Recent ucsbecon_bergstrom items

In Nash equilibrium, when would just one country contribute to pharmaceutical research

Sun, 16 Nov 2025 00:00:00 +0000

In Nash equilibrium, when would just one country contribute to pharmaceutical research

Lectures on the Elasticity of Substitution

Tue, 21 Oct 2025 00:00:00 +0000

Lectures on the Elasticity of Substitution

Lectures on Separable Preferences

Fri, 10 Oct 2025 00:00:00 +0000

Lectures on Separable Preferences

A geometry of three-candidate elections

Sun, 14 May 2023 00:00:00 +0000

A geometry of three-candidate elections

Sun, 14 May 2023 00:00:00 +0000

A geometry of three-candidate elections

When are there Condorcet winners despite extremist preferences

Sun, 27 Mar 2022 00:00:00 +0000

When are there Condorcet winners despite extremist preferences

To read and be read: When monopolists control access to academic prestige

Sun, 27 Mar 2022 00:00:00 +0000

To read and be read: When monopolists control access to academic prestige

Uniqueness of Nash equilibrium in private provision of public goods: An improved proof

Tue, 16 Feb 2021 00:00:00 +0000

Uniqueness of Nash equilibrium in private provision of public goods: An improved proof

Ethics, Evolution, and Games among neighbors

Mon, 15 Feb 2021 00:00:00 +0000

Ethics, Evolution, and Games among neighbors

Stem. Cell Donor Matching for Patients of Mixed Race

Mon, 15 Feb 2021 00:00:00 +0000

Stem. Cell Donor Matching for Patients of Mixed Race

To read and be read

Mon, 15 Feb 2021 00:00:00 +0000

To read and be read

Evaluating Big Deal Journal Bundles

Mon, 15 Feb 2021 00:00:00 +0000

Evaluating Big Deal Journal Bundles

Measures of Assortativity

Mon, 15 Feb 2021 00:00:00 +0000

Measures of Assortativity

On the evolution of hoarding, risk-taking, and wealth distribution in human and non-human populations

Mon, 15 Feb 2021 00:00:00 +0000

On the evolution of hoarding, risk-taking, and wealth distribution in human and non-human populations

Alternative economic designs for academic publishing

Mon, 15 Feb 2021 00:00:00 +0000

Alternative economic designs for academic publishing

Librarians and the Terrible Fix: Economics of the Big Deal

Mon, 15 Feb 2021 00:00:00 +0000

Librarians and the Terrible Fix: Economics of the Big Deal

Solving the Beautiful Mind coordination game

Mon, 15 Feb 2021 00:00:00 +0000

Solving the Beautiful Mind coordination game

Property rights and the Australian minerals sector

Mon, 15 Feb 2021 00:00:00 +0000

Property rights and the Australian minerals sector

Simple Economies with Multiple Equilibria

Sun, 14 Feb 2021 00:00:00 +0000

Simple Economies with Multiple Equilibria

Choosing Partners: A Classroom Experiment

Sun, 14 Feb 2021 00:00:00 +0000

Choosing Partners: A Classroom Experiment

Differences in Impact Factor Across Fields and Over Time

Sun, 14 Feb 2021 00:00:00 +0000

Differences in Impact Factor Across Fields and Over Time

Let me or let George: Motives of competing altruists

Sun, 14 Feb 2021 00:00:00 +0000

Let me or let George: Motives of competing altruists

Toward a Deeper Economics of Sleeping

Sun, 14 Feb 2021 00:00:00 +0000

Toward a Deeper Economics of Sleeping

The Use of Markets to Control Pollution

Sun, 14 Feb 2021 00:00:00 +0000

The Use of Markets to Control Pollution

An Economic Approach to Social Choice Ii

Sun, 14 Feb 2021 00:00:00 +0000

An Economic Approach to Social Choice Ii

One chance in a million: Altruism and the Bone Marrow Registry

Sun, 14 Feb 2021 00:00:00 +0000

One chance in a million: Altruism and the Bone Marrow Registry

Do download reports reliably measure journal usage? Trusting the fox to count your hens?

