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Sorting on skills and preferences: Tinbergen meets Sattinger

Dupuy, Arnaud - 2010

This paper proposes an assignment model where sorting occurs on attributes including both skills (Sattinger, 1979) and preferences (Tinbergen, 1956). The key feature of this model is that the wage function admits both jobs' and workers' attributes as arguments. Since this function is generically...

Persistent link: https://www.econbiz.de/10010274700

Economic reform, informal-formal sector linkages and intervention in the informal sector in developing countries: A paradox

Arvin-Rad, Hassan; Basu, Arnab K.; Willumsen, Maria - 2010

Within a general equilibrium framework of a developing economy with a foreign owned factor of production, this paper questions whether the informal-formal sector relationship is procyclical/ complementary - expansion or contraction in one necessarily implies an expansion or contraction in the...

Persistent link: https://www.econbiz.de/10010274701

Public and private insurance with costly transactions

Bertola, Giuseppe; Koeniger, Winfried - 2010

We characterize how public insurance schemes are constrained by hidden financial transactions. When non-exclusive private insurance entails increasing unit transaction costs, public transfers are only partly offset by hidden private transactions, and can influence consumption allocation. We show...

Persistent link: https://www.econbiz.de/10010274703

Linearity in instrumental variables estimation: Problems and solutions

Mogstad, Magne; Wiswall, Matthew - 2010

where theory suggests a nonlinear relationship, yet previous research has used linear IV estimators. We find that relaxing … the linearity restriction in the IV estimation changes the qualitative conclusions about the relevant economic theory and …

Persistent link: https://www.econbiz.de/10010274706

A note on arbitrage under transaction costs

Irle, Albrecht; Prelle, Claas - 2008

Guasoni (2006) introduced a simple condition for the absence of arbitrage opportunities. In this note we show that his results remain valid under a weaker notion of arbitrage which arises by excluding liquidation costs from the value process of a portfolio.

Persistent link: https://www.econbiz.de/10010274720

One-sided private provision of public goods with implicit Lindahl pricing

Meier, Volker - 2010

We consider a sequential game in which one player produces a public good and the other player can influence this decision by making an unconditional transfer. An efficient allocation requires the Lindahl property: the sum of the two (implicit) individual prices has to be equal to the resource...

Persistent link: https://www.econbiz.de/10010274724

Competition between state universities

Luporini, Lisa; Grazzini, Annalisa; Petretto, Alessandro - 2011

We analyse how state university competition to collect resources may affect both research and the quality of teaching. By considering a set-up where two state universities behave strategically, we model their interaction with potential students as a sequential noncooperative game. We show that...

Persistent link: https://www.econbiz.de/10010274738

Rank dependent utility, tax evasion and labor supply

Eide, Erling; von Simson, Kristine; Strøm, Steinar - 2010

payers act according to some non-expected utility theory, and (2) Individual ethical norms and social stigma induce people … subjective probabilities of being penalised according to the rank dependent utility theory, and (2) Tax payers' beliefs about … utility theory. The model explains data 53% better than pure random choices and predicts hours worked in the regular economy …

Persistent link: https://www.econbiz.de/10010274740

Foreign market entry under incomplete contracts

Seidel, Tobias - 2010

I show in this paper that incomplete contracts affect a firm's decision about serving foreign customers through exports or local sales from an affiliated plant. When contracts between two agents within a firm are too costly to write, the share of multinational firms may be higher or lower...

Persistent link: https://www.econbiz.de/10010274741

Optimal taxation of externalities interacting through markets: A theoretical general equilibrium analysis

Ren, Xiaolin; Fullerton, Don; Braden, John B. - 2010

This study develops a theoretical general equilibrium model to examine optimal externality tax policy in the presence of externalities linked to one another through markets rather than technical production relationships. Analytical results reveal that the second-best externality tax rate may be...

Persistent link: https://www.econbiz.de/10010274742