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Strategic Interaction (strategic + interaction)
Selected AbstractsWHY DO COMMUNITIES MOBILIZE AGAINST GROWTH: GROWTH PRESSURES, COMMUNITY STATUS, METROPOLITAN HIERARCHY, OR STRATEGIC INTERACTION?JOURNAL OF URBAN AFFAIRS, Issue 1 2009MAI THI NGUYEN ABSTRACT:,Findings from this study challenge the conventional wisdom about the motivations for local growth control. Using data of California ballot box growth controls merged with city level demographic and housing data from the U.S. Census Bureau, logit models are estimated to test four hypotheses for why communities mobilize against growth. Of the four hypotheses, growth pressures, community status, metropolitan hierarchy, and strategic interaction, the only hypothesis that was strongly supported by the logistic regression analyses was strategic interaction. Support for the strategic interaction hypothesis reveals that jurisdictions located in regions where growth control policies are more abundant have a higher probability of mobilizing against growth. In other words, jurisdictions' growth control policies influence the growth decisions made by neighboring jurisdictions within the same region. One of the most surprising findings in the logistic regression analyses is that low-income suburbs are significantly more likely to mobilize against growth than high-income suburbs. These results refute the commonly held belief that growth control is strictly a concern of elite communities and suggest that residents of low-income suburbs may be turning to the ballot box to control growth because their communities are the locations of choice for noxious land uses. [source] DEVELOPING COUNTRY BORROWING FROM A MONOPOLISTIC LENDER: STRATEGIC INTERACTIONS AND ENDOGENOUS LEADERSHIP,THE JAPANESE ECONOMIC REVIEW, Issue 2 2009SAQIB JAFAREY We develop a two-period model with endogenous investment and credit flows. Credit is subject to quantitative restrictions. With an exogenous restriction, we analyse the welfare effects of a temporary consumption tax. We then consider three scenarios under which a monopoly lender optimally decides the level of credit and a borrower country chooses a consumption tax: one in which the two parties act simultaneously and two scenarios where one of them is a Stackleberg leader. The equilibrium under the leadership of the borrower country is Pareto superior to the simultaneous move equilibrium but may or may not be to that under the leadership of the lender. If the sequence of moves is itself chosen strategically, leadership by the borrower emerges as the unique equilibrium. [source] Empathy and Strategic Interaction in Crises: A Poliheuristic PerspectiveFOREIGN POLICY ANALYSIS, Issue 2 2009Jonathan W. Keller Empirical evidence supports the poliheuristic (PH) theory of decision making, which states that leaders typically employ a two-stage non-compensatory decision-making process. In stage one leaders reject options that do not meet some minimum criteria of acceptability on one or more dimensions, and in stage two they choose among the remaining options using a more rational utility-maximizing rule. While PH theory has primarily been applied at the monadic level, to explain the process and content of states' decisions, we contend it has important implications for strategic interaction and can help to explain outcomes in world politics. Specifically, we argue that a crucial variable shaping crisis outcomes is the degree to which leaders' non compensatory decision criteria in stage one include options' acceptability to the opponent. When leaders empathize with their opponent and screen out those options the opponent considers unacceptable, crises will be resolved more quickly and with a lower likelihood of escalation. Empathy introduced during the second, utility-maximizing stage, may also dampen conflict but is less effective than stage one empathy. We illustrate this dyadic non compensatory model by examining two cases involving the U.S.,China and U.S.,Iraq bilateral relationships. [source] Strategic Interactions in a Growth Model with Infrastructure CapitalMETROECONOMICA, Issue 4 2002Akihisa Shibata A dynamic game growth model with infrastructure capital is analyzed and it is shown that the pattern of growth can be either endogenous or exogenous depending on agents' commitment behavior. If the agents commit their future actions, there is a unique Nash equilibrium with endogenous growth. However, if they cannot commit their future actions and they condition their actions on the state variable at each time, then for any level of infrastructure capital there exist infinitely many equilibria: some of them exhibit endogenous growth and others show no growth in the long run (or even in the short run). [source] Disclosures and Asset ReturnsECONOMETRICA, Issue 1 2003Hyun Song Shin Public information in financial markets often arrives through the disclosures of interested parties who have a material interest in the reactions of the market to the new information. When the strategic interaction between the sender and the receiver