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Unemployment in an Extended Cournot Oligopoly Model∗
Unemployment in an Extended Cournot Oligopoly Model∗ Claude d'Aspremont,y Rodolphe Dos Santos Ferreiraz and Louis-Andr´eG´erard-Varetx 1 Introduction Attempts to explain unemployment1 begin with the labour market. Yet, by attributing it to deficient demand for goods, Keynes questioned the use of partial analysis, and stressed the need to consider interactions between the labour and product markets. Imperfect competition in the labour market, reflecting union power, has been a favoured explanation; but imperfect competition may also affect employment through producers' oligopolistic behaviour. This again points to a general equilibrium approach such as that by Negishi (1961, 1979). Here we propose an extension of the Cournot oligopoly model (unlike that of Gabszewicz and Vial (1972), where labour does not appear), which takes full account of the interdependence between the labour market and any product market. Our extension shares some features with both Negishi's conjectural approach to demand curves, and macroeconomic non-Walrasian equi- ∗Reprinted from Oxford Economic Papers, 41, 490-505, 1989. We thank P. Champsaur, P. Dehez, J.H. Dr`ezeand J.-J. Laffont for helpful comments. We owe P. Dehez the idea of a light strengthening of the results on involuntary unemployment given in a related paper (CORE D.P. 8408): see Dehez (1985), where the case of monopoly is studied. Acknowledgements are also due to Peter Sinclair and the Referees for valuable suggestions. This work is part of the program \Micro-d´ecisionset politique ´economique"of Commissariat G´en´eral au Plan. Financial support of Commissariat G´en´eralau Plan is gratefully acknowledged. -
Chapter 16 Oligopoly and Game Theory Oligopoly Oligopoly
Chapter 16 “Game theory is the study of how people Oligopoly behave in strategic situations. By ‘strategic’ we mean a situation in which each person, when deciding what actions to take, must and consider how others might respond to that action.” Game Theory Oligopoly Oligopoly • “Oligopoly is a market structure in which only a few • “Figuring out the environment” when there are sellers offer similar or identical products.” rival firms in your market, means guessing (or • As we saw last time, oligopoly differs from the two ‘ideal’ inferring) what the rivals are doing and then cases, perfect competition and monopoly. choosing a “best response” • In the ‘ideal’ cases, the firm just has to figure out the environment (prices for the perfectly competitive firm, • This means that firms in oligopoly markets are demand curve for the monopolist) and select output to playing a ‘game’ against each other. maximize profits • To understand how they might act, we need to • An oligopolist, on the other hand, also has to figure out the understand how players play games. environment before computing the best output. • This is the role of Game Theory. Some Concepts We Will Use Strategies • Strategies • Strategies are the choices that a player is allowed • Payoffs to make. • Sequential Games •Examples: • Simultaneous Games – In game trees (sequential games), the players choose paths or branches from roots or nodes. • Best Responses – In matrix games players choose rows or columns • Equilibrium – In market games, players choose prices, or quantities, • Dominated strategies or R and D levels. • Dominant Strategies. – In Blackjack, players choose whether to stay or draw. -
DOI Number: 10.30520/Tjsosci.655840 SOCIO
Year:4, Volume:4, Number:7 / 2020 DOI Number: 10.30520/tjsosci.655840 SOCIO-ECONOMIC VARIABLES AND TAX COMPLIANCE IN THE SCOPE OF FISCAL SOCIOLOGY: A RESEARCH ON THE EUROPEAN UNION AND OECD* Rana DAYIOĞLU ERUL** ABSTRACT Fiscal sociology investigates financial events from a sociological point of view and explores the effects of tax and spending policies on society and also the role and influence of the elements that constitute society in defining these policies. As the tax system and policies of each country reflect the characteristics of the country's social, political, cultural and economic structure, tax systems differ according to the characteristics of the structure of the society. Tax systems that are in line with the social structure ensure that tax compliance is achieved at a high level. From this point of view, aim of the study is defined as investigating the level of interaction of the structural elements with tax compliance. In this respect, tax compliance and socio-economic variables that affect the structure of the society are included in the study and they are analyzed using panel data analysis covering the 2008-2016 time period by making comparisons between the European Union and OECD countries. As a result of the analysis, the main point in increasing tax compliance is that the tax policies are adopted by the society, for this reason it is concluded that implementations that reflect the society need to be taken as a basis while making the regulations on the tax system. Key Words: Fiscal sociology, tax compliance, panel data analysis, socio-economic variables. -
