The effects of entry in thin markets

We consider entry of additional firms into the market for a single commodity in which both sellers and buyers are permitted to interact strategically. We show that the market is quasi-competitive, in that the inclusion of an additional seller lowers the price and increases the volume of trade, as expected. However, whilst buyers benefit from this change under reasonable conditions on preferences, we cannot conclude that sellers are always made worse off in the face of more intense competition, contrary to the conventional wisdom. We characterize the conditions under which entry by new sellers may raise the equilibrium profit of existing sellers, which will depend in an intuitive way on the elasticity of a strategic analog of demand and the market share of existing sellers, and encompass completely standard economic environments.

Revealed cardinal preference

I prove that as long as we allow the marginal utility for money (lambda) to vary between purchases (similarly to the budget) then the quasi-linear and the ordinal budget-constrained models rationalize the same data. However, we know that lambda is approximately constant. I provide a simple constructive proof for the necessary and sufficient condition for the constant lambda rationalization, which I argue should replace the Generalized Axiom of Revealed Preference in empirical studies of consumer behavior. 'Go Cardinals!' It is the minimal requirement of any scientifi c theory that it is consistent with the data it is trying to explain. In the case of (Hicksian) consumer theory it was revealed preference -introduced by Samuelson (1938,1948) - that provided an empirical test to satisfy this need. At that time most of economic reasoning was done in terms of a competitive general equilibrium, a concept abstract enough so that it can be built on the ordinal preferences over baskets of goods - even if the extremely specialized ones of Arrow and Debreu. However, starting in the sixties, economics has moved beyond the 'invisible hand' explanation of how -even competitive- markets operate. A seemingly unavoidable step of this 'revolution' was that ever since, most economic research has been carried out in a partial equilibrium context. Now, the partial equilibrium approach does not mean that the rest of the markets are ignored, rather that they are held constant. In other words, there is a special commodity -call it money - that reflects the trade-offs of moving purchasing power across markets. As a result, the basic building block of consumer behavior in partial equilibrium is no longer the consumer's preferences over goods, rather her valuation of them, in terms of money. This new paradigm necessitates a new theory of revealed preference.

Fiscal Sustainability in a New Keynesian Model

Recent work on optimal monetary and fiscal policy in New Keynesian models suggests that it is optimal to allow steady-state debt to follow a random walk. Leith and Wren-Lewis (2012) consider the nature of the timeinconsistency involved in such a policy and its implication for discretionary policy-making. We show that governments are tempted, given inflationary expectations, to utilize their monetary and fiscal instruments in the initial period to change the ultimate debt burden they need to service. We demonstrate that this temptation is only eliminated if following shocks, the new steady-state debt is equal to the original (efficient) debt level even though there is no explicit debt target in the government’s objective function. Analytically and in a series of numerical simulations we show which instrument is used to stabilize the debt depends crucially on the degree of nominal inertia and the size of the debt-stock. We also show that the welfare consequences of introducing debt are negligible for precommitment policies, but can be significant for discretionary policy. Finally, we assess the credibility of commitment policy by considering a quasi-commitment policy which allows for different probabilities of reneging on past promises. This on-line Appendix extends the results of this paper.

Fiscal Sustainability in a New Keynesian Model

Recent work on optimal monetary and fiscal policy in New Keynesian models suggests that it is optimal to allow steady-state debt to follow a random walk. Leith and Wren-Lewis (2012) consider the nature of the timeinconsistency involved in such a policy and its implication for discretionary policy-making. We show that governments are tempted, given inflationary expectations, to utilize their monetary and fiscal instruments in the initial period to change the ultimate debt burden they need to service. We demonstrate that this temptation is only eliminated if following shocks, the new steady-state debt is equal to the original (efficient) debt level even though there is no explicit debt target in the government’s objective function. Analytically and in a series of numerical simulations we show which instrument is used to stabilize the debt depends crucially on the degree of nominal inertia and the size of the debt-stock. We also show that the welfare consequences of introducing debt are negligible for precommitment policies, but can be significant for discretionary policy. Finally, we assess the credibility of commitment policy by considering a quasi-commitment policy which allows for different probabilities of reneging on past promises. This on-line Appendix extends the results of this paper.

Class-size Reduction Policies and the Quality of Entering Teachers

State-wide class-size reduction (CSR) policies have typically failed to produce large achievement gains. One explanation is that the introduction of such policies forces schools to hire relatively low-quality teachers. This paper uses data from an anonymous state to explore whether teacher quality suff ered from the introduction of CSR. We find that it did, but not nearly enough to explain the small achievement effects of CSR. The combined fall in achievement due to hiring lower quality teachers and more inexperienced teachers is small relative to the unrealized gains. Furthermore, between-school diff erences in the quality of incoming teachers cannot explain the poor estimated CSR performance from previous quasi-experimental treatment-control comparisons.