Sun, 14 Feb 2021 00:00:00 +0000

Download rates of academic journals have joined citation rates as commonly-used indicators of the value of journal subscriptions. While citation rates reflect worldwide influence, the value that a single library places on access to a journal is probably more accurately measured by the rate at which it is downloaded by local users. If local download rates accurately measure local usage, there is a strong case for employing download rates to compare the cost-effectiveness of journals. We examine download data for more than five thousand journals subscribed to by the ten universities in the University of California system. We find that controlling for measured journal characteristics - citation rates, number of articles, and year of download - download rates, as captured by the ratio of downloads to citations, differs substantially between academic disciplines. This suggests that discipline specific adjustments to download rates are needed to construct a reliable tool...

Efficient Ethical Rules for Volunteer's Dilemmas

Mon, 27 Nov 2017 00:00:00 +0000

This paper extends the classic Volunteer’s Dilemma game to environments in which individuals have differing costs and private information about their own costs. It explores

the nature of symmetric ethical optimum strategies for Volunteer's Dilemma games with and without differing costs. Where costs differ, ethical optima are constructed by symmetrizing the game with a Rawlsian “Veil of Ignorance

The Good Samaritan and Traffic on the Road to Jericho

Fri, 22 Sep 2017 00:00:00 +0000

The Good Samaritan and Traffic on the Road to Jericho

When was Coase Right?

Fri, 22 Sep 2017 00:00:00 +0000

When was Coase Right?

The Uncommon Insight of Eleanor Ostrom

Fri, 22 Sep 2017 00:00:00 +0000

This article was written in celebration of Eleanor Ostrom's Nobel Prize. Standard economic approaches to the problem of overuse of common property resources have emphasized two competing remedies, the Pigovian approach of corrective taxation and the property rights approach of internalizing externalities by means of assigning marketable property rights to individual owners with exclusive claim on the entire commons. Elinor Ostrom pursues a third approach, which is based on case studies of existing communities that have established successful and durable systems of managing common property resources. This paper discusses her work and suggests that economists with an interest in public policy have much to gain from becoming familiar with the work of Ostrom and her co-authors.

Saving Lives with Stem Cell Transplants

Wed, 4 Feb 2015 00:00:00 +0000

Saving Lives with Stem Cell Transplants

The Rotten Kid Theorem--Entry for the New New Palgrave

Thu, 8 Sep 2011 00:00:00 +0000

This paper is a survey of the literature on the Gary Becker's Rotten Kid Theorem

Competition and Personality in a Restaurant Entry Game: Is there an Entrepreneurial Personality Type?

Fri, 19 Aug 2011 00:00:00 +0000

Students in a large principles class participated in a market experiment in which they had opportunities to take entrepreneurial action. These students had also taken the Meyers-Briggs personality test. We explore the relation between personality characteristics and participation decisions.

The Eigenfactor Metrics: A network approach to assessing scholarly journals

Thu, 13 May 2010 00:00:00 +0000

Limited time and budgets have created a legitimate need for quantitative measures of scholarly work. The well-known journal impact factor is the leading measure of this sort; here we describe an alternative approach based on the full structure of the scholarly citation network. The Eigenfactor and Article Influence Score use an iterative ranking scheme similar to Google's PageRank algorithm. With this approach, citations from top journals are weighted more heavily than citations from lower-tier publications. We describe these metrics and the rankings that they provide.

Big Macs and Eigenfactor Scores: Don't Let the Correlation Coefficients Fool You

Fri, 30 Apr 2010 00:00:00 +0000

A recent article by Phil Davis suggested that the Eigenvalue metric does adds little useful information to the more simply calculated measure of total citations published by the ISI. This paper argues that Davis's claim is an instance of a classic statistical fallacy of spurious correlation. Based on an analysis of the entire 2006 ISI Journal Citation Reports, we show that there are statistically and economically significant differences between the Eigenfactor metrics and the ISI's impact factor and total citations.

