Allen Wilhite

Bilateral Trade and `Small-World' Networks

Trade requires search, negotiation, and exchange, which are activities thatabsorb resources. Thispaper investigates how different trade networks attend to these activities.An artificial marketis constructed in which autonomous agents endowed with a stock of goods seekout partners,negotiate a price, and then trade with the agent offering the best deal.Different trade networksare imposed on the system by restricting the set of individuals with whom anagent cancommunicate. We then compare the path to the eventual equilibrium as well asthe equilibriumcharacteristics of each trade network to see how each system dealt with thetasks of search,negotiation, and exchange.Initially, all agents are free to trade with any individual in the globalmarket. In such a world,global resources are optimally allocated with few trades, but only after atremendous amount ofsearch and negotiation. If trade is restricted within disjoint localboundaries, search is simple butglobal efficiency elusive. However, a hybrid model in which most agents tradelocally but a fewagents trade globally results in an economy that quickly reaches a Paretooptimal equilibriumwith significantly lower search and negotiation costs. Such ’small-world‘networks occur innature and may help explain the ease with which most of us acquire goods fromaround theworld. We also show that there are private incentives for such a system toarise.

Economic Activity on Fixed Networks

A large portion of our economic interactions involves a very small portion of the population. We seem to prefer familiar venues. But the tendency to focus our attention on a few individuals or activities is an attribute that is typically omitted in our characterization of markets. In markets agents seem to interact impersonally and efficiently with countless other faceless agents. This chapter looks into the consequences of including a connection between agents, a tendency to interact with a specific few, in economic decision making. Agents are assumed to occupy the nodes of a network and to interact exclusively with agents to whom they are directly linked. We then study evolution of game strategies and the effectiveness of exchange as the topology of the underlying network is altered. We find that networks matter, that changes in a networks structure can alter the steady-state attributes of an artificial society as well as the dynamics of that system.

Labor PAC contributions and labor legislation: A simultaneous logit approach

Summary and conclusionsLabor PACs are used to explore the potential congressional influence of campaign contributions from special interest groups. PACs of organized labor are particularly useful for two reasons. First, a set of labor issues are defined each year by the AFL-CIO and so ad-hoc decisions about pertinent legislation are not made by the researcher. Secondly, there are measurable traits of representatives and constitutents that may lead to a predisposition of labor support. By combining these two attributes, a model is developed to investigate the question of congressional influence.A wider set of PAC strategies is allowed to operate in this formulation than previous studies. A series of roll-call votes is used to construct an index reflecting the probability that a representative will vote in favor of labor legislation. Therefore, labor PACs may contribute money to various members of congress hoping to sway their vote on a specific issue, a variety of issues, or they may simply want to increase their chances of obtaining access when issues of interest arise. The latter access-oriented strategy may affect the general trend in legislation even though its influence on specific bills is uncertain a priori. Because the dependent variable is a fraction based on samples from binomial populations, a quantal choice model is required. The simultaneous-logit formulation used here allows for the joint determination of PAC dollars and voting probabilities while exploring this discreet choice.The results of this study provide evidence that labor PACs are able to affect legislation. In both congressional terms studies, the tendency of a representative to support labor issues was directly related to the size of campaign contributions from labor PACs. Furthermore, these results suggest that the interaction between funds and legislation ran in both directions, i.e., additional labor funds increased pro-labor votes and at the same time representatives with a predisposition to vote for labor also receive more funds from labor PACs.Further hypothesized relationships were also tested. Representatives are more likely to support labor legislation when their constituents are unionized and less likely when constituents are conservative. Members of the Democratic Party lean towards labor, while congressmen and congress-women from states with right-to-work laws tend to oppose labor issues. With all of these characteristics included in the regression model, PAC money is still important.The determinants of labor PAC contributions include ideological measures, the Representatives of political clout, and measures of the need for funds in addition to the simultaneous interaction with labor voting probabilities. Democrats and members of House committees of importance to labor received greater funds while incumbents facing a strong challenger also increased their PAC receipts. These results are consistent with previous works.Labor PACs appear to have the ability to influence legislation through the manipulation of campaign contributions. Whether PACs are able to directly purchase a particular vote probably depends on the issue i.e., some studies have founds evidence of vote-buying while others have not. But if a broader spectrum of PAC concerns are considered, the evidence appears to be more convincing. PACs seem to have an impact.

