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on Microeconomics |
| By: | Michael Richter; Ariel Rubinstein |
| Date: | 2013–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:786969000000000836&r=mic |
| By: | Öztürk Z.E.; Bosmans K.G.M. (GSBE) |
| Abstract: | We characterize a class of envy measures. There are three key axioms. Decomposability requires that overall envy is the sum of the envy within and between subgroups. The other two axiomsdeal with the two-individual setting and specify how the envy measure should react to simple changes in the individuals commodity bundles. The characterized class measures the envy of oneindividual to another by the relative utility difference using the envious utility function between the bundle of the envied and the bundle of the envious. The particular utility representation to be used is fixed by the axioms. The class measures overall envy by the sum of these transformed relative utility differences. We discuss our results in the light of previous contributions to envy measurement and multidimensional inequality measurement. |
| Keywords: | Equity, Justice, Inequality, and Other Normative Criteria and Measurement; |
| JEL: | D63 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013063&r=mic |
| By: | Stéphane Gonzalez (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | The paper proposes a new concept of solution for TU games, called multicoalitional solution, which makes sense in the context of production games, that is, where v(S) is the production or income per unit of time. By contrast to classical solutions where elements of the solution are payoff vectors, multicoalitional solutions give in addition an allocation time to each coalition, which permits to realize the payoff vector. We give two instances of such solutions, called the d-multicoalitional core and the c-multicoalitional core, and both arise as the strong Nash equilibrium of two games, where in the first utility per active unit of time is maximized, while in the second it is the utility per total unit of time. We show that the d-core (or aspiration core) of Benett, and the c-core of Guesnerie and Oddou are strongly related to the d-multicoalitional and c-multicoalitional cores, respectively, and that the latter ones can be seen as an implementation of the former ones in a noncooperative framework. |
| Keywords: | Cooperative game; core; aspiration core; strong Nash equilibrium |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00881108&r=mic |
| By: | Matias Iaryczower; Santiago Oliveros |
| Abstract: | We consider a model of decentralized bargaining among three parties. Parties meet one-on-one after being randomly matched, and can sell or buy votes to one another. The party with a majority of the votes can decide to implement its preferred policy or extend negotiations to capture additional rents. We provide necessary and suffcient conditions for the existence of an equilibrium in which a party acts as an intermediary, transferring resources and voting rights among parties that wouldn't negotiate directly with one another. These conditions are generic, do not require special frictions, and include `well-behaved' (i.e., single-peaked) preference profiles. |
| Date: | 2013–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:731&r=mic |
| By: | Robert Becker (Department of Economics, Indiana University); Stefano Bosi (EPEE, University of Evry); Cuong Le Van (CES, CNRS, VCREME and Hanoi WRU); Thomas Seegmuller (Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS) |
| Abstract: | We address the fundamental issues of existence and efficiency of an equilibrium in a Ramsey model with many agents, where agents have heterogenous discounting, elastic labor supply and face borrowing constraints. The existence of rational bubbles is also tackled. In the first part, we prove the equilibrium existence in a truncated bounded economy through a fixed-point argument by Gale and Mas-Colell (1975). This equilibrium is also an equilibrium of any unbounded economy with the same fundamentals. The proof of existence is eventually given for an infinitehorizon economy as a limit of a sequence of truncated economies. Our general approach is suitable for applications to other models with different market imperfections. In the second part, we show the impossibility of bubbles in a productive economy and we give sufficient conditions for equilibrium efficiency. |
| JEL: | C62 D31 D91 G10 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dpc:wpaper:1513&r=mic |
| By: | Jens Leth Hougaard (Department of Food and Resource Economics, University of Copenhagen); Kurt Nielsen (Department of Food and Resource Economics, University of Copenhagen); Athanasios Papakonstantinou (Department of Food and Resource Economics, University of Copenhagen) |
| Abstract: | We analyze a simple multi-attribute procurement auction that uses yardstick competition to settle prices. Upon receiving the submitted bids, a mediator computes the yardstick prices (bids) by a linear weighting of the other participants’ bids. The auction simplifies the procurement process by reducing the principal’s articulation of his preferences to simply choosing the most preferred offer as if it was a market with posted prices. Although truthful reporting does not constitute a Nash equilibrium, we demonstrate by simulations that truth-telling may indeed be some kind of focal point. By focusing on the initial winner in case everyone tells the truth, we show that even if the other bidders are allowed to misreport by as much as 20% of their true cost, the initial winner remains the winner in 80% of all simulated auctions in the case of 3 competing bidders. Furthermore, as it takes aggressive bidding to become the new winner of the auction, we show that the new winners typically win with a loss. Combining the two results we have that, almost independently of the number of competing bidders and the degree of misreporting, approximately 90% of all simulations will either have the same initial winner or a new winner who wins the auction with a loss in its utility. |
| Keywords: | Multi-attribute auction, yardstick competition, articulation of preferences, simulation |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:foi:msapwp:02_2013&r=mic |
| By: | Otto, Clemens A.; Volpin , Paolo F. |
| Abstract: | We examine how mark-to-market accounting affects investment decisions in an agency model with reputation concerns. Reporting the current market value of a firm's assets in the financial statements can serve as a disciplining device because the information contained in the market price provides a benchmark against which the agent's actions can be evaluated. However, the fact that market prices are informative can have a perverse effect on the investment decisions: The agent may prefer to ignore relevant but contradictory private information whose revelation would damage his reputation. Surprisingly, this effect makes mark-to-market accounting less desirable as market prices become more informative. |
| Keywords: | Accounting rules; marking to market; historical cost accounting; investment decisions; reputation; agency problem |
| JEL: | D81 G31 M41 |
| Date: | 2013–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0986&r=mic |