Optimal negligence rule under limited liability

We study the standard economic model of unilateral accidents, in its simplest form, assumingthat the injurers have limited assets.We identify a second-best optimal rule that selects as duecare the minimum of first-best care, and a level of care that takes into account the wealth ofthe injurer. We show that such a rule in fact maximizes the precautionary effort by a potentialinjurer. The idea is counterintuitive: Being softer on an injurer, in terms of the required level ofcare, actually improves the incentives to take care when he is potentially insolvent. We extendthe basic result to an entire population of potentially insolvent injurers, and find that the optimalgeneral standards of care do depend on wealth, and distribution of income. We also show theconditions for the result that higher income levels in a given society call for higher levels of carefor accidents.

Distributional equivalence and subcompositional coherence in the analysis of contingency tables, ratio-scale measurements and compositional data

We consider two fundamental properties in the analysis of two-way tables of positive data: the principle of distributional equivalence, one of the cornerstones of correspondence analysis of contingency tables, and the principle of subcompositional coherence, which forms the basis of compositional data analysis. For an analysis to be subcompositionally coherent, it suffices to analyse the ratios of the data values. The usual approach to dimension reduction in compositional data analysis is to perform principal component analysis on the logarithms of ratios, but this method does not obey the principle of distributional equivalence. We show that by introducing weights for the rows and columns, the method achieves this desirable property. This weighted log-ratio analysis is theoretically equivalent to spectral mapping , a multivariate method developed almost 30 years ago for displaying ratio-scale data from biological activity spectra. The close relationship between spectral mapping and correspondence analysis is also explained, as well as their connection with association modelling. The weighted log-ratio methodology is applied here to frequency data in linguistics and to chemical compositional data in archaeology.

The impact of tax credits on labour supply

One of the principle aims of the Working Families' Tax Credit in the UK was to increase the participation of single mothers. The literature to date concludes there was approximately a five-percentage-point increase in employment of single mothers. The differences-in-differences methodology that is typically used compares single mother with single women without children. However, the characteristics of these groups are very different, and change over time in relative covariates are likely to violate the identifying assumption. We find that when we control for differential trends between women with and without children, the employment effect of the policy falls significantly. Moreover, the effect is borne solely by those working full-time (30 hours or more), while having no effect on inducing people into the labor market from inactivity. Looking closely at important covariates over time, we can see sizeable changes in the relative returns to employment between the treatment and control groups.

Stabilization versus insurance: Welfare effects of procyclical taxation under incomplete markets

We construct and calibrate a general equilibrium business cycle model with unemployment and precautionary saving. We compute the cost of business cycles and locate the optimum in a set of simple cyclical fiscal policies. Our economy exhibits productivity shocks, giving firms an incentive to hire more when productivity is high. However, business cycles make workers' income riskier, both by increasing the unconditional probability of unusuallylong unemployment spells, and by making wages more variable, and therefore they decrease social welfare by around one-fourth or one-third of 1% of consumption. Optimal fiscal policy offsets the cycle, holding unemployment benefits constant but varying the tax rate procyclically to smooth hiring. By running a deficit of 4% to 5% of output in recessions, the government eliminates half the variation in the unemployment rate, most of the variation in workers'aggregate consumption, and most of the welfare cost of business cycles.

Optimal bail out policy, conditionality and constructive ambiguity

This paper addresses the issue of the optimal behaviour of the Lender of Last Resort (LOLR) in its microeconomic role regarding individual financial institutions in distress. It has been argued that the LOLR should not intervene at the microeconomic level and let any defaulting institution face the market discipline, as it will be confronted with the consequences of the risks it has taken. By considering a simple costbenefit analysis we show that this position may lack a sufficient foundation. We establish that, instead, uder reasonable assumptions, the optimal policy has to be conditional on the amount of uninsured debt issued by the defaulting bank. Yet in equilibrium, because the rescue policy is costly, the LOLR will not rescue all the banks that fulfill the uninsured debt requirement condition, but will follow a mixed strategy. This we interpret as the confirmation of the "creative ambiguity" principle, perfectly in line with the central bankers claim that it is efficient for them to have discretion in lending to individual institutions. Alternatively, in other cases, when the social cost of a bank's bankruptcy is too high, it is optimal for the LOLR to bail out the insititution, and this gives support to the "too big to fail" policy.

