Jörgen W. Weibull

Balanced-budget redistribution as the outcome of political competition

This paper models balanced-budget redistribution between socio-economic groups as the outcome of electoral competition between two political parties. Equilibrium is unique in the present model, and a sufficient condition for existence is given, requiring that there be enough ‘stochastic heterogeneity’ with respect to party preferences in the electorate. The validity of Hotellings ‘principle of minimum differentiation’, and of ‘Directors Law’, are examined under alternative hypotheses concerning administrative costs of redistributions, and voters possibilities both of abstaining from voting and of becoming campaign activists for one of the parties. The policy strategy of expected-plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality. Incomes are fixed and known, so lump-sum taxation is feasible. However, constraints on tax/transfer differentiation between individuals are permitted in the analysis.

Social Norms and Economic Incentives in the Welfare State

This paper analyzes the interplay between social norms and economic incentives in the context of work decisions in the modem welfare state. We assume that to live off ones own work is a social norm, and that the larger the population share adhering to this norm, the more intensely it is felt by the individual. Individuals face two choices: one economic, whether to work or live off public transfers; and one political, how large the transfer should be. The size of the transfer and the intensity of the social norm are determined endogenously in equilibrium.

An axiomatic approach to the measurement of accessibility

Abstract In this paper an axiomatic approach is developed for the task of measuring accessibility. The general mathematical form of a measure satisfying the postulated axioms is derived. This class of measure contains as a sub-class the so-called gravity potentials. A measure of the accessibility to employment opportunities is presented with applications to the Stockholm region. Finally some ideas on further development of accessibility measures are discussed.

A minimum information principle: Theory and practice

Abstract The paper treats some extensions of so-called entropy models. In a theoretical part some crucial assumptions of such models are analyzed and it is shown that the models may be considerably generalized if the state spaces of macro and micro information are properly discerned from each other. A probabilistic argument is used to derive an extended entropy measure for treating a priori information, based on the notion that there is generally a sufficiently fine grain micro state space to exhaust the available information, thus motivating the assumption that all such micro states, consistent with any macro information, are equally probable. The information theoretic linkages of the information handling principle are explored. In a practical part three illustrations are given of the applicability of the minimum information principle. The first focusses on a comparison between commuting model performances under alternative assumptions about prior probabilities and macro restrictions. The other uses time series data for intermediary shipments of goods and services to analyze the fading away of prior information over time. The third shows how a priori information from a micro model of housing selection may be confronted with macro restrictions to model equilibria.

Strategy subsets closed under rational behavior

A set of strategy profiles is here said to be closed under rational behavior (curb) of it contains all its best replies. Each curb set contains the support of at least one Nash equilibrium in mixed ...

EVOLUTIONARY SELECTION IN NORMAL-FORM GAMES

This paper investigates stability properties of evolutionary selection dynamics in normal-form games. The analysis is focused on deterministic dynamics in continuous time and on asymptotic stability of sets of population states, more precisely of faces of the mixed-strategy space. The main result is a characterization of those faces that are asymptotically stable in all dynamics from a certain class, and the authors show that every such face contains an essential component of the set of Nash equilibria and, hence, a strategically stable set in the sense of E. Kohlberg and J. F. Mertens (1986). Copyright 1995 by The Econometric Society.

On the Numerical Measurement of Accessibility

The aim of this paper is to clarify the validity of a fairly broad range of numerical indicators of accessibility. To this purpose a measurement-theoretic framework is presented, where accessibility is considered as a property of configurations of opportunities for spatial interaction. Within this framework a few established indicators of accessibility are discussed and notions of separable, additive, and maxitive indicators are introduced. An analysis is given of the validity of numerical indicators in general and of separable, additive, and maxitive indicators in particular.

Testing Game Theory

Experimentalists frequently claim that human subjects playing games in the laboratory violate such solution concepts as Nash equilibrium and subgame perfection. This claim is premature. What has been rejected are certain joint hypotheses about preferences, knowledge, and behavior. This note strives to clarify some issues in connection with laboratory experiments, from the viewpoint of non-cooperative game theory, and provides a sketch for a research program for experimental testing of game-theoretic solution concepts.

Markets with Asymmetric Information: The Contributions of George Akerlof, Michael Spence and Joseph Stiglitz

For more than two decades, research on incentives and market equilibrium in situations with asymmetric information has been a prolific part of economic theory. In 1996, the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel recognized James Mirrlees and William Vickreys fundamental contributions to the theory of incentives under asymmetric information, in particular their applications to the design of optimal income taxation and resource allocation through different types of auctions. The modem theory of markets with asymmetric information rests firmly on the work of this years prizewinners: George Akerlof (University of California, Berkeley), Michael Spence (Stanford University) and Joseph Stiglitz (Columbia University). This work has indeed transformed the way economists think about the functioning of markets. Analytical methods suggested by Akerlof,

Paternalism, buyers' and sellers' market☆

This paper contributes to the study of non-Walrasian states of the economy and provides a common framework for analysis of excess supply and unemployment in Western economies along with excess demand and chronic shortage in their Eastern counterparts. In particular, the paper formalizes the paternalistic relationship between the state and the firm and examines the comparative implications of state subsidies to firms subject to stochastic economic events. The analysis covers planned, market, and ‘mixed’ economies and links to some established approaches to disequilibrium phenomena.