The Uncommon Insight of Elinor Ostrom

Mon, 26 Apr 2010 00:00:00 +0000

Standard economic approaches to the problem of overuse of common property resources have emphasized two competing remedies, the Pigovian approach of corrective taxation and the property rights approach of internalizing externalities by means of assigning marketable property rights to individual owners with exclusive claim on the entire commons. Elinor Ostrom pursues a third approach, which is based on case studies of existing communities that have established successful and durable systems of managing common property resources. This paper discusses her work and suggests that economists with an interest in public policy have much to gain from becoming familiar with the work of Ostrom and her co-authors.

Regulation of Externalities

Mon, 28 Apr 2008 00:00:00 +0000

This paper presents a general equilibrium model with marketable pollution permits. It shows that competitive equilibrium with marketable permits is "conditionally optimal" in the sense that no Pareto improvement can be achieved without changing pollution standards. The paper also explores mechanisms for choosing efficient aggregate pollution levels.

Teaching Economics Interactively: A Cannibal's Dinner Party

Fri, 26 Oct 2007 00:00:00 +0000

This paper describes techniques that I use to teach economics principles "interactively". These techniques include classroom experiments and classroom clickers. The paper describes an experiment on market entry and gives examples of applications of classroom clickers. Clicker applications include the collection data about student preferences that can be used to construct demand curves and supply curves. Check on students' knowledge of central concepts. Play interactive games that illustrate economic concepts.

Some Evolutionary Economics of Family Partnerships

Tue, 9 Oct 2007 00:00:00 +0000

The article focuses on the economics of family partnerships. It states an allegory involving a prehistoric couple who split their responsibilities of gathering food and building a fire to create econometric models for family behavior. In theory, monogamous couples have exactly the same interest in their reproductive success, hence completely shared interest in their children. This is not the case in practice, as a variety of marital problems, divorce, and remarriage adversely affect the equation. The observed fact that an increase in a society's wealth tends to decrease family size runs counter to evolutionary biologic theory. No one theory in economics or biology has an adequate explanation for the reduction in family size as wealth increases. A variety of outside factors, notably the decline in child mortality and the change from an agricultural to an urban society, affect the models in both disciplines.

How often do economists self-archive?

Thu, 8 Feb 2007 00:00:00 +0000

To answer the question of the paper's title, we looked at the tables of contents from two recent issues of 33 economics journals and attempted to find a freely available online version of each article. We found that about 90 percent of articles in the most-cited economics journals and about 50 percent of articles in less-cited journals are available. We conduct a similar exercise for political science and find that only about 30 percent of the articles are freely available. The paper reports a regression analysis of the effects of author and article characteristics on likelihood of posing and it discusses the implications of self-archiving for the pricing of subscription-based academic journals.

Demographics and the Political Sustainability of Pay-as-you-go Social Security

Thu, 17 Feb 2005 00:00:00 +0000

The net present value of costs and benefits from a pay-as-you-go social security system are negative for young people and positive for the elderly. If people all vote their financial self-interest, there will be a pivotal age such that those who are younger favor smaller social security benefits and those who are older will favor larger benefits. For persons of each age and sex, we estimate the expected present value gained or lost from a small permanent increase in the amount of benefits, where the cost of these benefits is divided equally among the population of working age. Assuming that everyone votes his or her long run financial self-interest, and calculating the number of voters in the population of each age and sex, we can determine whether there is majority support for an increase or a decrease in social security benefits. We use statistics on the age distribution and mortality rates for the United States to explore the sensitivity of political support for social security...

Benefit-cost in a Benevolent Society

Mon, 3 Jan 2005 00:00:00 +0000

How should benefit-cost analysis account for the value that benevolent individuals place on other people's pleasure from public goods? When adding up the benefits to be compared with costs, should we sum the private valuations, the altruistic valuations, or something else? This paper proposes a partial answer and offers some suggestions for benefit-cost practitioners.

