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De Jure And De Facto Institutions – Disentangling The Interrelationships, Jacek Lewkowicz, Katarzyna Metelska-Szaniawska 2016 University of Warsaw

De Jure And De Facto Institutions – Disentangling The Interrelationships, Jacek Lewkowicz, Katarzyna Metelska-Szaniawska

The Latin American and Iberian Journal of Law and Economics

In this paper we contribute to the debate on the nature of institutions and their economic effects by extending the focus to the de jure de facto institutional distinction. Firstly, we define and conceptualize de facto institutions, as well as elaborate on their place in the broad institutional system and identification. Then we investigate the possible interrelationships between de facto and de jure institutions. Finally, we make a link between these interrelationships and economic outcomes. In this way the paper fills an underexploited niche in institutional research, which is a major background for law and economics.

Resumen

En este trabajo ...


Endogenous Differential Information, Sebastián Cea-Echenique, Carlos Hervés-Beloso, Juan Pablo Torres-Martínez 2016 University of Paris 1 Panthéon-Sorbonne

Endogenous Differential Information, Sebastián Cea-Echenique, Carlos Hervés-Beloso, Juan Pablo Torres-Martínez

Juan Pablo Torres-Martínez

We include endogenous differential information in a model with sequential trade and incomplete financial participation. Agents update information through market signals given by commodity prices and asset deliveries. Information acts over admissible strategies and consumption tastes, allowing discontinuities in preferences and choice sets. Therefore, equilibrium may cease to exist. However, internalizing the compatibility between information and consumption through preferences, and without requiring either financial survival assumptions or fully revealing prices, equilibrium existence can be ensured.


16-31 All-Pay Auctions With Ties, Alan Gelder, Dan Kovenock, Brian Roberson 2016 Institute for Defense Analyses

16-31 All-Pay Auctions With Ties, Alan Gelder, Dan Kovenock, Brian Roberson

ESI Working Papers

We study the two-player, complete information all-pay auction in which a tie ensues if neither player outbids the other by more than a given amount. In the event of a tie, each player receives an identical fraction of the winning prize. Thus players engage in two margins of competition: losing versus tying, and tying versus winning. Two pertinent parameters are the margin required for victory and the value of tying relative to winning. We fully characterize the set of Nash equilibria for the entire parameter space. For much of the parameter space, there is a unique Nash equilibrium which is ...


Welfare Maximization, Pricing, And Allocation With A Product Performance Or Environmental Quality Standard: Illustration For The Gasoline And Additives Market, Paul W. Gallagher, Hosein Shapouri, Jeffrey Price 2016 Iowa State University

Welfare Maximization, Pricing, And Allocation With A Product Performance Or Environmental Quality Standard: Illustration For The Gasoline And Additives Market, Paul W. Gallagher, Hosein Shapouri, Jeffrey Price

Paul Gallagher

Programming models approximate market prices and quantities when regulations constrain firm choices, because market outcomes result when welfare is appropriately defined and includes performance and environmental constraints. This study discusses market operation in quality-constrained sectors, like gasoline and additives; processors expand output until marginal processing cost equals the processing margin between product revenues and raw material costs; retailers who buy gasoline and additives from processors and sell blended retail gasoline price sales at a marginal cost that includes the blended input value plus adjustments for values of constrained attributes; and market supplies and demands of measurable attributes like octane are ...


Scale, Organization, And Profitability Of Ethanol Processing, Paul Gallagher, Hosein Shapouri, Heather Brubaker 2016 Iowa State University

Scale, Organization, And Profitability Of Ethanol Processing, Paul Gallagher, Hosein Shapouri, Heather Brubaker

Paul Gallagher

We analyze the appropriate size and implied profitability of a representative ethanol processing firm. An analysis based on current processing technology and costs with typical conditions in Iowa product and input markets is useful; because unit production costs have declined 30% in current dollars over the last 15 years; and because discovering a suitable size for processing facilities has been an important part of the cost-reducing process. We apply theoretical plant size rules for a conventional processing business, an integrated producer/processor enterprise, and a processing cooperative. We also introduce a spatial dimension for the corn input market, because ethanol ...


