bluuebunny/crossref_metadata_2025 huggingface dataset:
Ethics Case-Study Simulation: A Generic Tool for Psychology Teachers
Authors: McMinn Mark R.
Published: December 2005

A case-study simulation program designed to assist instructors in teaching ethics in psychology is described. The program is generic, allowing instructors to develop their own case studies to use with the software. Two case-study texts have been prepared for use with the program.
The Nature-Nurture Issue: Lessons from the Pillsbury Doughboy
Authors: Miller David B.
Published: December 2005

One of the most difficult concepts to explain in the classroom is the complex interrelationship between genes and experience in the development of organic structure and behavior. This article describes the use of a cooking metaphor as a means of conceptualizing the nature–nurture problem.
Interpreting Students' Interpretations of Research
Authors: May Richard B. , Hunter Michael A.
Published: December 2005

This article examines the role of random sampling and random assignment in the interpretation of research results. Students and faculty were asked two multiple-choice questions about research methods. When questioned about the role of random sampling, 75% of all subjects correctly associated it with generality inference (generalizability). When asked about the role of random assignment, however, only 27% of all subjects correctly associated it with causal inference. The remaining subjects allocated at least some part of the role of random assignment to generalizability. We suggest that these findings reflect a bias in psychologists' training due to teaching a statistical model that stresses random sampling and generality inference. We discuss the random assignment model, which focuses on causal inference, and recommend that both models be taught in introductory methods and statistics courses.
The Hypothesis-Testing Game: A Training Tool for the Graduate Interviewing Skills Course
Authors: Rickard Kathryn M. , Titley Robert W.
Published: December 2005

This article describes an interviewing game used in a graduate-level interviewing skills course. The goal of the game is to teach basic components of the interviewing process such as comfort with the interview, microcounseling skills, hypothesis generation, and hypothesis testing. The instructor plays the part of a client and is interviewed by two teams of students. Roles of students in the game and game procedure are explained. Favorable student ratings and positive feedback have been received.
What Students Know about the History of Psychology before Taking the Course
Authors: Henderson Bruce B.
Published: December 2005

This article describes the use of a questionnaire at the beginning of a history of psychology course. The questionnaire assesses student knowledge of historical findings, major concepts, and assumptions about the nature of psychology. Responses indicate gaps in students' knowledge that are useful in guiding course instruction. Comparison of student responses with responses by faculty members has stimulated discussions of the need for more careful attention to historical roots and broad conceptual issues in other psychology courses.
Production of reactive oxygen species in response to replication stress and inappropriate mitosis in fission yeast
Authors: Marchetti Maria A. , Weinberger Martin , Murakami Yota , Burhans William C. , Huberman Joel A.
Published: December 2005

Previous studies have indicated that replication stress can trigger apoptosis-like cell death, accompanied (where tested) by production of reactive oxygen species (ROS), in mammalian cells and budding yeast (Saccharomyces cerevisiae). In mammalian cells, inappropriate entry into mitosis also leads to cell death. Here, we report similar responses in fission yeast (Schizosaccharomyces pombe). We used ROS- and death-specific fluorescent stains to measure the effects of mutations in replication initiation and checkpoint genes in fission yeast on the frequencies of ROS production and cell death. We found that certain mutant alleles of each of the four tested replication initiation genes caused elevated ROS and cell death. Where tested, these effects were not enhanced by checkpoint-gene mutations. Instead, when cells competent for replication but defective in both the replication and damage checkpoints were treated with hydroxyurea, which slows replication fork movement, the frequencies of ROS production and cell death were greatly increased. This was a consequence of elevated CDK activity, which permitted inappropriate entry into mitosis. Thus, studies in fission yeast are likely to prove helpful in understanding the pathways that lead from replication stress and inappropriate mitosis to cell death in mammalian cells.
Myo10 in brain: developmental regulation, identification of a headless isoform and dynamics in neurons
Authors: Sousa Aurea D. , Berg Jonathan S. , Robertson Brian W. , Meeker Rick B. , Cheney Richard E.
Published: December 2005

Although Myo10 (myosin-X) is an unconventional myosin associated with filopodia, little is known about its isoforms and roles in the nervous system. We report here that, in addition to full-length Myo10, brain expresses a shorter form of Myo10 that lacks a myosin head domain. This `headless' Myo10 is thus unable to function as a molecular motor, but is otherwise identical to full-length Myo10 and, like it, contains three pleckstrin homology (PH) domains, a myosin-tail homology 4 (MyTH4) domain, and a band-4.1/ezrin/radixin/moesin (FERM) domain. Immunoblotting demonstrates that both full-length and headless Myo10 exhibit dramatic developmental regulation in mouse brain. Immunofluorescence with an antibody that detects both isoforms demonstrates that Myo10 is expressed in neurons, such as Purkinje cells, as well as non-neuronal cells, such as astrocytes and ependymal cells. CAD cells, a neuronal cell line, express both full-length and headless Myo10, and this endogenous Myo10 is present in cell bodies, neurites, growth cones and the tips of filopodia. To investigate the dynamics of the two forms of Myo10 in neurons, CAD cells were transfected with GFP constructs corresponding to full-length or headless Myo10. Only full-length Myo10 localizes to filopodial tips and undergoes intrafilopodial motility, demonstrating that the motor domain is necessary for these activities. Live cell imaging also reveals that full-length Myo10 localizes to the tips of neuronal filopodia as they explore and interact with their surroundings, suggesting that this myosin has a role in neuronal actin dynamics.
Here come the septins: novel polymers that coordinate intracellular functions and organization
Authors: Spiliotis Elias T. , Nelson W. James
Published: December 2005

