International Journal of Economic Theory最新文献

We consider a simple economy where production depends on labor supply and social capital. Networking increases the social capital (“greases the wheel”) but also the corruption level (“sands the wheel”). Corruption is a negative productive externality. We compare the market economy, where the negative externality is not taken into account by individuals, with a centralized economy, where the planner internalizes the negative effect. We highlight the possible existence of cycles in the market economy and optimal cycles in the planned economy. We compare the centralized and the decentralized solutions in the short and long run.

We consider multiple-type housing market problems as introduced by Moulin (1995) and study the relationship between strict strong Nash equilibria and the strict core (two solution concepts that are defined in terms of the absence of weak blocking coalitions). We prove that for lexicographically separable preferences, the set of all strict strong Nash equilibrium outcomes of each preference revelation game that is induced by a strictly core stable mechanism is a subset of the strict core, but not vice versa, that is, there are strict core allocations that cannot be implemented in strict strong Nash equilibrium. This result is extended to a more general set of preference domains that satisfy strict core non-emptiness and a minimal preference domain richness assumption.

In a simple continuous-time model where the learning process affects the willingness to hold liquidity, we provide an intuitive explanation of business cycle asymmetry and postcrisis slow recovery. When observing a liquidity shock, individuals rationally increase their subjective probability of re-encountering it. It leads to an upward jump in liquidity preference and a discrete fall in consumption. Conversely, as a period without shocks continues, they gradually decrease the subjective probability, reduce liquidity preference, and increase consumption. The recovery process is particularly slow after many shocks are observed within a short period because people do not easily change their pessimistic view.

We study solution concepts for nontransferable utility games according to which the coalition structure and the payoff allocations are simultaneously determined. The steady bargaining set is a refinement of the Zhou bargaining set, which is included in the Mas-Colell bargaining set. We prove the nonemptiness and partial efficiency of the steady bargaining set for at least one coalition structure under the restrictive non-crossing condition. Without this condition, the Zhou bargaining set may be empty and the Mas-Colell bargaining set is nonempty but may not be efficient.

In this paper, we consider whether a firm that produces high-quality products chooses to produce lower-quality products. We find that when there is only one monopoly in the market, the monopoly will only produce a single-quality product. When there are two firms in the market, one produces high-quality products and the other one produces low-quality products. When certain conditions are met, the firm that produces high-quality products has an incentive to produce products of medium or lower quality, thus profiting. The production of new products by a firm will bring about the improvement of consumer surplus and social welfare.

In this study, I analyze games in which the functions mapping a vector of efforts into each player's share of the prize and its value exhibit an arbitrary degree of homogeneity. I present a simple way to compute the equilibrium strategy and sufficient conditions for a unique interior symmetric pure-strategy Nash equilibrium. The setup nests Malueg and Yates (2006), who exploit homogeneity for rent-seeking contests with exogenous prize valuation, and shows that homogeneity can be used to solve (i) a wider range of rent-seeking contests and (ii) other classes of games, like Cournot games with nonlinear inverse demand and possibly non homogeneous goods.

Under the hypothesis that workers become distracted and spend less time working during the COVID-19 pandemic, we analyze, via a model of endogenous growth, the relationship between distracting activities and home office supply. We find a strong theoretical relation between the intertemporal elasticity of substitution of the time spent on distracting activities and the intertemporal elasticity of substitution of home office labor. We also analyze the effect that the intertemporal elasticity of substitution of home office labor has on the marginal productivity of effective labor and the growth rate of production.

We develop a 3 × 4 full-employment small open economy model for examining the consequences of anti-immigration policy against skilled labor adopted in the developed country on both national income and wage inequality in a source developing economy, keeping aside the aspect of immigration of unskilled labor. We find that both social welfare and wage inequality are likely to deteriorate when, ceteris paribus, the degree of distortion in the unskilled labor market is sufficiently high. In addition, through quantitative analysis we have recommended a couple of policies that are likely to lessen the adverse outcomes on both the economic indicators.

We study the slot allocation problem where agents have quasi-linear single-peaked preferences over slots and identify the rules satisfying efficiency, strategy-proofness, and individual rationality. Since the quasi-linear single-peaked domain is not connected, the famous characterization of the Vickrey rule in terms of Holmström (1979)'s three properties cannot be applied. However, we are able to establish that on the quasi-linear single-peaked domain, the Vickrey rule is still the only rule satisfying efficiency, strategy-proofness, and individual rationality.