Growing Biomass Fuel Industry, Declining Local Forage Demands, And Changing Greenhouse Gas Emissions From Us Agriculture: A Case Study, Paul W. Gallagher, Jeremiah Richey 2016 Iowa State University

Growing Biomass Fuel Industry, Declining Local Forage Demands, And Changing Greenhouse Gas Emissions From Us Agriculture: A Case Study, Paul W. Gallagher, Jeremiah Richey

Paul Gallagher

This paper investigates the effect of a biomass crop introduction in a local market where field crops; cattle forage and biomass crops compete for the agricultural resources and determine land use. A simulation study for a State in the US (Minnesota) with extensive and diverse agricultural resources that could also support a biomass industry is reported. Local market impact on prices and land use is summarized. A local biofuel industry with 1.0 billion gallon capacity can transform declining local land values to stable or moderately increasing land values; partly because secular declines in cattle forage can be replaced with ...


An Economic Analysis Of Expenditures On State Experiment Station Research, Wallace E. Huffman, John A. Miranowski 2016 Iowa State University

An Economic Analysis Of Expenditures On State Experiment Station Research, Wallace E. Huffman, John A. Miranowski

John Miranowski

The last decade can be characterized by a growing skepticism of the agricultural research establishment. Some have argued that agricultural researchers have been captured by the interests of large farmers or by large private farm input supply firms. Others have argued that the agricultural research establishment has been unresponsive to human resource, environmental, and income distributional issues. Some of these concerns have been expressed in recent changes made in the type of federal support for agricultural research.


Comparable Worth And The Structure Of Earnings: The Iowa Case, Peter F. Orazem, J. Peter Mattila 2016 Iowa State University

Comparable Worth And The Structure Of Earnings: The Iowa Case, Peter F. Orazem, J. Peter Mattila

Peter Orazem

Comparable worth pay plans have been implemented in several states since the early 1980s. To our knowledge, however, no study exists of the actual impact of such plans on the pay structure of state government. We examine the case of comparable worth in Iowa, both as proposed in 1984 and as actually implemented (in compromise form) in 1985. In particular, we identify the relative winners and losers from comparable worth by analyzing the impact on earnings for men, women, minorities, unionized employees, and particular occupational groups, such as supervisors and professionals. In addition, we are able to determine whether the ...


The Gold Standard And The Transmission Of Business Cycles, 1833-1932, Wallace E. Huffman, James R. Lothian 2016 Iowa State University

The Gold Standard And The Transmission Of Business Cycles, 1833-1932, Wallace E. Huffman, James R. Lothian

Wallace Huffman

Descriptions of the gold standard have stressed two very different aspects of that monetary system. Modern observers, concerned with high and rising rates of inflation, have written enthusiastically and often nostalgically of the longer-term price stability that existed during the gold standard era. Many other economists during the past century and a half, however, have rendered a less kindly judgment, emphasizing instead the frequent and sometimes severe business contractions that characterized the period as well as the substantial shorter- and intermediate-term swings in the price level.


16-30 Asymmetric Social Norms, Gabriele Camera, Alessandro Gioffré 2016 Chapman University

16-30 Asymmetric Social Norms, Gabriele Camera, Alessandro Gioffré

ESI Working Papers

Studies of cooperation in infinitely repeated matching games focus on homogeneous economies, where full cooperation is efficient and any defection is collectively sanctioned. Here we study heterogeneous economies where occasional defections are part of efficient play, and show how to support those outcomes through contagious punishments.