is formalized as a disclosure game with verifiable reports, equilibrium prices can be given a simple characterization in terms of the concatenation of binomial pricing trees. There are a number of empirical implications. The theory predicts that the return variance following a poor disclosed outcome is higher than it would have been if the disclosed outcome were good. Also, when investors are risk averse, this leads to negative serial correlation of asset returns. Other points of contact with the empirical literature are discussed. [source] Some Lessons from Transaction-Cost Politics for Less-Developed CountriesECONOMICS & POLITICS, Issue 2 2003Avinash Dixit Transaction-cost politics views economic policy-making as a political process constrained by asymmetric information and limited commitment possibilities. This paper examines some implications of this perspective for less-developed countries (LDCs) considering policy reform. It emphasizes that success requires reform of the rules and institutions which govern the strategic interaction of the participants in the political game, and that reforms must cope with the special interests and asymmetric information which already exist. In this light, it examines some broad issues of the design of constitutions and institutions (definition and enforcement of property rights, control of inflation, and of government expenditures, federalism, and redistribution), as well as some specific issue of the design of organizations and incentives (problems posed by the interaction of multiple tasks and multiple interests, and their interaction with the limitations on auditing and administration that exists in many LDCs). [source] On the Endogenous Choice between Protection and PromotionECONOMICS & POLITICS, Issue 1 2000D. Mitra In a model of strategic interaction between firms in lobbying activity, I show that capitalists might prefer tariffs (protection) to production subsidies (promotion). This is due to the congestion problem arising from the government's convex welfare costs of providing subsidies as opposed to both the free-rider problem and the congestion problem acting in opposite directions in the case of tariffs. If an industry association exists, coordination can be achieved when lobbying for tariffs, but not in the case of production subsidies. [source] Empathy and Strategic Interaction in Crises: A Poliheuristic PerspectiveFOREIGN POLICY ANALYSIS, Issue 2 2009Jonathan W. Keller Empirical evidence supports the poliheuristic (PH) theory of decision making, which states that leaders typically employ a two-stage non-compensatory decision-making process. In stage one leaders reject options that do not meet some minimum criteria of acceptability on one or more dimensions, and in stage two they choose among the remaining options using a more rational utility-maximizing rule. While PH theory has primarily been applied at the monadic level, to explain the process and content of states' decisions, we contend it has important implications for strategic interaction and can help to explain outcomes in world politics. Specifically, we argue that a crucial variable shaping crisis outcomes is the degree to which leaders' non compensatory decision criteria in stage one include options' acceptability to the opponent. When leaders empathize with their opponent and screen out those options the opponent considers unacceptable, crises will be resolved more quickly and with a lower likelihood of escalation. Empathy introduced during the second, utility-maximizing stage, may also dampen conflict but is less effective than stage one empathy. We illustrate this dyadic non compensatory model by examining two cases involving the U.S.,China and U.S.,Iraq bilateral relationships. [source] "Grab the Signatures and Run": Federal Unity Strategy in Canada from the Referendum to PatriationINTERNATIONAL POLITICAL SOCIOLOGY, Issue 2 2009Neal Carter Whether as a traumatic event or great accomplishment, the legacy of the First Ministers' Conference of 1981 lives on in Canadian politics. Constitutional negotiations among the prime minister and provincial premiers in 1981 produced the only "packaged" agreement since Confederation to achieve even the minimal support necessary to achieve ratification. The resulting Constitution Act of 1982, which included the Charter of Rights and Freedoms, remains in place and is the principal manifestation of intergovernmental bargaining from over two decades ago. This study reevaluates the strategic interaction and conflict processes that took place between Ottawa and the provinces in negotiations leading up to that fateful November 1981 conference. We apply the sociological framework for assessment of the dynamics of identity contention adopted from McAdam, Tarrow, and Tilly (2001) and find tentative support for its propositions. After an overview of the article's agenda, we present an analytic framework for the study of conflict processes. Second, the background to the constitutional crisis of 1980-81 is summarized. Using the analytic framework, the third section focuses on the