DSpace community: Departament d'Economia i d'Història Econòmica

Work Values, Endogenous Sentiments and Redistribution

Thu, 13 May 2010 14:21:21 GMT

title: Work Values, Endogenous Sentiments and Redistribution authors: Matteo Cervellati; Joan Esteban; Laurence Kranich
abstract: We examine the interactions between individual behavior, sentiments and the social contract in a model of rational voting over redistribution. Agents have moral "work values". Individuals' self-esteem and social consideration of others are endogenously determined comparing behaviors to moral standards. Attitudes toward redistribution depend on self-interest and social preferences. We characterize the politico-economic equilibria in which sentiments, labor supply and redistribution are determined simultaneously. The equilibria feature different degrees of "social cohesion" and redistribution depending on pre-tax income inequality. In clustered equilibria the poor are held partly responsible for their low income since they work less than the moral standard and hence redistribution is low. The paper proposes a novel explanation for the emergence of different sentiments and social contracts across countries. The predictions appear broadly in line with well-documented differences between the United States and Europe.

RETHINKING ECONOMY-WIDE REBOUND MEASURES: AN UNBIASED PROPOSAL

Thu, 13 May 2010 14:21:12 GMT

title: RETHINKING ECONOMY-WIDE REBOUND MEASURES: AN UNBIASED PROPOSAL authors: Ana-Isabel Guerra; Ferran Sancho
abstract: In spite of having been first introduced in the last half of the ninetieth century, the debate about the possible rebound effects from energy efficiency improvements is still an open question in the economic literature. This paper contributes to the existing research on this issue proposing an unbiased measure for economy-wide rebound effects. The novelty of this economy-wide rebound measure stems from the fact that not only actual energy savings but also potential energy savings are quantified under general equilibrium conditions. Our findings indicate that the use of engineering savings instead of general equilibrium potential savings downward biases economy-wide rebound effects and upward-biases backfire effects. The discrepancies between the traditional indicator and our proposed measure are analysed in the context of the Spanish economy.

Egalitarian Equivalence under Asymmetric Information

Thu, 13 May 2010 14:21:02 GMT

title: Egalitarian Equivalence under Asymmetric Information authors: Geoffroy de Clippel; David Pérez-Castrillo; David Wettstein
abstract: We propose a definition of egalitarian equivalence that extends Pazner and Schmeidler's (1978) concept to environments with incomplete information. If every feasible allocation rule can be implemented by an incentive compatible mechanism (as, for instance, in the case of non-exclusive information), then interim egalitarian equivalence and interim incentive efficiency remain compatible, as they were under complete information. When incentive constraints are more restrictive, on the other hand, the two criteria may become incompatible.

Mobile Termination, Network Externalities, and Consumer Expectations

Thu, 13 May 2010 14:20:51 GMT

title: Mobile Termination, Network Externalities, and Consumer Expectations authors: Sjaak Hurkens; Ángel L. López
abstract: We re-examine the literature on mobile termination in the presence of network externalities. Externalities arise when firms discriminate between on- and off-net calls or when subscription demand is elastic. This literature predicts that profit decreases and consumer surplus increases in termination charge in a neighborhood of termination cost. This creates a puzzle since in reality we see regulators worldwide pushing termination rates down while being opposed by network operators. We show that this puzzle is resolved when consumers' expectations are assumed passive but required to be fulfilled in equilibrium (as defined by Katz and Shapiro, AER 1985), instead of being rationally responsive to non-equilibrium prices, as assumed until now.