Publications

Résumé Under triopoly and Cournot competition, we study an infinite horizon Markov perfect equilibrium merger game in which in each period one of the firms (“the Buyer”) selects a bid price and then the two sellers accept or reject this offer with some probability. The possibility of a “war of attrition” equilibrium in which the seller who outlasts the other is then able to sell in the following period at a greater price, is a distinct feature of the model. Delayed monopolization is all the more likely when the discount factor is small and the ratio duopoly/ triopoly profits is important. Two other equilibria are shown to be possible: an unmerged and an immediate monopolization equilibrium. Each equilibrium is shown to correspond to a different set of parameter values. The two special cases of linear and constant price elastic demand functions are fully characterized.
Mots clés Markov-perfect equilibrium, Monopolization, War of attrition, Horizontal mergers
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Résumé We document the emergence of spatial polarization in the U.S. during the 1980-2008 period. This phenomenon is characterised by stronger employment polarization in larger cities, both at the occupational and the worker level. We quantitatively evaluate the role of technology in generating these patterns by constructing and calibrating a spatial equilibrium model. We find that faster skill-biased technological change in larger cities can account for a substantial fraction of spatial polarization in the U.S. Counterfactual exercises suggest that the differential increase in the share of low-skilled workers across city size is due mainly to the large demand by high-skilled workers for low-skilled services and to a smaller extent to the higher complementarity between low- and high-skilled workers in production relative to middle-skilled workers.
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Résumé This chapter reviews the recent Bayesian literature on poverty measurement together with some new results. Using Bayesian model criticism, we revise the international poverty line. Using mixtures of lognormals to model income, we derive the posterior distribution for the FGT, Watts and Sen poverty indices, for TIP curves (with an illustration on child poverty in Germany) and for Growth Incidence Curves. The relation of restricted stochastic dominance with TIP and GIC dominance is detailed with an example based on UK data. Using panel data, we decompose poverty into total, chronic and transient poverty, comparing child and adult poverty in East Germany when redistribution is introduced. When panel data are not available, a Gibbs sampler can be used to build a pseudo panel. We illustrate poverty dynamics by examining the consequences of the Wall on poverty entry and poverty persistence in occupied West Bank.
Mots clés Bayesian inference, Mixture model, Poverty indices, Stochastic dominance, Poverty dynamics
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Résumé We surveyed economists’ attitudes toward adjusting discount rates to the risk profile of public programs. Three-quarters of respondents recommend to use project-specific discount rates. For example, on average, respondents discount railway infrastructures more than hospitals and climate mitigation. But the degree of discount discrimination between distinct risk profiles of different projects is fairly limited in our sample given the differences in risk profiles for these projects. Economic experts thus penalize risky public projects far less than financial markets penalize private investments. We call this the ”discount premium puzzle”. Finally, among experts in favor of a single discount rate, there is no consensus on whether it should be based on the average cost of capital in the economy, the sovereign borrowing cost, or the Ramsey rule, which gives rise to disagreement over the level of the recommended discount rate.
Mots clés Risk premium, Project-specific discount rate, Survey evidence
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