some macroeconomic implications of alternative compensation systems a basic theme of this paper is the idea that some structural reform of employee compensation arrangements is necessary to make reasonable price stability compatible with reasonably full employment in this view even the best designed macroeconomic policies are much too aggregative to get at the heart of the stagflation problem the ultimate solution involves going inside the workings of a modern capitalist economy and correcting the underlying structural flaw directly on the level of the individual firm stagflation represents an especially intractable policy dilemma for macroeconomics without a decisive tendency of the economic system to remain near full employment there is a strong prima facie case for fighting recessions by exogenously stimulating aggregate demand but the usual keynesian expansionary policies tend to impart an inflationary inertia that is difficult to choke off and of course the basic strategy for fighting inflation is to cool down the economy by restrictive monetary and fiscal policy thereby increasing unemployment and closing the viscous circle because the practical macroeconomic policies for dealing with unemployment and inflation are so diametrically opposed stagflation is a pervasive structural problem when for whatever reason there is basically an unfavourable short run tradeoff between unemployment and inflation economic policy tends to vacillate between expansion of demand to fight unemployment and restriction of demand to fight inflation polarising the electorate and distracting society from dealing effectively with its underlying real economic problems even the difficulty of attaining external balance in foreign accounts is largely a spillover into the international payments arena of an inability to achieve an acceptable internal balance between full employment and price stability this paper takes what might be called a comparative systems approach to the problem of stagflation at the heart of modern industrial capitalism is an incredibly complicated system of overlapping monopolistic competitors 2 a starting point for the paper is the realisation that the coordination difficulty which can cause some systems to suffer involuntary unemployment is not inherent in laissez faire private enterprise per se it is closely tied to one particular property of a conventional wage payment system namely compensation of each firm s employees is stuck to an outside numeraire whether money or a cost of

partial international coordination in the great fish war this study extends the great fish war model of levhari and mirman levhari d and mirman l 1980 bell journal of economics 11 322 344 by incorporating a multiple country context into the model and investigates the existence of a partial coordination nash equilibrium first findings of this paper suggest that a partial coordination scheme is sustainable only in limited cases any coalition that has more than two member countries cannot be sustained second the existence and the number of coordinating countries depend critically on the magnitude of the biological and preference parameters finally if the coalition is assumed to be a dominant player there always exist one or two welfare improving sustainable coalitions and the size of the sustainable coalitions depends on the parameters of the problem

on the indeterminacy of capital accumulation paths abstract in neoclassical optimal growth models the stability of the accumulation paths depends on the discount parameter we prove that for discount factors small enough the policy function which describes an optimal path can be of any type the result is achieved using the notion of concavity we adopt a constructive approach given any twice differentiable map we show how to construct an optimal growth problem which produces that map as the optimal policy function a consequence is that chaos can appear in these models we also provide bounds on the values of the discount parameter for which indeterminacy is possible

renewable resource economists and policy what differences have we made abstract this paper surveys developments in fisheries economics and fisheries policy over the past half century early work clarified the nature of the economic issues associated with open access laying the groundwork for changes in policies after coastal nations expanded their jurisdictions in 1976 perhaps the most important point made by economists is that property rights matter and that open access conditions create economic as well as biological problems the policy process has begun to create property rights systems although many of the world s fisheries still operate under mixed systems of regulations and open access incentives

dynamic nonpoint source pollution control policy ambient transfers and uncertainty when a regulator cannot observe or infer individual emissions corrective policy must rely on ambient pollution data assuming this kind of environment we study a class of dierential games of pollution control with prot functions that are polynomial in the global pollution stock given an open loop emissions strategy satisfying mild regularity conditions an ambient transfer scheme is exhibited that induces it in markov perfect equilibrium mpe proposed transfers are a polynomial function of the dierence between actual and desired pollution levels moreover they are designed so that in mpe no tax or subsidy is ever levied their applicability under stochastic pollution dynamics is studied for a symmetric game of polluting oligopolists with linear demand we discuss a quadratic scheme that induces agents to adopt markovian emissions strategies that are stationary and linearly decreasing in total pollution total expected ambient transfers are non positive and their magnitude is linearly increasing in physical volatility the size of the economy and the absolute value of the slope of the inverse demand function however if the regulator is interested in inducing a constant emissions strategy then in expectation transfers vanish the total expected ambient transfer is compared to its point source equivalent

