Simon Wilkie

Lies, damned lies, and political campaigns

Abstract Despite a pervasive presence in politics, lying has not traditionally played a role in formal models of elections. In this paper we develop a model that allows candidates in the campaign stage to misrepresent their policy intentions if elected to office, and in which the willingness to lie varies across candidates. We find that candidates more willing to lie are favored, but that this advantage is limited by the electoral mechanism and to such an extent that more honest candidates win a significant fraction of elections. Most notably, the possibility that some candidates lie more than others affects the behavior of all candidates, changing the nature of political campaigns in an empirically consistent manner. This effect also implies that misleading conclusions will be drawn if homogeneous candidate honesty is assumed.

The bargaining problem without convexity: Extending the egalitarian and Kalai-Smorodinsky solutions

Abstract We relax the assumption used in axiomatic bargaining theory that the feasible set be convex. Instead we require only that it be 7 comprehensive. We show that on this domain, Kalais (1977) characterization of the egalitarian solution remains true, as does Kalai and Smorodinskys (1975) theorem if we use weak Pareto optimality.

Double implementation of the ratio correspondence by a market mechanism

To overcome deficits of the Lindahl solution concept when the economy does not exhibit constant returns to scale, Kaneko (1977a) introduced the concept of aratio equilibrium. Theratio correspondence selects for each economy its set of ratio equilibrium allocations. In this paper we provide a simple market game thatdouble implements the ratio correspondence in Nash and strong equilibria.

INCREMENTAL R

An Incremental Incentive Scheme (IIS) encourages some activity by rewarding an agent for overachieving a base level determined by past performance but not penalizing underachievement. We examine an IIS R&D subsidy in a dynamic model due to Grossman and Shapiro (1986). We show that the firms optimal R&D path either cycles around the no-subsidy path or follows a “ratchet” pattern of small increases in R&D relative to the no-subsidy path. A simple condition determines which type of behavior occurs. Furthermore, we show that an IIS may be an inefficient method of encouraging R&D compared to a flat-rate subsidy.

D SUBSIDIES

Conley and Wilkie (1993) introduced an axiomatization at the Nash extension bargaining solution defined on a domain of comprehensive but not necessarily convex problems. In this paper we present a non-cooperative game which implements the Nash extension solution in subgame perfect equilibria in the limit as the discount rate applied between rounds of play vanishes.

Implementing the nash extension bargaining solution for non-convex problems

SummaryWe examine the set of Pareto-efficient allocations in economies with public goods. We show that even if preferences are continuous and strongly monotonic, it need not coincide with the set of weakly efficient allocations. We then study topological properties of the Pareto set. We show that it is neither connected nor closed in allocation space. Furthermore, if the public goods are local, the image of the Pareto set in utility space need not be closed or connected. We provide two independent sufficient conditions for the closedness of the Pareto set. The results are directly applicable to private goods economies with joint production. Our results should be of interest for general equilibrium and mechanism design theory; where for example, the properties of the efficient set are important for proving the existence of an equilibrium and for the study of the properties of monotone-path social choice correspondences.

On the set of Pareto efficient allocations in economies with public goods (

We describe a model of entry timing assuming that a second mover can benefit from observing the experience of a first mover. We focus on how market attractiveness characteristics such as size and cost affect the time until first entry. The effects depend on whether the number of participants is exogenous or endogenous. In the former case, a more attractive market leads to earlier entry. In the latter case, it leads to later entry. Treating the number of firms as an integer, free entry leads to non‐monotone, but testable, effects of market attractiveness on entry timing.

Second Mover Advantage and Entry Timing

In a 2001 article that appeared in the International Journal of Industrial Organization, Delipalla and O’Donnell derive a formula for the incidence of an ad valorem or specific tax in a conjectural variations oligopoly model with potentially asymmetric firms (Delipalla and O’Donnell, 2001). However, the formula they derive is incorrect. We provide a brief discussion of their error and derive the correct formula.

Tax Incidence under Imperfect Competition

This article reviews some of the major economic issues faced by the FCC in thelast year. It focuses on the application of new analytic techniques at the FCC, andidentifies several areas in which further academic research would be valuable to theFCC.

Economic Analysis at the Federal Communications Commission

This paper constructs a model of the recorded music market to investigate the consequences of local content requirements in broadcasting for the “internationalization” of domestic music. It models the entry decisions of bands, the contracting decisions of record companies, the airplay decisions of radio stations and the radio listening and recording purchasing decisions of consumers. The paper shows that a local content quota leads, perversely, to the increased internationalization of domestic music. A quota that also requires increased broadcasting of “new” music yields an additional welfare loss but does nothing to a record companys incentives to sign up new bands.