Septins are conserved GTP-binding proteins that associate with cellular membranes and the actin and microtubule cytoskeletons. They polymerize to form filamentous structures that act as diffusion barriers between different membrane domains and as molecular scaffolds for membrane- and cytoskeleton-binding proteins. In yeast, septins are central to the spatio-temporal coordination of membrane polarity and cell division, but the roles of their mammalian counterparts have remained poorly understood. However, recent findings have shed light on the dynamics and regulation of mammalian septin assembly and our understanding of septin functions in cytoskeleton and membrane organization. The mammalian septins appear to form a novel network of hetero-polymers that are multi-functional, inter-changeable and respond dynamically to signals that coordinate events at the interface between cytoskeleton and membrane biology. Hence, studies of these molecules might provide new insights not only into how cells coordinate their functions, but also into the pathogenesis of cancer and other diseases in which septins are abnormally expressed.
Natural selection is not required to explain universal compositional patterns in rRNA secondary structure categories
Authors: SMIT SANDRA , YARUS MICHAEL , KNIGHT ROB
Published: December 2005

We have encountered an unexpected property of rRNA secondary structures that may generalize to all RNAs. Analysis of 8892 ribosomal RNA sequences and structures from a wide range of species revealed unexpected universal compositional trends. First, different categories of rRNA secondary structure (stems, loops, bulges, and junctions) have distinct, characteristic base compositions. Second, the observed patterns of variation are similar among sequences from large and small rRNA subunits and all domains of life, despite extensive evolutionary divergence. Surprisingly, these differences do not seem to be related to selection for different compositions in different structural categories, but rather relate to the overall composition of the molecule: Randomized RNAs with no evolutionary history show the same structure-dependent compositional biases as rRNAs. These compositional trends may improve the accuracy of RNA secondary structure prediction, because they allow us to compare predicted structures against known compositional preferences. They also suggest caution in interpreting differences in the rate of change of the GC content in different parts of the molecule as evidence of differential selection.
p54nrb is a component of the snRNP-free U1A (SF-A) complex that promotes pre-mRNA cleavage during polyadenylation
Authors: LIANG SONGCHUN , LUTZ CAROL S.
Published: December 2005

The U1 snRNP-A (U1A) protein has been known for many years as a component of the U1 snRNP. We have previously described a form of U1A present in human cells in significant amounts that is not associated with the U1 snRNP or U1 RNA but instead is part of a novel complex of non-snRNP proteins that we have termed snRNP-free U1A, or SF-A. Antibodies that specifically recognize this complex inhibit in vitro splicing and polyadenylation of pre-mRNA, suggesting that this complex may play an important functional role in these mRNA-processing activities. This finding was underscored by the determination that one of the components of this complex is the polypyrimidine-tract-binding protein-associated splicing factor, PSF. In order to further our studies on this complex and to determine the rest of the components of the SF-A complex, we prepared several stable HeLa cell lines that overexpress a tandem-affinity-purification-tagged version of U1A (TAP-tagged U1A). Nuclear extract was prepared from one of these cell lines, line 107, and affinity purification was performed along with RNase treatment. We have used mass spectrometry analysis to identify the candidate factors that associate with U1A. We have now identified and characterized PSF, p54nrb, and p68 as novel components of the SF-A complex. We have explored the function of this complex in RNA processing, specifically cleavage and polyadenylation, by performing immunodepletions followed by reconstitution experiments, and have found that p54nrb is critical.
Virus-like particles of the Ty3 retrotransposon assemble in association with P-body components
Authors: BELIAKOVA-BETHELL NADEJDA , BECKHAM CARLA , GIDDINGS THOMAS H. , WINEY MARK , PARKER ROY , SANDMEYER SUZANNE
Published: December 2005