Experimental Markets and Chamberlin's Excess Trading Conjecture

Mon, 5 Jul 2004 00:00:00 +0000

Edward Chamberlin conjectured that the number of trades in realistic trading systems is likely to exceed that predicted by competitive equilibrium theory. He supported this conjecture by data from a large number of classroom experiments and with a plausible argument based on a numerical example. This paper states and proves a theorem that supports and illuminates Chamberlin's intuition, supplies examples of trading processes that lead to excess trading, and presents some additional experimental evidence.

Extracting Valuable Information from Classroom Trading Pits

Mon, 5 Jul 2004 00:00:00 +0000

Edward Chamberlin, who initiated classroom market experiences, used the results of his experiments to argue that competitive equilibrium performs poorly in explaining the outcomes of real markets. Vernon Smith altered the design of Chamberlin's experiment so as to increase the amount of price information available to traders and in classroom experiments with this design found that trading outcomes were close to those predicted by competitive theory. This paper examines results of classroom trading experiments using the design found in Experiments with Economic Principles, an introductory economics text by Ted Bergstrom and John Miller. The procedure in this experiment is intermediate between that of Chamberlin and that of Smith. We have collected data on transaction prices and quantities from a large number of classroom experiments using this design. We compare the experimental outcomes with the predictions made by competitive equilibrium theory and by a simple...

A Test for Efficiency in the Supply of Public Goods

Tue, 18 May 2004 00:00:00 +0000

This paper conducts an empirical test of whether local governments spend more or less than a Pareto optimal amount on local public goods. Our procedure is to check whether the Samuelson first order conditions ) for efficient provision of public goods are satisfied.

The effects of cohort size on marriage markets in twentieth century Sweden

Tue, 24 Feb 2004 00:00:00 +0000

Large, short-run fluctuations in the birth rate have been an important demographic feature of industrialized, low-fertility populations in the twentieth century. Since females normally marry men who are two or three years older than themselves, these fluctuations result in large imbalances between the size of male and female cohorts who would normally marry each other. These imbalances must somehow be resolved, either by a change in traditional patterns of age at marriage or by changes in the proportions of the population of one sex or the other who ever marry.

Following a suggestion of Becker (1974,1981), we have developed a developed an implementable general equilibrium model of marriage assignments, which can be used to predict the way in which marriage patterns adjust to change in the numbers of males and females in each cohort. This model poses equilibrium in the marriage market as and application of the {\it linear programming assignment problem}, which was...

The costs and benefits of library site licenses to academic journals

Sat, 24 Jan 2004 00:00:00 +0000

Scientific publishing is rapidly shifting from a paper-based system to one of predominantly electronic distribution, in which universities purchase site licenses for online access to journal contents. Will these changes necessarily benefit the scientific community? By using basic microeconomics and elementary statistical theory, we address this question and find a surprising answer. If a journal is priced to maximize the publisher’s profits, scholars on average are likely to be worse off when universities purchase site licenses than they would be if access were by individual subscriptions only. However, site licenses are not always disadvantageous. Journals issued by professional societies and university presses are often priced so as to maximize subscriptions while recovering average costs. When such journals are sustained by institutional site licenses, the net benefits to the scientific community are larger than if these journals are sold only by individual subscriptions.

Log-concave Probability and its Applications

Thu, 1 Jan 2004 00:00:00 +0000

In many applications, assumptions about the log-concavity of a probability distribution allow just enough special structure to yield a workable theory. This paper catalogs a series of theorems relating log-concavity and/or log-convexity of probability density functions, distribution functions,reliability functions, and their integrals. We list a large number of commonly-used probability distributions and report the log-concavity or log-convexity of their density functions and their integrals. We also discuss a variety of applications of log-concavity that have appeared in the literature.

When is a Man's Life Worth More Than His Human Capital?

