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on Law and Economics |
| By: | Itai Arieli; Yakov Babichenko |
| Abstract: | We propose a simple adaptive procedure for playing strategic games: average testing. In this procedure each player sticks to her current strategy if it yields a payoff that exceeds her average payoff by at least some fixed \epsilon > 0; otherwise she chooses a strategy at random. We consider generic two-person games where both players play according to the average testing procedure on blocks of k-periods. We demonstrate that for all k large enough, the pair of time-average payoffs converges (almost surely) to the 3\epsilon-Pareto efficient boundary. |
| JEL: | K13 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp567&r=law |
| By: | Zhigang Cao |
| Abstract: | Although possessing many beautiful features, the Hart and Mas-Colell bargaining model is not flawless: the concept of threat in this model may behave quite counter-intuitive, and its SP equilibrium expected payoff vector may not be the same as the min-max solution payoff vector in zero-sum games. If we postpone realizations of all threats to the end of the game, the two problems can be solved simultaneously. This is exactly the 2(a) model suggested by Hart and Mas-Colell in the last section of their paper. I show that the new model, unfortunately, can only guarantee the existence of an SP equilibrium in the two player case. For the original model, I reduce the computation of an SP equilibrium to a system of linear inequalities. Quantitative efficiency and symmetric SP equilibria are also discussed. |
| JEL: | K13 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp565&r=law |
| By: | Cole, Scott (CERE, Centre for Environmental and Resource Economics) |
| Abstract: | Environmental considerations at wind power require avoidance and mitigation of environmental impacts through proper citing, operational constraints, etc. However, some impacts are unavoidable for otherwise socially-beneficial projects. Criteria for Environmental Impact Assessment (EIA) suggest that compensation be provided for unavoidable or residual impacts on species and/or habitat from wind power development. Current environmental compensation schemes for wind power fail to demonstrate a connection between the expected ecological damage and the ecological gains through restoration. The EU-funded REMEDE project developed quantitative methods known as "equivalency analysis" to assist in scaling environmental compensation. This study provides a framework for estimating compensation at wind facilities based on the REMEDE approach. I illustrate the approach with a hypothetical case study involving sea eagle impacts at the Smøla Wind Farm (Norway). I quantify the damage (debit) from sea eagle turbine collisions and scale a compensatory project (credit) that reduces eagle mortality from power line electrocution, which is quantified using hypothetical data. The framework is generalizable to on- and off-shore wind development but requires targeted and thoughtful data collection. Importantly, compensation should not be used disingenuously to justify otherwise environmentally costly projects. |
| Keywords: | Equivalency Analysis; environmental compensation; wind power |
| JEL: | K32 Q42 Q51 Q57 |
| Date: | 2011–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2011_004&r=law |
| By: | Lu Han; Siddhartha Bandyopadhyay; Samrat Bhattacharya |
| Abstract: | We examine various determinants of property and violent crimes by using police force area level (PFA) data on England and Wales over the period 1992-2008. Our list of potential determinants includes two law enforcement variables namely crime-specific detection rate and prison population, and various socio-economic variables such as unemployment rate, real earnings, proportion of young people and Gini Coefficient. By adopting a fixed effect dynamic GMM estimation methodology we attempt to address the potential bias that arises from the presence of time-invariant unobserved characteristics of a PFA and the endogeneity of several regressors. There is a significant positive effect of own-lagged crime rate. The own-lagged effect is stronger for property crime, on an average, than violent crime. We find that, on an average, higher detection rate and prison population leads to lower property and violent crimes. This is robust to various specifications. However, socio-economic variables with the exception of real earnings play a limited role in explaining different crime types. |
| Keywords: | Crime, Dynamic Panel, GMM, Law Enforcement, Socio-economic Variables |
| JEL: | K42 C23 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:10-26r&r=law |
| By: | Bin Dong (QUT); Benno Torgler (QUT) |
| Abstract: | We explore theoretically and empirically whether social interaction, including local and global interaction, influences the incidence of corruption. We first present an interaction-based model on corruption that predicts that the level of corruption is positively associated with social interaction. Then we empirically verify the theoretical prediction using within-country evidence at the province-level in China during 1998 to 2007. Panel data evidence clearly indicates that social interaction has a statistically significantly positive effect on the corruption rate in China. Our findings, therefore, underscore the relevance of social interaction in understanding corruption. |
| Keywords: | corruption, social interaction, China |
| JEL: | K42 D72 D64 O17 J24 |
| Date: | 2010–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:261&r=law |