nep-mic New Economics Papers
on Microeconomics
Issue of 2005‒07‒03
six papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. A micro simulation model of demographic development and households' economic behavior in Italy By Albert Ando; Sergio Nicoletti-Altimari
  2. Returns to Scale, Technical Progress and Total Factor Productivity Growth in New Zealand Industries By Kevin J Fox
  3. Congestion pricing of inputs in vertically related markets By isamu matsukawa
  4. Non Cooperatives Stackelberg Networks: Get Informed Earlier Pays Off By Juan M.C. Larrosa
  5. Equilibria with increasing returns : sufficient conditions on bounded production allocations. By Jean-Marc Bonnisseau; Alexandrine Jamin
  6. Does Watching TV Make Us Happy? By Bruno S. Frey; Christine Benesch; Alois Stutzer

  1. By: Albert Ando; Sergio Nicoletti-Altimari (European Central Bank)
    Abstract: The relationship between the demographic structure and the saving rate of a society is the reflection of the aggregation of the behaviour of heterogeneous households, differing from one another in the type of living arrangements and in the characteristics of their members. In order to contribute to the understanding of this relationship, we construct a dynamic micro model capable of simulating the demographic development of a population, including the creation, destruction, dimension and various other important characteristics of households and their members. The demographic model is then combined with a specification of the processes generating income, social security wealth, retirement and consumption behaviour of households, and applied to a data set derived from survey data on the Italian household sector. Simulations of the model are used to study the evolution of aggregate income, saving and asset accumulation over the period 1994-2100. If fertility and mortality assumptions of recent official projections are adopted and marriage and divorce rates maintained at current levels, the dramatic ageing of the population and the marked decline in the share of population living in traditional households would lead, other things being equal, to a substantial decline in the aggregate saving rate. However, the reduction in the number of children per household and, above all, the decline in the ratio of social security wealth of households to disposable income as the effects of the recently introduced reforms begin to be felt act as offsetting factors. As a result, the aggregate saving rate increases over the initial 30 years of the simulation and moderately decreases thereafter, stabilizing slightly above the original level. Implications of changes in a number of key assumptions regarding the demographic evolution, productivity growth and individual behavioural responses are also analyzed.
    Keywords: demographic developments, family structure, consumption, saving, social security, micro simulation model
    JEL: D12 D31 D91 E21 H55 J10 J26
    Date: 2004–12
  2. By: Kevin J Fox (School of Economics, & CAER, University of New South Wales)
    Abstract: This paper reviews and applies some recently proposed methods for separating total factor productivity (TFP) growth into contributions from technical progress and returns to scale, allowing for imperfectly competitive markets. The methods are applied to New Zealand data, using a recently available dataset on nine market-sector industries and the aggregate market sector, 1988-2002. The findings suggest that there has been little contribution from technical progress to TFP growth, but increasing returns to scale may have played a substantial role. However, the results are not statistically satisfactory for several industries, and are quite sensitive to the model used. This highlights the need for more work on both data and analysis if a better understanding is to be had of New Zealand’s productivity performance.
    Keywords: Returns to scale; technical progress; monopolistic markups
    JEL: D24
    Date: 2005–06
  3. By: isamu matsukawa (musashi university)
    Abstract: This paper conducts a welfare analysis of a two-part tariff that is applied to the congestion pricing of inputs supplied by a natural monopolist with increasing returns to scale to competitive firms that require an input in a fixed proportion to output. Congestion pricing of inputs is optimal for both the welfare-maximizing regulator and the profit-maximizing monopolist if it is applied in the form of a uniform price for the input. However, a two-part tariff for the congestion pricing of inputs is optimal if competition in the downstream market is imperfect or if there is demand uncertainty in the market.
    Keywords: two-part tariff
    JEL: L
    Date: 2005–06–28
  4. By: Juan M.C. Larrosa (CONICET-Universidad Nacional del Sur)
    Abstract: Non cooperative network-formation games in oligopolies analyze the optimal connection structure that emerges when linking represent the appropriation of cost-reducing one-way externalities. These models reflect situations where one firm access to another firm’s (public or private) information and this last cannot refuse it. What would happen if one firm can move first? A classical model of exogenous Stackelberg leader is developed and first-mover advantages are observed.
    Keywords: Keywords: non cooperative games, network formation strategies, Stackelberg equilibrium.
    JEL: C70 D43 L13
    Date: 2005–06–29
  5. By: Jean-Marc Bonnisseau (CERMSEM); Alexandrine Jamin (CERMSEM)
    Abstract: This paper deals with the existence of marginal pricing equilibria or equilibria with general pricing rules in an economy with increasing returns to scale or more general types of non convexities in production. Its main contribution is to posit the bounded loss and survival assumptions on a bounded subset of production allocations. Furthermore, the free-disposal assumption is weaken, which allows to consider non positive prices. Finally, we also provide an existence result for a quasi-equilibria, when the survival assumption is weaken on the attainable allocations.
    Keywords: General economic equilibrium, increasing returns, general pricing rules, bounded losses, marginal pricing rule, free disposal.
    JEL: D21 D43 D51
    Date: 2003–04
  6. By: Bruno S. Frey; Christine Benesch; Alois Stutzer
    Abstract: The paper studies a major human activity – that of watching TV - where many individuals have incomplete control over, and foresight into, their own behavior. As a consequence, they watch more TV than they consider optimal for themselves and their well-being is lower than what could be achieved. Mainly people with significant opportunity costs of time regret the amount of time spent watching TV. They report lower subjective well-being when watching TV for many hours. For others, there is no negative effect on life satisfaction from watching TV. Long hours spent in front of a TV are linked to higher material aspirations and anxiety and therewith lower life satisfaction.
    Keywords: Life satisfaction; mispredicting utility; revealed behavior; self-control problem; TV consumption
    JEL: D12 I31
    Date: 2005–05

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