tipping points and business as usual in a global commons abstract this paper analyzes a dynamic strategic model of resource extraction from a global commons countries derive benefits from both direct extraction and aggregate conservation of an open access resource each period a country s output depends both on its resource usage and on the global stock of the resource stored within the ecosystem leading examples are ocean fisheries habitat preservation forestry and land carbon biomass the production coefficients on these inputs vary across countries and evolve stochastically over time a business as usual bau equilibrium characterizes each country s resource usage in the absence of an effective international agreement under non concave resource dynamics depletion of the resource in a bau equilibrium may reach a tipping point below which the stock spirals downward toward a steady state of marginal sustainability under the assumptions of the model the tipping points emerge endogenously if the number of extractors exceeds some fixed finite bound the commons always tips regardless of the initial stock we find that countries will accelerate their rates of extraction the closer they are to reaching the low end steady state by contrast in the socially efficient plan the commons never tips if the initial stock is large

the new pattern of regional unemployment causes and policy significance in common with most oecd countries unemployment in britain has differed significantly between regions but the persistence of relative regional unemployment rates in britain has been until recently particularly striking however during the i990 93 recession the relative regional unemployment pattern changed significantly for the first time in seventy years our primary purpose here is to understand these recent changes and to examine what might be learned about the contribution of economic policies to the amelioration of both regional unemployment rate differentials and the amplitude of regional unemployment cycles finally we ask whether there are any policy lessons to be drawn from the recent cycles in regional unemployment patterns which might provide insight into the amplitude of macro economic cycles

differentiated contracts heterogeneous borrowers and the mortgage choice decisions previous analyses of mortgage choice assume that adjustable rate mortagages are standard contracts and estimate bivariate models the authors estimate a multinomial logit model that explicitly treats mortgages as differentiated contracts and provides insights on several important issues the impact of price variables differs significantly across alternative mortgage contracts borrower heterogeneity particularly mobility influences the type of contract chosen and borrowers respond to market conditions as expected when choosing between alternative mortgage contracts copyright 1995 by ohio state university press

household risk management and optimal mortgage choice the portfolio of the typical american household is quite unlike the diversie ed portfolio of liquid assets discussed in e nance textbooks the major asset in the portfolio is a house a relatively illiquid asset with an uncertain capital value the value of the house generally exceeds the net worth of the household which e nances its homeownership through a mortgage contract to create a leveraged position in residential real estate other e nancial assets and liabilities are typically far less important than the house and its associated mortgage contract the importance of housing in household wealth is illustrated in figure i this e gure plots the fraction of household assets in housing and in equities against the wealth percentile of the household poor households appear at the left of the e gure and wealthy households at the right data come from the 1989 and 1998 survey of consumer finances the e gure shows that middle class american families from roughly the fortieth to the eightieth percentile of the wealth distribution have more than half their assets in the form of housing even after the expansion of equity ownership during the 1990s equities are of negligible importance for these households 1

nash and stackelberg solutions in a differential game model of capitalism abstract this paper examines two noncooperative open loop solution concepts in a simple model of economic growth and distribution formulated as a differential game between workers who may save or consume and capitalists who may consume or invest it is demonstrated that both players prefer the stackelberg game to the nash game furthermore it is shown that under fairly realistic assumptions about the parameters of the model both workers and capitalists would prefer to act as the follower in the stackelberg game this means that capitalism is in a stalemate i e in a position where neither class wants to take the initiative and announce its strategy first the result is interpreted as an explanation of the difficulties met in designing and implementing incomes policies and social contracts

is incomes policy the answer to unemployment in western europe unemployment has remained obstinately high ever since 1975 what has prevented governments from reducing it the answer is simple if unemployment were reduced by normal methods inflation would rise it follows that the only way to cut the long run level of unemployment is to find some other way of controlling inflation no such device will be costless but if we could find any method that was less costly than unemployment we ought to adopt it maurice chevalier was asked in later life what he thought of old age it s not so bad he replied when you consider the alternative that was a true economist talking and it is also the spirit in which i shall approach the unhappy choices open to us my argument will proceed roughly as follows first imagine that a costless incomes policy is available then most people would probably agree that if inflation was too high a temporary incomes policy would be a good idea in order to get inflation down but what then when it was down we would still be left with far too high an unemployment rate only a permanent incomes policy can substantially reduce the non inflationary level of unemployment however against these benefits have to be set the costs of an incomes policy a conventional incomes policy which permanently suspended collective bargaining would be out of the question in a free society so we have to have an incomes policy that works by incentive rather than by regulation the best thing would be a tax on wage increases levied on employers and proportional to wage increases above a prescribed norm i shall spend some time discussing this tax using various different models of wage setting to explain how it would have its effect and finally i shall try producing a first draft of the operator s manual