Retroviruses and retrotransposons assemble intracellular immature core particles around a RNA genome, and nascent particles collect in association with membranes or as intracellular clusters. How and where genomic RNA are identified for retrovirus and retrotransposon assembly, and how translation and assembly processes are coordinated is poorly understood. To understand this process, the subcellular localization of Ty3 RNA and capsid proteins and virus-like particles was investigated. We demonstrate that mRNAs, proteins, and virus-like particles of the yeast Ty3 retrotransposon accumulate in association with cytoplasmic P-bodies, which are sites of mRNA translation repression, storage, and degradation. Deletions of genes encoding P-body proteins decreased Ty3 transposition and caused changes in the pattern of Ty3 foci, underscoring the biological significance of the association of Ty3 virus-like protein components and P-bodies. These results suggest the hypothesis that P-bodies may serve to segregate translation and assembly functions of the Ty3 genomic RNA to promote assembly of virus-like particles. Because Ty3 has features of a simple retrovirus and P-body functions are conserved between yeast and metazoan organisms, these findings may provide insights into host factors that facilitate retrovirus assembly.
Early Breastfeeding Cessation in Rural Senegal: Causes, Modes, and Consequences
Authors: Mané N. Binta , Simondon Kirsten B. , Diallo Aldiouma , Marra Adama M. , Simondon François
Published: December 2005

Objectives. We studied reasons for cessation of breastfeeding before the age of 15 months, replacement feeding modes, and child mortality in West Africa.

Methods. Data were gathered for 12208 children born between 1987 and 1997 in a rural area of Senegal. Interviews were conducted with caregivers of early-weaned children, and child mortality risks were assessed.

Results. Fewer than 1% of children had been weaned early. The main reasons for early weaning were maternal death and new pregnancy (in 41% and 27% of cases, respectively). Twenty percent of children had been relactated by a wet nurse, and 16% had received formula. Many early-weaned children died before the age of 2 years (26%), particularly those weaned early as a result of the mother’s death (hazard ratio = 5.1; 95% confidence interval [CI] = 1.74, 15.0). Girls had a lower hazard ratio than boys (0.16; 95% CI=0.05, 0.41).

Conclusions. Our results showed that early cessation of breastfeeding was rare but that associated mortality was high, especially when the mother had died.
Exploring the Political Economy of Consumer Legislation: The Development of Automobile Lemon Laws
Authors: Shaffer Brian , Ostas Daniel T.
Published: December 2005

Between 1982 and 1994 all fifty states enacted new car warranty legislation commonly known as ‘lemon laws’. These statutes provide that a consumer who buys a lemon (defined as ‘a chronically defective new car that cannot be repaired with a reasonable effort’) is entitled to receive a replacement car or full refund from the car's manufacturer. We ask why these laws were enacted, exploring both economic and political rationales. The analysis demonstrates that reasonable economic arguments can be advanced for the legislation, both pro and con, and concludes that the legislation resulted most directly from an alliance of consumer advocates and automobile dealers at the expense of manufacturers. This case study illustrates the interplay of legal, political, and economic factors that shape consumer legislation generally.
Enforcement of China's Accounting Standards: Reflections on Systemic Problems
Authors: Opper Sonja
Published: December 2005

The key objective of this paper is to highlight the interconnectedness between China's political and economic system and its weak enforcement of accounting and auditing standards. The institutional analysis shows that the prevailing political and economic priorities constituting China's “socialist market economy” create a framework, that basically relies on state-led enforcement with weak supplementary private safeguard mechanisms. The resulting policy-mix is characterized by a mismatch of incentives and available devices to effectively enhance enforcement. While the state bureaucracy has little incentive to effectively fight financial misreporting because of both blurred policy–economy boundaries and the coexistence of multiple and even non-economic goals, shareholders and creditors do not have sufficient and effective private safeguard mechanisms at hand. Findings lead to the conclusion that China's recent harmonization move of accounting and auditing standards urgently needs to be backed up by stronger efforts to create effective enforcement mechanisms. Sound reforms would have to center on a rigorous upgrading and restructuring of the responsible bodies supervising auditing quality and financial disclosure. Parallel to these measures, the increasing integration into the global economy may provide incentives and competitive pressure to comply with globally accepted standards.
Regional Integration and Third-Country Inward Investment
Authors: Markusen Jim
Published: December 2005

The paper focuses on how the Free Trade Area of the Americas (FTAA), which will include both high-income developed and developing countries, will affect the options and investment strategies of multinational firms outside the region. Preliminary sections discuss the strategies open to both insider firms (headquartered with the Americas) and outsider firms, and the characteristics of technologies and countries that determine equilibrium location choices. Then I turn more explicitly to the question at hand, and suggest that a free-trade area of the Americas can be conceptually decomposed into (a) integration among the southern developing countries and (b) integration between the south and NAFTA. The first will give third-country multinationals horizontal investment opportunities to serve the effectively larger southern market with local production to serve the local southern market. The second gives third-country multinationals the opportunity to exploit low labor costs in the south to produce for export to North America (export-platform FDI). While this all sounds attractive for third-country firms, the theory emphasizes that the same advantages of integration are conferred upon U.S. and Canadian firms who have the additional advantage of supplying services and intermediate goods to southern affiliates at lower cost than the third country firms. This competitive effect from insider firms leads the theory to suggest weaker benefits to third-country firms than a simpler approach might predict.
Genericity with Infinitely Many Parameters
Authors: Anderson Robert M. , Zame William R.
Published: December 2005

