Calendrier du 14 octobre 2019
Roy Seminar (ADRES)
Du 14/10/2019 de 17:00 à 18:30
salle R1-09, campus Jourdan - 75014 Paris
PUPPE Clemens (Karlsruhe Institute for Technology)
Resource Allocation by Frugal Majority Rule
écrit avec Klaus Nehrig
We propose a model of ‘frugal aggregation’ in which the evaluation of social welfare must be based on information about agents’ top choices plus general qualitative background conditions on preferences. The former is elicited individually, while the latter is not. We apply this model to problems of public budget allocation, relying on the specific assumption of separable and convex preferences. We propose and analyze a particularly aggregation rule called ‘Frugal Majority Rule.’ It is defined in terms of a suitably localized net majority relation. This relation is shown to be consistent, i.e. acyclic and decisive; its maxima minimize the sum of the natural resource distances to the individual tops. As a consequence of this result, we argue that the Condorcet and Borda perspectives – which conflict in the standard, ordinal setting – converge here. The second main result provides a crisp algorithmic characterization that renders the Frugal Majority Rule analytically tractable and efficiently computable.
GSIELM (Graduate Students International Economics and Labor Market) Lunch Seminar
Du 14/10/2019 de 13:00 à 14:00
MSE(106, Blv de l'Hôpital, salle 116) 75013 Paris
LEQUIEN Matthieu (Banque de France-PSE-Insee)
The Heterogeneous Impact of Market Size on Innovation: Evidence from French Firm-Level Exports
écrit avec Philippe Aghion (College de France-LSE), Antonin Bergeaud (Banque de France-PSE) and Marc Melitz (Harvard)
We analyze how demand conditions faced by a firm impacts its innovation decisions. To disentangle the direction of causality between innovation and demand conditions, we construct a firm-level export demand shock which responds to aggregate conditions in a firm's export destinations but is exogenous to firm-level decisions. Using exhaustive data covering the French manufacturing sector, we show that French firms respond to exogenous growth shocks in their export destinations by patenting more; and that this response is entirely driven by the subset of initially more productive firms. The patent response arises 3 to 5 years after a demand shock, highlighting the time required to innovate. In contrast, the demand shock raises contemporaneous sales and employment for all firms, without any notable differences between high and low productivity firms. We show that this finding of a skewed innovation response to common demand shocks arises naturally from a model of endogenous innovation and competition with firm heterogeneity. The market size increase drives all firms to innovate more by increasing the innovation rents; yet by inducing more entry and thus more competition, it also discourages innovation by low productivity firms.
Régulation et Environnement
Du 14/10/2019 de 12:00 à 13:00
salle R1-13, campus Jourdan - 75014 Paris
NEWMAN Andy (Boston University)
Competing for a Quiet Life: An Organizational Theory of Market Structure
écrit avec Patrick Legros, Zsolt Udvari
We develop a property-rights model of endogenous market structure in
which contracting imperfections, rather than scale economies, emerge as the
source of market power. Production of a homogenous good is carried out
by substitutable, incentive-constrained teams that can stand alone as
perfect competitors or sell their assets to profit-motivated HQs, thereby
becoming subordinate members of their firms. HQs subsequently Cournot
compete in the product market. Team output and costs aggregate linearly
within and across firms, there are no diseconomies of HQ ownership, and HQs
are abundant.
A fundamental hold-out problem places lower and upper bounds on the
degree of concentration. The equilibrium market structure is typically an
oligopoly, sometimes with a competitive fringe. Concentration may increase
with the size of the market, unlike in the standard Cournot entry model.
Entry barriers and competition policy may have distinct effects depending
on the demand regime, which has implications for optimal policy in rich vs.
developing countries.