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A propos de la valeur de la vie humaine dans les décisions économiques.

Espérance morale avec risque moral

Le terme « risque moral » est utilisé ici pour désigner les situations où un décideur unique choisit simultanément un « acte » (au sens de la théorie des jeux contre la nature, telle que développée notamment par L.J. Savage) et une « stratégie », non observable, susceptible d’influencer le cours des événements. Dans les nombreuses applications de la théorie de la décision à des situations de risque moral, on suppose que, pour chaque acte, le décideur choisit, dans un ensemble donné, la stratégie qui maximise l’espérance d’utilité. Les choix entre les actes reflètent alors les espérances d’utilité associées à ces stratégies optimales. On obtient ici une justification axiomatique de cette représentation, en affaiblissant l’axiome appelé « Inversion d’ordre » par Anscombe et Aumann. Aux termes de cet axiome, quand une épreuve aléatoire décide de l’acte qui prévaudra, il doit être indifférent pour le décideur que l’épreuve aléatoire soit conduite avant ou après que l’on observe l’état du monde. L’affaiblissement consiste à stipuler au contraire que le décideur ne préfère jamais strictement que l’épreuve aléatoire soit conduite après observation de l’état du monde plutôt qu’avant (i.e. la valeur de l’information est non négative). Conjointement avec les autres axiomes habituels, cet affaiblissement conduit à un théorème d’espérance morale généralisé : il existe un ensemble (convexe fermé) de probabilités P sur les états du monde, et une utilité sur les conséquences, tels que les préférences entre les actes reflètent les maxima par rapport à P des espérances d’utilité.The words "moral hazard" are used here to denote situations where the decision-maker chooses simultaneously an "act" (as defined in the theory of games against nature, developed in particular by L.J. Savage) and an unobserved "strategy" susceptible of influencing the course of events. In applied work on moral hazard, it is assumed that, for each act, the decision-maker chooses, from a given set, the strategy which maximises expected utility. Preferences among acts are then isomorphic with expected utilities under the maximising strategies. An axiomatic justification of that representation is obtained here by weakening the axiom called "Reversal of order" by Anscombe and Aumann. Under that axiom, when a random device is to decide which of two acts obtains, the device may indifferently be activated before or after observing the true state. The weakening consists in stipulating instead that the decision-maker never prefers strictly that the device be activated after observing the true state instead of beforehand (i.e. the value of information is non-negative). Together with the other standard axioms, this weakening leads to a generalised moral expectation theorem: there exist a (closed convex) set of probability measures P on the states of the world, and a utility on consequences, such that preferences among acts are isomorphic with the maxima over P of the expected utilities

Voluntary Matching Grants can Forestall Social Dumping

The European economic integration leads to increasing mobility of factors, thereby threatening the stability of social transfer programs. This paper investigates the possibility to achieve by means of voluntary matching grants both the optimal allocation of factors and the optimal level of redistribution in the presence of factor mobility. We use a fiscal competition model a la Wildasin (1991) in which states differ in their technologies and preferences for redistribution. We first investigate a simple process in which the regulatory authority progressively raises the matching grants to the district choosing the lowest transfer and all districts respond optimally to the resulting change in transfers all around. This process is shown to increase total production and the level of reditribution. However it does not guarantee that all districts gain, nor that an efficient level of redistribution is attained. Assuming complete information among districts, we first derive the willingness of each district to match the contribution of other districts and we show that the aggregate willingness to pay for matching rates converges to zero when both the efficient level of redistribution and the efficient allocation of factors are achieved. We then describe the ajustment process for the matching rates that will lead districts to the efficient outcome and guarantee that everyone will gain.