Genericity analysis is widely used to show that desirable properties that fail in certain "knife-edge" economic situations nonetheless obtain in "typical" situations. For finite-dimensional spaces of parameters, the usual notion of genericity is full Lebesgue measure. For infinite dimensional spaces of parameters (for instance, the space of preferences on a finite-dimensional commodity space, no analogue of Lebesgue measure is available; the lack of such an analogue has prompted the use of less compelling topological notions of genericity. Christensen (1974) and Hunt, Sauer and Yorke (1992) have proposed a measure-theoretic notion of genericity, which Hunt, Sauer and Yorke call prevalence, which coincides with full Lebesgue measure in Euclidean space and which extends to infinite-dimensional vector spaces. This notion is not directly applicable in most economic settings because the relevant parameter sets are small subsets of vector spaces -- especially cones or order intervals -- not vector spaces themselves. We adapt the notion to economically relevant environments by defining two notions of prevalence relative to a convex set in a topological vector space. The first notion is very easy to understand and apply, and has all of the properties one would desire except that it is not closed under countable unions; the second notion contains the first and has all the good properties of the first notion except simplicity; it is closed under countable unions. We provide four economic applications: 1) generic existence of equilibrium in financial models, 2) generic finiteness of the number of pure strategy Nash equilibria and Pareto inefficiency of "non-vertex" Nash equilibria for games with a continuum of actions and smooth payoffs, 3) generic regularity of exchange economies when some agents are constrained to have 0 endowment of some goods, 4) generic single-valuedness of the core of transferable utility games.
Faulty Communication: Some Variations on the Electronic Mail Game
Authors: Morris Stephen E
Published: December 2005

The electronic mail game of Rubinstein (1989) showed that a lack of common knowledge generated by faulty communication can make coordinated action impossible. This paper shows how this conclusion is robust to having a more realistic timing structure of messages, more than two players who meet publicly but not as a plenary group, and may be robust to strategic decisions about whether to communicate.
Market Research and Market Design
Authors: Baliga Sandeep , Vohra Rakesh
Published: December 2005

We study trading models when the distribution of signals such as costs or values is not known to traders or the mechanism designer when the profit-maximizing trading procedure is designed. We present adaptive mechanisms that simultaneously elicit this information (market research) while maintaining incentive compatibility and maximizing profits when the set of traders is large (market design). First, we study a monopoly pricing model where neither the seller nor the buyers know the distribution of values. Second, we study a model with a broker intermediating trade between a large number of buyers and sellers with private information about their valuations and costs. We show that when the set of traders becomes large our adaptive mechanisms achieve the same expected profits for the monopolist and the broker as when the distribution of signals is common knowledge.
Asymmetric Vertical Integration
Authors: Buehler Stefan , Schmutzler Armin
Published: December 2005

We examine vertical backward integration in a reduced-form model of successive oligopolies. Our key findings are: (i) There may be asymmetric equilibria where some firms integrate and others remain separated, even if firms are symmetric initially; (ii) Efficient firms are more likely to integrate vertically. As a result, integrated firms also tend to have a large market share. The driving force behind these findings are demand/mark-up complementarities in the product market. We also identify countervailing forces resulting from strong vertical foreclosure, upstream sales and endogenous acquisition costs.
On the Right-of-First-Refusal
Authors: Bikhchandani Sushil , Lippman Steven A. , Ryan Reade
Published: December 2005

When the seller of an asset grants a right-of-first-refusal to a buyer, this special buyer has the opportunity to purchase the asset at the best price the seller can obtain from the other potential buyers. We show that the right-of-first-refusal is inefficient, and it benefits the special buyer at the expense of the seller and other buyers. In a private values model, the benefit the special buyer obtains via the right-of-first-refusal equals the cost to the seller. When buyers' valuations are correlated, the presence of a special buyer exacerbates the winner's curse on regular buyers. Consequently, the special buyer's expected gain from the right-of-first-refusal is often less than the expected loss to the seller. Thus, our analysis suggests that the seller should exercise considerable caution prior to deciding whether to grant this right to a buyer.
Denial of Death and Economic Behavior
Authors: Kopczuk Wojciech , Slemrod Joel
Published: December 2005

We model denial of death and its effect on economic behavior. Attempts to reduce death anxiety and the possibility of denial of mortality-relevant information interact with intertemporal choices and may lead to time-inconsistent behavior and other behavioral phenomena. In the model, repression of signals of mortality leads to underconsumption for unsophisticated individuals, but forward-sophisticated individuals may over-consume in anticipation of future denial and may seek ways to commit to act according to ones mortality prospects as currently perceived. We show that the mere possibility of engaging in this kind of denial leads to time-inconsistent but efficient behavior. Refusal to face up to the reality of death may help explain a wide range of empirical phenomena, including the underutilization of tax-advanced inter vivos gifts and inadequate purchase of life insurance.
Joint Liability and Peer Monitoring under Group Lending
Authors: Che Yeon-Koo
Published: December 2005

