Does the EU financing system contribute to shadow economic activity?

Financial contributions to the EU budget depend basically on official GDP. This means that countries with higher shadow economic activity contribute less than they should contribute in a system based on actual GDP and therefore could reduce their incentive to fight against such activities. In this paper we investigate if the EU financing system really has an influence on the intensity with which governments in EU member states fight against shadow economic activity. We find that the EU net contributors significantly fight more intensively against shadow economic activity while EU net receivers significantly fight less. As a result, shadow economic activity is higher in net receiver and lower in net contributor countries than it were in comparison with a scenario of nationally balanced EU funding. Quantitatively and averaged over the time period 2001-2007, the diagnosed effect amounts to a stimulation of hidden economic activity by almost 10% for particular economies. JEL classification: C31, D63, F33, H21, H26. Keywords: EU financing system, shadow economy, tax auditing.

An axiomatic justification of mediation in bankruptcy problems.

This paper provides a natural way of reaching an agreement between two prominent proposals in a bankruptcy problem. Particularly, using the fact that such problems can be faced from two different points of views, awards and losses, we justify the average of any pair of dual bankruptcy rules through the definition a double recursive process. Finally, by considering three posible sets of equity principles that a particular society may agree on, we retrieve the average of old and well known bankruptcy rules, the Constrained Equal Awards and the Constrained Equal Losses rules, Piniles’ rule and its dual rule, and the Constrained Egalitarian rule and its dual rule. Keywords: Bankruptcy problems, Midpoint, Bounds, Duality, Recursivity. JEL classification: C71, D63, D71.

A way to play bankruptcy problems.

The commitment among agents has always been a difficult task, especially when they have to decide how to distribute the available amount of a scarce resource among all. On the one hand, there are a multiplicity of possible ways for assigning the available amount; and, on the other hand, each agent is going to propose that distribution which provides her the highest possible award. In this paper, with the purpose of making this agreement easier, firstly we use two different sets of basic properties, called Commonly Accepted Equity Principles, to delimit what agents can propose as reasonable allocations. Secondly, we extend the results obtained by Chun (1989) and Herrero (2003), obtaining new characterizations of old and well known bankruptcy rules. Finally, using the fact that bankruptcy problems can be analyzed from awards and losses, we define a mechanism which provides a new justification of the convex combinations of bankruptcy rules. Keywords: Bankruptcy problems, Unanimous Concessions procedure, Diminishing Claims mechanism, Piniles’ rule, Constrained Egalitarian rule. JEL classification: C71, D63, D71.

A Proportional Approach to Bankruptcy Problems with a guaranteed minimum

In a distribution problem, and specfii cally in bankruptcy issues, the Proportional (P) and the Egalitarian (EA) divisions are two of the most popular ways to resolve the conflict. The Constrained Equal Awards rule (CEA) is introduced in bankruptcy literature to ensure that no agent receives more than her claim, a problem that can arise when using the egalitarian division. We propose an alternative modi cation, by using a convex combination of P and EA. The recursive application of this new rule finishes at the CEA rule. Our solution concept ensures a minimum amount to each agent, and distributes the remaining estate in a proportional way. Keywords: Bankruptcy problems, Proportional rule, Equal Awards, Convex combination of rules, Lorenz dominance. JEL classi fication: C71, D63, D71.

Solidarity and uniform rules in bankruptcy problems

The idea of ensuring a guarantee (a minimum amount of the resources) to each agent has recently acquired great relevance, in both social and politi- cal terms. Furthermore, the notion of Solidarity has been treated frequently in redistribution problems to establish that any increment of the resources should be equally distributed taking into account some relevant characteris- tics. In this paper, we combine these two general concepts, guarantee and solidarity, to characterize the uniform rules in bankruptcy problems (Con- strained Equal Awards and Constrained Equal Losses rules). Keywords: Constrained Equal Awards, Constrained Equal Losses, Lower bounds, Bankruptcy problems, Solidarity. JEL classification: C71, D63, D71.

Discrimination in Bankruptcy Situations

In a bankruptcy situation, not all claimants are affected in the same way. In particular, some depositors may enter into a situation of personal bankruptcy if they lose part of their investments. Events of this kind may lead to a social catastrophe. We propose discrimination among the claimants as a possible solution. A fact considered in the American bankruptcy law (among others) that establishes some discrimination on the claimants, or the Santander Bank that in the Madoff’s case reimbursed only the deposits to its particular customers. Moreover, the necessity of discriminating has already been mentioned in different contexts by Young (1988), Bossert (1995), Thomson (2003) and Pulido et al. (2002, 2007), for instance. In this paper, we take a bankruptcy solution as the reference point. Given this initial allocation, we make transfers from richer to poorer with the purpose of distributing not only the personal incurred losses as evenly as possible but also the transfers in a progressive way. The agents are divided into two groups depending on their personal monetary value (wealth, net-income, GDP or any other characteristic). Then, we impose a set of Axioms that bound the maximal transfer that each net-contributor can make and each net-receiver can obtain. Finally, we define a value discriminant solution, and we characterize it by means of the Lorenz criterion. Endogenous convex combinations between solutions are also considered. Keywords: Bankruptcy, Discrimination, Compensation, Rules JEL classification: C71, D63, D71.