The Demand For Agricultural Research By State Governments, Jyoti Khanna, Wallace E. Huffman, Todd Sandler 2016 Iowa State University

The Demand For Agricultural Research By State Governments, Jyoti Khanna, Wallace E. Huffman, Todd Sandler

Wallace Huffman

Public agricultural research in the United States is conducted by state agricultural experiment stations (SAES) and by the research agencies of the USDA. Both have research activities in every state. A vast amount of research and experiments has shown that the performance of plants and to a lesser extent animals, in which new technologies are frequently embodied, is altered by local geoclimatic conditions that differ within and between states. Basic research and livestock research to some extent lead to new knowledge or technologies that spill widely across state boundaries. Thus, public agricultural research produces knowledge that is both state specific ...


Understanding Post-War Changes In U.S. Household Production: A Full-Income Demand-System Perspective, Wallace Huffman 2016 Iowa State University

Understanding Post-War Changes In U.S. Household Production: A Full-Income Demand-System Perspective, Wallace Huffman

Wallace Huffman

This paper examines the changing structure of U.S. household production over the post-World War II period. We apply production theory in order to define a new set of inputs for U.S. households and use newly constructed data so as to examine with the aid of a relatively simple complete household aggregate demand system. The goal is to extent our understanding of the changing structure of the U.S. household sector over the post-World War II period, including the demand for inputs of women’s and men’s housework or unpaid household labor and seven other aggregate input categories ...


Implications Of Agency Theory For Optimal Land Tenure Contracts, Wallace E. Huffman, Richard E. Just 2016 Iowa State University

Implications Of Agency Theory For Optimal Land Tenure Contracts, Wallace E. Huffman, Richard E. Just

Wallace Huffman

For more than 2 centuries, economists have been interested in agricultural contracts, especially landowner-tenant contracts. The early work by Marshall (1890) argued that share tenancy was inefficient relative to owner cultivation and should not be expected to persist when other arrangements are available. Later D. Gale Johnson (1950) and Cheung (1969) argued that, if landowners can costlessly monitor and enforce tenants’ effort, then share tenancy can compete effectively with owner cultivation or cash rental. Subsequently, Stiglitz (1974) and Newberry and Stiglitz (1979) introduced principal-agent models in the more realistic case where monitoring is costly to study optimal landowner-tenant risk sharing ...


Should The United States Regulate Mandatory Labeling For Genetically Modified Foods?, Wallace Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene 2016 Iowa State University

Should The United States Regulate Mandatory Labeling For Genetically Modified Foods?, Wallace Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene

Wallace Huffman

Public debate continues over whether the United States should regulate genetically modified (GM) foods by imposing a mandatory labeling policy. This paper develops a model that shows that a voluntary GM- labeling policy results in higher welfare than a regulated mandatory GMlabeling policy, if consumers can accurately read the signals in each market. We then develop an experiment that shows consumers behave as if they can accurately identify signals for GM foods. Our model and results support the perspective that the United States has been prudent in fending off calls for regulations demanding a mandatory GM- labeling policy.


Aggregate Private R&D Investments In Agriculture: The Role Of Incentives, Public Policies, And Institutions, Oscar Alfranca, Wallace E. Huffman 2016 University Politecnica de Catalunya

Aggregate Private R&D Investments In Agriculture: The Role Of Incentives, Public Policies, And Institutions, Oscar Alfranca, Wallace E. Huffman

Wallace Huffman

Most observers have come to agree that Research and Development (R&D) is fundamental to the innovations that take place in advanced countries and that drive growth and development around the world. This is equally true for agricultural R&D, which has substantially increased the supply of food and fiber over time. Given the evident importance of agricultural R&D, we look at the forces that determine the amount of privately funded research in this vital sector using a sample of European countries. We construct indicators of private incentives, property rights, and publicly funded research in the various countries. Private research has grown with unusual speed in recent years and offers the prospect of advances in the quality of agricultural goods as well as reductions in their costs. Furthermore, considerable interest exists in knowing how changes in private and public research expenditures are related empirically; for example, are they complements or substitutes?1 If they are substitutes, then additional private agricultural R&D expenditures may not result in larger total agricultural research expenditures.