federal strategy in the crisis as suggested by minutes from cabinet meetings, and the fourth section examines key events of the First Ministers Conference of November 1981. Fifth, and finally, the contributions of the preceding sections are summed up and ideas are put forward for further research. [source] FROM EXOGENOUS TO ENDOGENOUS ECONOMIC NETWORKS: INTERNET APPLICATIONSJOURNAL OF ECONOMIC SURVEYS, Issue 5 2006Alessio D'Ignazio Abstract Economic agents' behaviour is affected by their position in a network, either exogenous or endogenous, in which they interact with a sub-set of neighbours only. The network's links, which may be generated by vertical and/or horizontal relations, or by more complex morphologies, may explain the transition between dynamic equilibria and the instability of economic aggregates. Moreover, networks shape strategic interaction among agents by determining their strategies; the problem of access and interconnection, particularly relevant in the Internet, is perhaps the best example. A two-way feedback between strategies and network structures arises instead when links are endogenous: those features are clearly shown in the mechanism underlying the formation of peering links and R & D networks. [source] Structural change in the West German agricultural sectorAGRICULTURAL ECONOMICS, Issue 2009Silke Huettel Structural change; Strategic competition; Land market; Markov chain Abstract This article explains regionally differentiated patterns of structural change based on a theoretical framework dealing with strategic interaction of farms on the land market. The main research question focuses on the causes of regionally persistent structures. An empirical Markov chain model is defined for the West German agricultural sector. The model is used to explain the probabilities of farm growth, decline, or exit in terms of the current and former regional farm size structure. Further, the impact of variables describing the regional farm structure, thereby indicating market power of the large, the potential of high competition for land within a region, and possibly high rents of the status quo in combination with sunk costs, is quantified. The results confirm the relevance of strategic interaction as a crucial determinant of persistent regional differences in the farm size structure over time. [source] WHY DO COMMUNITIES MOBILIZE AGAINST GROWTH: GROWTH PRESSURES, COMMUNITY STATUS, METROPOLITAN HIERARCHY, OR STRATEGIC INTERACTION?JOURNAL OF URBAN AFFAIRS, Issue 1 2009MAI THI NGUYEN ABSTRACT:,Findings from this study challenge the conventional wisdom about the motivations for local growth control. Using data of California ballot box growth controls merged with city level demographic and housing data from the U.S. Census Bureau, logit models are estimated to test four hypotheses for why communities mobilize against growth. Of the four hypotheses, growth pressures, community status, metropolitan hierarchy, and strategic interaction, the only hypothesis that was strongly supported by the logistic regression analyses was strategic interaction. Support for the strategic interaction hypothesis reveals that jurisdictions located in regions where growth control policies are more abundant have a higher probability of mobilizing against growth. In other words, jurisdictions' growth control policies influence the growth decisions made by neighboring jurisdictions within the same region. One of the most surprising findings in the logistic regression analyses is that low-income suburbs are significantly more likely to mobilize against growth than high-income suburbs. These results refute the commonly held belief that growth control is strictly a concern of elite communities and suggest that residents of low-income suburbs may be turning to the ballot box to control growth because their communities are the locations of choice for noxious land uses. [source] Capacity allocation with traditional and Internet channelsNAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 8 2006Yue Dai Abstract In this paper we study a capacity allocation problem for two firms, each of which has a local store and an online store. Customers may shift among the stores upon encountering a stockout. One question facing each firm is how to allocate its finite capacity (i.e., inventory) between its local and online stores. One firm's allocation affects the decision of the rival, thereby creating a strategic interaction. We consider two scenarios of a single-product single-period model and derive corresponding existence and stability conditions for a Nash equilibrium. We then conduct sensitivity analysis of the equilibrium solution with respect to price and cost parameters. We also prove the existence of a Nash equilibrium for a generalized model in which each firm has multiple local stores and a single online store. Finally, we extend the results to a multi-period model in which each firm decides its total capacity and allocates this capacity between its local and online stores. A myopic solution is derived and shown to be a Nash equilibrium solution of a