any given mechanism it is rather difficult to compare performances across varieties of mechanisms to overcome this difficulty we come up with an alternative approach our analysis begins with characterizing efficient and revenue maximizing auctions for any given feasible entry pattern which can be described through a vector of bidders entry thresholds of acquisition costs

all pay contests this paper studies a class of games all pay contests which capture general asymmetries and sunk investments inherent in scenarios such as lobbying competition for market power labor market tournaments and r d races players compete for one of several identical prizes by choosing a score conditional on winning or losing it is weakly better to do so with a lower score this formulation allows for differing production technologies costs of capital prior investments attitudes toward risk and conditional and unconditional investments among others i provide a closed form formula for players equilibrium payoffs and analyze player participation a special case of contests is multiprize complete information all pay auctions

gambling in contests with heterogeneous loss constraints i study the impact of asymmetric loss constraints on risk taking behavior in the contest model of seel and strack 2013 i derive the unique nash equilibrium outcome the equilibrium payoffs and comparative statics about the bankruptcy risk

investment in the absence of property rights the role of incumbency advantages in many situations the individuals who can generate some output must enter a contest for appropriating this output this paper analyses the investment incentives of such agents and the role of incumbency advantages in the contest depending on the advantages an increase in the productivity of the investment can decrease or increase the amount of investment the results are applied to autocrats investment behavior and job specific investment in organizations

evaluation and understanding in local economic policy recent evaluative studies of local economic policy have emphasised the measurement of policy impacts and cost effectiveness above all else more effort could usefully be made to understand the mechanisms by which policy effects are produced and the circumstances which condition their effectiveness the paper outlines a simple conceptual framework to help explain in broad terms why local industrial policies are or are not effective at creating employment the framework is illustrated with examples drawn from an initiative in london this involved the provision of financial assistance to local firms but did not prove very successful at creating or securing jobs partly because circumstances were unfavourable and the problems deep seated the implication is that for local policies to be effective in these conditions wider ranging and more carefully targeted interventions are required

contests with three or more heterogeneous agents abstract we study monotone equilibrium behavior in contests with observable effort bid where three or more participants have distinct risk attitudes and the monetary value for the prize of each is drawn independently from a distinct distribution these differences can either cause a player to drop out that is always choose zero effort regardless of his valuation or use all or nothing strategies with discontinuous effort choice neither complete drop out nor discontinuous bidding with finitely many gaps is consistent with pure strategy monotone bayesian nash equilibrium in a contest with either ex ante identical players or only two distinct participants

a model of casino gambling we show that prospect theory offers a rich theory of casino gambling one that captures several features of actual gambling behavior first we demonstrate that for a wide range of preference parameter values a prospect theory agent would be willing to gamble in a casino even if the casino offers only bets with no skewness and with zero or negative expected value second we show that the probability weighting embedded in prospect theory leads to a plausible time inconsistency at the moment he enters a casino the agent plans to follow one particular gambling strategy but after he starts playing he wants to switch to a different strategy the model therefore predicts heterogeneity in gambling behavior how a gambler behaves depends on whether he is aware of the time inconsistency and if he is aware of it on whether he can commit in advance to his initial plan of action this paper was accepted by brad barber teck ho and terrance odean special issue editors

the industrial structure and labour market segmentation urban and regional implications danson m w 1982 the industrial structure and labour market segmentation urban and regional implications reg studies 16 255 65 we argue that dualism in the industrial structure as suggested by averitt 1968 and galbraith 1967 determines stratification and segmentation in the labour market as suggested by kerr 1954 piore 1973 and friedmann 1977 in recognizing this the urban and regional economist has greater understanding of the processes of change of the last fifty years in particular government and corporate policy by replacing the pre 1914 centre industries of steel shipbuilding and engineering with branch and other peripheral plants and firms has led to a deterioration in the relative position of the inner cities and regions

urban diversity and economic growth at the risk of some simplification it is possible to identify four periods of intense study of cities by economists each of these has led to an increased understanding of the economics of urban areas and the unique role played by cities in the modem economy the first of these periods occurred in the decade after world war i only about ten years after the truck revolutionized the transport of goods within urban areas this period included the first systematic empirical analysis of the forces affecting the location of firms and households within cities robert murray haig 1926 and a number of other microeconomists at columbia analyzed the spatial pattems of manufacturing activity in lower manhattan and in the rest of new york city haig jmd his colleagues devoted considerable attention to where things belong in an urban area p 402 providing the first systematic economic analysis of urban spatial structure for example they analyzed the garment industry concluding that it was destined by nature to disperse north of 14th street and predicting that it would follow the estabhshed spatial pattem of the cooperage barrelmaking industry standardization in size and quality of barrels had meant that identical barrels could be made throughout the new york metropolitan area even in new jersey and the introduction of the truck meant that they could be transported cheaply throughout the region and exported the second of these periods though not in chronological order began in the mid 1960s it formalized many of the insights about location incentives within urban areas which had been uncovered a half century before mixed them with the logic of heinrich von thunen s 1826 ancient theories about agricultural crops and land values and applied them to the hotisehold sector the works of william alonso 1964

does government performance matter the effects of local government on urban outcomes in england this paper applies an extensive literature that argues that political leadership and local government activity enhance urban performance using the state of the cities database of 56 primary urban areas in england it tests for the impact of consolidated governance political stability planning performance average service performance local government capacity and planning development expenditure on jobs and population growth from 1995 to 2005 the regression analysis finds that the competence of service delivery is weakly associated with full time jobs growth and that a consolidated governance structure is weakly associated with greater population growth none of the other tests is statistically significant overall the findings place doubt on the salience of the political determinants of economic performance in english cities for the period in question

gambling in contests this paper presents a strategic model of risk taking behavior in contests formally we analyze an n player winner take all contest in which each player decides when to stop a privately observed brownian motion with drift a player whose process reaches zero has to stop the player with the highest stopping point wins unlike the explicit cost for a higher stopping time in a war of attrition here higher stopping times are riskier because players can go bankrupt we derive a closed form solution of a nash equilibrium outcome in equilibrium highest expected losses occur at an intermediate negative value of the drift

fiscal pressure tax competition and the adoption of tax increment financing tax increment financing tif has been widely adopted as an economic development tool by municipalities this study estimates a structural probit model of municipal tif adoption decisions using data drawn from cities in indiana it provides empirical evidence that factors such as fiscal pressures tax competition economic distress industrial composition availability of alternative programmes and the expected gains in property values from the use of tif exert significant influence in a city s decision to adopt a tif programme after using an accurate measure of prior growth this analysis finds no empirical evidence to support the contention that growing cities are more likely to adopt tif

strategic behavior in contests comment in an influential paper avinash dixit 1987 considers a class of symmetric two player contests in which each player s effort xi influences the probability of winning a prize valued at k 0 letting p x1 x2 denote the probability 1 that player 1 wins the expected payoffs of the two players are p1 5 p x1 x2 k 2 x1 and p2 5 1 2 p x1 x2 k 2 x2 dixit s main result is that if there is perfect symmetry between the players and each player s effort has a positive but diminishing marginal effect on his or her probability of winning i e

handicaps in incomplete information all pay auctions with a diverse set of bidders abstract in many contests a subset of contestants is granted preferential treatment which is presumably intended to be advantageous examples include affirmative action and biased procurement policies in this paper however i show that some of the supposed beneficiaries may in fact become worse off when the favored group is diverse the reason is that the other favored contestants become more aggressive which may outweigh the advantage that is gained over contestants who are handicapped the contest is modeled as an incomplete information all pay auction in which contestants have heterogenous and possibly non linear cost functions