transboundary pollution and household mobility are they equivalent abstract recent research has shown that perfect household mobility can serve as a disciplinary mechanism inducing national policy makers to internalize interregional externalities caused by transboundary pollution this paper develops a differential game to illustrate that the result is not necessarily robust when migration costs and explicit dynamics are introduced the paper shows that if governments constantly reoptimize imperfect household mobility leads to a tragedy of the commons and individual countries overemit even when pollution is purely local moreover these dynamic externalities get worse as the degree of household mobility increases and there is a qualitative difference between almost perfect and perfect mobilty that is a discontinuity at zero migration costs

booms and busts in the uk housing market the often volatile behaviour of uk house prices between 1957 and 1994 is analysed in an annual econometric model theory suggests that financial liberalisation of mortgage markets in the 1980s should have led to notable shifts in house price behaviour the evidence supports the predictions of theory suggesting shifts took place in wealth effects as in the consumption function and that real interest rates and income expectations became more important the presence of transactions costs suggests important nonlinearities in house price dynamics the paper also contains an explicit econometric treatment of expectations demography supply spillovers from the rented sector and of composition biases in the official house price index

international pollution control cooperative versus noncooperative strategies abstract international pollution control involving two neighboring countries is modeled as a simple two player dynamic game each country produces a good that is consumed by domestic households production of each consumption good results in emissions of pollutants households in each country derive utility from the consumption of the domestically produced good but incur costs through the total stock of pollution stock externality in this setting we characterize cooperative as well as noncooperative pollution control strategies of the governments of the two countries that maximize the discounted stream of net benefits of a representative consumer it turns out that when the governments are restricted to use linear strategies noncooperative behavior results in overall losses for both countries if on the contrary governments use nonlinear markov perfect strategies and the discount rate is small enough a pareto efficient steady state pollution stock can be supported as a differentiable subgame perfect equilibrium thus the emergence of first best solutions cooperative outcomes does not require any institutional arrangements threats retaliation etc but can be brought about through the use of nonlinear markov perfect equilibrium strategies

a differential game model of a market of substitutable products abstract modern industrial organization often classifies groups of differentiated products that are fairly good substitutes to belong to the same market this paper develops a differential game model of a market of substitutable products to avoid the problem of time inconsistency we solve a feedback nash equilibrium solution for the game a set of state dependent equilibrium strategies is derived extensions of the model to a stochastic formulation and to an infinite time horizon specification are also provided

testing a theoretical model of mortgage demand on uk data mortgage demand is a poorly understood and under researched aspect of the financial behaviour of households this paper tests empirically the basic results of brueckner s model of mortgage demand on uk mortgage market data the choice of mortgage instrument is used to identify impatient debt maximizers and patient borrowers who borrow at intermediate levels thus the research confirms the conditions under which households will use the largest possible mortgage and the circumstances under which savings are invested in the property a unique contribution of the work is the estimation of mortgage demand equations corrected for endogenous housing demand for a single housing finance system where borrowers face different opportunity costs of equity in their owner occupied property allowing a purer test of the theoretical model

feedback nash equilibria for non linear differential games in pollution control abstract dynamic problems of pollution and resource management with stock externalities often require a differential games framework of analysis in addition they are represented realistically by non linear transition equations however feedback nash equilibrium fbne solutions which are the desired ones in this case are difficult to obtain in problems with non linear quadratic structure we develop a method to obtain numerically non linear fbne for a class of such problems with a specific example for shallow lake pollution control we compare fbne solutions by considering the entire equilibrium trajectories with optimal management and open loop solutions and we show that the value of the best fbne is in general worse than the open loop and optimal management solutions

nonlinear strategies in dynamic duopolistic competition with sticky prices abstract we discuss nonlinear strategies in an infinite horizon duopoly game with sticky prices where firms maximize their discounted sum of profit we construct a stationary feedback equilibrium without guessing value functions and feedback strategies that solve the hamilton jacobi equation for this purpose we study the auxiliary equation that is derived from the hamilton jacobi equation we show that the domain of the state space plays an crucial role in characterizing feedback equilibria and discuss several implications of this observation in particular we find that when the upper bound of the state space is not very high previously unknown feedback equilibria emerge

differential game models in management science abstract this paper reviews a number of differential games applications to management science and operations research problems published with a few exceptions during the last decade the purpose of the article is to provide the reader with an up to date account of the state of the art within this field after having stated in an introduction the general differential games framework as well as some conceptual problems we proceed to review the models which have been divided into the following functional areas investment consumption and employment production inventories and maintenance marketing advertising pricing and rd bargaining natural resources and pollution the survey concludes with some remarks on applicability solvability and directions for future research