This paper studies an incentive rationale for the use of group lending as a method of financing liquidity-constrained entrepreneurs. The joint liability feature associated with group lending lowers the liquidity risk of default but creates a free-riding problem. In the static setting, the free-riding problem dominates the liquidity risk effect under a plausible condition, thus making group lending unattractive. When the projects are repeated infinitely many times, however, the joint liability feature provides the group members with a credible means of exercising peer sanction, which can make the group lending attractive, relative to individual lending.
Regulating Endogenous Customer Switching Costs
Authors: Gans Joshua S , King Stephen Peter
Published: December 2005

Recent concern has arisen with regard to the potential for introducing competition in previously protected sectors as customer switching costs may make entry (and hence, aggressive price competition) difficult to achieve. An excellent example of this arises telecommunications deregulation with regard to the costs customers face in changing phone numbers. Interestingly, in such cases, switching costs can be ameliorated by incumbent action. For telecommunications, technologies exist that port existing phone numbers between networks. Regulators therefore, favour mandating such amelioration of switching costs but issues arise as to the allocation of the costs of implementing such solutions. This paper examines the issues associated with the regulation of customer switching costs. We compare regimes whereby customers as opposed to firms bear amelioration costs and find that while a customers-pay approach assists in facilitating an efficient choice regarding amelioration, incumbents have an incentive to distort those costs upwards under such a regime. Our central result is that a better approach would be to have incumbents bear amelioration costs but encourage the exercise of 'buy back’ options whereby the incumbent pays the switching customer to bear their original cost of switching rather than utilize amelioration technologies. In the case of number portability, this regulatory option is similar to vesting customers with property rights over their existing number that they can sell to their current network.
Private Strategies in Finitely Repeated Games with Imperfect Public Monitoring
Authors: Mailath George J. , Matthews Steven A. , Sekiguchi Tadashi
Published: December 2005

We present three examples of finitely repeated games with public monitoring that have sequential equilibria in private strategies, i.e., strategies that depend on own past actions as well as public signals. Such private sequential equilibria can have features quite unlike those of the more familiar perfect public equilibria: (i) making a public signal less informative can create Pareto superior equilibrium outcomes; (ii) the equilibrium final-period action profile need not be a stage game equilibrium; and (iii) even if the stage game has a unique correlated (and hence Nash) equilibrium, the first-period action profile need not be a stage game equilibrium.
Risk Averse Supervisors and the Efficiency of Collusion
Authors: Faure-Grimaud Antoine , Laffont Jean-Jacques , Martimort David
Published: December 2005

This paper studies the efficiency of collusion between supervisors and supervisees. Building on Tirole (1986)'s results that deterring collusion with infinitely risk averse supervisors is impossible, while it is costless to do so under risk neutrality, we develop here a theory of collusion based on a trade-off between the risk premia required by (less extreme) risk attitudes and incentives. This allows us to link the efficiency of collusion to the supervisor's risk aversion and to various parameters characterizing the economic environment in which collusion may take place. We are then able to derive implications for the design of organizations, like determining how the number of tasks/agents per supervisor or the level of competition may impact on the cost of collusion, studying the impact of vertical integration on those same costs, or characterizing the role of uncertainty on side-contracting.
Homothetic or Cobb-Douglas Behavior Through Aggregation
Authors: Giraud Gael , Quah John K.-H.
Published: December 2005

A common theme in the theory of demand aggregation is that market demand can acquire properties which are not always individually present among the agents who make up that market, a phenomenon we call heteroiosis in this paper. This paper focusses on the well known result that with a suitable distribution of demand behavior (arising perhaps from the underlying distribution of preferences), market demand can become an approximately linear function of income or even take on approximately Cobb-Douglas properties. We highlight the mathematical arguments underpinning these models and show that in the right context, it is possible to carry the arguments further and achieve exact, rather than just approximate, results: exact Cobb-Douglas market demand or exact linearity of market demand with respect to income.
A One-Period Version of Rubinstein's Bargaining Game
Authors: Evans Robert
Published: December 2005

A one-period, simultaneous-offers bargaining game is analyzed in which, for each player, there is a small probability that his or her proposal will not reach the other player. The unique pure strategy equilibrium offers are identical to those of the Rubinstein (1982) infinite-horizon, alternating-offers bargaining game. This provides a novel interpretation of Rubinstein's result, as well as a new non-cooperative implementation of the Nash Bargaining Solution.
Search and Bargaining in Large Markets With Homogeneous Traders
Authors: Ponsati Clara
Published: December 2005