L'autonomie obligatoire : analyse sociologique des dispositifs scolaires de l'autonomie

La thèse traite des injonctions à l'autonomie dans le champ scolaire et des pratiques destinées à favoriser son développement chez les élèves. Elle se base sur une enquête ethnographique réalisée dans une école primaire genevoise, réunissant des observations menées durant deux ans et demi dans des classes allant de la 2° enfantine à la 3e primaire (2P-5P, selon HARMOS) et des entretiens d'enseignants, complétée par des observations dans les familles et des entretiens d'enfants et de leurs parents. Elle met en évidence le paradoxe auquel sont quotidiennement confrontés les enseignants qui doivent amener les élèves à découvrir et s'approprier les savoirs et les règles scolaires de manière autonome, tout en encadrant leurs pratiques afin que ceux-ci se conforment aux attentes de l'institution scolaire. La notion de dispositif, en tant qu'échelle intermédiaire d'analyse (Bonnéry, 2009), rend possible l'articulation des niveaux macro- et micro-sociologique dans l'analyse des pratiques. L'analyse des dispositifs scolaires de l'autonomie considère la traduction de la norme d'autonomie et des injonctions institutionnelles dans les pratiques individuelles. L'autonomie est ici définie comme un principe de socialisation, sur le mode de l'engagement : les dispositifs scolaires de l'autonomie visent à amener les élèves à choisir, vouloir, aimer ce que l'institution scolaire leur demande. Cette analyse permet de dégager plusieurs types de dispositifs et surtout de mettre en lumière leurs contradictions internes lorsque ne sont pas perçues ou partagées par les acteurs les attentes implicites ou explicites contenues dans les dispositifs. L'analyse des dispositifs porte également, dans une perspective plus interactionniste, sur les stratégies individuelles de gestion des contradictions et la retraduction des normes par les acteurs. Les dispositifs sont alors examinés sous l'angle des processus d'étiquetage réalisé par les enseignants et des formes de déviances qu'ils font apparaître chez les élèves et les parents. - The thesis deals with injunctions to autonomy in the field of education and practices used to facilitate its development in students. It is based on an ethnographic survey in Geneva elementary school, bringing together observations made during two and a half years in classes ranging from 2P to 5P (according HARMOS), interviews with teachers, observations in families and interviews with children and their parents. It highlights the paradox that teachers are daily confronted to, as they should encourage students to discover and acquire the knowledge and school rules independently, while framing their practices so that they conform to the expectations of the educational institution. The concept of dispositif as an intermediary level of analysis (Bonnéry, 2009) makes possible the articulation of the macro- and micro-sociological analysis in practices. The analysis of pedagogic dispositives considers the translation of the norm of autonomy and institutional injunctions in individual practices. In this perspective, autonomy is defined as principle of socialization, on the mode of engagement : pedagogic autonomy dispositives designed to encourage students to choose, want, love what institution demands. This analysis identifies several types of dispositives and highlights their internal contradictions when actors do not share expectations. In a more interactionnist perspective, the analysis also includes individual strategies to deal with contradictions and the retranslation of norms by actors. The dispositives are then examined in term of the labelling process conducted by teachers and forms of deviance among students and parents.

Signalling, mating success and paternal investment in sticklebacks (Gasterosteus aculeatus): A theoretical model

I present an optimisation model that links paternal investment, male display and female choice. Although deviced for sticklebacks, it readily applies to other fish with male guarding behaviour. It relies on a few basic assumptions on the ways hatching success depends on paternal investment and clutch size, and male survival on paternal investment and signaling. Paternal investment is here a state-dependent decision, and signal a condition-dependent handicap by which males inform females of how much they are willing to invest. Series of predictions are derived on female and male breeding strategies, including optimal levels of signaling and paternal investment as functions of clutch size, own condition, and residual reproductive value, as well as alternative strategies such as egg kleptoparasitism. Some predictions already have empirical support, for which the present model provides new interpretations. Other might readily be tested, e.g. by simple clutch-size manipulations.

A measure of rationality and welfare

There is evidence showing that individual behavior often deviates fromthe classical principle of maximization. This evidence raises at least two importantquestions: (i) how severe the deviations are and (ii) which method is the best forextracting relevant information from choice behavior for the purposes of welfare analysis.In this paper we address these two questions by identifying from a foundationalanalysis a new measure of the rationality of individuals that enables the analysis ofindividual welfare in potentially inconsistent subjects, all based on standard revealedpreference data. We call such measure minimal index.

A characterization of sequential rationalizability

A choice function is sequentially rationalizable if there is an ordered collection of asymmetric binary relations that identifies the selected alternative in every choice problem. We propose a property, F-consistency, and show that it characterizes the notion of sequential rationalizability. F-consistency is a testable property that highlights the behavioral aspects implicit in sequentially rationalizable choice. Further, our characterization result provides a novel tool with which to study how other behavioral concepts are related to sequential rationalizability, and establish a priori unexpected implications. In particular, we show that the concept of rationalizability by game trees, which, in principle, had little to do with sequential rationalizability, is a refinement of the latter. Every choice function that is rationalizable by a game tree is also sequentially rationalizable. Finally, we show that some prominent voting mechanisms are also sequentially rationalizable.

