Backward Stealing and Forward Manipulation in the WTO

Motivated by the structure of WTO negotiations, we analyze a bargaining environment in which negotiations proceed bilaterally and sequentially under the most-favored-nation (MFN) principle. We identify backward-stealing and forward-manipulation problems that arise when governments bargain under the MFN principle in a sequential fashion. We show that these problems impede governments from achieving the multilateral efficiency frontier unless further rules of negotiation are imposed. We identify the WTO nullification-or-impairment and renegotiation provisions and its reciprocity norm as rules that are capable of providing solutions to these problems. In this way, we suggest that WTO rules can facilitate the negotiation of efficient multilateral trade agreements in a world in which the addition of new and economically significant countries to the world trading system is an ongoing process.

The impact of trust on private equity contracts

This paper adresses the impact of trust on private equity contracts. Trust between investor and entrepreneur is essential to help overcome control problems, especially in an environment with severe agency risks and incomplete contracts. In this study, information about the effects of trust is collected using a simulation with 144 entrepreneurs and investors. We find that trust has an impact on the desired contracts of entrepreneurs, but not on that of investors. Our findings suggest that for parties, faced with potentially large agency problems (investors), trust and control seem to play complementary roles. On the other hand, for parties faced with smaller agency problems (entrepreneurs), trust seems to be a substitute for control

Vertical integration and exclusive vertical restraints in health-care markets

We examine vertical integration and exclusive vertical restraints in health-care markets where insurers and hospitals bilaterally bargain over contracts. We employ a bargaining model in a concentrated health-care market of two hospitals and two health insurers competing on premiums. Without vertical integration, some bilateral contracts will not be concluded only if hospitals are sufficiently differentiated, whereas with vertical integration we find that a breakdown of a contract will always occur. There may be two reasons for not concluding a contract. First, hospitals maychoose to soften competition by contracting only one insurer in the market. Second, insurers and hospitals may choose to increase product differentiation by contracting asymmetric hospital networks. Both types raise total industry profits and lower consumer welfare.

THE PEACE OF WORK AGREEMENT: THE EMERGENCE AND ENFORCEMENT OF A SWISS LABOUR MARKET INSTITUTION

This paper deals with a specific institution of the Swiss labour market called the work peace agreement. It notably appeared in 1937 in the machine and metal work industry. First, the paper portrays the characteristics of the agreement and work peace clauses in Switzerland. Second, the paper describes the emergence of the 1937 agreement, which was a big step in Swiss industrial relations. The agents’ strategies and external economic pressure which provoked the move to cooperation are the main factors stressed. Third, the problem of the agreement persistence is addressed. As benefits from the convention generate a context of public goods allocation, finally the paper scrutinises the free rider problem which is expanding when the agreement is continuously signed.

`Breaking and entering' of contracts as a matter of bargaining power and exclusivity clauses

We analyze the effect of liquidated damage rules in exclusive contracts that are negotiated in a sequential bargaining process between one seller and two buyers with endogenous outside options. We show that assumptions on the distribution of bargaining power influence the size of the payment of damages and determine which contractual party benefits from including liquidated damage rules. Furthermore, we show that the effect of the payment of damages on the efficiency of the consummated deals depends on the possibility to sign more than one contract. Only if this is not possible, damage rules may prevent the breaking and entering of contracts and thus lead to inefficient deals in the market of corporate control, or allow for `naked' exclusion in the context of supplier contracts with externalities.sequential bargaining, bargaining power, outside option, liquidated damage rules, termination fees, exclusivity agreements

Measuring Baseball’s Heartbeat: The Hidden Harms of Wearable Technology to Professional Ballplayers