We study decentralized trade in dynamic markets with homogeneous, non-atomic, buyers and sellers that wish to exchange one unit. In the first part of the paper we characterize equilibrium in a bargaining model with two-sided time varying outside options. In the second part we analyze a market equilibrium model in which (i) buyers and sellers are randomly matched in pairs; (ii) each buyer-seller pair bargains over the price of a good; and (iii) each agent has the option of abandoning negotiations, in which case the value of returning to the pool of unmatched agents constitutes an outside option. The second part is therefore an application of the first part in which the values of the outside options are endogenous to the model. Conditions for uniqueness of the market equilibrium are given; when it is unique it converges to the Walrasian outcome as frictions vanish. To the extent that multiplicity of market equilibria may (under some conditions) persist as frictions are removed, the limit of some sequences of equilibrium prices may converge to non-Walrasian values.
Players With Limited Memory
Authors: Huck Steffen , Sarin Rajiv
Published: December 2005

This paper studies a model of memory. The model takes into account that memory capacity is limited and imperfect. We study how agents with such memory limitations, who have very little information about their choice environment, play games. We introduce the notion of a Limited Memory Equilibrium (LME) and show that play converges to an LME in every generic normal form game. Our characterization of the set of LME suggests that players with limited memory do (weakly) better in games than in decision problems. We also show that agents can do quite well even with severely limited memory, although severe limitations tend to make them behave cautiously.
On the Welfare Evaluation of Income and Opportunity
Authors: Villar Antonio
Published: December 2005

This paper provides an axiomatization of a cardinal welfare measure for the evaluation of income and opportunity. Following Roemer's (1998) formulation of equality of opportunity, we divide the society in n effort groups consisting of subsets of agents who exert a comparable degree of effort. We show that social welfare can be measured as the sum of n partial indices, one for each effort group, each of which consists of a function of the aggregate income of the group and its dispersion (measured by Theil's first inequality index).
Uniform Proofs of Order Independence for Various Strategy Elimination Procedures
Authors: Apt Krzysztof R.
Published: December 2005

We provide elementary and uniform proofs of order independence for various strategy elimination procedures for finite strategic games, both for dominance by pure and by mixed strategies. The proofs follow the same pattern and focus on the structural properties of the dominance relations. They rely on Newman's Lemma established in 1942 and related results on the abstract reduction systems.
Precedents and Timing: A Strategic Analysis of Multi-Plaintiff Litigation
Authors: Lee Jihong
Published: December 2005

We study the decision of when to sue in a game in which multiple plaintiffs have similar cases against a single defendant. Two legal regimes are considered. In one, prior results are binding in all future cases. In contrast, under the prevalent asymmetric regime, adverse results are binding against the defendant in future actions, but a judgement adverse to one plaintiff will not be binding against another plaintiff. Some legal scholars have argued that such a system is unfair to defendants and benefits plaintiffs. Our analysis reveals, however, that an asymmetric regime may actually hurt plaintiffs in equilibrium by inducing them to wait.
Counterfactual Reasoning and Common Knowledge of Rationality in Normal Form Games
Authors: Zambrano Eduardo
Published: December 2005

When evaluating the rationality of a player in a game one has to examine counterfactuals such as "what would happen if the player were to do what he does not do?" In this paper I develop a model of a normal form game where counterfactuals of this sort are evaluated as in the philosophical literature (cf. Lewis, 1973; Stalnaker, 1968). According to this method one evaluates a statement like ``what would the player believe if he were to do what he does not do'' at the world that is closest to the actual world where the hypothetical deviation occurs. I show that in this model common knowledge of rationality need not lead to rationalizability. I also present assumptions that allow rationalizability to follow from common knowledge of rationality. These assumptions suggest that rationalizability may not rely on weaker assumptions about belief consistency than Nash equilibrium.
Monotone Preferences over Information
Authors: Dubra Juan , Echenique Federico
Published: December 2005

We consider preference relations over information that are monotone: more information is preferred to less. We prove that, if a preference relation on information about an uncountable set of states of nature is monotone, then it is not representable by a utility function.
Vertical Differentiation, Asymmetric Information and Endogenous Bank Screening
Authors: Hyytinen Ari , Toivanen Otto
Published: December 2005

In a model of bank lending characterized by asymmetric information, we show that banks may use an interim monitoring technology strategically to soften price competition, even though the borrowers face no moral hazard problem. The interim monitoring technology can also be used to alleviate adverse selection. The equilibria that emerge resemble those in vertical product differentiation models. We also show that because of the strategic use of interim monitoring, a bank may forego the use of a costless and perfect ex-ante screening technology.
Spontaneous Market Emergence
Authors: Fafchamps Marcel
Published: December 2005

