New Economics Papers
on Law and Economics
Issue of 2005‒02‒27
two papers chosen by
Jeong-Joon Lee, Towson University

  1. Bargaining under Incomplete Information, Fairness, and the Hold-Up Problem By von Siemens, Ferdinand
  2. Product market regulation in OECD countries: 1998 to 2003 By Paul Conway; Véronique Janod; Giuseppe Nicoletti

  1. By: von Siemens, Ferdinand
    Abstract: In the hold-up problem incomplete contracts cause the proceeds of relation specific investments to be allocated by ex-post bargaining. The present paper investigates the efficiency of incomplete contracts if individuals have heterogeneous preferences implying heterogeneous bargaining behavior and - equally important - preferences are private information. As the sunk investment costs can thus potentially signal preferences, they can influence beliefs and consequently bargaining outcomes. The necessities of signalling are shown to generate very strong investment incentives. These incentives are based on the desire not to reveal information that is unfavorable in the ensuing bargaining. After finding all perfect Bayesian equilibria in pure strategies, the paper derives the necessary and sufficient conditions under which it is optimal to invest and trade efficiently.
    JEL: L22 K12 J33 D82 D63 D23 C70
    Date: 2005–02
  2. By: Paul Conway; Véronique Janod; Giuseppe Nicoletti
    Abstract: This paper describes trends in product market regulation in OECD countries over the period 1998 to 2003. The analysis is based on summary indicators of product market regulation that measure the degree to which policies promote or inhibit competition. The results suggest that regulatory impediments to competition have declined in all OECD countries in recent years. Regulation has also become more homogenous across the OECD as countries with relatively restrictive policies have, in some areas, moved towards the regulatory environment of the more liberalized countries. Within some countries product market policies have become more consistent across different regulatory provisions, although relatively restrictive countries still tend to have a more heterogeneous approach to competition. In general, domestic barriers to competition tend to be higher in countries that have higher barriers to foreign trade and investment, and high levels of state control and barriers to competition tend to be associated with cumbersome administrative procedures and policies that reduce the adaptability of labour markets. Notwithstanding recent progress in product market reform, a 'hard core' of regulations that impede competition still persists in virtually all countries. <p> La réglementation des marchés de produits dans les pays de l'OCDE, 1998-2003 <p> Ce document décrit les évolutions de la réglementation encadrant les marchés de produits dans les pays de l'OCDE sur la période 1998-2003. L'analyse est basée sur des indicateurs synthétiques de la réglementation des marchés de produits qui mesurent l'intensité avec laquelle les politiques favorisent ou restreignent la concurrence. Les résultats suggèrent que les entraves à la concurrence résultant de la réglementation ont décliné dans tous pays de l'OCDE ces dernières années. La réglementation est aussi devenue plus homogène à travers l'OCDE, les pays disposant de politiques relativement restrictives, s'étant ralliés, dans certains domaines, à l'environnement réglementaire des pays plus libéraux. Dans certains pays, les politiques concernant les marchés de produits sont devenues plus cohérentes au regard des différents dispositifs réglementaires, même si les pays relativement restrictifs ont toujours tendance à disposer d'une approche plus disparate de la concurrence. De façon générale, les barrières à la concurrence résultant de politiques à vocation intérieure ont tendance à être plus importantes dans les pays disposant d'importants obstacles aux échanges internationaux et à l'investissement ; de même de hauts niveaux de contrôles étatiques et d'importants obstacles à la concurrence ont tendance à être associés avec d'encombrantes procédures administratives et des politiques qui réduisent la capacité d'adaptation du marché du travail. En dépit des récents progrès accomplis par les réformes des marchés de produits, un 'noyau dur' de règlements, entravant la concurrence, persiste toujours dans pratiquement tous les pays.
    Keywords: indicators; product market regulation
    JEL: K2 L5
    Date: 2005–02–14

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