14,879 research outputs found
Optimal Partitions in Additively Separable Hedonic Games
We conduct a computational analysis of fair and optimal partitions in
additively separable hedonic games. We show that, for strict preferences, a
Pareto optimal partition can be found in polynomial time while verifying
whether a given partition is Pareto optimal is coNP-complete, even when
preferences are symmetric and strict. Moreover, computing a partition with
maximum egalitarian or utilitarian social welfare or one which is both Pareto
optimal and individually rational is NP-hard. We also prove that checking
whether there exists a partition which is both Pareto optimal and envy-free is
-complete. Even though an envy-free partition and a Nash stable
partition are both guaranteed to exist for symmetric preferences, checking
whether there exists a partition which is both envy-free and Nash stable is
NP-complete.Comment: 11 pages; A preliminary version of this work was invited for
presentation in the session `Cooperative Games and Combinatorial
Optimization' at the 24th European Conference on Operational Research (EURO
2010) in Lisbo
BUDGET INFLEXIBILITY
The study of budgetary institutions has long been an important topic in the economic literature. Nonetheless, the degree of rigidity or inflexibility in budget preparation, a prime preoccupation for policy makers and in particular for finance ministers since a long time ago, has been relatively unexplored. In this paper we show that budget inflexibility can take several forms and argue that it is likely to be closely related to various types of political conflict present in the budget process. Moreover, we study one particular form of budget inflexibility and its connection with one specific (but perhaps the most important) political force driving the budget process. More specifically, we discuss some of the consequences of "expenditure inflexibility," defined as the existence of transfers to special interests enjoying constitutional or legal protection which impede their modification in the short run, in a simple model of legislative bargaining that captures the Tragedy of the Commons present in public budget allocation.Colombia, Fiscal Policy, Budget, Inflexibility
Strategyproof Mechanisms for Additively Separable Hedonic Games and Fractional Hedonic Games
Additively separable hedonic games and fractional hedonic games have received
considerable attention. They are coalition forming games of selfish agents
based on their mutual preferences. Most of the work in the literature
characterizes the existence and structure of stable outcomes (i.e., partitions
in coalitions), assuming that preferences are given. However, there is little
discussion on this assumption. In fact, agents receive different utilities if
they belong to different partitions, and thus it is natural for them to declare
their preferences strategically in order to maximize their benefit. In this
paper we consider strategyproof mechanisms for additively separable hedonic
games and fractional hedonic games, that is, partitioning methods without
payments such that utility maximizing agents have no incentive to lie about
their true preferences. We focus on social welfare maximization and provide
several lower and upper bounds on the performance achievable by strategyproof
mechanisms for general and specific additive functions. In most of the cases we
provide tight or asymptotically tight results. All our mechanisms are simple
and can be computed in polynomial time. Moreover, all the lower bounds are
unconditional, that is, they do not rely on any computational or complexity
assumptions
Sustainability and Optimality in Economic Development: Theoretical Insights and Policy Prospects
This paper takes sustainability to be a matter of intergenerational welfare equality and examines whether an optimal development path can also be sustainable. It argues that the general “zero-net-aggregate-investment” condition for an optimal development path to be sustainable in the sense of the maximin criterion of intergenerational justice is too demanding to be practical, especially in the context of developing countries. The maximin criterion of sustainability may be more appealing to the rich advanced industrial countries, but is too costly and ethically unreasonable for developing nations as it would act as an intergenerational “poverty equalizer”. The paper suggests that a compromise development policy that follows the optimal growth approach but adopts certain measures to mitigate the intergenerational and intragenerational welfare inequalities may better serve these countries. Some of the principal elements of such a policy are highlighted.Sustainability, Intergenerational Equity, Optimality, Discounting, Development Policy
A Paradox of Environmental Awareness Campaigns
We build a workable game of common-property resource extraction under rational Bayesian learning about the renewal prospects of a resource. We uncover the impact of exogenously shifting the prior beliefs of each player on the response functions of others. What we find about the role of environmental conservation campaigns is paradoxical. To the extent that such campaigns instill overly high pessimism about the potential of natural resources to reproduce, they create anti-conservation incentives: anyone having exploitation rights becomes inclined to consume more of the resource earlier, before others overexploit, and before the resource's stock is reduced to lower levels.renewable resources; resource exploitation; non-cooperative dynamic games; Bayesian learning; stochastic games; commons; rational learning; uncertainty; beliefs
Intergenerational Justice in the Hobbesian State of Nature
We analyse the issue of justice in the allocation of resources across generations. Our starting point is that if all generations have a claim to natural resources, then each generation should be entitled to exercise veto power on the unpalatable choices of the other generations. We analyse this situation as one of bargaining à la Rubinstein, Safra and Thomson [15], which incorporates a notion of justice as mutual advantage, rather than justice as impartiality, as in the Kantian-Rawlsian tradition. Our framework captures some key aspects of the interaction between isolated agents in a Hobbesian state of nature, in which agents are not placed behind a veil of ignorance, but none of them is sufficiently strong to impose their will against all others (state of war of all against all). We analyse some new social welfare relations emerging from this Hobbesian framework. JEL Categories: D63, Q01Intergenerational justice; bargaining; Hobbes; social choice.
Socially-Tolerable Discrimination
History is replete with overt discrimination on the basis of race, gender, age, citizenship, ethnicity, marital status, academic performance, health status, volume of market transactions, religion, sexual orientation, etc. However, these forms of discrimination are not equally tolerable. For example, discrimination based on immutable or prohibitively unalterable characteristics such as race, gender, or ethnicity is much less acceptable. Why? I develop a simple rent-seeking model of conflict which is driven by either racial (gender or ethnic) discrimination or generational discrimination (i.e., young versus old). When the conflicts are mutually exclusive, I find that racial discrimination is socially intolerable for a much wider range of parameter values relative to generational discrimination. When they are not mutually exclusive, I find that racial discrimination can be socially intolerable while generational discrimination is socially tolerable. The converse is not true. My results are not driven by a stronger intrinsic aversion to discrimination on the basis of immutable characteristics. I am able to explain why some forms of discrimination (e.g., racism) are much less tolerable than other forms of discrimination (e.g., age discrimination) without making any value judgements about either form of discrimination.conflict, contest, discrimination, race, generation, rent-seeking
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