decentralized management of a fishery we construct an economic mechanism to realize in nash equilibrium an optimal consumption time path of a natural resource for exposition convenience the analysis is conducted within the model initiated by levhari and mirman bell j econ 11 322 334 1980 this framework allows us to explicitely compute the consumption time paths of the resource associated with an open access regime with a cooperative management and with a stationary markovian nash equilibrium of the difference game induced by the proposed mechanism

an econometric analysis of global waste paper recovery and utilization the main purpose of this paper is to provide aneconometric analysis of the most importantdeterminants of inter country differences inwaste paper recovery and utilization rates byemploying pooled t

an econometric analysis of choice of mortgage design in the united kingdom the research seks to better understand the choice of mortgage design by households in the united kingdom family expenditures survey data is used to test the various hypotheses on the determinants of the choice between an endowment and a repayment mortgage a bivariate probit model with sample selection is estimated to detect any likely selectivity bias arising out of tenure choice the theoretical modelling reflects the behaviour of liquidity constrained households comparing comparative periodic mortgage costs and households concerned with the oppurtunity cost of equity in a property actual choices appear to reflect the impact of nominal interest rates income and cash flow considerations there is little direct evidence that the choice of mortgage repayment vehicle is motivated by portfolio design there is some tentative evidence of supply side pressure on endowment mortgage take up

efficiency of nonpoint source pollution instruments an experimental study in nonpoint source pollution problems the regulator does not observe each polluter s individual emission which prevents him from using the conventional policy instruments therefore new instruments have been designed to regulate this type of pollution in an experiment we compare the efficiency of some of these instruments an input based tax an ambient tax subsidy an ambient tax and a group fine we assume that polluters themselves are affected by environmental damages a control session without any regulation is also carried out in order to study the status quo situation our experimental data show that the input tax and the ambient tax are very efficient and reliable and the group fine is fairly efficient and reliable these instruments improve social welfare with respect to the status quo on the contrary the ambient tax subsidy decreases social welfare with respect to the status quo and its effect is very unreliable

a model of mortgage default in this paper we solve a dynamic model of households mortgage decisions incorporating labor income house price inflation and interest rate risk using a zero profit condition for mortgage lenders we solve for equilibrium mortgage rates given borrower characteristics and optimal decisions the model quantifies the effects of adjustable versus fixed mortgage rates loan to value ratios and mortgage affordability measures on mortgage premia and default mortgage selection by heterogeneous borrowers helps explain the higher default rates on adjustable rate mortgages during the recent u s housing downturn and the variation in mortgage premia with the level of interest rates

stackelberg versus cournot a differential game approach abstract we propose an infinite horizon differential oligopoly game where at each point in time m stackelberg leaders and n m stackelberg followers exploit a common pool renewable resource and sell their harvest in the marketplace at a price that depends on total harvest we derive a feedback generalized stackelberg nash cournot equilibrium a generalization of the feedback stackelberg equilibrium nesting feedback stackelberg and feedback cournot as special cases we proceed with a comparison between the feedback stackelberg and the feedback cournot equilibria and find a number of interesting results in contrast with static oligopoly theory as to the relative efficiency of the two equilibria we show that the cournot equilibrium can be more efficient than the stackelberg equilibrium this holds true in the short run at the steady state and in terms of discounted welfare

stochastic house appreciation and optimal mortgage lending w e characterize the optimal mortgage contract in a continuous time setting with stochastic growth in house price and income costly foreclosure and a risky borrower who requires incentives to repay his debt we show that many features of subprime loans can be consistent with properties of the optimal contract and that when house prices decline mortgage modification can create value for borrowers and lenders our model provides a number of empirical predictions that relate the features of mortgage contracts originated in a housing boom and the extent of their modification in a slump to location and borrowers characteristics jel g20 g21 g33

international fisheries agreements a game theoretical approach this paper surveys the application of game theory to the economic analysis of international fisheries agreements the relevance of this study comes not only from the existence of a vast literature on the topic but especially from the specific features of these agreements the emphasis of the survey is on coalition games an approach that has become prominent in the fisheries economics literature over the last decade it is shown that coalition games were first applied to international fisheries agreements in the late 1990s addressing cooperative issues under the framework of characteristic function games then progressively this cooperative approach was combined with non cooperative elements such as the stability analysis of the agreements finally partition function games which model coalition formation endogenously were introduced and became the standard approach to study the formation and stability of international fisheries agreements a key message that emerges from this literature strand is that self enforcing cooperative management of internationally shared fish stocks is generally difficult to achieve hence the international legal framework and regulations play a decisive role on ensuring cooperation over the use of these resources

