Documents de travail

This paper considers the dynamics of pollution and sustainable growth in a context where the detrimental effects of pollution on total factor productivity can push the economy to a point of collapse. With environmental policy constrained by tax revenues, we investigate how the proximity to collapse -distance to the end -influences the balance between mitigation and adaptation spending. We show that adaptation policies are recommended when pollution intensity is high, whereas mitigation policies may be more effective when pollution intensity is low. Financing these policies by a carbon tax is more effective than an income tax. Examining the welfare of present and future generations, we reveal that the trade-off between mitigation and adaptation does not align across generations: while current generations may prefer adaptation, future generations tend to benefit more from mitigation.

We propose a mean-field game (MFG) set-up to study the dynamics of spatial agglomeration in a continuous space-time framework where trade across locations may follow a broad class of static gravity models. Forward-looking intertemporal utility-maximizing agents work and migrate in a twodimensional geography and face idiosyncratic shocks. Equilibrium wages and prices depend on their common distribution and adjust statically according to the underlying trade model. We first prove existence and uniqueness of the static trade equilibrium. We then prove existence of dynamic equilibria. In the case of Krugman (1996)'s racetrack economy, we obtain closed-form solutions for small sinusoidal perturbations around the steady state, and we identify the sets of parameters that lead to agglomeration or dispersion. We exploit the MFG structure of the model to explicitly quantify how uncertainty and forward-looking expectations contribute to agglomeration and dispersion. In particular, we show that, regardless of the static trade model, forward-looking expectations always promote agglomeration, but cannot reverse the dominant pattern that would arise under myopic behavior.

In contrast to standard economic models, recent empirical evidence suggests that agents often operate based on subjective and divergent views of the competitive landscape. We develop a novel framework in which such imperfections are explicitly modeled through subjective perception networks, and introduce the concept of perception-consistent equilibrium (PCE), in which agents' actions and conjectures respond to the feedback generated by perceived competition. We establish the existence of equilibrium in broad classes of aggregative games. The model typically yields multiple equilibria, including outcomes that feature patterns of localized exclusion. Remarkably, heterogeneity in beliefs induces perceived competition rents-payoff differentials that arise purely from subjective misperceptions. We further show that PCE actions correspond to ordinal centrality measures, with eigenvector centrality emerging as a behavioral benchmark in separable payoff environments. Finally, a graph-theoretic taxonomy of PCEs reveals a hierarchical structure that ranks perceived competition rents. We also give conditions under which a unique stable equilibrium exists.

Deviations from Bayesian updating are traditionally categorized as biases, errors, or fallacies, thus implying their inherent “sub-optimality.” We offer a more nuanced view. In learning problems with misspecified models, we show that some non-Bayesian updating can outperform Bayesian updating.

This paper introduces demotivation in the context of social comparison in networks. Social comparison is modeled as a status effect rewarding or penalizing agents according to their relative performance with respect to local peers. A demotivated agent faces both a reduced marginal return to effort and a psychological cost. In the absence of demotivation, social comparison leads to higher effort levels but reduces equilibrium welfare. Introducing demotivation leads to two main findings. First, it generates a network game of strategic substitutes. Second, despite the individual psychological costs incurred by demotivated agents, it can enhance overall welfare—by alleviating social pressure to exert effort and by generating positive externalities for peers.

This article establishes a direct proof of the equivalence between two incomplete rankings of distributions of an ordinal attribute. The first ranking is the possibility of going from one distribution to another by a finite sequence of Hammond transfers. The second ranking is the intersection of two dominance criteria introduced by Gravel et al.(Economic Theory, 71 (2021), 33-80). The proof constructs an algorithm that provides a series of Hammond transfers, between any two distributions related by the intersection of the two dominances.

The transition towards a sustainable food system requires comprehensive changes in food production and consumption, shaped by the interplay of public policy, market forces, and cultural norms. We develop a model to analyse the role of sustainable food culture in shaping consumption choices, particularly in terms of purchasing from short food supply chains. The model accounts not only for the heterogeneity of preferences and their evolution but also for the heterogeneity of incomes. This allows for a discussion of the effectiveness of policies fostering sustainable food consumption choices, considering their varying impacts across income levels. The results suggest that if policy makers seek to promote a sustainable food system, public policies must be carefully designed, as their effects can be uncertain and may impact low-income households.

Experts argue that the adoption of healthy sanitation practices, such as hand washing and latrine use, requires focusing on the entire community rather than individual behaviors. According to this view, one limiting factor in ending open defecation lies in the capacity of the community to collectively act toward this goal. Each member of a community bears the private cost of contributing by washing hands and using latrines, but the benefits through better health outcomes depend on whether other community members also opt out of open defecation. We rely on a community-based intervention carried out in Mali as an illustrative example (Community-Led Total Sanitation or CLTS). Using a series of experiments conducted in 121 villages and designed to measure the willingness of community members to contribute to a local public good, we investigate the process of participation in a collective action problem setting. Our focus is on two types of activities: (1) gathering of community members to encourage public discussion of the collective action problem, and (2) facilitation by a community champion of the adoption of individual actions to attain the socially preferred outcome. In games, communication helps raise public good provision, and both open discussion and facilitated ones have the same impact. When a community member facilitates a discussion after an open discussion session, public good contributions increase, but there are no gains from opening up the discussion after a facilitated session. Community members who choose to contribute in the no-communication treatment are not better facilitators than those who choose not to contribute.

Based on the calibration of a simple model, we decompose the decline in the labor share into four structural components: task displacement, labor rents, capital rents, and labor-capital substitution effect. Our estimation suggests that task displacement and the switch of distributed rents from labor to capital are the main drivers of the labor share decline over the past three decades. On the other hand, the neoclassical substitution effect seems not to have a long term impact on the labor share.

In this paper, we examine the possibility for a regulator to reduce policy costs by substituting a voluntary policy based on a legislative threat to an active harvest control. Specifically, we focus on fisheries where the regulator aims to maintain an optimal level of conservation through a voluntary agreement. To achieve this, we identify a mandatory regulation that can serve as a threat to ensure voluntary compliance and avoid regulation costs. However, threats differ from effective policies. To be enforceable, they must be validated through a legislative process, the outcome of which is uncertain and subject to objections. Consequently, we introduce of a random delay in its application and address issues of social acceptability. This threat rests upon two pillars: a moratorium with financial compensation followed by an Individual Transferable Quota (ITQ) mechanism, and a suitably chosen tax on harvesting capacity to deter deviations. We use data from the scallop fishery in the Bay of Saint-Brieuc (France) to illustrate this voluntary mechanism.