Affirmative Action Policy and Effort Levels. Sequential-Move Contest Game Argument

In this paper we analyse a simple two-person sequential-move contest game with heterogeneous players. Assuming that the heterogeneity could be the consequence of past discrimination, we study the effects of implementation of affirmative action policy, which tackles this heterogeneity by compensating discriminated players, and compare them with the situation in which the heterogeneity is ignored and the contestants are treated equally. In our analysis we consider different orders of moves. We show that the order of moves of contestants is a very important factor in determination of the effects of the implementation of the affirmative action policy. We also prove that in such cases a significant role is played by the level of the heterogeneity of individuals. In particular, in contrast to the present-in-the-literature predictions, we demonstrate that as a consequence of the interplay of these two factors, the response to the implementation of the affirmative action policy option may be the decrease in the total equilibrium effort level of the contestants in comparison to the unbiased contest game.

Life-Cycle, Effort and Academic Inactivity

It has been observed that university professors sometimes become less research active in their later years. This paper models the decision to become inactive as a utility maximising problem under conditions of uncertainty and derives an age-dependent activity condition for the level of research productivity. The model implies that professors who are close to retirement age are more likely to become inactive when faced with setbacks in their research while those who continue research do not lower their activity levels. Using data from the University of Iceland, we find support for the model’s predictions. The model suggests that universities should induce their older faculty to remain research active by striving to make their research more productive and enjoyable, maintaining peer pressure, reducing job security and offering higher performance related pay.

The Impact of Population Ageing on House Prices: A Micro-simulation Approach

This paper attempts to estimate the impact of population ageing on house prices. There is considerable debate about whether population ageing puts downwards or upwards pressure on house prices. The empirical approach differs from earlier studies of this relationship, which are mainly regression analyses of macro time-series data. A micro-simulation methodology is adopted that combines a macro-level house price model with a micro-level household formation model. The case study is Scotland, a country that is expected to age rapidly in the future. The parameters of the household formation model are estimated with panel data from the British Household Panel Survey covering the period 1999-2008. The estimates are then used to carry out a set of simulations. The simulations are based on a set of population projections that represent a considerable range in the rate of population ageing. The main finding from the simulations is that population ageing—or more generally changes in age structure—is not likely a main determinant of house prices, at least in Scotland.