managing interacting species in unassessed fisheries abstract this paper addresses the management of multispecies fisheries and suggests the use of restricted fishing policies as an interesting option for unassessed fisheries as is the case within developing countries specifically we consider a predator prey system under two potential management policies an unrestricted regime where agents can compete to harvest from both species and a second one where they are allowed to harvest only predators the performance of both policies is compared from an ecological and an economic point of view for a sufficiently large number of agents or for strong biological interaction parameters the assumed restricted fishing policy yields both higher long run stock levels and profits thus this contribution suggests that such a policy while requiring weaker monitoring governance than instruments based on outputs such as quotas or taxes would meet environmental and economic objectives finally several features of the analysis are discussed including targeting prey instead of predator and the issue of compliance

marine ecosystem considerations and second best management we compare how the long run distribution of fishing activities is affected in multispecies fisheries when facing different second best control rules 1 species specific landing regulation and 2 global input regulation we show how this depends on the economic returns and on the type of ecological interaction considered we highlight specifically that fishing effort does not necessarily increase on nontargeted species and decrease on targeted species and that the characterization of second best efficient instruments may differ drastically depending on the nature of the interaction

regional housing price cycles a spatio temporal analysis using us state level data kuethe t h and pede v o regional housing price cycles a spatio temporal analysis using us state level data regional studies a study is presented of the effects of macroeconomic shocks on housing prices in the western united states using quarterly state level data from 1988 1 to 2007 4 the study contributes to the existing literature by explicitly incorporating locational spillovers through a spatial econometric adaptation of vector autoregression spvar the results suggest these spillovers may granger cause housing price movements in a large number of cases spvar provides additional insights through impulse response functions that demonstrate the effects of macroeconomic events in different neighbouring locations in addition it is demonstrated that including spatial information leads to significantly lower mean square forecast errors kuethe t h et pede v o la variation cyclique regionale du prix du logement une analyse geographico temporelle des donnees sur les etats aux e u regional s

the rise and fall of the arm an econometric analysis of mortgage choice this paper estimates an empirical model of the choice between adjustable and fixe d rate mortgages using a large national database compiled by the nat ional association of realtors the explanatory variables in the probi t choice equation include borrower characteristics regional dummies the frm rate and the frm arm rate differential since the intrerest rate on the mortgage not chosen is unobserved this rate must be est imated in a way that eliminates selectivity bias simulation of the e stimated choice equation provides insight into the origin of the arm revolution copyright 1988 by mit press

a stochastic differential fishery game for a two species fish population with ecological interaction we combine and extend two existing lines of research in game theoretic studies of fisheries building up on quirk and smith 1977 anderson 1975 fisher and mirman 1996 sumaila 1997 and most recently datta and mirman 1999 who developed either static or discrete time models not including ecological uncertainty and jorgensen and yeung 1996 who do include uncertainty but do not capture any features of ecological interaction in this article we develop a continuous time framework where ecological interaction is described by a stochastic dynamics including the cases of predator prey and competition we obtain a stochastic differential game and derive markov feedback nash equilibrium strategies in semi analytic form furthermore we compare the results with the case where fisheries regulations restrict each fishery to harvest only one species and study the inefficiencies which arise from this in addition to that we also consider the case where fisheries cooperate here we observe quite different effects on the ecosystem depending on whether the system is competitive or predator prey

equilibria in a stochastic resource management game under imperfect information abstract the paper considers equilibrium solutions in a stochastic resource management game the countries choose frequently between cooperative and noncooperative retaliation modes of play the choices between cooperative and noncooperative subgames are based on imperfect estimates of the fishing efforts fleet sizes of the co harvesting country during the previous period if either of the countries concludes that the fishing activity of the co harvesting country has been too intensive during the previous period i e the estimated fishing effort exceeds a trigger value then either a noncooperative retaliation period follows or cooperation is continued after a noncooperative period the countries begin to cooperate once again it is shown that equilibria in which cooperative and noncooperative periods alternate can occur in dynamic games different types of equilibria for the game exist the countries may be able to sustain efficient cooperation all the time they may oscillate between cooperation and noncooperation or they may fail to cooperate at all conditions under which an equilibrium coincides with a pareto optimal solution are studied

fishing as a supergame abstract this paper considers how cooperative solutions to games of sharing fish resources can be supported by threat strategies with highly mobile fish stocks the number of agents compatible with a cooperative self enforcing solution is not very high for reasonable values of the discount rate but sensitive to changes in the discount rate and costs and to cost heterogeneity with migrating stocks where growth and reproduction depend on how much all agents leave behind after harvesting the likelihood of a cooperative self enforcing equilibrium is increased with a dominant player and a competitive fringe the rents and optimum stock level of the dominant player fall quickly as the share of the competitive fringe increases

