Urban crime and labor mobility

We present a model of crime where two municipalities exist within a metro area (MSA). Consistent with the literature, local law enforcement has a crime reduction effect and a crime diversion effect. The former confers a spillover benefit to the other municipality, while the latter a spillover cost. If the net spillovers are positive (negative), then the respective Nash enforcement levels are too low (high) from the perspective of the MSA. When we allow for Tiebout type mobility, labor will move to the location offering lower disutility crime (including the tax burden). To attract labor both jurisdictions would like to raise the relative crime that exists in the competing region. Interestingly, this could raise or reduce enforcement compared to the immobility case. If it was too high (low) under immobility, it will be raised (reduced) further under mobility. In the symmetric case, neither can gain any labor, but the competition for it pushes the jurisdictions further away from the efficient (cooperative) outcome. Thus, mobility must be welfare reducing. We also consider asymmetry in the context of differences in efficiency of enforcement. The low cost municipality has the lower crime damage (inclusive of the tax burden) and attracts labor. Mobility is necessarily welfare reducing for the high cost municipality and for the MSA, but it has an ambiguous effect on the low cost municipality.Crime - Economic aspects ; Labor mobility - United States

Behavioural decisions & welfare

If decision-makers (DMs) do not always do what is in their best interest, what do choices reveal about welfare? This paper shows how observed choices can reveal whether the DM is acting in her own best interest. We study a framework that relaxes rationality in a way that is common across a variety of seemingly disconnected positive behavioral models and admits the standard rational choice model as a special case. We model a behavioral DM (boundedly rational) who, in contrast to a standard DM (rational), does not fully internalize all the consequences of her own actions on herself. We provide an axiomatic characterization of choice correspondences consistent with behavioral and standard DMs, propose a choice experiment to infer the divergence between choice and welfare, state an existence result for incomplete preferences and show that the choices of behavioral DMs are, typically, sub-optimal

A Relation-algebraic Approach to Simple Games

Simple games are a powerful tool to analyze decision-making and coalition formation in social and political life. In this paper, we present relation-algebraic models of simple games and develop relational algorithms for solving some basic problems of them. In particular, we test certain fundamental properties of simple games (being monotone, proper, respectively strong) and compute specific players (dummies, dictators, vetoers, null players) and coalitions (minimal winning coalitions and vulnerable winning coalitions). We also apply relation-algebra to determine central and dominant players, swingers and power indices (the Banzhaf, Holler-Packel and Deegan-Packel indices). This leads to relation-algebraic specifications, which can be executed with the help of the BDD-based tool RelView after a simple translation into the tool's programming language. In order to demonstrate the visualization facilities of RelView we consider an example of the Catalonian Parliament after the 2003 election.relation algebra; RelView; simple game; winning coalition; swinger; dominant player; central player; power index

Functionals and the Quantum Master Equation

The quantum master equation is usually formulated in terms of functionals of the components of mappings from a space-time manifold M into a finite-dimensional vector space. The master equation is the sum of two terms one of which is the anti-bracket (odd Poisson bracket) of functionals and the other is the Laplacian of a functional. Both of these terms seem to depend on the fact that the mappings on which the functionals act are vector-valued. It turns out that neither this Laplacian nor the anti-bracket is well-defined for sections of an arbitrary vector bundle. We show that if the functionals are permitted to have their values in an appropriate graded tensor algebra whose factors are the dual of the space of smooth functions on M, then both the anti-bracket and the Laplace operator can be invariantly defined. Additionally, one obtains a new anti-bracket for ordinary functionals.Comment: 21 pages, Late

A model of the Eurosystem's operational framework for monetary policy implementation

This paper offers a game theoretic model of liquidity provision through repeated central bank tenders, in the spirit of the operational framework of the Eurosystem. Banks are required to satisfy reserve requirements subject to an averaging provision over individual maintenance periods, and transactions may hang over into the respective subsequent period. It is shown that liquidity shocks are absorbed by the system by exponentially declining oscillations around the stationary equilibrium. When a policy rate cut is expected, bidders strategically reduce demand prior to the decision, which may unbalance the system. The anticipation of strategic behavior may generate an oscillation even before the maintenance period in which the decision is expected. When the recently released ECB proposal is implemented in the model, then the bidders' strategic motives are effectively eliminated. It is shown that, alternatively, bidding behavior can be corrected using a simple reimbursement scheme. JEL Classification: E51, G28