Shareholder-efficient production plans in a multi-period economy

We propose an objective for the firm in a general model of production economies extending over time under uncertainty and with incomplete markets. Trading in commodities and shares of stock occurs sequentially on spot markets at all date-events. We derive the objective of the firm from the assumption of initial-shareholders efficiency. Each shareholder is assumed to communicate to the firm her marginal valuation of profits all date events (expressed in terms of initial resources). In defining her own marginal valuation of the firm's profits, a shareholder will take two elements into consideration. To evaluate the direct impact of a change in dividends the shareholder uses her own vector of marginal rates of substitution for revenue across date-events. In addition, the shareholder will take into account the impact of future dividends on the firm's stock price when she trades shares. To predict the effect on the stock price, she uses a (possibly different) state price process, her price theory. The only restriction that we impose on consumers' price theories is that they should be compatible with the observed equilibrium : given the equilibrium prices and production plans, a price theory must satisfy a no-arbitrage condition. The firm computes its own shadow prices for profits at all date-events by simply adding up the marginal valuations of all its initial shareholders. We prove existence of an equilibrium.Incomplete markets, shareholders, price theories, firm's objective.

Voluntary Matching Grants Can Forestall Social Dumping

The European economic integration leads to increasing mobility of factors, thereby threatening the stability of social transfer programs. This paper investigates the possibility to achieve by means of voluntary matching grants both the optimal allocation of factors and the optimal level of redistribution in the presence of factor mobility. We use a fiscal competition model a la Wildasin (1991) in which states differ in their technologies and preferences for redistribution. We first investigate a simple process in which the regulatory authority progressively raises the matching grants to the district choosing the lowest transfer and all districts respond optimally to the resulting change in transfers all around. This process is shown to increase total production and the level of redistribution. However it does not guarantee that all districts gain, nor that an efficient level of redistribution is attained. Assuming complete information among districts, we first derive the willingness of each district to match the contribution of other districts and we show that the aggregate willingness to pay for matching rates converges to zero when both the efficient level of redistribution and the efficient allocation of factors are achieved. We then describe the adjustment process for the matching rates that will lead districts to the efficient outcome and guarantee that everyone will gain.fiscal federalism, adjustment process, matching grants

La prise de décision en situation d’incertitude

A conceptual framework is provided by the "states of the world" approach (reviewed in section 1). The powerful normative analysis of individual decision-making under uncertainty extends the theory of consumer choice under certainty into an adequate specification of individual norms of behavior (section 2). But the link with observable market phenomena would require the existence of a complete set of insurance markets, one for every commodity conditionally on every state of the world. Although some disagreement persists on this point, the author feels that the insurance and asset markets which exist in western economies fall substantially short of offering trading opportunities comparable to those implied by a complete set of insurance markets. Consequently, consumer preferences are incompletely revealed by market prices. And business firms lack the information required to reach decisions by mere arithmetic comparisons of alternative profit levels (section 3). Management under uncertainty and incomplete markets acquires genuine significance. What norms of managerial behavior should be assumed for positive economic analysis is a disputed issue. From a normative viewpoint, managerial decisions must be viewed as group decisions, with consequences affecting many individuals—and the theory of such decisions is by necessity more complex (section 4).