using automatic tax changes to control pollution emissions abstract in the absence of information about abatement costs the level of emissions tax needed to achieve a target level of pollution abatement is unknown this problem can be overcome by using an iterative procedure in which the tax is adjusted when current emissions exceed or fall short of the target this idea has become part of the standard textbook material but there has been no formal analysis of its dynamic properties we find that emissions can be reduced to the target whether firms behave strategically or not but the strategic element changes the welfare properties of the mechanism

noncooperative solutions for a differential game model of fishery abstract in this paper a generalization of gordon schaefer s fishery resource model to a duopoly is presented the resulting noncooperative game is solved analytically as well as numerically by using the equilibrium concepts of nash and stackelbewrg it turns out that in both cases the player with the smaller unit costs is able to choose a higher catch rate than his opponent furthermore it is shown that the game is stackelberg dominant in the stackelberg case any information disadvantage in the sense of stackelberg fellowership can be eliminated by a more efficient technology

strategic exploitation of a common resource under environmental risk abstract we study the effect of environmental risk on the extraction of a common resource using a dynamic and non cooperative game in which an environmental event impacts the renewability and the quality of the resource we show that the anticipation of such an event has an ambiguous effect on extraction and the tragedy of the commons a risk of a reduction in the renewability induces the agents to extract less today while a risk of a deterioration in the quality has the opposite effect moreover when environmental risk induces conservation the tragedy of the commons is worsened

efficiency inducing taxation for polluting oligopolists abstract we show that there exists a time independent tax rule that guides polluting oligopolists to achieve the socially optimum production path the optimal tax is dependent on the current pollution stock and it may be negative when the pollution stock is low a surprising result is that the optimal tax rule may give firms a subsidy for an initial time interval even though under laissez faire their output always exceeds the socially optimal output this subsidy however induces firms to produce less than they would under laissez faire

choice of mortgage instrument liquidity constraints and the demand for housing debt in the uk the research uses microdata to estimate reduced form mortgage demand equations based on truncated regressions dissagregated by choice of mortgage instrument the choice is between a standard annuity mortgage and a balloon type mortgage the endowment the estimates are used to indicate the differential impact of credit market rationing and financial liberalization on households the results indicate significant variations in mortgage demand by choice of mortgage instrument econometric testing demonstrates that the choice between an endowment and a repayment mortgage can be used as an exogenous indicator of liquidity and portfolio positions and different user costs of owner occupation

regional differences in mortgage demand and mortgage instrument choice in the uk koblyakova a hutchison n and tiwari p regional differences in mortgage demand and mortgage instrument choice in the uk regional studies this paper presents empirical evidence of regional variations in mortgage choice decisions within the uk s mortgage sector utilizing british household panel survey bhps data for the years 2001 2007 and 2008 the paper suggests that a household s decision to choose a variable rate mortgage is more likely to occur in areas with lower incomes and affordability rates such as northern england scotland and wales since variable rate mortgages are more sensitive to income and monetary policy shocks the disproportional distribution of variable contracts within the mortgage sector may have a differential impact on the regions

a dynamic model of union membership and employment that it recognizes some link between present wage and employment levels and future membership and that it has an interest in the level of membership attained we model membership decisions with stochastic demand and a differential layoff rate for union and non union workers membership dynamics are behavioural in that membership increases when the utility of being a member exceeds the utility of not being a member the model permits a variety of possible relationships between employment and membership in the adjustment to steady state

evidence on the demand for mortgage debt by owner occupants abstract this paper explores the relationship between household mortgage debt burdens and housing consumption periodic income nonhousing wealth the income tax position of the household expected mobility and other micro level characteristics that proxy for household risk preferences and life cycle effects we use 1985 and 1989 american housing survey data to estimate mortgage debt level equations simultaneous with house value equations controlling for the contemporaneous nature of these two choices we find that larger debt levels are positively associated with greater value residences and with the level of household income numerous household level demographic characteristics are also systematically related to mortgage demand of particular interest are our findings that the use of mortgage debt is affected significantly by the rate of tax savings on mortgage interest deductions and by the expected mobility of the household

strategic resource extraction capital accumulation and overlapping generations abstract the standard resource extraction framework assumes infinitely lived agents and yields an overfishing result for some applications a finite time horizon may be more appropriate a direct extension of the levhari mirman model to overlapping generations yields an extreme overfishing result alternatively we assume young and old specialize and respectively fish and supply capital in this model under some circumstances there may well be under utilization of natural resources however for a given production technology if there are a sufficiently large number of agents overfishing always results