How Optimal is US Monetary Policy?

Most of the literature estimating DSGE models for monetary policy analysis assume that policy follows a simple rule. In this paper we allow policy to be described by various forms of optimal policy - commitment, discretion and quasi-commitment. We find that, even after allowing for Markov switching in shock variances, the inflation target and/or rule parameters, the data preferred description of policy is that the US Fed operates under discretion with a marked increase in conservatism after the 1970s. Parameter estimates are similar to those obtained under simple rules, except that the degree of habits is significantly lower and the prevalence of cost-push shocks greater. Moreover, we find that the greatest welfare gains from the ‘Great Moderation’ arose from the reduction in the variances in shocks hitting the economy, rather than increased inflation aversion. However, much of the high inflation of the 1970s could have been avoided had policy makers been able to commit, even without adopting stronger anti-inflation objectives. More recently the Fed appears to have temporarily relaxed policy following the 1987 stock market crash, and has lost, without regaining, its post-Volcker conservatism following the bursting of the dot-com bubble in 2000.

Fast numerical algorithms for the computation of invariant tori in Hamiltonian systems

In this paper, we develop numerical algorithms that use small requirements of storage and operations for the computation of invariant tori in Hamiltonian systems (exact symplectic maps and Hamiltonian vector fields). The algorithms are based on the parameterization method and follow closely the proof of the KAM theorem given in [LGJV05] and [FLS07]. They essentially consist in solving a functional equation satisfied by the invariant tori by using a Newton method. Using some geometric identities, it is possible to perform a Newton step using little storage and few operations. In this paper we focus on the numerical issues of the algorithms (speed, storage and stability) and we refer to the mentioned papers for the rigorous results. We show how to compute efficiently both maximal invariant tori and whiskered tori, together with the associated invariant stable and unstable manifolds of whiskered tori. Moreover, we present fast algorithms for the iteration of the quasi-periodic cocycles and the computation of the invariant bundles, which is a preliminary step for the computation of invariant whiskered tori. Since quasi-periodic cocycles appear in other contexts, this section may be of independent interest. The numerical methods presented here allow to compute in a unified way primary and secondary invariant KAM tori. Secondary tori are invariant tori which can be contracted to a periodic orbit. We present some preliminary results that ensure that the methods are indeed implementable and fast. We postpone to a future paper optimized implementations and results on the breakdown of invariant tori.

Tractable valuations under uncertainty

I put forward a concise and intuitive formula for the calculation of the valuation for a good in the presence of the expectation that further, related, goods will soon become available. This valuation is tractable in the sense that it does not require the explicit resolution of the consumerís life-time problem.

Dynamic Relational Contracts under Complete Information

This paper considers a long-term relationship between two agents who both undertake a costly action or investment that together produces a joint benefit. Agents have an opportunity to expropriate some of the joint benefit for their own use. Two cases are considered: (i) where agents are risk neutral and are subject to limited liability constraints and (ii) where agents are risk averse, have quasi-linear preferences in consumption and actions but where limited liability constraints do not bind. The question asked is how to structure the investments and division of the surplus over time so as to avoid expropriation. In the risk-neutral case, there may be an initial phase in which one agent overinvests and the other underinvests. However, both actions and surplus converge monotonically to a stationary state in which there is no overinvestment and surplus is at its maximum subject to the constraints. In the risk-averse case, there is no overinvestment. For this case, we establish that dynamics may or may not be monotonic depending on whether or not it is possible to sustain a first-best allocation. If the first-best allocation is not sustainable, then there is a trade-off between risk sharing and surplus maximization. In general, surplus will not be at its constrained maximum even in the long run.

Service offshoring and white-collar employment

This paper empirically studies the effects of service offshoring on white-collar employment, using data for more than one hundred U.S. occupations. A model of firm behavior based on separability allows to derive the labor demand elasticity with respect to service offshoring for each occupation. Estimation is performed with Quasi-Maximum Likelihood, to account for high degrees of censoring in the employment variable. The estimated elasticities are then related to proxies for the skill level and the degree of tradability of the occupations. Results show that service offshoring increases high skilled employment and decreases medium and low skilled employment. Within each skill group, however, service offshoring penalizes tradable occupations and benefits non-tradable occupations.

Quasiconformal maps, analytic capacity, and non linear potentials

"Vegeu el resum a l'inici del document del fitxer adjunt."