Föreliggande examensarbete undersöker möjligheterna att effektivisera order- och lagerhanteringen av surfplattor hos företaget Företag A. Arbetet är avgränsat till företagets varuhus i Barkarby och till de två största märkena på marknaden just nu; Apple och Samsung. Detta är ett ämne som är relativt nytt eftersom det är en relativt ny marknad runt hela världen som har exploderat sedan Apples första lansering av surfplattan. Eftersom Företag A säljer samtliga märkens surfplattor vilka har helt olika efterfrågan, så kan deras order- och lagerhantering bli svårhanterlig. De uppställda frågeställningarna som ligger till grund för arbetet är: Vilken/vilka teoretiska modeller om orderhantering kan bäst tillämpas på fallet Företag A Barkarby? Vilka åtgärder skulle kunna genomföras för att effektivisera det nuvarande arbetssättet? Utifrån dessa frågor har en del modeller undersöks huruvida de passar in i både teori och praktik på Företag As sätt att hantera de mest sålda surfplattorna på sitt lager. Genom att studera deras arbetssätt när det gäller ordrar och förvaring på lagret kan sedan passande modeller appliceras. Fallstudien har till stor del genomförts genom att utifrån studielitteratur diskutera ämnet med personal från Företag A; både från huvudkontoret och från Barkarbyvaruhuset.Resultatet från uppsatsen är att det inte finns någon befintlig modell som passar in till 100% på Företag As arbetssätt, däremot finns det andra faktorer som kan ändras på för att få en mer kontinuerlig och överseende orderhantering. Marknaden för surfplattor är otroligt oförutsägbar och fluktuerar ofta utan något utstuderat mönster. Det enda som har visat sig vara säkert är åtgången av de två mest populära märkena när de släpper en ny modell.Marknaden för elektronikkedjor är otroligt konkurrensstyrd, inte bara i Sverige utan i hela Europa, vilket gör det än viktigare att ha rätt kvantitet på lager. Finns inte det kunderna vill ha så går de någon annanstans, eftersom priserna på surfplattor är densamma överallt.This paper examines the possibilities to make the handling of orders and storage for tablets more efficient for Företag As warehouse in Barkarby. The work is limited to the company’s warehouse in Barkarby and to the two largest manufacturers for tablets; Apple and Samsung. This is a relatively new subject because it is a relatively new market around the world, which has exploded since Apple released their first tablet. Because Företag A sells every manufacturer’s tablet, all with different demands, it makes the organisation of orders and storage quite difficult.The formulated questions which this paper is based on are: Which of the theoretical models about orderhandeling can best be applied on the case of Företag A Barkarby? What measures can be used to make the current way of working more efficient? With these questions as a starting point some models have been studied whether they fit in theory and practice in the way Företag A works when it comes to handling the most sold tablets in their storage. Through studying their way of working suiting models can be applied. The case study has mainly been implemented by after reading student literature discussing the problems with people who works at Företag A; both at the head quarters and in the warehouse in Barkarby.The result from this essay is that there isn’t any model which fits 100 % on Företag A’s way of work, but there are other factors that can be changed to get a more continuous and overseeing order process. The market for tablets is very unpredictable and fluctuates often without a worked out pattern. The only sure thing is the demand with the two most popular manufacturers when they release a new model.The market for electronic chains is extremely competition controlled, not only in Sweden but in all of Europe, which makes it even more important to have the right quantity in storage. If the product that the customers want isn’t available they simply go somewhere else, since the prices are the same everywhere

Efficient partnership dissolution under buy/sell clauses

When a partnership comes to an end partners have to determine the terms of the dissolution. A well known way to do so is by enforcing a buy/sell option. Under its rules one partner has to offer a price for the partnership and the other agent can choose whether she wants to sell her share or buy her partners share at this price. It is well known that in a model with private valuations this dissolution rule may generate inefficient allocations. However, we here show that if partners negotiate for the advantage of being chooser, then this buy/ sell provision results in an ex-post efficient outcome. This result helps to explain why such provisions are so widely introduced in partnership contracts.partnership dissolution, divide and choose mechanism, cake-cutting mechanism, buy/sell clause

GATT-Think

We describe recent work on the theory of trade agreements that speaks to the purpose and design of GATT. Our discussion proceeds in three steps. First, we examine the purpose of a trade agreement. In both the traditional economic and the political-economy approaches to the study of trade agreements, the problem for a trade agreement to solve is the excessive protection that arises in the absence of an agreement as a consequence of the terms-of-trade externality. Second, we consider the origin and design of GATT. We note that GATT is a rules-based institution whose origin can be traced to the disastrous economic performance that accompanied the high tariffs of the 1920's and 1930's. Finally, we review the theoretical literature that interprets and evaluates the institutional features found in GATT. We consider in particular whether GATT articles can be interpreted as offering negotiation rules that help governments undo the inefficient restrictions in trade that are caused by the terms-of-trade externality. On the whole, our review suggests that the core principles of GATT indeed may be interpreted in this manner. Specifically, we report findings that indicate that the principles of reciprocity and non-discrimination work in concert to remedy the inefficiency created by the terms-of-trade externality. We also extract a variety of predictions from the literature on enforcement and trade policy, and we argue that these predictions are broadly compatible with both the design of GATT and certain historical experiences in trade-policy conduct. We thus interpret the literature reviewed here as providing a strong presumption for the view that GATT can be understood as an institution whose central principles are well-designed to assist governments in their attempt to escape from a terms-of-trade-driven Prisoners' Dilemma. Our review therefore offers support for the (politically-augmented) terms-of-trade theory as an appropriate framework within which to interpret and evaluate GATT.