stock externality vs symbiosis in a forest air system stock externalities and ecological interaction have similar equilibrium effects the influence on the dynamics of an ecosystem however is quite different the different effects are laid out theoretically in the context of a forest air model we compare a centralized welfare maximizing policy and decentralized policies finally we numerically simulate the dynamic differences between stock externalities and ecological interaction

the effect of outsiders on union contracts abstract a recent proposal for incorporating the insider outsider distinction into the static monopoly union model results in implausible comparative static properties this paper presents an alternative formulation that rehabilitates the monopoly union model

the compleat fish wars biological and dynamic interactions abstract in this article we study an example of a fishery in which there are two agents each harvesting two species of fish there are two externalities in the model the dynamic externality studied in levhari and mirman 1980 and the biological externality examined in fischer and mirman 1992 this model allows us to study the interactions between agents in a model in which the species of fish interact we find the unique closed loop nash equilibrium in the context of a differential game and we compare the resulting catch ratios to the results of the earlier papers which allow for only one externality we also study the efficiency of the solution

supply driven mortgage choice variable mortgage contracts dominate the uk mortgage market the dominance of the variable rate mortgage contracts has important consequences for the transmission mechanism of monetary policy decisions and systemic risks this raises an obvious concern that a mortgage market such as that in the uk where the major proportion of mortgage debt is either at a variable or fixed for less than two years rate is vulnerable to alterations in the interest rate regime theoretically mortgage choice is determined by demand and supply factors so far most of the existing literature has focused on the demand side perspective and what is limited is consideration of supply side factors in empirical investigation on mortgage choice decisions this paper uniquely explores whether supply side factors may partially explain observed ex post mortgage type decisions empirical results detect that lenders profit motives and mortgage funding pricing issues may have assisted in preferences toward variable rate contracts sec

externalities trade and dynamics with expanding global trade countries around the world are becoming increasingly interdependent the necessity for the governments to devise economic policies strategically with respect to the world is therefore becoming more important however at the same time there are various sectors of economies that are competitive and thus not strategic since they are in a competitive environment agents in these sectors do not perceive the influence of their decisions on the world economy and act nonstrategically of course government policies affect all sectors hence economies are mixed having both strategic and nonstrategic components it is worthwhile to point out some examples of this type of mixed economy in western capitalist countries interest rates and exchange rates are determined in a competitive market while monetary and fiscal policies an integral part of the determination of these rates are controlled by governments the government decides on the amount of aggregate resources to be allocated for education and research and development research is often carried out by individuals or firms and there is a competitive market for the products generated by it another example can be found in the fishing industry government policies dictate the maximum amount of fish that can be extracted from the ocean while there is a conmpetitive market in fish along with the dual nature of decision making the above examples have another feature in common there are externalities between the policy makers decisions these externalities imply that there are interdependences among the countries so that the decisions of each of the countries have effects on the outcome of the competitive market the competitive outcome in turn affects the decisions of the policy makers in the various countries in the example of the monetary sector money supply in one country affects the rate of interest in the domestic country as well as abroad to properly

demographic change and the housing market evidence from a comparison of scotland and england this paper examines the impact of demographic change on the housing market more specifically a difference in differences methodology is used to explore the effect of population decline and population ageing on house prices in scotland and england wales the analysis suggests that population decline and population ageing put downward pressure on prices therefore the long run trend of rising real house prices can not be assumed to continue into the future particularly in scotland

analysis of nash equilibria in a class of capital accumulation games in a simple capital accumulation game we study existence and dynamic properties of the cooperative solution two kinds of markov perfect equilibria mpe and a trigger strategy equilibrium in the cooperative solution the stock always converges towards a steady state this property is shared by our first mpe whereas the second type of mpe may result in complicated dynamics a pareto comparison of both mpe depends on the parameter specifications but can turn out either way finally we show how the players can achieve the efficient payoffs of the cooperative solution as an equilibrium outcome by using trigger strategies

trade unions and seniority employment rules abstract some but not all trade union and insider outsider models assume that a seniority employment rule is used we investigate when firm and union members gain from such a rule and the consequences of their adopting one generally providing a seniority wage scale is also used they gain if union membership is not too large relative to demand and union bargaining power not too great moreover when outsiders are hired under a seniority employment rule employment is at the competitive level these results might explain why bargaining over employment is relatively uncommon and typically occurs only in industries with declining employment