Redistribution & the New Fiscal Sociology: Race and The
Redistribution & the New Fiscal Sociology: Race and the Progressivity of State and Local Taxes Rourke O’Brien, Harvard University1 Abstract: States redistribute wealth through two mechanisms: spending and taxation. Yet, efforts to delineate the determinants of redistribution often focus exclusively on social spending. This article aims to explore how one important determinant of redistributive social spending—racial composition—influences preferences for and the structure of tax systems. First, using fixed- effects regression analyses and unique data on state and local tax systems, we demonstrate that changes in racial composition are associated with changes in the progressivity of state and local tax systems. Specifically, between 1995 and 2007, an increase in the percentage of Latinos in a state is associated with more regressive state and local tax systems as well as higher tax burdens on the poor. Second, using evidence from a nationally representative survey experiment, we find that individual preferences for taxation are actively shaped by the changing racial composition of the community. Finally, we show that in-group preference—or feeling “solidarity” with neighbors—is a key mechanism through which racial threat shapes preferences for taxation. By providing empirical evidence that racial composition drives preferences for taxation at the individual level as well as the structure of tax systems at the state and local levels, this paper serves as an important contribution to our understanding of welfare state policy and the determinants of redistribution as well as the broader project of the new fiscal sociology. 1 Direct all correspondence to Rourke O’Brien, Harvard Center for Population and Development Studies ([email protected]). -
A Supergame-Theoretic Model of Business Cycles and Price Wars During Booms
working paper department of economics A SUPERGAME-THEORETIC MODEL OF BUSINESS CYCLES AND PRICE WARS DURING BOOMS Julio J. Rotemberg and Garth Saloner* M.I.T. Working Paper #349 July 1984 massachusetts institute of technology 50 memorial drive Cambridge, mass. 021 39 Digitized by the Internet Archive in 2011 with funding from IVIIT Libraries http://www.archive.org/details/supergametheoret349rote model of 'a supergame-theoretic BUSINESS CYCLES AOT) PRICE WARS DURING BOOMS Julio J. Rotemberg and Garth Saloner* ' M.I.T. Working Paper #349 July 1984 ^^ ""' and Department of Economics --P^^^i^J^' *Slo.n ;-..>>ool of Management Lawrence summers -^.any^helpful^^ .ei;ix;teful to ^ames.Poterba and ^^^^^^^ from the Mationax do conversations, Financial support is gratefully acknowledged.^ SEt8209266 and SES-8308782 respectively) 12 ABSTRACT This paper studies implicitly colluding oligopolists facing fluctuating demand. The credible threat of future punishments provides the discipline that facilitates collusion. However, we find that the temptation to unilaterally deviate from the collusive outcome is often greater when demand is high. To moderate this temptation, the optimizing oligopoly reduces its profitability at such times, resulting in lower prices. If the oligopolists' output is an input to other sectors, their output may increase too. This explains the co-movements of outputs which characterize business cycles. The behavior of the railroads in the 1880' s, the automobile industry in the 1950's and the cyclical behavior of cement prices and price-cost margins support our theory. (j.E.L. Classification numbers: 020, 130, 610). I. INTRODUCTION This paper has two objectives. First it is an exploration of the way in which oligopolies behave over the business cycle. -
GEORGE J. STIGLER Graduate School of Business, University of Chicago, 1101 East 58Th Street, Chicago, Ill
THE PROCESS AND PROGRESS OF ECONOMICS Nobel Memorial Lecture, 8 December, 1982 by GEORGE J. STIGLER Graduate School of Business, University of Chicago, 1101 East 58th Street, Chicago, Ill. 60637, USA In the work on the economics of information which I began twenty some years ago, I started with an example: how does one find the seller of automobiles who is offering a given model at the lowest price? Does it pay to search more, the more frequently one purchases an automobile, and does it ever pay to search out a large number of potential sellers? The study of the search for trading partners and prices and qualities has now been deepened and widened by the work of scores of skilled economic theorists. I propose on this occasion to address the same kinds of questions to an entirely different market: the market for new ideas in economic science. Most economists enter this market in new ideas, let me emphasize, in order to obtain ideas and methods for the applications they are making of economics to the thousand problems with which they are occupied: these economists are not the suppliers of new ideas but only demanders. Their problem is comparable to that of the automobile buyer: to find a reliable vehicle. Indeed, they usually end up by buying a used, and therefore tested, idea. Those economists who seek to engage in research on the new ideas of the science - to refute or confirm or develop or displace them - are in a sense both buyers and sellers of new ideas. They seek to develop new ideas and persuade the science to accept them, but they also are following clues and promises and explorations in the current or preceding ideas of the science. -
