Van Kolpin

SHARED IRRIGATION COSTS : AN EMPIRICAL AND AXIOMATIC ANALYSIS

Abstract This paper examines cost-sharing arrangements on a sample of twenty-five irrigation ditches located in a south-central Montana community. These arrangements, variations of serial and average cost sharing, often date back to the corresponding ditchs construction at the turn of the century. We provide axiomatic characterizations of these mechanisms using a list of static and dynamic equity principles that have been embraced by the ranchers actually involved, as revealed by direct phone surveys. We also show that the observed cost-sharing arrangements can be characterized as unique solutions to equity-constrained welfare maximization. Our characterizations provide both theoretical support for the observed longevity of these arrangements and new insight into similarities and differences between serial and (restricted) average cost sharing in a context of irrigation.

The Gender Composition and Scholarly Performance of Economics Departments: A Test for Employment Discrimination

Using data on academic economists in the years 1973, 1977, 1982, and 1987, the authors investigate gender differences in placement and their consequences for departmental productivity. The initial analysis shows that in the years studied, the departments that were highest-ranked on a measure of scholarly publications per faculty member were the least likely to hire female faculty. A second analysis shows that departments that hired fewer women in the 1970s subsequently declined in publications rank relative to other departments. Finally, in a third analysis the authors find that the research output of women in the 1970s cohort of economists was greater than that of their male counterparts at comparable institutions. These results reject productivity-based explanations for the observed differential placement, and they provide some of the first formal evidence that employment discrimination is costly to the employer.

Environmental determinants of cost sharing

Abstract Multiple cost-sharing rules often coexist in seemingly identical environments. We use shared irrigation costs as a context for examining the extent to which the structural environment explains cost-sharing rule selection. We find that environmental factors affecting irrigation costs and benefits, as well as those determining irrigator distribution along the ditch, have impressive explanatory power. These results present some of the first formal empirical analysis of the manner in which structural features influence the actual cost-sharing choices of economic agents. Moreover, our results also suggest that previous axiomatic studies are reflective of real-world cost-sharing behavior.

Bayesian serial cost sharing

Abstract Shared productive facilities often entail incomplete information regarding attributes such as production costs, production quality, user lists, user preferences, etc. We formulate the notion of Bayesian cost share games to model such environments and find that many of the desirable features the serial cost-sharing rule enjoys in nonstochastic settings also extend to Bayesian frameworks. We also introduce the concept of normal goods to cost-sharing games and demonstrate that normality further strengthens the serial rules appeal.

Equilibrium refinement in psychological games

Abstract Psychological games are structures in which a players “belief-dependent emotions” may affect realized utility. We show that these mechanisms can be modeled as conventional games, thus traditional game-theoretic intuition is applicable. Equilibrium refinements are investigated. When formulated so that beliefs reflect sensitivity to the “trembles” of competitors, perfect and even proper equilibria of psychological games are shown to exist.

A note on tight extensive game forms

Associated with each extensive game form are the α- and β-effectivity functions,Eα andEβ. These functions characterize the effective capabilities which coalitions command under pessimistic and optimistic cooperative behavior respectively. A game form is said to be tight whenEα ≡Eβ, in which case pessimistic, optimistic, and intermediate types of behavior all support the same effective power. Dalkeys condition for Nash consistency, essentially perfect information, is found to be a necessary and sufficient condition for a game form to be tight.

Equity and the core

Abstract Equal treatment of identical individuals cannot generally be guaranteed in nonreplicant economies. This has led some to label the core as inequitable. We show that a variety of fairness axioms far more stringent than equal treatment are embraced by replicant refinements of the core. Furthermore, adopting an average perspective suggests that every core allocation may be considered equitable. These results are established without the imposition of monotonicity or continuity constraints on consumer preferences.

Core implementation via dynamic game forms

Implementation of a social choice correspondence (SCC) involves finding a decentralized choice mechanism for which the solution is a manifestation of the SCC. We examine whether dynamic game forms with corelike solutions are feasible candidates for implementation. When the solution is the α-, β-, or “intermediate”-cores respectively, such feasibility is found to require a choice structure which embeds a sequential dictatorship, in turn implying the SCC has a partial dictator. Implementation via the strong equilibrium set is found feasible iff society consists of a single citizen. Tapering the range of “permissible” utility profiles to include only von Neumann-Morgenstern utilities does little to rectify these impossibility results. Effectivity functions are used as analytical tools and several new effectivity function concepts are introduced.

Mixed effectivity and the essence of stability

Effectivity functions (EFs) are models of coalitional power. An EF is said to be stable when its core is nonempty irrespective of player preferences. When the outcome space is composed of lotteries, each players indifference map will be a family of parallel hyperplanes. By explicitly recognizing this fact, we are able to attain much sharper stability results than found using traditional infinite EF theory. Frequently the inherent nature of cooperative problems imposes further restrictions on the domain of admissible preferences. Results are further refined by incorporating these restrictions into concepts relating to stability. A number of applications are also presented, including a study of pure exchange in the EF framework.

Regulation and Cost Inefficiency

The well known Averch Johnson effect states thatrate-of-return regulation will induce costinefficient production. This paper examinesregulation induced inefficiency in broad set ofenvironments including arbitrary regulatorymechanisms, multiple outputs/inputs, uncertainty,time dynamics, price discrimination, and more. Ishow that the Averch Johnson effect appliesthroughout a wide variety of settings. Despite thegenerality of framework, my analysis is trulyelementary and does not rely on Kuhn–Tucker analysisor three dimensional graphics. I also provideresults and discussion which clarifies the limits toAverch and Johnson-like insights in practicalapplications.