do multiple nash equilibria in markov strategies mitigate the tragedy of the commons abstract in a seminal paper dockner and van long 1993 international pollution control cooperative versus non cooperative strategies journal of environmental economics and management 25 13 29 argue that nonlinear strategies allow to protect the commons compared with the linear and singular strategy this paper shows that the existence of multiple equilibria depends on preference characteristics and that multiple equilibria need not foster conservation in particular if the absolute elasticity of marginal utility is decreasing then multiple equilibria aggravate the tragedy of the commons compared with the singular or saddlepoint strategy

union wages temporary lay offs and seniority it is widely believed that the seniority system in conjunction with the collective bargaining process contributes significantly to the determination of the unemployment level in unionized sectors causa i empiricism suggests that real wage demands often remain buoyant in these sectors in the face of seemingly high rates of unemployment among union members james medoff 1979 p 380 convincingly documents the evidence that adjustment through lay offs is substantially greater in unionized firms than in comparable non unionized firms the usual but somewhat informal explanation is that the outcome of union voting is greatly influenced by senior workers who are fairly certain that they will not be laid off when normal shifts in the industry s demand for labour occur 2 these inframarginal workers are believed to vote for higher wage settlements than they would if their own jobs were not so secure

dynamic cournot competitive harvesting of a common pool resource a variant of the classical harvesting game where a number of competing agents simultaneously harvest a common pool natural resource is analysed the harvesting at each time is a cournot competition the critical assumption made in the present analysis is that most or all individual participants maintain a perspective which is wholly myopic three cases are analysed 1 the case of aggressive myopic cournot competition 2 co operation and 3 competition when there is an incumbent player the development in the number of active participants is outlined and stability criteria for a dynamic cournot competitive game are given the exact deadweight loss due to lack of co operation is calculated 2003 elsevier b v all rights reserved

can negotiations prevent fish wars abstract the standard alternating offer model is extended by integrating it with the levhari and mirman fish war model in order to investigate negotiations over fish quota the disagreement actions are endogenous the interior and linear markov perfect equilibrium mpe results in immediate agreement on an efficient path of fish quota this mpe is not analytically tractable numerical solutions show that patience is a disadvantage in this mpe and small differences in patience lead to large asymmetries in the bargaining outcome

unionized contracts with fixed wage rates and state contingent employment levels a union sets a state independent wage the firm sets employment along the state contingent demand for labor curve the union s maximand is the welfare of its cu rrent members however it sets a wage at which outsiders are recruit ed in good states so as to protect insiders employment prospects in bad states if these newly recruited workers join the union there m ay exist an equilibrium membership comparative statics results are o btained for government policy measures copyright 1988 by the london school of economics and political science

on the markovian efficiency of bertrand and cournot equilibria we characterize and compare closed loop feedback price and quantity strategies within a full fledged dynamic model of oligopolistic competition in which production requires exploitation of a renewable productive asset unlike previous papers on the strategic exploitation of productive assets we allow for imperfect product substitutability which enables us to deal with price competition we show that the traditional result that the bertrand equilibrium is more efficient than the cournot equilibrium does not necessarily hold in a markovian environment either in the short run or at the stationary equilibrium or using the discounted sum of welfare as a criterion for relative efficiency

optimal trade policies for a small open economoy this paper investigates optimal trade policies for a small open economy with unemployment when factor prices are rigid random foreign prices result in random unemployment of resources the ranking of second best policies is investigated if the marginal propensity to consume the importable is positive and nonincreasing in income the optimal composite tariff dominates the optimal target price which in turn dominates the optimal quota copyright 1993 by the london school of economics and political science

entry deterrence and overexploitation of the fishery abstract two stackelberg game models open access and restricted entry of a poaching fishery situation are proposed only the long run noncooperative solution of managing resource stocks is assumed feasible the optimal stock under open access for poachers is shown to be lower than under restricted entry and the latter to be lower than under exclusive ownership deterrence is completely successful under open access but is partially successful only under restricted entry the game models considered are shown to be equivalent to a constrained ownership fishery control problem or its surrogate

oligopoly exploitation of a private property productive asset abstract in this paper we build a closed loop nash equilibrium of a private property productive asset oligopoly we compare and contrast private with common property in terms of exploitation rates and social welfare and provide a comparative dynamic analysis with respect to the number of firms in the industry contrary to previous studies on oligopolistic exploitation of productive assets before exploitation begins the resource is parcelled out each firm privately owns and manages the assigned parcel over the entire planning horizon compared with the common property regime we find a new set of results both in the short and in the long run as for social welfare we provide conditions on the implicit growth rate and the initial asset stock under which the socially optimal allocation of the resource implies a natural monopoly