Drawing insights from the literature and from the author's own survey work on contractual practices among manufacturers and traders in Africa, we study the transition from anonymous to personal to impersonal exchange. Using a dynamic game with heterogenous agents and information sharing, we derive precise conditions under which relational contracting spontaneously emerges and deters opportunistic breach even in the absence of formal market institutions. Exclusion of cheaters is not required for contracting to begin. As exchange develops, newcomers may be excluded from contracting when screening costs are high and agents long lived. Reputational equilibria in which cheaters are permanently excluded are not decentralizable unless contracting is already developed and breach of contract is interpreted as a sign of impending bankruptcy.
Upward and Downward Limit Pricing: The Role of Post-Entry Competition
Authors: Granero Luis M
Published: December 2005

Under asymmetric information, entry-deterring strategies by an incumbent monopolist can consist of deviations from its static monopoly price through downward deviations termed downward limit pricing, or upward deviations termed upward limit pricing. Our analysis shows that the mode of post-entry competition influences the range of situations in which an incumbent adopts a strategy of downward limit pricing instead of an upward one: this range is greater under price than under output competition; it is decreasing in the degree of product differentiation; and with homogeneous product only downward limit pricing emerges under price competition, while upward limit pricing can still take place with output competition.
Patent Renewal Fees and Self-Funding Patent Offices
Authors: Gans Joshua S , King Stephen P , Lampe Ryan
Published: December 2005

A socially optimal structure of application and renewal fees for patents would encourage the maximal number of applications while reducing effective patent length. We find, however, that when patent offices are required to be self-funding, resource constraints can distort this fee structure. Specifically, a financially constrained, but welfare-oriented, patent office will tend to raise initial application fees while lowering renewal fees. This creates two detriments to social welfare as it discourages the filing of some patents while extending the effective life of others.
Unraveling of Information: Competition and Uncertainty
Authors: Stivers Andrew E
Published: December 2005

This paper examines incentives for information disclosure in a oligopolistic market when buyers are unsure of the existence of that information. Previous empirical and theoretical work has shown that mandatory disclosure laws can be binding when buyers do not know whether the information exists. This paper shows that the information unraveling result is strengthened by competition not only because a market with more firms is increasingly likely to have at least one firm with quality high enough to want to disclose it (thus starting the information unraveling result) but also because firms reveal information that makes themselves look bad if they can make their competitors look worse. This results in prisoner's dilemma style incentives to reveal that ensures full disclosure as the number of firms goes to infinity.
Testing for Stabilizing Monetary Policy Rules: How Robust to Alternative Specifications?
Authors: Carey Kevin
Published: December 2005

A common hypothesis of interest in estimated Taylor rules is whether the Federal Funds rate increases more than one-for-one with inflation; a rule with this characteristic is described as stabilizing. This paper discusses the interaction of this hypothesis with the widespread use of a partial adjustment model, in the context of sub-sample stability and robustness to the assumed exclusion of the long bond rate. Estimated rules display sharply different behavior in the 1980s versus the 1990s, and the degree of inertia -- on which the calculated policy response depends -- rises to implausibly high levels in the 1990s. The rising inertia sharpens the non-linearity of the model, imparting fragility to the stabilization inference. Long bond inclusion mitigates these problems, but alternatives to partial adjustment, with a more flexible approach to autocorrelation, also show promise.
Fiscal institutions and welfare in an open economy
Authors: Negrete Juan Carlos
Published: December 2005

This paper shows that, in a multi-country framework with government deficit spillovers, designing institutions that reduce the budget deficit is an optimal response from a country’s individual point of view. However, at an aggregate level this non-cooperative behavior is counterproductive. The case in which countries cooperate in the design of their fiscal institutions is also studied and compared with the former scenario. The study provides a new approach for analyzing mechanisms, such as the Stability Pact for Europe’s monetary union, recently implemented with the aim of reducing the budget deficit.
Income Taxation, Productive Government Expenditure and Stochastic Growth: On Conditions for an Optimal Policy and the Role of the Risk Premium
Authors: Clemens Christiane
Published: December 2005

This paper employs a stochastic endogenous growth model with productive government expenditure to analyze the macroeconomic effects of income taxation. We demonstrate that in the presence of capital and income risk the impact of taxation on consumption choice as well as on economic growth is ambiguous as it affects the mean as well as the variance of disposable income. It is possible to solve for welfare-maximizing policies, but contrary to the deterministic framework, welfare-, consumption- and growth-maximizing policies do not necessarily coincide. Multiple solutions for optimal tax rates can be found. The risk premium turns out to be a key factor in explaining the effects. In fact, growth-maximizing policies also maximize the risk premium. This may entail too much risk for risk-averse agents, thereby minimizing welfare and the propensity to consume.
Roads versus Schooling: Growth Effects of Government Choices
Authors: Rioja Felix K.
Published: December 2005

This paper studies the growth effects of productive public expenditures on education and public capital in an endogenous growth model of overlapping generations. The model is calibrated to Latin American data, and the effects of raising government expenditures on education and public capital are computed. Results show that increases in these public expenditures have moderate, positive effects on per capita growth and income under different scenarios. In addition, re-allocating expenditures from public capital to education while keeping the budget constant can raise growth up to a threshold.
Output Gap Uncertainty and Monetary Policy During the 1970s
Authors: Spencer David E.
Published: December 2005