The Classics in Economic Sociology
I The Classics in Economic Sociology There exists a rich and colorful tradition of economic sociology, which roughly began around the turn of the twentieth century and continues till today. This tradition has generated a number of helpful concepts and ideas as well as interesting research results, which this and the following chapter seek to briefly present and set in perspective. Economic soci- ology has peaked twice since its birth: in 1890–1920, with the founders of sociology (who were all interested in and wrote on the economy), and today, from the early 1980s and onward. (For the history of economic sociology, see Swedberg 1987, 1997; Gislain and Steiner 1995). A small number of important works in economic sociology—by economists as well as sociologists—was produced during the time between these two periods, from 1920 to the mid-1980s. The main thesis of this chapter, and of this book as a whole, is as follows: in order to produce a powerful economic sociology we have to combine the analysis of economic interests with an analysis of social relations. From this perspective, institutions can be understood as dis- tinct configurations of interests and social relations, which are typically of such importance that they are enforced by law. Many of the classic works in economic sociology, as I shall also try to show, hold a similar view of the need to use the concept of interest in analyzing the economy. Since my suggestion about the need to combine interests and social relations deviates from the existing paradigm in economic sociology, a few words will be said in the next section about the concept of interest as it has been used in social theory. -
Breaking the Mould: an Institutionalist Political Economy Alternative to the Neoliberal Theory of the Market and the State Ha-Joon Chang, May 2001
Breaking the Mould An Institutionalist Political Economy Alternative to the Neoliberal Theory of the Market and the State Ha-Joon Chang Social Policy and Development United Nations Programme Paper Number 6 Research Institute May 2001 for Social Development The United Nations Research Institute for Social Development (UNRISD) thanks the governments of Denmark, Finland, Mexico, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom for their core funding. Copyright © UNRISD. Short extracts from this publication may be reproduced unaltered without authorization on condition that the source is indicated. For rights of reproduction or translation, application should be made to UNRISD, Palais des Nations, 1211 Geneva 10, Switzerland. UNRISD welcomes such applications. The designations employed in UNRISD publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of UNRISD con- cerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The responsibility for opinions expressed rests solely with the author(s), and publication does not constitute endorse- ment by UNRISD. ISSN 1020-8208 Contents Acronyms ii Acknowledgements ii Summary/Résumé/Resumen iii Summary iii Résumé iv Resumen v 1. Introduction 1 2. The Evolution of the Debate: From “Golden Age Economics” to Neoliberalism 1 3. The Limits of Neoliberal Analysis of the Role of the State 3 3.1 Defining the free market (and state intervention) 4 3.2 Defining market failure 6 3.3 The market primacy assumption 8 3.4 Market, state and politics 11 4. -
Mind, Society, and Fiscal Sociology Richard E. Wagner Department Of
States and the Crafting of Souls: Mind, Society, and Fiscal Sociology Richard E. Wagner Department of Economics, 3G4 George Mason University Fairfax, VA 22030 USA [email protected] http://mason.gmu.edu/~rwagner Abstract For the most part, the theory of public finance follows economic theory in taking individual preferences as given. The resulting analytical agenda revolves around the ability of different fiscal institutions to reflect and aggregate those preferences into collective outcomes. This paper explores the possibility that to some extent fiscal institutions can influence and shape what are commonly referred to as preferences. Statecraft thus becomes necessarily a branch of soulcraft, in that the state is inescapably involved in shaping preferences through its impact on the moral imagination, and not just in reflecting or representing them. This paper first explores some general conceptual issues and then examines some particular illustrations. Keywords: endogenous preferences, fiscal institutions, constitutional economics, public enterprise States and the Crafting of Souls: Mind, Society, and Fiscal Sociology For the most part, the theory of public finance follows economic theory in taking individual preferences as given. The resulting analytical agenda revolves around the ability of different fiscal institutions to reflect and aggregate those preferences into collective outcomes. This paper explores the possibility that to some extent fiscal institutions, and the fiscal practice that those institutions generate, can influence and shape what are commonly referred to as preferences. In standard public finance, the activities of the state simply represent offerings by alternative vendors to those that exist in private markets. Hence, shoppers buy some things from public goods stores and other things from private goods stores. -