Emotional intelligence: On definitions, neuroscience, and marshmallows

In his timely article, Cherniss offers his vision for the future of "Emotional Intelligence" (EI). However, his goal of clarifying the concept by distinguishing definitions from models and his support for "Emotional and Social Competence" (ESC) models will, in our opinion, not make the field advance. To be upfront, we agree that emotions are important for effective decision-making, leadership, performance and the like; however, at this time, EI and ESC have not yet demonstrated incremental validity over and above IQ and personality tests in meta-analyses (Harms & Credé, 2009; Van Rooy & Viswesvaran, 2004). If there is a future for EI, we see it in the ability model of Mayer, Salovey and associates (e.g, Mayer, Caruso, & Salovey, 2000), which detractors and supporters agree holds the most promise (Antonakis, Ashkanasy, & Dasborough, 2009; Zeidner, Roberts, & Matthews, 2008). With their use of quasi-objective scoring measures, the ability model grounds EI in existing frameworks of intelligence, thus differentiating itself from ESC models and their self-rated trait inventories. In fact, we do not see the value of ESC models: They overlap too much with current personality models to offer anything new for science and practice (Zeidner, et al., 2008). In this commentary we raise three concerns we have with Cherniss's suggestions for ESC models: (1) there are important conceptual problems in both the definition of ESC and the distinction of ESC from EI; (2) Cherniss's interpretation of neuroscience findings as supporting the constructs of EI and ESC is outdated, and (3) his interpretation of the famous marshmallow experiment as indicating the existence of ESCs is flawed. Building on the promise of ability models, we conclude by providing suggestions to improve research in EI.

Homotopy Batalin-Vilkovisky algebras

This paper provides an explicit cofibrant resolution of the operad encoding Batalin-Vilkovisky algebras. Thus it defines the notion of homotopy Batalin-Vilkovisky algebras with the required homotopy properties. To define this resolution we extend the theory of Koszul duality to operads and properads that are defined by quadratic and linear relations. The operad encoding Batalin-Vilkovisky algebras is shown to be Koszul in this sense. This allows us to prove a Poincaré-Birkhoff-Witt Theorem for such an operad and to give an explicit small quasi-free resolution for it. This particular resolution enables us to describe the deformation theory and homotopy theory of BV-algebras and of homotopy BV-algebras. We show that any topological conformal field theory carries a homotopy BV-algebra structure which lifts the BV-algebra structure on homology. The same result is proved for the singular chain complex of the double loop space of a topological space endowed with an action of the circle. We also prove the cyclic Deligne conjecture with this cofibrant resolution of the operad BV. We develop the general obstruction theory for algebras over the Koszul resolution of a properad and apply it to extend a conjecture of Lian-Zuckerman, showing that certain vertex algebras have an explicit homotopy BV-algebra structure.

Les difficultés de gestion des partenariats public-privé en Europe. Pour une lecture "institutionnelle"

Les partenariats public-privé se développent dans la quasi-totalité des pays de l'OCDE. De nombreux acteurs, publics ou privés, y voient un moyen pour développer de nouvelles infrastructures et prestations publiques à moindre coût et de manière sensiblement plus rapide et plus efficace. Considérés sous l'angle de leur gestion, les PPP s'avèrent finalement bien plus complexes qu'ils ne paraissent d'un premier abord. Basé sur une revue de la littérature européenne portant sur les expériences en cours sur le Continent, l'article vise à faire état de la nature des débats gestionnaires entourant cette nouvelle forme de coordination des activités étatiques en relevant plus spécifiquement les difficultés auxquelles la plupart des PPP sont confrontés, sur la base d'une lecture institutionnelle.

T lymphocytes and iron overload: novel correlations of possible significance to the biology of the immunological system

This paper is written in the context of our changing preception of the immunological system as a system with possible biological roles exceding the prevailung view of a system concerned principally with the defense against external pathogens. The view discussed here relates the immunological system inextricably to the metabolism of iron, the circulation of the blood and the resolution of the evolutionary paradox created by oxygen and iron. Indirect evidence for this inextricable relationship between the two systems can be derived from the discrepancy between the theoretical quasi-impossibility of the existence of an iron deficiency state in the adult and the reality of the WHO numbers of people in the world with iron deficiency anemia. With mounting evidence that TNF, IL-1, and T lymphocyte cytokines affect hemopoieisis and iron metabolism it is possible that the reported discrepancy is a reflection of that inextricable interdependence between the two systems in the face of infection. Further direct evidence for a relationship between T cell subset numbers and iron metabolism is presented from the results of a study of T cell populations in patients with hereditary hemochromatosis. The recent finding of a correlation between low CD8+ lymphocite numbers, liver demage associated with HCVpositivity and severity of iron overload in B-thalassemia major patients (umpublished data of RW Grandy; P. Giardina, M. Hilgartner) concludes this review.