The issue of instability in a simple policy game between the central bank and a representative union

In the recent economic literature the independence of the central bank is often considered to be one of the most effective guarantees to achieve price stability. A strong theoretical basis for this proposition is that the monetary policy delegation given to an independent central bank is an optimal instrument to avoid the time inconsistency problem of monetary policy. This paper investigates the stability properties of this solution in a simple game in which the private sector (i.e. the trade unions) and the public sector (i.e. the central bank) simultaneously interact. A representative monopoly union is considered, and – in line with the recent economic debate – two types of unions are investigated: (i) the standard micro-founded trade union; (ii) the inflation-averse trade union. In both cases, we find that the requirement for the Nash equilibrium to be stable imposes a limit to the conservativeness of the central bank. Instability of the Nash equilibrium reveals a strategic co-ordination failure between the public and the private sector.     

The game of manifestos!

This paper investigates, leveraging a simple two‐stage game with incomplete information, the motivation behind announcing unreasonable commitments in the manifesto by candidates and political parties. I analyse the expected communication pattern in an environment where legal costs are not imposed for broken promises and psychological costs related to lying are not incurred by candidates. I demonstrate that there is an absence of separation between a high‐type candidate and a low‐type candidate regarding the degree to which they indulge in “cheap talk.” This paper also analyses the introduction of a penalty for broken promises and establishes that an imposition of penalty has the potential to improve the behaviour of political parties by inducing separation.     

袁世凯与约法体系之博弈

辛亥革命后,革命党人在民主共和思想还未具有深厚社会根基的基础上,通过了一部具有近代意义的宪法《中华民国临时约法》。基于革命党人难以处理各种社会矛盾的现实,又和北方的袁世凯集团达成妥协,使政权转移到袁世凯手中,约法体系被破坏殆尽。但约法体系的尝试仍为中国政治的发展指明了方向,推动了中国政治现代化的历史进程。     

Learning the structure of a simple rent-seeking game

This paper considers a form of the Tullock imperfectly discriminating rent-seeking game in which the contestants are uncertain about the value of a bias parameter in the probability of winning function. Beliefs about this unknown parameter are not constrained to be static; we consider two methods by which the players' prior beliefs on this parameter can be updated. First, we allow for information to emerge by considering the case in which the game is played twice, with the outcome of the first game known before the second begins. The identity of the winner of the first contest represents information which emerges endogenously that can be used to revise beliefs on the unknown bias parameter. Second, information can be produced outside of the model by an external agency; this gives rise to exogenous learning. We consider the consequences for rent-seeking in each of these two cases.     

Legal expenditure as a rent-seeking game

Legal expenditures at a civil trial constitute an interesting type of rent-seeking contest. In civil litigation there is a natural interaction between the objective merits of the case and the outcome of the contest. Institutions such as fee shifting do not generally have a counterpart in other rent-seeking contests. The endogenous decision to participate in the rent-seeking contest corresponds to the decision by the plaintiff to bring a case, and the decision by the defendant to defend it. The desirability of fee shifting is very sensitive to the value of the parameter which describes the legal technology.     

Evolutionary dynamics in the voting game

Voter participation is immense but theoretically doubtful because there exists cost of voting and the probability of casting the deciding ballot is low. Game theoretic models (Palfrey and Rosenthal, 1985) confirm this paradox of voting. Individual optimization in the voting game is problematic with respect to the rationality and information requirements of traditional game theory. Therefore in this paper a non-optimizing but learning individual is considered. By individual learning the adjustment processes and equilibria of voter turnout are determined. Voters are able to learn to participate and substantial voter turnout is possible.     

Public good provision in a repeated game: The role of small fixed costs of participation

Pecorino (1998) models tariff lobbying in a repeated game and finds that cooperation can be maintained in a large group, even though tariff lobbying provides a rival public good to interest group members. We add small fixed costs of participation to this model and find that cooperation must break down in large groups. By contrast, if a fully rival public good directly enters the utility function, then cooperation is possible in large groups, even with small participation costs. Thus, we find only partial support for Olson’s (1965) proposition that collective action must break down in large groups.     

The dynamics of lobbying — A differential game

This paper presents a dynamic model on lobbying. The interactions between two competing lobbies, who attempt to influence regulations and legislation, are modelled as a differential game. We consider for this game first a time consistent and then a subgame perfect equilibrium (in linear Markov strategies). The subgame perfect equilibrium lowers considerably lobbying activity and expenses. This provides a partial explanation of the puzzle that rent-seeking expenses are often small compared with the prize sought.     

Equilibrium in fiscal choices: Evidence from a budget game

This is an applied study about the stability of collective decision-making in fiscal matters and the features of individual preferences which are sufficient to reach a social ordering. It is based on data about citizens' preferences collected through a budget game played by a sample of voters in Turin, a large Italian city. By simulating a series of individual choices, a social ordering of the municipal budget items is arrived at. The role played by restricted (i.e., single-peaked, single-caved etc.) preferences to avoid cycles in choice simulations is then assessed.     

The decline of the idea of progress

The philosphers of the Englightenment conceived Progress as evidence of mankind's natural perfectibility. In the nineteenth century this image of the future was tarnished by abrupt epistemological changes and technical surprises. An unforeseen consequence of the invention and use of the steam engine was the breaking up of on idea that had acted as a principle for preservingt values, caused by the principle of the dissipation of energy in physics and the revolutionary analyses of the relations of socio-economic inequality in industrial societies. With Freud and Levi-Strauss, Carnot's principle becam the principle for judging history.