New Economics Papers
on Computational Economics
Issue of 2008‒03‒15
ten papers chosen by

  1. Ex-vessel Pricing and IFQs: A Strategic Approach By Fell, Harrison
  2. Analyzing Poverty Impact of Trade Liberalization Policies in CGE Models: Theory and Some Policy Experiments in Agricultural and Non-agricultural Sectors in South Asia By Khan, haider
  3. Labour market characteristics and the burden of ageing : North America versus Europe By Luca, MARCHIORI
  4. ABSALOM: Balancing assembly lines with assignment restrictions By Armin Scholl; Malte Fliedner; Nils Boysen
  5. Distributional and Behavioural Effects of the German Labour Market Reform By Clauss, Markus; Schnabel, Reinhold
  6. Welfare Effects of Tax and Price Changes Revisited By Knud J., MUNK
  7. Subset Selection from Large Datasets for Kriging Modeling By Rennen, G.
  8. Marginal Social Cost Pricing on a Transportation Network: Comparison of Second-Best Policies By Safirova, Elena A.; Houde, Sébastien; Harrington, Winston
  9. Washington START Transportation Model By Houde, Sébastien; Safirova, Elena A.; Harrington, Winston
  10. A minority-proof cheap-talk protocol By Heller, Yuval

  1. By: Fell, Harrison (Resources for the Future)
    Abstract: In this paper, intraseasonal fishing is modeled as a differential game between fishermen in a total allowable catch–regulated fishery with and without individual fishing quotas (IFQs). Heterogeneous harvest values are included by incorporating time-specific harvest costs and a stock effect into fishermen’s profit functions. I also allow for strategic interaction among fishermen via ex-vessel price dynamics. The equilibrium harvest strategies of the differential games are solved numerically through the use of a genetic algorithm. I demonstrate how different harvesting sector environments lead to varying degrees of ex-vessel price increases when IFQs are implemented. The primary result shows that possible margins for competition among fishermen, beyond competition for a greater share of the total allowable catch, can still exist under IFQ management and may be substantial enough to be able to prevent sizeable rent transfers from the processing sector to the harvesting sector.
    Keywords: individual fishing quotas, property rights, differential games, genetic algorithm
    JEL: Q22 C73 C61
    Date: 2008–02–01
  2. By: Khan, haider
    Abstract: The paper uses a dualistic, compact and “generic” (macroeconomic) computable general equilibrium (CGE) model specially constructed for the purpose of investigating the implications of trade liberalization for poverty reduction in South Asia. The model is a stylized representation of economies with large populations including large numbers of both urban and rural poor as in India, Pakistan or Bangladesh. The current “generic” model uses CES production functions and Harris-Todaro type migration model together with representative data to generate economy wide results. It is found that a dualistic production structure with sufficient details on the labor markets and household side can capture some of the effects of trade liberalization on poverty reduction. The model’s general equilibrium results suggest that trade liberalization can complement other specific policy interventions for poverty reduction.
    Keywords: Poverty; Trade Liberalization; Dualism; CGE model; Agriculture Informal; Urban Informal sector.
    JEL: F16 D31 C68 A10 D43 A11
    Date: 2008–03
  3. By: Luca, MARCHIORI (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)
    Abstract: A transition from pay-as-you-go pension systems to more private funded systems is often suggested as a solution to finance pension systems threatened by ageing. This paper analyses alternative potential remedies linked to changes in labour market characteristics, within an international computable overlapping-generations model of the world economy. A prolongation of the working life of skilled or unskilled individuals, an increase in the demand of skills, a rise in the education levels and increased skilled or unskilled immigration have very different outcomes in North-America and in Europe. In the latter region, a postponement in the retirement age of unskilled individuals has the most beneficial effect in relieving the fiscal pressure on pensions systems, because the proportion of unskilled workers is relatively larger in Europe than in North-America. In North-America, where skilled labour is more abundant, an acceleration in skill-biased technical change has the biggest impact on pensions systems, as it raises the productivity of skilled workers.
    Keywords: OLG-CGE Model, ageing, labour market, migration
    JEL: C68 H55 O30 J26 J61
    Date: 2008–02–15
  4. By: Armin Scholl (Chair of Decision Analysis and Management Science, Friedrich-Schiller-University Jena); Malte Fliedner (Institute of Industrial Management, University of Hamburg); Nils Boysen (Chair of Operations Management, Friedrich-Schiller-University Jena)
    Abstract: Assembly line balancing problems (ALBPs) arise whenever an assembly line is configured, redesigned or adjusted. An ALBP consists of distributing the total workload for manufacturing products among the work stations along the line. On the one hand, research has focussed on developing effective and fast solution methods for exactly solving the simple assembly line balancing problem (SALBP). On the other hand, a number of real-world extensions of SALBP have been introduced but solved with straightforward and simple heuristics in many cases. Therefore, there is a lack of procedures for exactly solving such generalized ALBP. In this paper, we show how to extend the well-known solution procedure SALOME (INFORMS J. Computing 9, 319-334), which is able to solve even large SALBP instances in a very effective manner, to a problem extension with different types of assignment restrictions (called ARALBP). The extended procedure is given the acronym ABSALOM. It consists of a favourable branching scheme, an arsenal of bounding rules and a variety of logical tests using ideas from constraint programming. Computational experiments show that ABSALOM is a very promising exact solution approach though the additional assignment restrictions complicate the problem and require some components of SALOME to be modified in a relaxing manner.
    Keywords: assembly line balancing, assignment restrictions, combinatorial optimization, branch-and-bound
    Date: 2008–03–03
  5. By: Clauss, Markus; Schnabel, Reinhold