The conduct of monetary policy during the 1970s was greatly complicated by systematic real-time misperceptions of the state of economic activity as measured by the output gap. Employing real-time data and using the Taylor rule as an analytical framework, I explore the implications of utilizing alternative observable proxies for the unobservable output gap. I compare the counterfactual paths for the federal funds rate generated under each proxy with the actual path of the federal funds rate and a benchmark ( "ideal" ) path implied by a full information Taylor rule. Results suggest that these real-time proxies would have resulted in better policy outcomes than actually occurred. Indeed, the federal funds rate path that comes closest to the ideal path occurs when the estimate of the output gap is taken to be zero (its steady-state value) at every point in time. This is equivalent to ignoring output gap information in monetary policy decisions.
Do Minimum Wages Raise the NAIRU?
Authors: Tulip Peter
Published: December 2005

Maybe a lot. The ratio of the minimum wage to the average wage enters a Phillips-curve equation with a coefficient that is highly significant, stable, and robust. One interpretation of these results is that the relative level of the minimum wage affects the Non-Accelerating Inflation Rate of Unemployment or NAIRU. My estimates are consistent with the reduction in the relative level of the minimum wage since 1980 lowering the U.S. NAIRU about 1½ percentage points, while raising the NAIRU in continental Europe. However, other interpretations are also possible.
Labor Market Performance and Flexibility: Which Comes First?
Authors: Saltari Enrico , Tilli Riccardo
Published: December 2005

We use a matching framework to explore the hypothesis that firing costs are a decreasing function of labor market tightness. Conventional wisdom suggests that differences in employment protection legislation (EPL) cause differences in labor market performance. Our hypothesis suggests a reverse causality nexus: it is labor market tightness which causes labor market rigidities. The endogeneity of firing costs produces a positive externality. We show that if this externality offsets the standard search externality, the model generates multiple equilibria. which reflect a trade off between wage moderation and the strictness of EPL. We demonstrate that the equilibria are not Pareto ranked. The analysis of local stability shows that, when firing costs externality offsets the search cost externality, the equilibrium is a stable node; vice versa, the equilibrium is an unstable saddle point. Finally, we investigate the question of social efficiency, obtaining a generalization of the Hosios (1990) condition.
Job Insecurity, Reallocation and Technological Innovation in a Self-Fulfilling Prophecy
Authors: Vermeylen Koen
Published: December 2005

If workers anticipate a technological innovation, some workers may decide to quit their job and retrain themselves to acquire the skills which are needed by this new technology. However, this may facilitate the innovation and make it a self-fulfilling prophecy. This self-fulfilling mechanism is reinforced if the anticipated innovation causes job insecurity for workers who do not retrain themselves and keep their current job, but realize that the innovation may make their job obsolete. If these workers engage in precautionary saving and cut their consumption expenditures, aggregate output contracts. This gives the other workers an extra incentive to quit their job and acquire new skills, and therefore facilitates even more the innovation which consumers were worried about. This paper formalizes this idea. It also provides an illustration of how a first-order Taylor-approximation of the Euler equation yields an effect of precautionary saving.
Unions and Workforce Adjustment Costs
Authors: Piccirilli Giulio
Published: December 2005

We present an economy composed of many sectors. In each sector, a simple dynamic stochastic game is played between a wage-setting union and many competitive firms that choose employment. Firms are subject to linear workforce adjustment costs whilst the union, along with employment and wages, is also concerned with limiting the number of insiders fired during business downturns.We show that the interaction between mandated firing costs and the protection of insiders operated by the union through the wage policy reduces the effect of the former on the job turnover rate. In particular, the negative relationship between turnover and firing costs may be so weak that it could easily escape empirical detection. Thus, the paper offers a potential explanation for the surprisingly similar patterns of aggregate job turnover exhibited by OECD countries despite large differences in the stringency of legislated employment protection.
Socio-Cultural Variables and Economic Success: Evidence from Italian Provinces 1951-1991
Authors: Peri Giovanni
Published: December 2005

Italy makes for an interesting case-study of the impact of socio-cultural variables on economic performance: under a common institutional framework differences in socio-cultural attitudes across Italian provinces correspond to large differences in their economic success. We analyze the effects of social variables on long-run provincial economic performance during Italy's era of economic take-off (1951-1991). Since socio-cultural traits in Italy are deeply rooted in local history and traditions, we argue that their persistence produces an (at least partly) exogenous determinant of economic prosperity. While we find rather weak evidence that civic involvement (Social Capital as defined in Putnam, 1993) fosters economic success, we do find strong evidence that the presence of organized crime (proxied by murder rates at the beginning of the period) is associated with low economic development, even after controlling for other economic and geographic factors.