Wed, 12 Nov 2003 00:00:00 +0000

This paper develops a "subjectivist" theory of the value that individuals place on risks to their lives. It explains the paradox that although individuals may view their lives as priceless, they still will take small risks for a finite amount of money. Typical public projects that alter risks to life result in small changes in survival probability for a large number of people. Standard tools of benefit cost can therefore be applied, where statistical lives saved are valued at a price equal to the marginal rate of substitution between survival probability and wealth. This "value" is compared to human capital measures of the value of saving a life and is shown under reasonable assumptions to exceed the human capital value.

An Evolutionary View of Family Conflict and Cooperation

Tue, 26 Aug 2003 00:00:00 +0000

What can our evolutionary history tell us about the economics of the family. This paper explores the implications of the partially coincident, partially opposed reproductive interests of family members.

The Algebra of Assortative Encounters and the Evolution of Cooperation

Wed, 30 Jul 2003 00:00:00 +0000

This paper explores the way that assortative matching can maintain cooperative behavior under evolutionary dynamics.

The Existence of Maximal Elements and Equilibria in the Absence of Transitivity

Mon, 21 Jul 2003 00:00:00 +0000

This paper generalizes results of Ky Fan and Hugo Sonnenschein on the existence of maximal elements for non-transitive binary relations. It proves a generalization of Nash's theorem on the existence of non-cooperative equilibrium. It also shows that existence of competitive equilibrium can be proved as a consequence of the existence of a maximal element for an appropriately chosen binary relation.

Preferences Which Have Open Graphs

Mon, 21 Jul 2003 00:00:00 +0000

Gale and Mas-Collel and Shafer and Sonnenschein introduced powerful new theorems on the existence of competitive equilibrium which used the assumption that the graph of the strict preference relation P is an open set. We show when this condition is satisfied and when it is not.

A Scandinavian Consensus Solution for Efficient Income Distribution Among Nonmalevolent Consumers

Mon, 21 Jul 2003 00:00:00 +0000

If Persons A and B are both benevolent to C, then a gift from A to C also benefits B. Thus C's income is like a public good to A and B. What happens with lots of people whose affections are entangled? This paper shows that a "distributional Lindahl equilibrium" exists and leads to an efficient income redistribution.

Do Governments Spend Too Much?

Mon, 21 Jul 2003 00:00:00 +0000

This paper extends Bowen's theorem on the efficiency of majority-chosen public expenditures. It also discusses situations under which majority rule is likely to lead to inefficient outcomes.

Interrelated Consumer Preference and Voluntary Exchange

Mon, 21 Jul 2003 00:00:00 +0000

This paper presents a model of interrelated preferences for pairs of individuals. It investigates the possibility of an equilibrium with voluntary transactions. It identifies the puzzling case of two people who disagree because each wants the other to have the better part and shows that if this is assumed away, then there exists a competitive equilibrium with voluntary bilateral gifts.

How to Discard Free Disposability--At No Cost

Mon, 21 Jul 2003 00:00:00 +0000

This paper shows how to prove the existence of competitive equilibrium without assuming either monotonic preferences or free disposability--and without adding any new assumptions.

Medical Care, Medical Insurance, and Survival Probability--The True Cost of Living

Mon, 21 Jul 2003 00:00:00 +0000

This paper incorporates medical insurance, life insurance, annuities, and the value of risks to human life in a single theory.

Competitive Equilibrium Without Transitivity, Monotonicity, or Free Disposal

Sun, 20 Jul 2003 00:00:00 +0000

This paper shows how to relax several of the standard assumptions used to prove the existence of competitive equilibrium.

Pricing and Cost of Electronic Journals

Fri, 11 Jul 2003 00:00:00 +0000

Here are two comments published by the JEP on my 2001 journals paper my response.

One comment was from Joop Dirkmaat of Reed-Elsevier who maintains that

"Bergstrom's essay is based on an outdated print-based view of the publishing industry," and doesn't take account of the high

costs of dual publication, electronic and paper.

