The Distribution of Earnings under Monopsonistic/polistic Competition

Recent empirical contributions in labor economics suggest that individual firms face upward sloping labor supplies. We rationalize this by assuming that idiosyncratic non-pecuniary conditions interact with money wages in workers’ decisions to work for specific firms. Likewise, firms supply differentiated goods in response to differences in consumer tastes. Hence, firms are price-makers and wage-setters. By combining monopolistic and monopsonistic competition, our setting encapsulates general equilibrium interactions between the two markets. The equilibrium involves double exploitation of labor. Compared to the competitive outcome, the high-productive workers are overpaid under free entry, whereas the low-productive workers are underpaid. In the same vein, capital-owners receive a premium, whereas workers are exploited.wage dispersion, worker heterogeneity, monopsonistic competition, monopolistic competition, labor exploitation

A simple model of economic geography à la Helpman-Tabuchi

This paper explores the interplay between commodities’ transportation costs and workers’ commuting costs within a general equilibrium framework à la Dixit-Stiglitz. Workers are mobile and choose a region where to work as well as an intraurban location to live. We sow that a more integrated economy need not be more agglomerated. Instead, low transportation costs lead to the dispersion of economic activities. This is because workers are able to alleviate the burden of urban costs by being dispersed, while retaining a good access to all varieties. By contrast, low commuting costs foster the agglomeration of economic activities.Commuting costs; urban costs; transportation costs; economic geography; agglomeration

Competing for capital when labor is heterogeneous

This paper investigates the impacts of capital mobility and tax competition in a setting with imperfect matching between firms and workers. The small country always gains and the large country always loses from tax competition, thus implying tax competition leads to redistribution from the large to the small country. These results imply that our model encapsulates both the “importance of being small” as well as the “importance of being large”. We also show that tax harmonization leads to redistribution from the large to the small countryfiscal competition; local labor markets; capital mobility

The role of fixed cost in international environmental negotiations.

We investigate the relative efficiency of an agreement based on a uniform standard without transfers and one based on differentiated standards with transfers when strictly identical countries deal with transboundary pollution. We especially ask what role fixed cost plays. Two approaches are examined: the Nash bargaining solution, involving two countries, and the coalition formation framework, involving numerous countries and emphasizing self-enforcing agreements. In the former, in terms of welfare, strictly identical countries may wish to reduce their emissions in a non-uniform way under the differentiated agreement. For this result to hold, the fixed cost of investment in abatement technology must be sufficiently high. The nature of the threat point of negotiations, however, also plays a crucial role. As concerns global abatement, the two countries abate more under the uniform agreement than under the differentiated one. In terms of coalition formation when numerous countries are involved, a grand coalition could emerge under a differentiated agreement.bargaining; standards; costs; Transboundary pollution;

Regional inequality and product variety

We investigate how differences in set-up costs of various types affect the trade-off between global efficiency and spatial equity and show that the standard assumption of symmetry in fixed costs masks the existence of an interesting effect : the range of available varieties varies depends on the spatial distribution of firms. In such a setting, even when the market outcome leads to excessive agglomeration under symmetric fixed costs, a planner opts for asymmetric fixed costs and more agglomeration. The reason is that the losses induced by more agglomeration are offset by the gains due to additional product variety.fixed costs; set-up costs; market size; international trade; homemarket effect

The resistible decline of European science

Using a new data set that allows us to analyze precisely the research output in all fields of science, we show that the gap in scientific performance between Europe, especially continental Europe, and Anglo-Saxon countries, especially the USA, is large. We measure research quality by the number of highly cited researchers in nineteen selected scientific fields. After controlling for different variables, such as par capita GDP and outlays in R&D, the differences in productivity between Anglo-Saxon countries and other countries are explained, not surprisingly, by the importance of English proficiency, but also by the quality of institutions and of governance of the countries in the studied sample, the latter being in all likelihood highly correlated with the governance quality of research institutions

The role of recent experience and weight on hen's agonistic behaviour during dyadic conflict resolution.

Recent victory or defeat experiences and 2-hour familiarity with the meeting place were combined with size differences in order to better understand their effects on the behaviour leading to the establishment of dyadic dominance relationships between hens not previously acquainted with each other. Three kinds of encounters were videotaped: (i) a previous winner unfamiliar with the meeting place met a previous loser familiar for 2 hours with the meeting place (n = 12 dyads); (ii) as in (i) but both were unfamiliar with the meeting place (n=12); (iii) as in (i) but the previous winner was familiar with the meeting place while the previous loser was unfamiliar (n=13). The weight asymmetry was combined with these three types of encounters by selecting hens of various weight differences: in 29 dyads the recent loser was heavier than the recent winner and in 8 dyads it was the reverse. Recent experience had a major influence upon both agonistic behaviour and dominance outcome. Hens that were familiar with the meeting site initiated attacks more frequently than their unfamiliar opponent but did not win significantly more often. Recent experience and site familiarity could be used to identify 80% of future initiators. Once the first aggressive behaviour had been initiated, it led to victory of its initiator in 92% of cases. Weight was not found to influence agonistic behaviour nor dominance outcome. However, hens with superior comb and wattles areas won significantly more initial meetings than opponents with smaller ones. In the final encounters, victory also went more frequently to the bird showing larger comb and wattles, which happened also to be the previous dominant in a majority of cases. The use of higher-order partial correlations as an ex post facto control for comb and wattles indicates that they were not influential upon agonistic behaviour nor on dominance outcome, but were simply co-selected with the selection of victorious and defeated birds in the first phase of the experiment designed to let hens acquire recent victory/defeat experience