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Publications
Publications (21)
Although economics claims that sunk costs should not figure in current decision-making, there is ample evidence to suggest that people squander resources by honoring bygones. We argue that such wastage of resources was tolerated in our evolutionary past by Nature because it served fitness-enhancing functions. In this study, we propose and model one...
We model the emergence of an innate, biological sense of property rights where resource scarcity and output contestability reign. Preferences evolve such that, in evolutionarily stable equilibrium, an object is valued more by an individual who possesses it, or has produced it, than if he is neither possessor nor producer. In a distributional contes...
Social conflict and slow growth are features of many developing economies. This paper considers the role institutions of property rights and conflict management can play in both achieving prosperity and mitigating conflict in these economies. We study how introducing conflict over economic distribution into an otherwise standard model of growth can...
A model of growth and imperfect property rights is used to examine the impact that government fiscal policy can have in tempering the inefficiencies associated with insecure property. Looking at optimal fiscal policy in this context gives insight into the problems involved with imperfect property rights and points to the limitations that government...
Received wisdom maintains that LDCs ought to pursue pro-growth fiscal policy if it is incentive-feasible. We extend a standard model of growth to include imperfect, endogenously determined, property rights, and re-examine the welfare consequences of fiscal policy. Contrary to conventional wisdom, our analysis indicates that pro-growth fiscal policy...
An incentive model of a planner and two firm-types is presented, in which the planner assigns material input to the firms as part of the organization’s production plan. The optimal incentive-compatible one-period plan is described. This static plan is then shown to be not incentive-compatible in a dynamic (two-period) setting if the firm’s discount...
Four different types of equilibrium are possible within a two-player model of society where only armed self-enforcement of property rights is possible. The main underlying parameters are the total resource endowment and the initial distribution of this endowment between the players. The parameter space is partitioned into regions in which the respe...
The authors examine firm profitability in mixed duopoly equilibrium with one labor managed (LM) firm and one profit maximizing (PM) firm, and with strategic investment. Conventional wisdom suggests that firms deviating from profit-maximization will suffer forced exit in the long run. The authors reverse this conclusion. In mixed LM-PM duopoly with...
This paper provides a comparative analysis of the basic rent-seeking model and a simple economic model of conflict. Each model
is concerned with a game in which players invest resources in pursuit of a prize. The purpose of the analysis is to elucidate
structural differences between the two models, and to analyse the consequent behavioral differenc...
Economic models of conflict typically suppose the non-destruction of resources that are re- distributed by force - conflict is costless. This paper analyzes a model with costly conflict. Behavior and equilibrium outcomes dier qualitatively from previous models, whose predic- tions are substantially modified. The key is that costly conflict creates...
In the context of bilateral agency contracts in which the input of each agent cannot be contractually enforced, this paper asks, What determines the relative shares of the agents? The answer is simple and surprisingly general. The relative shares are given by the fourth root of the inverse ratio of the slopes of marginal products. This result is ap...
This paper presents a non-co-operative bargaining model of membership expansion in a producer co-operative. The emphasis is on examining the distribution of the resulting surplus between the existing partners and the new member. In the presence of a number of alternative candidates, the existing partners can use the threat of switching negotiating...
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...
A simple macroeconomic model of a labour-managed economy is analysed. The paper looks at the comparative statics of stabilization policy in this type of economy, while taking fully into account the nature of the macroeconomic equilibrium involved. The fixed price, quantity adjusting paradigm for describing non-Walrasian equilibria is adopted. The e...
Comparative static results for a multiple-output, multiple-input labor-managed firm are derived and presented using a profit function rather than a production function to describe the firm's technology. This profit-function approach complements the more usual production-function approach: it provides additional intuition, simplifies the derivation...
The purpose of this paper to identify and evaluate the welfare consequences of differences in the size distribution of firms in the imperfectly competitive market equilibria of comparable industries whose firms are organized along labour-managed and entrepreneurial (profit-maximizing) lines, respectively. In zero-profit market equilibria the two fo...
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...
This paper reports on an incentive structure designed to secure productive efficiency in a multi-firm socialist industry where firm managers are reward-maximisers. By assessing managers a bonus / penalty according as their profits are above or below the industry average the system makes the managers play in an n-person constant-sum game. This game,...
The labor managed firm (LMF) is viewed as a contract-based coalition of workers. The coalition contract defines the worker's membership in the LMF, gives credence to the short-run risk of layoffs, and identifies the LMF as being more than a mere neoclassical production function plus fixed cost. Our model embodies three key features: the rational wo...
This paper looks at the relationship between the equilibrium level of social wel- fare and the initial distribution of social resources in a two-player model where only self- enforcement of property rights is possible. Players allocate their resource endowment shares between investment and arms. Welfare losses, measured in terms of output, arise wh...