I show that the pattern of pricing that we saw with paper journals has reemerged with electronic site licenses. Commercial publishers continue to charge prices far above average cost and far above the prices charged by

the no profits. Electronic site licenses for universities are priced at about 6 times as much per page for the 10 most-cited commercial journals (all of which are now owned by Elsevier) as for the 10 most-cited non-profit journals.

The Iron Law of Selfishness: Response to a comment by Alexander Field

Fri, 11 Jul 2003 00:00:00 +0000

Alexander Field was not convinced of a result that I claimed in my JEP 2001 paper that in "haystack models" with non-assortative mating, if the number of descendants of founding group members is determined by an n-player prisoners' dilemma game, then the population will converge to a population of defectors. He thought that the result applied only if the groups were large. I respond with a more detailed discussion and show how the result works even when groups have only two members.

Free Labor for Costly Journals

Fri, 11 Jul 2003 00:00:00 +0000

Commercial publishers charge libraries about 6 times as much per page and 16 times as much per citation as nonprofit journals. The paper presents evidence that successful for profit journals are priced at several times average cost. They are able to earn "monopoly profits" despite free entry into the industry because journal reputation is the result of a kind of coordination game. The paper advocates withholding free referee services from overpriced journals.

Evolution of Behavior in Family Games

Thu, 10 Jul 2003 00:00:00 +0000

William Hamilton developed the biological theory of kin selection before game theory became familiar to biologists. Thus he implicitly confined his analysis to a rather special subclass of games, with linear structure. This paper shows that while Hamilton's rule does not apply to a more general class of games, there is a useful generalization that does apply. This paper also generalizes results in my 1995 AER paper on sibling interaction from symmetric two-player games to multiplayer games that may be asymmetric.

Can Courtship be Cheatproof?

Wed, 9 Jul 2003 00:00:00 +0000

In 1983, I told Richard Manning about Gale and Shapley's beautiful 1962 paper on matching. He asked whether in the Gale-Shapley it was in the interest of all participants to tell the truth. We rather quickly showed that in general it is not in the interest of the recipients of offers to be truthful. In fact we were able to show that no mechanism can guarantee efficient assignments and be cheatproof. We were very pleased. We sent it to a journal, only to learn that Al Roth had beat us to it in a paper that was to appear in JET in 1984. Roth's paper was not only earlier, but deeper and better than ours. But our proof is different from his and our example might still be of interest.

Two Remarks on Cournot Equilibria

Tue, 8 Jul 2003 00:00:00 +0000

One remark explains how Cournot equilibrium responds to taxation on the duopolists. (To maximize revenue, tax 'em the same) The other remark answers the question, What does Cournot Equilibrium maximize.

Recovering Event Histories by Cubic Spline Interpolation

Mon, 7 Jul 2003 00:00:00 +0000

If event histories are recorded in discrete intervals of times, errors are introduced when the data are converted from the unit in which they were recorded, such as date, to another unit such as age or duration. The problem is illustrated by the inconsistent age at marriage schedules published by two recent U.S. censuses. This paper develops a general method for fixing problems of this kind by using cubic spline interpolation. We use the method to adjust U.S. age at marriage data, thus resolving a large proportion of the discrepancy between 1960 and 1970 censuses.

The Two-Sex Problem and the Marriage Squeeze in an Equilibrium Model of Marriage Markets

Mon, 7 Jul 2003 00:00:00 +0000

We develop a model of marriage market equilibrium that can be used to study effects of the age distribution of men and women on marriage patterns. The model clarifies issues in the literature such as the two-sex problem and the marriage squeeze. In particular, the fact that women tend to marry men who are older than they implies that when cohort sizes fluctuate, there are shifts in relative supply and demand of marriage partners of the two sexes. We consider age difference between spouses as an equilibrating mechanism in marriage markets. The model follows Becker's application of the Koopmans-Beckman assignment model to marriage markets. We show that even large differences in cohort sizes can be absorbed by relatively small changes in the age differential of spouses, with no necessary changes in the proportion of men and women ever marrying.