corresponding "sequential game." © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2006 [source] Personifying the State: Consequences for Attitude FormationPOLITICAL PSYCHOLOGY, Issue 3 2007Kathleen M. McGraw Because states are abstract entities, they often require embodiment for mass publics and elites to understand them. This embodiment often occurs as personification, where the state is associated with the most salient figure in the political system, but embodiment can also occur through political institutions and social groups. Surprisingly, there is virtually no systematic empirical work on the political and psychological consequences of state personification, or other forms of embodiment. In this experiment, we investigate how various ways of embodying the state influence attitude formation processes. Drawing on the on-line/memory-based processing and entitativity literatures, we hypothesize that personification of the state should facilitate on-line processing and stronger attitudes, whereas embodying the state as a parliamentary institution should produce weaker attitudes that are formed in a memory-based fashion. The results support these hypotheses. Embodiment as a social group produced inconsistent results. This study provides the first systematic evidence that the widespread practice of personification of the state has robust and potentially far-reaching attitudinal consequences that have meaningful implications for strategic interaction, perception and learning, and attitude change in the international realm. [source] A Social Psychological Approach to Enduring RivalriesPOLITICAL PSYCHOLOGY, Issue 4 2001Cameron G. Thies The recent scholarly work on the concept of enduring rivalries offers a promising way to examine strategic interaction among dyads of states over extended periods of time. A focus on rivalry, and on the mechanisms that provide for such interaction, may offer a way to bridge existing theories of international relations that rely exclusively on structure or process. Unfortunately, the potential for theory-building has not been fully realized because research into rivalry has tended to be inductive. This paper seeks to rectify that problem by situating the rivalry concept within a social psychological approach to international relations. The rivalry concept is appropriately located in a theoretical approach that views the international system as a social system where actors are conditioned by mechanisms of competition and socialization. [source] Rationalist and Constructivist Perspectives on ReputationPOLITICAL STUDIES, Issue 1 2007J. C. Sharman This article argues for a new and broader understanding of reputation as a generally shared belief concerning a referent's character or nature, based on a range of information, associations and social cues. This is in place of the conventional rationalist definition of this concept as the degree to which an actor reliably upholds its commitments, based on a record of past behaviour. A brief literature review shows that this concept is crucial in underpinning a wide range of work in political science and economics premised on strategic interaction. The difference between a rationalist and constructivist understanding of reputation hinges on three points. Firstly, reputation is argued to be a relational concept rather than a property concept. Secondly, reputation is a social fact with an emergent, intersubjective quality, not just a collection of individual beliefs. Thirdly, rather than being an inductively derived objective record of past behaviour, reputation is based on associations, feelings and social cues. The last section of the article applies this broader conceptual understanding to two empirical examples: the importance of international organisations' reputation for their influence over policy-makers, and the way in which small states are classified as tax havens by a reputation test. [source] Strategic Party Government: Party Influence in Congress, 1789,2000AMERICAN JOURNAL OF POLITICAL SCIENCE, Issue 3 2007Matthew J. Lebo Why does the influence of Congressional parties fluctuate over time? Building on prevailing answers, we develop a model, Strategic Party Government, which highlights the electoral motives of legislative parties and the strategic interaction between parties. We test this theory using the entire range of House and Senate party behavior from 1789 to 2000 and find that the strategic behavior of parties complements members' preferences as an explanation for variation in party influence. Specifically, the strongest predictors of one party's voting unity are the unity of the opposing party and the difference between the parties in the preceding year. Moreover, we find strong links between party behavior in Congress and electoral outcomes: an increase in partisan influence on legislative voting has adverse electoral costs, while winning contested votes has electoral benefits. [source] CAPITAL,LABOUR SUBSTITUTION AND ENDOGENOUS FLUCTUATIONS: A MONOPOLISTIC COMPETITION APPROACH WITH VARIABLE MARKUP,THE JAPANESE ECONOMIC REVIEW, Issue 3 