Price and Death

How does an artistâs death impact on the price of his or her works of art? We investigate this question in an infinite-horizon dynamic general equilibrium setting. Employing the open-loop Stackelberg equilibrium concept to describe the interactive behaviour of collectors and artists, we find that the art price remains at some well-defined "pseudo-competitive" level as long as the artist is alive. Only when the artist unexpectedly dies, the price increases on impact. This so-called death effect varies negatively with the artistâs age at death. If it is well known that an artist is ailing from some terminal illness and his or her death thus does not come as a surprise, the price of the ailing artistâs work increases when the news of the ailment is divulged; the price immediately jumps to the level which will prevail at the time when the artist dies.art prices, durable-goods monopoly, Stackelberg equilibrium

MODELS WITH TWO OR MORE PUBLIC GOODS

We extend the simple model of voluntary public good provision to allow for two or more public goods, and explore the new possibilities that arise in this setting. We show that, when there are many public goods, voluntary contribution equilibrium typically generates, not only too low a level of public good provision, but also the wrong mix of public goods. We also analyse the neutrality property in the more general setting, and extend a neutrality proposition of Bergstrom, Blume and Varian (1986). The first author would like to thank Professor Peter Bardsley and the Economic Theory Centre, University of Melbourne, for providing a very congenial period as a visitor, during which this paper was completed.Public goods, Neutrality, Constrained Pareto efficiency

Technology, Preference Structure, and the Growth Effect of Money Supply

This paper studies the growth effect of money supply in the presence of increasing returns and endogenous labor supply. By using a simple model of endogenous growth with a cash-in-advance constraint, it is shown that the growth effect of money supply depends on the specifications of preference structures as well as on the production technology. Either if the production technology exhibits strong non-convexity or if the utility function has a high elasticity of intertemporal substitution, then there may exist dual balanced-growth equilibria and the impact of a change in money growth depends on which steady state is realized in the long run. It is also shown that there is no systematic relationship between the growth effect of money supply and local determinacy of the balanced growth path.monetary growth, indeterminacy, increasing returns, non-separable utility.

Partial Harmonization of Corporate Taxes in an Asymmetric Repeated Game Setting

This paper investigates the conditions under which partial harmonization for capital taxation is sustained in a repeated interactions model of tax competition when there are three heterogenous countries with respect to their capital endowments. We show that regardless of the structure of the coalition (i.e., any group of countries), whether partial tax harmonization is sustainable or not crucially depends on the capital endowment of the median country relative to those of the large and small countries. The most noteworthy finding is that the closer the capital endowment of the median country to the average capital endowment of the large and small countries, the less likely is the tax harmonization including the median country to prevail and the more likely is the partial tax harmonization excluding the median country to prevail.tax coordination, asymmetric countries, repeated game, tax competition

On the Sustainability of Partial Tax Harmonization among Asymmetric Countries

This paper investigates the conditions under which partial harmonization for capital taxation is sustained in a repeated interactions model of tax competition when there are three countries asymmetric in repect to their capital endowments. We show that regardless of the structure of the coalition (i.e., any group of asymmetric countries), whether partial tax harmonization is sustainable or not crucially depends on the capital endowment of the median country relative to those of the large and small countries. The most noteworthy finding is that the closer the capital endowment of the median country to the average capital endowment of the large and small countries, the less likely is the tax harmonization including the median country to prevail and the more likely is the partial tax harmonization excluding the median country to prevail

Partial Tax Coordination in a Repeated Game Setting

This paper addresses the problem of partial tax coordination among regional or national sovereign governments in a repeated game setting. We show that partial tax coordination is more likely to prevail if the number of regions in a coalition subgroup is smaller and the number of existing regions in the entire economy is larger. We also show that under linear utility, partial tax coordination is more likely to prevail if the preference for a local public good is stronger. The main driving force for these results is the response of the intensity of tax competition. The increased (decreased) intensity of tax competition makes partial tax coordination more (less) sustainable.partial tax coordination, repeated game, tax competition

Private Provision of Public Goods between Families

We consider a two-stage voluntary provision model where individuals in a family contribute to a pure public good and/or a household public good, and, at the same time, the parent makes private transfers to her child within the same family. We show not only that Warr’s neutrality holds regardless of the different timings of parent-to-child transfers, but also that there is a continuum of Nash equilibria in the sense that individuals’ contributions and parental transfers are indeterminate, although the allocation of each’s private consumption and total public good provision is uniquely determined. We further show that, even in the presence of impure altruism or productivity difference in supplying public goods, neutrality and uniqueness of the equilibrium allocation may persist.

Optimal emission tax with endogenous location choice of duopolistic firms

This paper explores optimal environmental tax policy under which duopoly firms strategically choose the location of their plants in a simple three-stage game. We examine how the relationship between the optimal emission tax and the choice of location of duopoly firms affects the welfare of the home country. We characterize the relationship between the optimal emission tax and the fixed cost, depending on the degree of environmental damage from production. Finally, we show the existence of asymmetric equilibrium in which either firm chooses relocation of its plant even if the duopoly firms are identical ex ante.

Optimal Emission Tax with Endogenous Location Choice of Duopolistic Firms

This paper explores optimal environmental tax policy under which duopoly firms strategically choose the location of their plants in a simple three-stage game. We examine how the relationship between the optimal emission tax and the choice of location of duopoly firms affects the welfare of the home country. We characterize the relationship between the optimal emission tax and the fixed cost, depending on the degree of environmental damage from production. Finally, we show the existence of asymmetric equilibrium in which either firm chooses relocation of its plant even if the duopoly firms are identical ex ante.Environmental policy, Relocation, Welfare

Letter from Ray Itaya to Claire D. Sprauge, June 5, 1942

June 5, ‘42 [1942] Dear Mrs. Sprague, Hello! Thanks for the nice workbook. There isn\u27t nothing going on but today [but] [the] graduates of Stockton High and Lodi High graduated. I enclose our newspaper and the program paper of the high school. Well I’ll close now. Sincerely, Ray Itaya P.S. I’ll write more next time.https://scholarlycommons.pacific.edu/sprague/1004/thumbnail.jp