220 research outputs found
It is Hobbes, not Rousseau:an experiment on voting and redistribution
We perform an experiment which provides a laboratory replica of some
important features of the welfare state. In the experiment, all individuals in a group
decide whether to make a costly effort, which produces a random (independent) outcome
for each one of them. The group members then vote on whether to redistribute
the resulting and commonly known total sum of earnings equally amongst themselves.
This game has two equilibria, if played once. In one of them, all players make
effort and there is little redistribution. In the other one, there is no effort and nothingWe thank Iris Bohnet, Tim Cason, David Cooper, John Duffy, Maia Guell, John Van Huyck and Robin Mason for helpful conversations and encouragement. The comments of the Editor and two referees helped improve the paper. We gratefully acknowledge the financial support from Spain’s Ministry of Science and Innovation under grants CONSOLIDER INGENIO 2010 CSD2006-0016 (all authors), ECO2009-10531 (Cabrales), ECO2008-01768 (Nagel) and the Comunidad de Madrid under grant Excelecon (Cabrales), the Generalitat de Catalunya and the CREA program (Nagel), and project SEJ2007-64340 of Spain’s Ministerio de Educación y Ciencia (Rodríguez Mora).Publicad
Employment Expectations and Gross Flows by Type of Work Contract
There is growing interest in understanding firms’ temporary and permanent employment practices and how institutional changes shape them. Using data on Spanish establishments, we examine: (a) how employers adjust temporary and permanent job and worker flows to prior employment expectations, and (b) how the 1994 and 1997 labour reforms promoting permanent employment affected establishments’ employment practices. Generally, establishments’ prior employment expectations are realized through changes in all job and worker flows. However, establishments uniquely rely on temporary hires as a buffer to confront diminishing long-run employment expectations. None of the reforms significantly affected establishments’ net temporary or permanent employment flows.http://deepblue.lib.umich.edu/bitstream/2027.42/40032/3/wp646.pd
A Top Dog Tale with Preference Complementarities
The emergence of a winner-take-all (top dog) outcome is generally due to political or institutional constraints or to specific technological features which favour the performance of just one individual. In this paper we provide a different explanation for the occurrence of a top-dog equilibrium in exchange economies. We show that once heterogeneous complementarities (i.e. Scarf’s preferences) are analysed with general endowment distributions, a variety of equilibria different from the well-known symmetric outcome with full utilisation of resources can emerge. Specifically, we show that stable corner equilibria with a winner-take-all (top dog) individual arise that are Pareto optima although the remaining individuals are no better off than with zero consumption and resources can be unused. Because of heterogenous complementarities, market mechanisms are weak and cannot overcome the top dog’s power. Voting mechanisms or taxation policies can reduce the top dog’s privileged position
Cooperation, Norms, and Revolutions: A Unified Game-Theoretical Approach
Cooperation is of utmost importance to society as a whole, but is often
challenged by individual self-interests. While game theory has studied this
problem extensively, there is little work on interactions within and across
groups with different preferences or beliefs. Yet, people from different social
or cultural backgrounds often meet and interact. This can yield conflict, since
behavior that is considered cooperative by one population might be perceived as
non-cooperative from the viewpoint of another.
To understand the dynamics and outcome of the competitive interactions within
and between groups, we study game-dynamical replicator equations for multiple
populations with incompatible interests and different power (be this due to
different population sizes, material resources, social capital, or other
factors). These equations allow us to address various important questions: For
example, can cooperation in the prisoner's dilemma be promoted, when two
interacting groups have different preferences? Under what conditions can costly
punishment, or other mechanisms, foster the evolution of norms? When does
cooperation fail, leading to antagonistic behavior, conflict, or even
revolutions? And what incentives are needed to reach peaceful agreements
between groups with conflicting interests?
Our detailed quantitative analysis reveals a large variety of interesting
results, which are relevant for society, law and economics, and have
implications for the evolution of language and culture as well
Taking the Sector Seriously: Data, Developments, and Drivers of Intrasectoral Earnings Inequality
The politics and administration of institutional chang
Profitability of Pension Contributions: Evidence from Real-Life Employment Biographies
Labor Market Segmentation and Efficient Bargaining in a Macroeconomic Model
Claas O. Labor Market Segmentation and Efficient Bargaining in a Macroeconomic Model. Center for Mathematical Economics Working Papers. Vol 600. Bielefeld: Center for Mathematical Economics; 2018.This paper studies the implications of a segmented labor market with efficient wage–
employment bargaining on the internal labor market and a competitive external labor
market on the temporary equilibrium of a closed monetary macroeconomy of the AS–
AD type with government activity, fiat money, and expectations. Workers have identical
preferences, those on the internal labor market are represented by a labor union. There
is no mobility between the labor markets.
Union power measured by the share of the production surplus allotted to the union
and union density measured by the fraction of workers who are union members impact
the functional income distribution, but neither affect the individual employment levels
nor the aggregate employment level and the aggregate supply function. The wage on the
internal labor market is above the wage on the external labor market if and only if the
profit share of total revenue is smaller than under a fully competitive labor market.
Unique temporary equilibria exist for all combinations of union power and union density.
The paper provides a complete comparative-statics analysis showing in particular a
negative price effect of union power and a positive price effect of union density. In general,
the effects of union power and union density on any equilibrium value are usually of
opposite signs. Single-labor-market models with a fully competitive or a fully unionized
labor market are special or limiting cases of the segmented-labor-market model
Expenditure Reform in Industrialised Countries: A Case Study Approach
This study examines reforms of public expenditure in industrialised countries over the past two decades. We distinguish ambitious and timid reformers and analyse in detail reform experiences in eight case studies of ambitious reform episodes. We find that ambitious reform countries reduce spending on transfers, subsidies and public consumption while largely sparing education spending. Such expenditure retrenchment is also typically part of a comprehensive reform package that includes improvements in fiscal institutions as well as structural and other macroeconomic reforms. The study finds that ambitious expenditure retrenchment and reform coincides with large improvements in fiscal and economic growth indicators
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