2009THOMAS SEEGMULLER This paper analyses an overlapping generations model with endogenous product diversity where strategic interactions between producers are introduced; it examines how they affect the stability properties of the steady state. Because of free entry, strategic interactions between producers imply a new dynamic feature, markup variability, promoting indeterminacy and endogenous cycles. Indeed, in contrast to the model without strategic interaction, endogenous fluctuations can occur when the substitution between the production factors, capital and labour, is not too weak, but in accordance with empirical estimates. [source] OPTIMAL CONTRACTS FOR CENTRAL BANKERS AND PUBLIC DEBT POLICY*THE JAPANESE ECONOMIC REVIEW, Issue 4 2004HIROSHI FUJIKI We consider how the second-best allocation corresponding to an optimal rule under the policy commitment of a central bank and a fiscal authority with a consolidated government budget constraint can be achieved, even though these authorities are unable to commit themselves to their optimal policies and ignore the strategic interaction between their policies. Our results show that the best practical institutional arrangement is to have an instrument-independent central bank that controls the money supply to determine the rate of inflation and commits itself to an inflation target that depends on fiscal variables. [source] Presidential Address: Issuers, Underwriter Syndicates, and Aftermarket TransparencyTHE JOURNAL OF FINANCE, Issue 4 2007RICHARD C. GREEN ABSTRACT I model strategic interaction among issuers, underwriters, retail investors, and institutional investors when the secondary market has limited price transparency. Search costs for retail investors lead to price dispersion in the secondary market, while the price for institutional investors is infinitely elastic. Because retail distribution capacity is assumed to be limited for each underwriter-dealer, Bertrand competition breaks down in the primary market and new issues are underpriced in equilibrium. Syndicates emerge in which underwriters bid symmetrically, with quantities allocated internally to efficiently utilize retail distribution capacity. [source] Strategic and Queue effects on Entry in Spanish BankingJOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 4 2001Lucio Fuentelsaz This paper analyzes the factors that influence entry and geographic diversification decisions, a topic of special strategic interest in a context of growing globalization. The empirical model we propose is tested in a framework, the Spanish savings-bank market,where recent deregulation has eliminated the legal barriers to entry. Our results show two important conclusions for the evolution of the effects of branching deregulation in Europe and the US. First, it seems that entry in new geographical markets has been impeded by the strategic interactions between entrants and incumbents. Second, savings banks exhibit a preference for closer locations at the time of expanding, which may have undermined the effects of deregulation and its potential benefits for consumers. [source] A Theory of Consumer Boycotts under Symmetric Information and Imperfect Competition,THE ECONOMIC JOURNAL, Issue 511 2006Robert Innes This article models strategic interactions between non-identical duopolistic firms and a public interest/environmental organisation (EO) that promotes ,green' production practices by threatening consumer boycotts against ,brown' producers. The article describes when boycotts are deterred by prior firm commitments to be ,green' and, also when a boycott arises in equilibrium, despite symmetric information. When a boycott arises, it is either a small persistent boycott against the ,small firm' in the industry, or a large transitory boycott against the ,large firm' in the industry that prompts the target firm to accede to the boycott demands quickly. [source] The supply of information by a concerned expert,THE ECONOMIC JOURNAL, Issue 497 2004Andrew Caplin How much information should a policy maker pass on to an ill-informed citizen? In this paper, we address this classic question of Crawford and Sobel (1982) in a setting in which beliefs impact utility, as in Kreps and Porteus (1978). We show that this question cannot be answered using a utility function with standard revealed preference foundations. To solve the model, we go beyond the classical model in two respects, relying on the psychological expected utility model of Caplin and Leahy (2001) to capture preferences, and the psychological game model of Geanakoplos et al. (1989) to capture strategic interactions. [source] Misconceptions and political outcomes*THE ECONOMIC JOURNAL, Issue 484 2003David Romer A large literature shows that strategic interactions among actors with conflicting objectives can cause the political process to produce outcomes that lower welfare. This paper investigates an alternative explanation of such outcomes: if individuals' errors in assessing the likely effects of proposed policies are correlated, democratic decisionmaking can produce welfare-reducing