Economic Sociology in Israel
ASA SECTION NEWSLETTER VOLUME XY, ISSUE 2, SPRING 2016 ECONOMIC SOCIOLOGY IN ISRAEL Circuits of Global and Local Knowledge By: Oleg Komlik Economic sociology in Israel is thriving. After years of gradual disciplinary evolution and scholarly elaboration, Israeli economic sociology has become soundly estab- lished. This essay aims to explain the emergence of this field of research and to profile the contemporary eco- nomic sociology in Israel. Our point of departure lies in the contention that Israeli economic sociology - as an umbrella term for the variety of socio-political studies of economic organizations, in- stitutions and processes – has been constituting from the 1980s onward in the spirit of two concurrently unfolding academic trends: on the global level, the stimulating re- vival and remarkable spring of economic sociology in the US and Europe, and on the local level, the growing influ- ence of critical sociological approaches on Israeli sociol- ogy as a whole. Decades after the establishment-oriented structural-functionalist sociology ceded the economy as a topic of inquiry to economics and produced papers echoing the dominant ideology and government poli- cies, researchers associated with different streams of critical sociology, especially interested in elites, power and political economy of labor, have begun to problematize notions of economic phenomena which for years were conceptually simplified and (un)intentionally omitted. Finally, the institutionalization of econom- ic sociology was intensified by the transformative and detrimental consequences of the Neoliberal conquest of the Israeli society and polity during the 1990s (e.g. Shafir and Peled 2002; Shalev 1998). In 1992, after returning from Columbia University where he obtained his PhD, Ilan Talmud pioneered the first courses in ‘new economic sociology’ in Israel - “Social capital” and “State and entrepreneurship” (see also Talmud 1992, 1994; Burt and Talmud 1993). -
THE UN WOMEN GENDER and ECONOMICS TRAINING MANUAL © UN Women 2017
TRAINING MANUAL THE UN WOMEN GENDER AND ECONOMICS TRAINING MANUAL © UN Women 2017. All rights reserved. This training manual on Gender and Economics is the result of extensive collaboration and consultation across UN Women. The preparation of the training manual was led by the Economic Empowerment Team in UN Women. Special thanks to Anuradha Seth and Mamadou Bobo Diallo for providing the leadership and support for this initiative. Invaluable support was provided by UN Women’s Training Centre and by the regional economic advisors for Europe & Central Asia and Asia & the Pacific. The contributions of Clemencia Munoz- Tamayo, Nilüfer Çagatay and Francisco Cos-Montiel are duly acknowledged. Thanks are also extended to Gabrielle Leite for production coordination, revision support and her attention to detail. The training manual benefited from the valuable inputs and feedback received from UN Women regional and country office programme staff: Sabawoon Ahmadzai (Afghanistan), May Babiker (Egypt), Erisa Cela (Albania), Ruangkhao Chanchai (Thailand), Alia El-Yassir (Turkey), Ramon Garlayee Garway (Liberia), Marie Laetitia Kayisire (Guinea Bissau), Jennet Kem (Sudan), Jamaluddin Khan (Pakistan), Loise Maina (Kenya), Enock Mugabi (Kenya), Amna Muharemovic (Bosnia and Herzegovina), Hadil Naser (Palestine), Da Barca Vieira Rosa Ondina Xavier (Mozambique), Dominika Stojanovska (Macedonia), Misrak Tamiru (Ethiopia), and Zhypargul Turmamatova (Kyrgyzstan). This initiative was made possible by financial support received from the Swiss Agency for Development -
Efficiency Wages in Cournot-Oligopoly
DISCUSSION PAPER SERIES IZA DP No. 12351 Efficiency Wages in Cournot-Oligopoly Marco de Pinto Laszlo Goerke MAY 2019 DISCUSSION PAPER SERIES IZA DP No. 12351 Efficiency Wages in Cournot-Oligopoly Marco de Pinto IUBH University of Applied Science and IAAEU Trier Laszlo Goerke IAAEU, Trier University, IZA and CESifo MAY 2019 Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world’s largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. ISSN: 2365-9793 IZA – Institute of Labor Economics Schaumburg-Lippe-Straße 5–9 Phone: +49-228-3894-0 53113 Bonn, Germany Email: [email protected] www.iza.org IZA DP No. 12351 MAY 2019 ABSTRACT Efficiency Wages in Cournot-Oligopoly* In a Cournot-oligopoly with free but costly entry and business stealing, output per firm is too low and the number of competitors excessive, assuming labor productivity to depend on the number of employees only or to be constant.