Justin Leroux

Sharing the Cost of Global Warming

Due to meteorological factors, the distribution of the environmental damage due to climate change bears no relationship to that of global emissions. We argue in favor of offsetting this discrepancy, and propose a “global insurance scheme” to be financed according to countries’ responsibility for climate change. Because GHG decay very slowly, we argue that the actual burden of global warming should be shared on the basis of cumulated emissions, rather than sharing the expected costs of actual emissions as in a Pigovian taxation scheme. We characterize new versions of two well-known cost-sharing schemes by adapting the responsibility theory of Bossert and Fleurbaey (1996) to a context with externalities.

Cooperative production under diminishing marginal returns: interpreting fixed-path methods

Fixed-path methods (FPMs) were introduced to manage situations where several individuals jointly operate a single technology (see Math Soc Sci 44:145–154 (2002)). In the production context, they consist in allocating marginal increments of output according to a proportions vector which changes along an arbitrary path. While very appealing from an incentives viewpoint under diminishing marginal returns, the asymmetry of these methods lacks solid economic interpretation. We provide such an interpretation by considering a situation where the technology to be shared results from the aggregation of private production processes. We propose a group-strategyproof mechanism under which no single agent wishes to secede from the partnership: the inverse marginal product proportions mechanism. It is the only FPM satisfying autarkic individual rationality; its path is uniquely determined by the technological contributions of the agents.

Share the Gain, Share the Pain? Almost Transferable Utility, Changes in Production Possibilities, and Bargaining Solutions

We consider an n-person economy in which efficiency is independent of distribution but the cardinal properties of the agents’ utility functions may preclude transferable utility (a property we call “Almost TU”). Holding the disagreement point fixed, we show that Almost TU is a necessary and sufficient condition for all agents to either benefit jointly or suffer jointly with any change in production possibilities under well-behaved generalized utilitarian bargaining solutions (of which the Nash bargaining and the utilitarian solutions are special cases). We apply the result to policy analysis and to incentive compatibility.

Profit sharing in unique Nash equilibrium: Characterization in the two-agent case

Two agents jointly operate a decreasing marginal returns technology to produce a private good. We characterize the class of output-sharing rules for which the labor-supply game has a unique Nash equilibrium. It consists of two families: rules of the serial type which protect a small user from the negative externality imposed by a large user, and rules of the reverse serial type, where one agent effectively employs the other agents labor. Exactly two rules satisfy symmetry; a result in sharp contrast with Moulin and Shenkers characterization of their serial mechanism as the unique cost-sharing rule satisfying the same incentives property [Moulin, H., Shenker, S., 1992. Serial cost sharing. Econometrica 60 (5), 1009-1037]. We also show that the familiar stand-alone test characterizes the class of fixed-path methods under our incentives criterion [Friedman, E.J., 2004. Strong monotonicity in surplus sharing. Econ. Theory 23, 643-658].

Local Lyapunov Exponents: A new way to predict chaotic systems

We propose a novel methodology for forecasting chaotic systems which is based on exploiting the information conveyed by the local Lyapunov ex- ponent of a system. We show how our methodology can improve forecast- ing within the attractor and illustrate our results on the Lorenz system.

Predicting Chaos with Lyapunov Exponents: Zero Plays no Role in Forecasting Chaotic Systems

We propose a nouvel methodology for forecasting chaotic systems which uses information on local Lyapunov exponents (LLEs) to improve upon existing predictors by correcting for their inevitable bias. Using simulations of the Rossler, Lorenz and Chua attractors, we find that accuracy gains can be substantial. Also, we show that the candidate selection problem identified in Guegan and Leroux (2009a,b) can be solved irrespective of the value of LLEs. An important corrolary follows: the focal value of zero, which traditionally distinguishes order from chaos, plays no role whatsoever when forecasting deterministic systems.

Gilles Campagnolo et Jean-Sébastien Gharbi (éds.), Philosophie économique – Un état des lieux, Paris, Éditions Matériologiques, 2017, 646 p.

Cet ouvrage collectif, sous la direction de Gilles Campagnolo et Jean-Sebastien Gharbi, arrive a point nomme pour faire de la philosophie economique un « etat des lieux », comme le precise son sous-titre.Il y a un peu plus de vingt ans, l’expression « philosophie economique » n’allait pas d’elle-meme. La gene n’etait pas uniquement d’ordre semantique, elle paraissait tout autant relever de l’orthophonie...

Rights on What is Left: An Axiomatic Discussion of Grandfathering

Allocating property rights on an open-access resource that has been freely exploited in the past is often problematic. In practice, involved agents typically rely on one of two competing principles to determine future allocation. The first principle, grandfathering, favors the status quo while the other one, historical accountability, is a corrective justice argument. Using a conceptual framework inspired from the axiomatic literature on claims problems, we examine formally the relationship between the two principle. In particular, we show that both principles are actually not as incompatible as international climate negotiations make it sound. We then characterize allocation rules that correspond to extreme versions of the two principles. In particular, we show that sharing the remaining carbon budget in proportion to historical emissions---usually referred to as “the grandfathering rule”---is actually the most regressive sharing rule compatible with the grandfathering principle.

Accounting for Needs in Cost Sharing

Abstract We introduce basic needs in cost-sharing problems so that agents with higher needs are not penalized, all the while holding them responsible for their consumption. We characterize axiomatically two families of cost-sharing rules, each favoring one aspect—compensation or responsibility—over the other. We also identify specific variants of those rules that protect small users from the cost externality imposed by larger users. Lastly, we show how one can implement these schemes with realistic informational assumptions; i.e., without making explicit interpersonal comparisons of needs and consumption.

La « dette carbone »: Une idée novatrice pour sortir de l’impasse climatique

La 21e Conference mondiale sur le climat (COP21) doit aboutir a un accord universel de lutte contre les changements climatiques, le plus ambitieux depuis le premier Sommet de la Terre, a Rio en 1992. Les representants des 196 pays vont-ils reussir a fixer un prix unique mondial du carbone qui aiderait a reduire efficacement les emissions de gaz a effet de serre ? Bien des economistes sont sceptiques : une telle entente est-elle meme envisageable ?