outcomes even in the absence of conflicting objectives. Under plausible assumptions, choosing candidates from among the best informed individuals does not remedy the problems created by such errors, but subsidising information and exposing representatives to information after their election do. Concentration of power has ambiguous effects. [source] CAPITAL,LABOUR SUBSTITUTION AND ENDOGENOUS FLUCTUATIONS: A MONOPOLISTIC COMPETITION APPROACH WITH VARIABLE MARKUP,THE JAPANESE ECONOMIC REVIEW, Issue 3 2009THOMAS SEEGMULLER This paper analyses an overlapping generations model with endogenous product diversity where strategic interactions between producers are introduced; it examines how they affect the stability properties of the steady state. Because of free entry, strategic interactions between producers imply a new dynamic feature, markup variability, promoting indeterminacy and endogenous cycles. Indeed, in contrast to the model without strategic interaction, endogenous fluctuations can occur when the substitution between the production factors, capital and labour, is not too weak, but in accordance with empirical estimates. [source] Low-Price Low-Capacity Traps and Government Intervention in the Québec Hog MarketCANADIAN JOURNAL OF AGRICULTURAL ECONOMICS, Issue 3 2004Bruno Larue This paper investigates the marketing of a primary commodity produced by competitive producers that sell to a single downstream processor. There is a significant lag between production and marketing decisions made by producers. If a credible price commitment cannot be made before producers make their output decision, it is a dominant strategy for the processor to buy producers' output at the world price adjusted for transportation costs. Producers fully anticipate this partial holdup ex ante and adjust production accordingly. When the processor's capacity is binding ex post, the equilibrium is described as a low-price, low-capacity trap. Under a specific condition, the processor finds it advantageous to credibly commit to a price increment before producers make their output decision. The ensuing equilibrium is Pareto-superior to the no-commitment equilibrium. We argue that the Québec hog/pork industry has experienced such a situation in the past few years. Government intervention is justified even if the processor has committed to a price increment. The modeling of strategic interactions between the government and the processor reveals that their price increments are strategic substitutes. However, given that the processor's (government's) payoff is increasing with the government's (processor's) price increment, the first-mover advantage entails committing early to a low-price increment to force one's rival to offer a high-price increment. Cet article analyse la mise en marché d'un produit primaire vendu par des producteurs preneurs de prix à un seul et unique transformateur. Les décisions de production et de mise en marché sont séparées dans le temps. Si le transformateur ne peut pas s'engager à payer un certain prix avant que les producteurs prennent leur décision de production, alors la stratégie dominante du transformateur est d'offrir aux producteurs le prix mondial diminué par les coûts de transport. Les producteurs anticipant ce hold-up partiel et réduisent leur production en conséquence. Lorsque le transformateur est confrontéà une contrainte de capacité ex post, les producteurs et le transformateur sont piégés dans un équilibre de « petit prix et petit volume ». Si une condition est respectée, il peut être avantageux pour le transformateur d'offrir un supplément aux producteurs avant leur décision de production. L'équilibre qui s'en suit constitue alors une amélioration au sens de Pareto. Nous soumettons que l'industrie porcine québécoise a vécu pareille expérience durant les dernières années. L'intervention du gouvernement demeure justifiée même si le transformateur s'est commis à payer un supplément. En fait, les interventions du transformateur et du gouvernement sont des substituts stratégiques. Puisque le gain du transformateur (gouvernement) croit avec le supplément offert par le gouvernement (transformateur), il y a un avantage àêtre le premier à se commettre à payer un faible supplément, tant pour le transformateur que pour le gouvernement, pour ainsi forcer l'autre partie à offrir un supplément plus généreux. [source] Buying power and strategic interactionsCANADIAN JOURNAL OF ECONOMICS, Issue 4 2005Can Erutku As a result, retailers without buying power may increase their retail price. Nevertheless, total surplus is non-decreasing in the degree of buying power possessed by the ,dominant' retailer. JEL classification: L13 Pouvoir d'achat et interactions stratégiques., Ce mémoire montre que le pouvoir d'achat au niveau du commerce de détail peut mener à un accroissement dans les prix de gros. En conséquence, les détaillants qui n'ont pas de pouvoir d'achat peuvent accroître leurs prix au détail. Néanmoins, le surplus total ne décroît pas à mesure que le degré de pouvoir d'achat du détaillant s'accroît. [source] | |||||||||||||||||||||||||