Articles scientifiques

A framework for analyzing the political support for active labor market policy


Journal of Public Economics

février 1998, vol. 67, n°2, pp.151-165

Départements : Finance

We develop a general equilibrium analysis of the impact of active labor market policy on unemployment, wages and the welfare of the employed. This framework is used to assess the political support in favour of such policies and to relate it to the working of Such policies and other parameters characterizing the economic environment. The main finding is that if the employed have little exposure to unemployment and if the demand for unskilled labour is inelastic, then there may be political support for policies which actually raise the equilibrium level of total unemployment

Asset Prices and Trading Volume in a Beauty Contest


Review of Economic Studies

avril 1998, vol. 65, n°2, pp.307-340

Départements : Finance

Speculators buy an asset hoping to sell it later to investors with higher private valuations. If agents are uncertain about the distribution of private valuations and about the beliefs of others about this distribution, a beauty contest with an infinite hierarchy of beliefs arises. Under Harsanyi's assumption of a common prior the infinite beliefs hierarchy is readily solved using Bayes' law. This paper shows that common knowledge of the "beliefs formation rule," mapping the private valuation of each agent into his first-order belief, also simplifies the beliefs hierarchy while allowing for disagreement among agents. We analyse the resulting speculation in a stylized asset market. Several statistic, computed only from readily observable quote, return and volume data, are evaluated in terms of their power to discriminate between genuine disagreement and the Harsanyian case. Only statistics that relate volume and volatility, or volume and changes in best offers, have the necessary discriminatory power

Condorcet Cycles in Bipartite Populations

H. CRES, Y. Balasko

Economic Theory

août 1998, vol. 12, pp.313-334

Départements : Finance

Simple majority voting between pairs of alternatives is used to aggregate individual preferences. The occurence of Condorcet cycles is limited thanks to a principle of homogeneity on individual preferences. The restrictions induced on the domain of the latters are weak: among the n! possible orderings of n alternatives, more than one half are admissible within a domain. The resulting aggregated preference has then a neglectable probability of showing up cycles. We show moreover that the set of individual preferences can be 'naturally' partitioned into two such domains.

Efficient Liability Rules for Multi-Party Accidents with Moral Hazard

E. Feess, U. HEGE

Journal of Institutional and Theoretical Economics

1998, vol. 154, n°2, pp.422-450

Départements : Finance

The economic analysis of tort law is extended to multi-party accidents with unobservable actions. Due to the requirement of no punitive damages, the problem resembles a team production problem. It is shown that asymmetry in the agents' impact on the stochastic damage function can be exploited to improve ex ante incentives. This implies departures from the proportional rule, based on the statistical information contained in the circumstances of the accident. If a noisy monitoring technology is introduced, then monitoring can add enough stochastic identifiability among injurers to restore efficiency.

Exchange and Optimality


Economic Theory

1998, n°00

Départements : Finance