Income Prospects and Age at Marriage

Mon, 7 Jul 2003 00:00:00 +0000

In an earlier paper Courtship as a Waiting Game, Mark Bagnoli and I proposed a theory that explained why it is the case that in almost every society and at almost all recorded times, the average age at marriage of men exceeds that of women. An additional prediction of this model was that men who married later in life would turn out to have higher incomes when they reach maturity than those who marry young. The current paper reviews this theory and tests it with U.S. data. Consistent with our theory, we find that there is a strong positive relationship for men between age at marriage and earnings in later life and that no such relationship exists for women.

Primogeniture, Monogamy, and Reproductive Success in a Stratified Society

Sat, 5 Jul 2003 00:00:00 +0000

This paper explores the workings of stratified societies in which there is primogeniture and where the nobility practice monogamous marriage with a double standard of sexual fidelity. We model a simple stratified society and define the reproductive values of the male and female nobility relative to that of commoners. We then explore implications of the hypothesis that preferences have evolved to favor maximization of reproductive value. The hypothesis is tested against fragmentary data from ancient civilizations and quite detailed information about the British aristocracy in the seventeenth and eighteenth centuries.

A Survey of Theories of the Family

Fri, 4 Jul 2003 00:00:00 +0000

This review explores the theory of household technology and the associated possibilities for distributing utility among household members. It also explores decision theory within the household, drawing on standard consumer decision theory. The review discusses models of equilbrium in which families are formed by persons voluntarily choosing mates. This theory is analogous to ``Tiebout theory'' in urban economics, where the objects of choice include not only the amount of public goods supplied in each city, but also which individuals live in each place. An aspect of family life that has fewer parallels in the economics of market economies is intrafamilial affection. The final section of this paper reviews a growing theoretical literature on love, altruism and the family.

Evolution and Group Behavior: Individual and Group Selection

Thu, 3 Jul 2003 00:00:00 +0000

How selfish does our evolutionary history suggest that humans will be? We explore models in which groups are formed and dissolved and where reproduction of individuals is determined by their payoffs in a game played within groups. If groups are formed ``randomly'' and reproductive success of group founders is determined by a multi-person prisoners' dilemma game, then selfish behavior will prevail over maximization of group payoffs. However, interesting models exist in which ``group selection'' sustains cooperative behavior. Forces that support cooperative behavior include assortative matching in groups, group longevity, and punishment-based group norms.

The Algebra of Assortative Encounters and the Evolution of Cooperation

Thu, 3 Jul 2003 00:00:00 +0000

This paper explores the quantitative relation between non random, assortative matching and the maintenance of cooperative behavior under evolutionary dynamics. It considers a population of individuals who are hardwired to play either cooperate or defect. They meet other individuals according to some random process and play their programmed strategy in a game of Prisoners' Dilemma. The type that gets the higher expected payoff reproduces more rapidly. The paper defines an index of assortativity of encounters and develops an "algebra of assortative encounters." The paper also calculates the index of assortativity for games between relatives with either cultural or genetic inheritance and shows the logical connection between the index of assortativity and Hamilton's theory of kin selection. The index of assortativity is used to determine the population dynamics when players select their partners, using partially informative cues about each others' types.

Cournot Equilibrium in Factor Markets

Thu, 3 Jul 2003 00:00:00 +0000

Cournot's classic oligopoly model has two mineral water sellers whose products are perfect substitutes. Cournot studies equilibrium when each duopolist believes the other's quantity choice is invariant to his own action. Cournot also studied the case of dupolists producing perfect complements, copper and zinc, which are used in fixed proportions to produce brass. In this case Cournot studies equilibrium where each duopolist believes the others price is invariant to his own action. This paper unifies Cournot's two theories of duopoly as special cases of a more general technology and discusses the existence of Cournot equilibrium in price and quantity in general. There is seen to be a neat duality between equilibrium in price and in quantity (generalizing an observation of Hugo Sonnenschein).