Negativity effect in multiparty electoral competition

We construct a dynamic voting model of multiparty competition in order to capture the following facts: voters base their decision on past economicperformance of the parties, and parties and candidates have different objectives. This model may explain the emergence of parties' ideologies,and shows the compatibility of the different objectives of parties and candidates. Together, these results give rise to the formation ofpolitical parties, as infinetely-lived agents with a certain ideology, out of the competition of myopic candidates freely choosing policy positions. We also show that in multicandidate elections held under the plurality system, Hotelling's principle of minimum differentiation is no longer satisfied.

The risk of divorce and household saving behavior

We analyze the impact of an increase in the risk of divorce on the savingbehaviour of married couples. From a theoretical perspective, the expected sign of theeffect is ambiguous. We take advantage of the legalization of divorce in Ireland in 1996as an exogenous increase in the likelihood of marital dissolution. We analyze the savingbehaviour over time of couples who were married before the law was passed. We proposea difference-in-differences approach where we use as comparison groups either marriedcouples in other European countries (not affected by the law change), or Irish familieswho did not experience a significant increase in the expected risk of divorce (such as veryreligious families, or single individuals). Our results suggest that the increase in the riskof divorce brought about by the law was followed by an increase in the propensity to saveof married couples, consistent with a rise in precautionary savings interpretation. Anincrease in the risk of marital dissolution of about 40 percent led to a 7 to 13 percent risein the proportion of married couples reporting positive savings.

The acquisition of pronouns by French children: A parallel study of production and comprehension

This study examines syntactic and morphological aspects of the production and comprehension of pronouns by 99 typically developing French-speaking children aged 3 years, 5 months to 6 years, 5 months. A fine structural analysis of subject, object, and reflexive clitics suggests that whereas the object clitic chain crosses the subject chain, the reflexive clitic chain is nested within it. We argue that this structural difference introduces differences in processing complexity, chain crossing being more complex than nesting. In support of this analysis, both production and comprehension experiments show that children have more difficulty with object than with reflexive clitics (with more omissions in production and more erroneous judgments in sentences involving Principle B in comprehension). Concerning the morphological aspect, French subject and object pronouns agree in gender with their referent. We report serious difficulties with pronoun gender both in production and comprehension in children around the age of 4 (with nearly 30% errors in production and chance level judgments in comprehension), which tend to disappear by age 6. The distribution of errors further suggests that the masculine gender is processed as the default value. These findings provide further insights into the relationship between comprehension and production in the acquisition process.

A simple model of multiple equilibria based on risk

This paper shows how risk may aggravate fluctuations in economies with imperfect insurance and multiple assets. A two period job matching model is studied, in which risk averse agents act both as workers and as entrepreneurs. They choose between two types of investment: one type is riskless, while the other is a risky activity that creates jobs.Equilibrium is unique under full insurance. If investment is fully insured but unemployment risk is uninsured, then precautionary saving behavior dampens output fluctuations. However, if both investment and employment are uninsured, then an increase in unemployment gives agents an incentive to shift investment away from the risky asset, further increasing unemployment. This positive feedback may lead to multiple Pareto ranked equilibria. An overlapping generations version of the model may exhibit poverty traps or persistent multiplicity. Greater insurance is doubly beneficial in this context since it can both prevent multiplicity and promote risky investment.

Irreversible investment in stochastically cyclical markets

This paper presents a new framework for studying irreversible (dis)investment whena market follows a random number of random-length cycles (such as a high-tech productmarket). It is assumed that a firm facing such market evolution is always unsure aboutwhether the current cycle is the last one, although it can update its beliefs about theprobability of facing a permanent decline by observing that no further growth phasearrives. We show that the existence of regime shifts in fluctuating markets suffices for anoption value of waiting to (dis)invest to arise, and we provide a marginal interpretationof the optimal (dis)investment policies, absent in the real options literature. Thepaper also shows that, despite the stochastic process of the underlying variable has acontinuous sample path, the discreteness in the regime changes implies that the samplepath of the firm s value experiences jumps whenever the regime switches all of a sudden,irrespective of whether the firm is active or not.

Functional Sub-Types

The paper argues that a functional reduction of ordinary psychology to neuropsychology is possible by means of constructing fine-grained functional, mental sub-types that are coextensive with neuropsychological types. We establish this claim by means of considering as examples the cases of the disconnection syndrome and schizophrenia. We point out that the result is a conservative reduction, vindicating the scientific quality of the mental types of ordinary psychology by systematically linking them with neuroscience. That procedure of conservative reduction by means of functional sub-types is in principle repeatable down to molecular neuroscience.