The effect of military service on the subsequent civilian wage of the post-Vietnam veteran

Abstract Each year, thousands of young men enlist in the Armed Forces and after a few years most are discharged and re-enter the civilian labor force. This article investigates the impact of military service, including formal military training and on-the-job experience, on the civilian wage of these veterans. Concentrating on the all voluntary military, we find that the impact of military service on subsequent civilian wages differs with education and race. Non-whites (blacks and hispanics) and high school dropouts benefit from a military stint while college graduates suffer a large wage penalty.

Illegal Markets and the Social Costs of Rent-Seeking

This paper argues that making goods or services illegal results in an increase in the social costs associated with rent-seeking. The increased social cost is in the form of negative externalities that result from market participants use of coercion and violence in attempts to control trade in the illegal good. Consequently, the social costs of rent-seeking will exceed the value of resources dissipated in rent-seeking competition. And, where the external costs exceed the undissipated portion of the Tullock cost, the social cost of rent-seeking is greater than the sum of Tullock and Harberger costs.

Unions, corporations, and political campaign contributions: The 1982 house elections

Because legislation affects so many aspects of the labor market, unions have long considered the political arena to be a major battleground. This paper investigates fund raising, a primary ingredient of this political activity. Specifically, the pattern of campaign contributions from labor PACs (and corporate PACs) is explained as an interaction of supply and demand. The results suggest that the demand for funds depends on the tightness of the race, the tenure of the incumbent, and ideology. Contributors are more willing to support ideological allies, expected winners, and powerful candidates.

The effect of drug use on wages: a human capital interpretation.

Our intuition tells us that using drugs use such as heroin, cocaine, psychedelics, hashish, and even marijuana and alcohol can have serious effects on our personal life and may have broader detrimental impacts on society at large. The adverse medical consequences of extensive use are well established (see Refs. 1–4 for overviews of this literature). The host of potential ills imposed on society includes the disruption of the family unit, crime, automobile and job-related accidents, as well as lost production from absenteeism, tardiness, and workers leaving the labor force. This last general category, the impact of drug use on workers, is the focus of this study. Several studies have explored the aggregate economic costs of drug use in the United States and suggest that output losses are substantial. For example, the 1984 Research Triangle Institute study by Harwood et al. (5) estimated the economic cost of lost wages associated with marijuana use to be almost

Self-Organizing Production and Exchange

26 billion. Kolb et al. (6) focused on personal impacts by examining drug use before, during, and after enlistment by a group of Navy personnel. They concluded that drug

Dynamic competition in IT security: A differential games approach

Consider autonomous agents endowed with two goods and the capability ofproducing each. Regularly each agent can produce one (only) of the goods or trade with other agents. Each good yields utility according to a utility function. This paper studies how utility-maximizing agents optimize in these circumstances, examines the aggregate characteristics of the resulting economy, and investigates the internal organization of production and exchange.

Authorship and citation manipulation in academic research

Hackers evaluate potential targets to identify poorly defended firms to attack, creating competition in IT security between firms that possess similar information assets. We utilize a differential game framework to analyze the continuous time IT security investment decisions of firms in such a target group. We derive the steady state equilibrium of the duopolistic differential game, show how implicit competition induces overspending in IT defense, and then demonstrate how such overinvestment can be combated by innovatively managing the otherwise misaligned incentives for coordination. We show that in order to achieve cooperation, the firm with the higher asset value must take the lead and provide appropriate incentives to elicit participation of the other firm. Our analysis indicates that IT security planning should not remain an internal, firm-level decision, but also incorporate the actions of those firms that hackers consider as alternative targets.