Storage for Good Times and Bad: Of Rats and Men

Wed, 2 Jul 2003 00:00:00 +0000

How do rats and squirrels decide how much to hoard for the winter when they do not know how long the winter will be? This paper argues that natural selection is likely to result in random differences in the attitudes toward systemic risk by genetically identical individuals.

Comment on The Welfare Loss from Price Distortion

Wed, 2 Jul 2003 00:00:00 +0000

One of the most disconcerting results in welfare economics is the "paradox of the second best". In a general equilibrium, if there are distortions in more than one market, it may not be efficient to remove distortions in a single market if the other distortions are not removed as well. In 1970, Sonnenschein and Foster proved a remarkable result that reduced the sting of this paradox. They showed that fairly generally, at least one form of piecemeal reform, namely proportional reduction of price distortions would improve welfare in a one-consumer general equilibrium economy. Trout Rader wrote an interesting paper that extended the Sonnenschein-Foster result. The current paper, examines Rader's contribution and that of Foster and Sonnenschein.

Micro-Based Estimatesof Demand Functions for Local School Expenditures

Wed, 2 Jul 2003 00:00:00 +0000

We devise and apply a new method for estimating demand for local public goods from survey data. Individuals' responses to questions about whether they wanted more, less, or the same amount of various local public goods are combined with observations of their incomes, tax rates, and the amounts of actual spending in their home communities. Parameter estimates turn out to be quite similar to those found with studies like Bergstrom and Goodman's study based on total expenditures across communities.

Nonsubstitution Theorems for a Small Trading Country

Wed, 2 Jul 2003 00:00:00 +0000

In 1951, Paul Samuelson showed that a surprisingly rich class of economies the production possibility frontier is a linear and even with neoclassical substitution possibilities, as outputs adjust, firms continue to use inputs and outputs in the same proportions. This model is often thought to be of limited practical value since it assumes that there is only one non-produced factor, and no joint production. The single factor assumption rules out economies in which agriculture and mining are important and the lack of joint production leaves no good way to handle durable capital goods. In this paper, I extend the Samuelson model to small trading economies with many nontradeable goods, some of which may be fixed factors, and where joint production is allowed. In my model, althought the production possibility frontier may be curved, the consumption possibility frontier after trade is linear. Output prices and wages of labor are determined independently of factor endowments or demand....

Hotelling Location Problems with Directional Constraints: An Application to Television News Scheduling

Wed, 2 Jul 2003 00:00:00 +0000

If viewers prefer to watch the news as soon as they get home from work, how should competing television stations schedule their broadcasts to maximize their own numbers of viewers. This is a Hotelling location problem with a directional constraint. Viewers can watch after they get home, but not before. We show that for this model, there exists no pure strategy Nash equilibrium.

Gorman and Musgrave are Dual: An Antipodean Theorem on Public Goods

Wed, 2 Jul 2003 00:00:00 +0000

This paper finds the conditions under which an allocation branch can determine the efficient amount of public goods to produce, independently of the distribution of private goods. The result is similar to that found in our Econometrica paper, but uses a quite different method--solving a differential equation.

Private Demands for Public Goods

Wed, 2 Jul 2003 00:00:00 +0000

This paper develops a method for using data for a large cross-section of municipalities relating expenditures on specific local public goods, median income, median house value, total assessed valuation, and population to estimate demand functions for local public goods. The key idea is to make the assumption that the quantity chosen in any municipality is the median of the preferred quantities of its citizens. The method is applied to cities with population exceeding 10,000 in several states. Seemingly plausible estimates of income and price elasticity are found. The estimated crowding parameter suggests that most local public goods are congestible in the sense that utility functions depend on the per capita quantity of public goods.

On the Private Provision of Public Goods