Endogenous Market Thickness and Honesty : A Quality Trap Model

Many emerging or transition economies lack institutional arrangements (like ISO certification) to credibly signal product quality. The absence of such institutions leads to low levels of market activity with poor quality products on sale. In this paper, we use a dynamic framework with asymmetric information to model this phenomenon. Sellers choose the quality they produce and face a trade-off between producing a high quality product, which gives low one period returns but leads to higher future profits, and a low quality product, which gives higher one period returns but bars the seller from future market activity. Sellers' differ in how they discount the future and thus in how they evaluate this trade-off. Demand is endogenous and the number of buyers that enter the market depends on the quality of the products they expect to find. Market thickness (the buyer-seller ratio), product quality, prices and the distribution of seller types are all endogenously determined and multiple steady states may emerge. In general, a sufficient number of sellers need to be patient for multiple steady states to exist. Technology that involves 'learning by doing' may cause market segregation. Importantly, sellers' expectations about market thickness matter in determining the quality only if sellers believe that market thickness will be less than one.market thickness, endogenous quality, multiple equilibria, price mechanism.

Conflict and Leadership: When is There a Hawkish Drift in Politics?

We analyze an agency model of political competition to examine whether conflict encourages hawkish behavior, and if such behavior can itself aggravate conflict. We consider situations of conflict between a state and an insurgent group, such as conflict over a piece of land. Negotiations are carried out on behalf of the state by a democratically elected leader whose ability and ideology are imperfectly observed by the electorate. A more capable leader can take a hardline position in the negotiations (i.e. cede less land to the insurgents) at a lower expected cost (modeled as the cost of continued insurgency) than a less capable one. Similarly, an ideologically hawkish leader enjoys greater intrinsic utility from retaining land than a less hawkish leader. Two main results that emerge are: certain types of politicians may be excessively hawkish as compared to their first best policy choices, which itself increases the probability of conflict; and for any credible voting strategy, the re-election probability of a hawk is greater than that of a dove. Finally, we show that the voting equilibrium of this game does not always achieve a constrained Pareto optimum suggesting that third party mediation may improve welfare.Conflict, hawkish drift

Party Formation and Coalitional Bargaining in a Model of Proportional Representation

We study a game theoretic model of a parliamentary democracy under proportional representation where `citizen candidates' form parties, voting occurs and governments are formed. We study the coalition governments that emerge as functions of the parties' seat shares, the size of the rents from holding office and their ideologies. We show that governments may be minimal winning, minority or surplus. Moreover, coalitions may be `disconnected'. We then look at how the coalition formation game affects the incentives for party formation. Our model explains the diverse electoral outcomes seen under proportional representation and integrates models of political entry with models of coalitional bargaining.Proportional representation, Party formation, Coalitions

Coalition Governments in a Model of Parliamentary Democracy

We analyze the relative importance of party ideology and rents from office in the formation of coalitions in a parliamentary democracy. In equilibrium, the types of coalitions that are formed may be minimal winning, minority or surplus and they may be ideologically `disconnected'. The coalitions that form depend upon the relative importance of rents of office and seat shares of the parties. If rents are high, governments cannot be surplus. With low rents or the formateur close to the median, minority governments occur for a wider ideological dispersion. Further, there is a non-monotonic relationship between connectedness of coalitions and rents.Coalitions, Ideology, Rents

Queuing up for justice : elections and case backlogs

We analyze the impact of prosecutor elections on case backlogs. Previous evidence has shown that re-election pressures result in more cases going to trial. Since trials require time and resources, one can expect an effect on the queue. Two competing theories are developed: one of signaling quality in an asymmetric information environment and one of effort exertion, each of which can explain increased trials before election, but differ in their predictions regarding the impact on backlogs. A district-level, panel data set of caseload flows in North Carolina is analyzed. Evidence is presented that contested re-elections are associated with a decrease in the number of cases handled and an acceleration of the growth of the backlog. This suggests that retention concerns lead to signaling which causes distortions, re-allocating resources from disposing cases to prosecuting cases at trial

Workplace Deviance and Recession

We examine the relationship between the incidence of workplace deviance (on-the-job crime) and the state of the economy. A worker\u27s probability of future employment depends on whether she has been deviant as well as on the availability of jobs. Using a two period model we show that the net impact on deviant behavior to changes in unemployment can go either way depending upon the nature of the equilibrium. Two kinds of equilibria are possible. In one, a non-deviant\u27s probability of being employed increases as expected market conditions improve which lowers the incentive to be a deviant. In contrast, in the other kind of equilibrium, the deviant\u27s probability of being employed increases when market conditions improve which increases the incentive to be a deviant. In either case, there is a setup cost to deviant behavior and the attractiveness of incurring that increases with an increase in expected probability of future employment which unambiguously increases the incentive to be deviant. In the first kind of equilibrium, the two effects counteract each other, while in the second they reinforce each other. Finally, we show that an increase in optimism, i.e. a reduction in the probability of facing a recession unambiguously increases deviant behavior

Manufacturing extremism: political consequences of profit-seeking media

We analyze the consequences of a monopolistic, non-partisan, profit-maximizing media on policy divergence. The media undertakes costly coverage that may reveal the quality of an office-seeking political challenger only if quality-conscious voters pay an access fee. Voters are ideologically homogenous and the incumbent politican is a populist with known quality. We show that while media absence implies a populist challenger, media presence yields platform extremism: it creates demand for information about quality and provides incentives to the media to invest in coverage that are exploited by high-quality challengers to signal strength. JEL Classifiers: C72, D72, D8

Anti-microbial sensitivity and resistance of organisms in blood-culture samples from prolonged fever cases: evidence from a tertiary care hospital in West Bengal, India

Background: Currently there is a rise in resistance to anti-microbials which is a matter of concern in treatment of systemic infections. Blood culture is considered “gold standard” in diagnosis of suspected systemic infection. The susceptibility to antibiotics thereafter determine the future course of treatment. The current study aims to find out the sensitivity and resistance pattern of the blood culture isolates.Methods: A cross-sectional study was performed on the blood culture samples sent within 24hours of admission of the adult patients reporting fever for 7 days or more with no history of consumption of any antibiotics within last month. Total 134 blood samples were analysed. The proportion of sensitivity and resistance to anti-bacterial agents was calculated among those samples which showed growth in the culture. Background information of the patients in terms of age, sex and religion were also noted.Results: Mean age of the patients was 39.33 (±12.19) years. Overall 47.76% were female patients and remaining were male. Among the Hindu patients majority were male while among Muslims majority were female. Of the total number of blood cultures examined 46.27% showed growth of bacteria. Staphylococcus aureus was the most frequently found bacteria isolated in cultures, followed by coagulase negative Staphylococcus and Pseudomonas. Of the frequently used antibiotics, higher sensitivity was seen with vancomycin, amikacin, netilmycin, imipenem, gentamicin. High resistance was observed in use of antibiotics like cefixime, amoxicillin-clavulanic acid and azithromycin.Conclusions: High level of resistance to several commonly used advanced antibiotics warrant judicial and evidence-based use of these drugs.