Seamus Hogan

Job Security and Labour Market Flexibility

This paper discusses the desirability of government-legislated job security. Job security may be beneficial to employed workers, but it can also impose a cost on unemployed workers by lowering labour market turnover and thereby increasing the average duration of unemployment spells. This externality can lead to self-reinforcing behaviour between workers at different firms: If most workers in the economy have job security then turnover will be low and the duration of unemployment following a layoff is likely to be high. As a result, other workers will also desire job security. Even in the absence of legislation, therefore, the externality may result in more job security being provided than is socially desirable.

Employment Adjustment versus Hours Adjustment: Is Job Security Desirable?

Firms can adjust to shocks by laying off and hiring workers or by adjusting the hours worked by each worker. Adjustment of hours provides job security for employed workers. Adjustment of employment generates higher labor market turnover and, thus, better job prospects for the unemployed. Since high turnover lowers the expected cost of being laid off by reducing the expected duration of unemployment, there is a strategic complementarity between firms in the provision of job security. This gives the possibility of multiple equilibria with different amounts of turnover. Copyright 1995 by The London School of Economics and Political Science.

A critique of Wolak's evaluation of the NZ electricity market: The incentive to exercise market power with elastic demand and transmission loss

This paper is the second in a symposium of papers that examine the 2009 report by Frank Wolak into the New Zealand electricity market. In this paper, we discuss the Reports measures of the ability and incentives of generators to exercise unilateral market power. We show that the construction and interpretation of these measures are highly sensitive to some key assumptions, particularly those concerning the elasticity of demand for electricity in the wholesale market and the amount of transmission loss on the national grid.

A critique of Wolak's evaluation of the NZ electricity market: Introduction and overview

This paper is the first in a symposium of papers that examine the 2009 report by Frank Wolak into the New Zealand electricity market. The Wolak report concluded that there had been a cumulative total of NZ

A critique of Wolak's evaluation of the NZ electricity market: Afterword

4.3 billion of overcharging in the New Zealand wholesale market over a period of seven years. In this paper, we introduce the Wolak findings in the context of the salient features of the New Zealand market, and explain that this headline figure is highly sensitive to some (quite unrealistic) assumptions about the structure of this market. The two papers that follow this introduction examine Wolaks methodology and its empirical application.

A New Existence and Uniqueness Theorem for Continuous Games

The editor of this journal made available to us Browne, Poletti and Young (BPY) (2012), which simulates the New Zealand electricity market and finds market rents of the order of

On the probability of winning a lottery with a random number of competitors

2.6 billion, during 2006 and 2008. Among other things, its approach ignores central points of our papers reported here. It simply does not provide a basis for quantifying the existence of rents. We select three issues. First, BPY (2012) assume that demand is perfectly inelastic, which accentuates the potentiality for market power. In fact, demand is not perfectly inelastic, even within a trading period and over longer periods of the sort experienced in dry years it is more elastic. Second, BPY calibrate behavioural parameters of their model in a wet year and use the same parameters in a dry year. There is no reason to believe that gas generators, for example, would or could behave the same way in a dry year as a wet year, as the thermal generation marginal cost curve is increasing and will reflect efficiency and the availability (option values) of gas as well as its price. Furthermore, the extent to which vertically integrated generators have a net positive or negative position in the wholesale market (and hence their incentive to exercise market power) can vary between wet and dry years simply because hydro makes up a much larger fraction of the generation capacity of some firms than it does others. Third, the BPY model produces peculiar behaviour. BPY (p. 10) state:

Are Athletes on the Right Track? The Effect of Availability of an All-Weather Athletics Track on Athletics Performance

This paper derives a general sufficient condition for existence and uniqueness in continuous games using a variant of the contraction mapping theorem applied to mappings from a subset of the real line on to itself. We first prove this contraction mapping variant, and then show how the existence of a unique equilibrium in the general game can be shown by proving the existence of a unique equilibrium in an iterative sequence of games involving such mappings. Finally, we show how a general condition for this to occur is that a matrix derived from the Jacobian matrix of best-response functions has positive leading principal minors, and how this condition generalises some existing uniqueness theorems for particular games. In particular, we show how the same conditions used in those theorems to show uniqueness, also guarantee existence in games with unbounded strategy spaces.

The fixed price offer mechanism in Trade Me online auctions

This article is concerned with models in which an agent faces a lottery with j other agents for a prize, so that the probability of winning the prize is 1/(j + 1), and where j is stochastic. After describing four different situations where such a lottery is present, we construct the expected value of the probability of winning such a lottery and prove a theorem that presents the expected value in a simpler form. We then give an example of the theorem being applied to gain new insights into auction theory.

The Employment Costs of Downward Nominal-Wage Rigidity

Abstract In February of 2011, an earthquake destroyed the only all-weather athletics facility in the city of Christchurch, New Zealand. The all-weather track has yet to be replaced, and so since the loss of the track, local Christchurch athletes have only had a grass track for training and preparation for championship events. The present study considers what effect the loss of the training facility has had on the performance of athletes from Christchurch at national championship events. Not surprisingly, the study finds that there has been a deterioration in the performance in events that are heavily dependent upon the all-weather surface. However, somewhat more surprisingly, the loss of the track appears to have caused a significant improvement in the performance of Christchurch athletes in events that, while on the standard athletics programme, are not heavily dependent on track surface.