Information, Competition, And The Quality Of Charities, Silvana Krasteva, Huseyin Yildirim 2016 Texas A & M University - College Station

Information, Competition, And The Quality Of Charities, Silvana Krasteva, Huseyin Yildirim

Huseyin Yildirim

Drawing upon the all-pay auction literature, we propose a model of charity competition in which informed giving alone can account for the significant quality heterogeneity across similar charities. Our analysis identifies a negative effect of competition and a positive effect of informed giving on the equilibrium quality of charity. In particular, we show that as the number of charities grows, so does the percentage of charity scams, approaching one in the limit. In light of this and other results, we discuss the need for regulating nonprofit entry and conduct as well as promoting informed giving.


Unequal Exchange In International Trade: A General Model, Andrea Ricci 2016 Università degli Studi di Urbino

Unequal Exchange In International Trade: A General Model, Andrea Ricci

Andrea Ricci

Increasing world inequality and mass migration make the topic of unequal exchange ever more important. Unequal exchange arises when spatial production of value is disjointed from its geographical distribution. The lack of a coherent theoretical framework has limited empirical research on value transfers in trade. This paper aims to overcome this gap. A disaggregated monetary model of world economy with heterogeneous labour, non-specific commodities, and different national production techniques is presented on the grounds of Marx’s labour theory of value. All the different forms of unequal exchange in international trade are explained without incurring the traditional impasses. Estimates of ...


16-29 Using Experiments To Compare The Predictive Power Of Models Of Multilateral Negotiations, Cary Deck, Charles J. Thomas 2016 Chapman University

16-29 Using Experiments To Compare The Predictive Power Of Models Of Multilateral Negotiations, Cary Deck, Charles J. Thomas

ESI Working Papers

We conduct unstructured negotiations in a laboratory experiment designed to empirically assess the predictive power of three approaches to modeling the multilateral negotiations observed in diverse strategic settings. For concreteness we consider two sellers negotiating with a buyer who wants to make only one trade, with the modeling approaches distinguished by whether the buyer negotiates with the sellers sequentially, simultaneously, or in a “take-it-or-leave-it” fashion. Our experiment features two scenarios within which the three approaches have observationally distinct predictions: a differentiated scenario with one high-surplus and one low-surplus seller, and a homogeneous scenario with identical high-surplus sellers. In both scenarios ...


Walras' Law, Pareto Efficiency, And Intermediation In Overlapping Generations Economies, Mark Pingle, Leigh Tesfatsion 2016 Iowa State University

Walras' Law, Pareto Efficiency, And Intermediation In Overlapping Generations Economies, Mark Pingle, Leigh Tesfatsion

Leigh Tesfatsion

Aiyagari (1992) demonstrates a connection between the failure of Walras' Law and nonoptimal equilibria for a version of the pure-exchange overlapping generations (OG) econ omy first studied by Samuelson (1958). The significant implication ofWalras' Law in finite economies, given all prices are positive and all consumers are locally nonsatiated, is that an excess supply (in value terms) cannot exist for some subset of goods without an excess demand (in value terms) existing forsome othersubset ofgoods. Aiyagari defines the failure of Walras' Law as a situation in which this implication of Walras' Law does not hold. His basic and interesting result ...


Teaching Agent-Based Computational Economics To Graduate Students, Leigh Tesfatsion 2016 Iowa State University

Teaching Agent-Based Computational Economics To Graduate Students, Leigh Tesfatsion

Leigh Tesfatsion

Agent-based computational economics (ACE) is roughly defined as the computational study of economies modeled as evolving decentralized systems of autonomous interacting agents. A key focus of ACE research is understanding how global regularities' arise from the-bottom^up, through the repeated local interactions-of autonomous agents channeled through socioeconomic institutions, rather than from top down coordination mechanisms such as imposed market clearing constraints or an assumption of single representative agents. This paper discusses how ACE materials have been.introduced into graduate-level courses in macroeconomic theory over the past several years, using an ACE labor market framework for concrete illustration...


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