    Abstract: We estimate the effects of the reform of the German Unemployment Insurance that replaced the wage related Unemployment Assistance with an income maintenance program and stronger means testing. We model the tax-benefit system and use the Socio-Economic Panel. We estimate a discrete labour supply model and simulate the behavioural and distributional effects using the pseudo-distribution method. Poverty and inequality decline overall, since households with children and low income gain, while those who used to earn high wages and received high unemployment transfers lose most. The behavioural responses mitigate the redistributive impact of the reform.
    Keywords: distribution analysis, household labour supply, microsimulation, poverty, Germany
    JEL: D31 H31 I32 I38 J22
    Date: 2008
  6. By: Knud J., MUNK
    Abstract: Dixit’s 1975 paper ‘Welfare Effects of Tax and Price Changes’ cosntitutes a seminal contribution to the theory of tax reform analysis within a second-best general equilibrium framework. The present paper clarifies ambiguities with respect to normalisation which have led to misinterpretation of some Dixit’s analytical results. It proves that a marginal tax reform starting from a proportional tax system will improve social welfare if it increases the supply of labour, whatever the rule of normalisation adopted, and shows that this result provides the key to understanding what determines the optimal system of commodity taxation as reflected in the Corlett and Hague analysis of optimal taxation in an economy with two produced commodities. Recasting work by Deaton (1981b), it generalises, using an alternative definition of the complementarity between consumption and leisure, to an economy with many commodities the insight that the optimal tax system is determined as a trade-off between two objectives : 1) to encourage the supply of labour to the market, and 2) to limit the distorsion of the pattern of consumption of produced commoditie. This insight cannot be illustrated by simulation studies using standard additive separable utility functions. However, extending work of Atkinson and Stern (1080,1981) the paper presents a parameterised utility function with explicit representation of the use of time, the CES-UT, which allows a flexible representation of the relationship between consumption and leisure. This functional form is used to provide a quantitative illustration of the trade-off which defines the optimal tax system and thus desirable directions of tax reform.
    Keywords: Public economics, optimal taxation, tax reform, tax simulation, distance functions, CGE models
    JEL: H2
    Date: 2008–02–20
  7. By: Rennen, G. (Tilburg University, Center for Economic Research)
    Abstract: When building a Kriging model, the general intuition is that using more data will always result in a better model. However, we show that when we have a large non-uniform dataset, using a uniform subset can have several advantages. Reducing the time necessary to fit the model, avoiding numerical inaccuracies and improving the robustness with respect to errors in the output data are some aspects which can be improved by using a uniform subset. We furthermore describe several new and current methods for selecting a uniform subset. These methods are tested and compared on several artificial datasets and one real life dataset. The comparison shows how the selected subsets affect different aspects of the resulting Kriging model. As none of the subset selection methods performs best on all criteria, the best method to choose depends on how the different aspects are valued. The comparison made in this paper can be used to facilitate the user in making a good choice.
    Keywords: Design of computer experiments;dispersion problem;Kriging model;large non-uniform datasets;radial basis functions;robustness;space filling;subset selection;uniformity.
    JEL: C0 C90
    Date: 2008
  8. By: Safirova, Elena A. (Resources for the Future); Houde, Sébastien; Harrington, Winston
    Abstract: In this paper we evaluate and compare long-run economic effects of six road-pricing schemes aimed at internalizing social costs of transportation. In order to conduct this analysis, we employ a spatially disaggregated general equilibrium model of a regional economy that incorporates decisions of residents, firms, and developers, integrated with a spatially-disaggregated strategic transportation planning model that features mode, time period, and route choice. The model is calibrated to the greater Washington, DC metropolitan area. We compare two social cost functions - one restricted to congestion alone and another that accounts for other external effects of transportation. We find that when the ultimate policy goal is a reduction in the complete set of motor vehicle externalities, cordon-like policies and variable-toll policies lose some attractiveness compared to policies based primarily on mileage. We also find that full social cost pricing requires very high toll levels and therefore is bound to be controversial.
    Keywords: traffic congestion, social cost pricing, land use, welfare analysis, road pricing, general equilibrium, simulation, Washington DC
    JEL: Q53 Q54 R13 R41 R48
    Date: 2008–01–09
  9. By: Houde, Sébastien; Safirova, Elena A. (Resources for the Future); Harrington, Winston
    Abstract: The document describes the Washington START transportation simulation model. In particular, it provides information about the model structure, the equilibrium concept, and the data used to calibrate the model. It also briefly describes the reference scenario and the elasticity analysis. Finally, the document discusses past and potential future applications and possible directions for model extensions.
    Keywords: transportation simulation, policy analysis, general equilibrium, travel demand, transportation network, mode of transportation
    JEL: R4 R41
    Date: 2007–11–29
  10. By: Heller, Yuval
    Abstract: This paper analyzes the implementation of correlated equilibria that are immune to joint deviations of coalitions by cheap-talk protocols. We construct a universal cheap-talk protocol (a polite protocol that uses only 2-player private channels) that is resistant to deviations of fewer than half the players, and using it, we show that a large set of correlated equilibria can be implemented as Nash equilibria in the extended game with cheap-talk. Furthermore, we demonstrate that in general there is no cheap-talk protocol that is resistant for deviations of half the players.
    Keywords: non-cooperative games; cheap-talk; correlated equilibrium; strong equilibrium; coalition-proof equilibrium; fault-tolerant distributed computation
    JEL: C72
    Date: 2005–08–19

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