A note on discrete claims problems

In this note, we consider claims problems with indivisible goods. Specifically, by applying recursively the P-rights lower bound (Jiménez-Gómez and Marco-Gil (2008)), we ensure the fulfillment of Weak Order Preservation, considered by many authors as a minimal requirement of fairness. Moreover, we retrieve the Discrete Constrained Equal Losses and the Discrete Constrained Equal Awards rules (Herrero and Martíınez (2008)). Finally, by the recursive double imposition of a lower and an upper bound, we obtain the average between them. Keywords: Claims problems, Indivisibilities, Order Preservation, Constrained Egalitarian rules, Midpoint. JEL classification: C71, D63, D71.

Fair bounds based solidarity

How should scholarships be distributed among the (public) higher education students? We raise this situation as a redistribution problem. Following the approach developed in Fleurbaey (1994) and Bossert (1995), redistribution should be based on the notion of solidarity and it re-allocates resources taking into account only agents’ relevant characteristics. We also follow Luttens (2010a), who considers that compensation of relevant characteristics must be based on a lower bound on what every individual deserves. In doing so, we use the so-called fair bound (Moulin (2002)) to define an egalitarian redistribution mechanism and characterize it in terms of non-negativity, priority in lower bound and solidarity. Finally, we apply our approach to the scholarships redistribution problem. Keywords: Redistribution mechanism, Lower bounds, Scholarship, Solidarity. JEL classification: C71, D63, D71

A note on Luttens’ Minimal rights based solidarity

Following the approach developed by Luttens (2010), we consider a model where individuals with di fferent levels of skills exert di fferent levels of e ffor. Speci fically, we propose a redistribution mechanism based on a lower bound on what every individual deserves: the so-called minimal rights (O'Neill (1982)). Our re finement of Luttens' mechanism ensures at the same time minimal rights based solidarity, participation (non-negativity) and claims feasibility. Keywords: Redistribution mechanism, Minimal rights, Solidarity, Participation, Claims feasibility. JEL classi fication: C71, D63, D71.

From bargaining solutions to claims rules: a proportional approach

Is it important to negotiate on proportions rather than on numbers? To answer this question, we analyze the behavior of well-known bargaining solutions and the claims rules they induce when they are applied to a "proportionally transformed" bargaining set SP -so-called bargaining-in-proportions set. The idea of applying bargaining solutions to claims problems was already developed in Dagan and Volij (1993). They apply the bargaining solutions over a bargaining set that is the one de ned by the claims and the endowment. A comparison among our results and theirs is provided. Keywords: Bargaining problem, Claims problem, Proportional, Constrained Equal Awards, Constrained Equal Losses, Nash bargaining solution. JEL classi fication: C71, D63, D71.

Some game-theoretic grounds for meeting people half-way

It is well known that, in distributions problems, fairness rarely leads to a single viewpoint (see, for instance, Young (1994)). In this context, this paper provides interesting bases that support the simple and commonly observed behavior of reaching intermediate agreements when two prominent distribution proposals highlight a discrepancy in sharing resources. Specifi cally, we formalize such a conflicting situation by associating it with a `natural' cooperative game, called bifocal distribution game, to show that both the Nucleolus (Schmeidler (1969)) and the Shapley value (Shapley (1953a)) agree on recommending the average of the two focal proposals. Furthermore, we analyze the interpretation of the previous result by means of axiomatic arguments. Keywords: Distribution problems, Cooperative games, Axiomatic analysis, Nucleolus, Shapley value. JEL Classi fication Numbers: C71, D63, D71.

On the coincidence of the Mas-Colell bargaining set and the core

In this paper we prove that the Mas-Colell bargaining set coincides with the core for three-player balanced and superadditive cooperative games. This is no longer true without the superadditivity condition or for games with more than three-players. Furthermore, under the same assumptions, the coincidence between the Mas-Collel and the individual rational bargaining set (Vohra (1991)) is revealed. Keywords: Cooperative game, Mas-Colell bargaining set, balancedness, individual rational bargaining set. JEL classi fication: C71, D63, D71.

ABS: a database of Annotated regulatory Binding Sites from orthologous promoters

Information about the genomic coordinates and the sequence of experimentally identified transcription factor binding sites is found scattered under a variety of diverse formats. The availability of standard collections of such high-quality data is important to design, evaluate and improve novel computational approaches to identify binding motifs on promoter sequences from related genes. ABS (http://genome.imim.es/datasets/abs2005/index.html) is a public database of known binding sites identified in promoters of orthologous vertebrate genes that have been manually curated from bibliography. We have annotated 650 experimental binding sites from 68 transcription factors and 100 orthologous target genes in human, mouse, rat or chicken genome sequences. Computational predictions and promoter alignment information are also provided for each entry. A simple and easy-to-use web interface facilitates data retrieval allowing different views of the information. In addition, the release 1.0 of ABS includes a customizable generator of artificial datasets based on the known sites contained in the collection and an evaluation tool to aid during the training and the assessment of motif-finding programs.

A Theory of Representative Behavior in the Dictator Game

In this paper we present a model of representative behavior in the dictator game. Individuals have simultaneous and non-contradictory preferences over monetary payoffs, altruistic actions and equity concerns. We require that these behaviors must be aggregated and founded in principles of representativeness and empathy. The model results match closely the observed mean split and replicate other empirical regularities (for instance, higher stakes reduce the willingness to give). In addition, we connect representative behavior with an allocation rule built on psychological and behavioral arguments. An approach consistently neglected in this literature. Key words: Dictator Game, Behavioral Allocation Rules, Altruism, Equity Concerns, Empathy, Self-interest JEL classification: C91, D03, D63, D74.