Espérance morale avec risque moral

The words "moral hazard" are used here to denote situations where the decision-maker chooses simultaneously an "act" (as defined in the theory of games against nature, developed in particular by L.J. Savage) and an unobserved "strategy" susceptible of influencing the course of events. In applied work on moral hazard, it is assumed that, for each act, the decision-maker chooses, from a given set, the strategy which maximises expected utility. Preferences among acts are then isomorphic with expected utilities under the maximising strategies. An axiomatic justification of that representation is obtained here by weakening the axiom called "Reversal of order" by Anscombe and Aumann. Under that axiom, when a random device is to decide which of two acts obtains, the device may indifferently be activated before or after observing the true state. The weakening consists in stipulating instead that the decision-maker never prefers strictly that the device be activated after observing the true state instead of beforehand (i.e. the value of information is non-negative). Together with the other standard axioms, this weakening leads to a generalised moral expectation theorem: there exist a (closed convex) set of probability measures P on the states of the world, and a utility on consequences, such that preferences among acts are isomorphic with the maxima over P of the expected utilities. Le terme « risque moral » est utilisé ici pour désigner les situations où un décideur unique choisit simultanément un « acte » (au sens de la théorie des jeux contre la nature, telle que développée notamment par L.J. Savage) et une « stratégie », non observable, susceptible d’influencer le cours des événements. Dans les nombreuses applications de la théorie de la décision à des situations de risque moral, on suppose que, pour chaque acte, le décideur choisit, dans un ensemble donné, la stratégie qui maximise l’espérance d’utilité. Les choix entre les actes reflètent alors les espérances d’utilité associées à ces stratégies optimales. On obtient ici une justification axiomatique de cette représentation, en affaiblissant l’axiome appelé « Inversion d’ordre » par Anscombe et Aumann. Aux termes de cet axiome, quand une épreuve aléatoire décide de l’acte qui prévaudra, il doit être indifférent pour le décideur que l’épreuve aléatoire soit conduite avant ou après que l’on observe l’état du monde. L’affaiblissement consiste à stipuler au contraire que le décideur ne préfère jamais strictement que l’épreuve aléatoire soit conduite après observation de l’état du monde plutôt qu’avant (i.e. la valeur de l’information est non négative). Conjointement avec les autres axiomes habituels, cet affaiblissement conduit à un théorème d’espérance morale généralisé : il existe un ensemble (convexe fermé) de probabilités P sur les états du monde, et une utilité sur les conséquences, tels que les préférences entre les actes reflètent les maxima par rapport à P des espérances d’utilité.

“Almost” Subsidy-free Spatial Pricing in a Multi-dimensional Setting

Consider a population of citizens uniformly spread over the entire plane, that faces a problem of locating public facilities to be used by its members. The cost of every facility is financed by its users, who also face an idiosyncratic private access cost to the facility. We assume that the facilities’ cost is independent of location and access costs are linear with respect to the Euclidean distance. We show that an external intervention that covers 0.19% of the facility cost is sufficient to guarantee secession-proofness or no cross-subsidization, where no group of individuals is charged more than its stand alone cost incurred if it had acted on its own. Moreover, we demonstrate that in this case the Rawlsian access pricing is the only secession-proof allocation.Secession-Proofness, Optimal Jurisdictions, Rawlsian Allocation, Hexagonal Partition, Cross-Subsidization

Sequentially complete Markets Remain Incomplete

We consider the well-known result of Arrow (1953) that the set of equilibria of an economy with complete markets coincides with the one of an economy with sequentially complete markets. We show by means of two examples that this results is problematic when there exist multiple equilibrium continuations to the initial-period component of an intertemporal equilibrium. Some consequences are drawn.microeconomics ;

Le chômage en Europe : conclusions d’une analyse économétrique multinationale

Cet article résume les principales conclusions empiriques du European Unemployment Program. Il se base sur dix études nationales qui utilisent le cadre macroéconomique développé par Sneessens et Drèze (1986). Les principales conclusions sont les suivantes : (i) un problème majeur de l’Europe résulte de ce que les gains de productivité sont absorbés rapidement dans les salaires tandis que l’incidence du chômage sur les accords salariaux est généralement faible; (ii) la spirale salaires-prix-productivité rend les économies européennes vulnérables à l’inflation; (iii) la tension de la demande se résorbe par la balance des paiements plutôt que par des hausses de prix; (iv) le principal déterminant immédiat de l’emploi dans les années quatre-vingt est le niveau de la demande effective.The paper summarizes the principal empirical findings of the European Unemployment Program. It draws on 10 country studies which utilize the macroeconomic framework set out by Sneessens and Drèze (1986). The main conclusions are as follows: (i) a major problem in Europe is that productivity gains are quickly absorbed into wages and the effect of unemployment on wage settlements is generally weak; (ii) a wage-price-productivity spiral means the European economies are inflation-prone; (iii) demand pressures spill over into the balance of payments rather than leading to price increases; (iv) the major proximate determinant of employment in the 1980s is the level of effective demand