[This article presents the first and second moments of an estimator which might be used when two subsamples are characterized by the same regression coefficients, but possibly different error variances. The estimator is the OLS estimator if the hypothesis of equal variances is accepted and the two-step Aitken estimator otherwise. The estimator is similar to one suggested by Goldfeld and Quandt and is applicable to a reparameterized version of the error components model.]

[Consider a society with n individuals who must choose an alternative from a given non-empty set X. For an integer d ≤ n, a d-majority equilibrium is an alternative x* ∈ X such that no alternative in X is preferred to x* by at least d individuals. It is proved that when X is a compact and convex set of dimension m, a necessary and sufficient condition that, for every profile of individuals' convex and continuous preferences, there exists a d-majority equilibrium, is that d be greater than (m/(m + 1))n. Using this result for the case when X consists of a finite number, T, of alternatives, it is shown that a necessary and sufficient condition that for every individuals' preference orderings there exists a d-majority equilibrium is that d exceeds ((T - 1)/T)n.]

Firms' investment in plant and equipment is explained by a stock-adjustment model in which the coefficient of adjustment is allowed to vary. It is assumed that firms partially close the gap between desired and actual capital stock, but that the speed of adjustment depends on the firm's ability to procure funds at reasonable cost. A panel of individual firm responses to the McGraw-Hill plant and equipment survey is the principal data source, supplemented by financial statement information for the firms and two indices representing costs of debt and equity financing. The predictions generated by the regressions are aggregated for comparison with the observed aggregates. 1. A STOCK-ADJUSTMENT INVESTMENT MODEL THE PURPOSE of this paper is to develop and test a model to explain firms' investment in plant and equipment. The model incorporates features which recent research on the investment decision suggests are significant. The basic framework is a stock-adjustment model, in which each year the firm moves partially toward its desired position, with the coefficient of adjustment (reaction coefficient) allowed to vary by firm and year. The model has the form

The authors introduce and analyze 'multistage situations, ' which generalize 'multistage games' (which, in turn, generalize 'repeated games'). One reason for this generalization is to avoid the perhaps unrealistic constraints--inherent to noncooperative games--that the set of strategy tuples must be a Cartesian product of the strategy sets of the players. Another reason is that, in most economic and social activities (e.g., in sequential bargaining without a rigid protocol), the 'rules of the game' are rather amorphous; the procedures are rarely pinned down. Such social environments can, however, be represented as multistage situations and be effectively analyzed through the theory of social situations. Copyright 1996 by The Econometric Society.

Internal labor markets are increasingly important for matching workers to jobs within organizations. We present evidence from a randomized trial that compares matching workers to jobs using the deferred acceptance (DA) algorithm to the traditional manager‐directed matching process. Our setting is the U.S. Army's internal labor market, which matches over 14,000 officers to units annually. We find that DA reduces administrative burden and increases match quality as measured by reduced justified envy, increased truthful preference reporting, and officers' and units' preferences over their matches. The overall impact of DA on officer retention and performance in the two years after officers started their new jobs is limited by strategic preference coordination between officers and units. However, DA leads to significant improvements in officer retention and promotions in markets with inexperienced managers. Our findings suggest that cross‐market communication between agents in internal labor markets can attenuate the benefits of strategyproof matching algorithms.

In many economic situations, individuals carry out activities as coalitions, and have personal preferences for belonging to specific groups (coalitions). These situations are studied in the framework of cooperative games with coalition structures, by defining for each player a utility function with two arguments, namely his consumption bundle and the coalition to which (s)he belongs. The optimality analysis brings out a surprising property of the games with coalitions, namely that transfers among coalitions may be necessary to attain Pareto optimality. Moreover, quite restrictive assumptions are needed to rule out this property. The analysis is concerned with the conditions under which no has incentives and opportunities to change Two concepts of individual stability of a coalition structure are introduced, and their existence properties are analyzed. 1.1 Summary IN MANY ECONOMIC SITUATIONS, individuals carry out activities as Thus, individuals organize themselves in firms for production purposes and in clubs for consumption purposes; or they rely upon local communities for the provision of public goods. In such situations, individuals typically have personal preferences for belonging to specific groups (coalitions). First, they are concerned with the size of the group and personalities of its members. Second, they are concerned with qualitative and quantitative characteristics of the group activities: Working conditions in the firms, facilities available at the clubs, local public goods. Cooperative games with coalition structures provide a natural framework for a formal analysis of these situations, when the individuals partition themselves into A general way of introducing explicitly personal preferences for membership in specific coalitions is to define for each player a utility function with two arguments, namely his consumption bundle and the coalition to which he belongs. It then seems natural to speak about games with hedonic coalitions. A model of an economy, or cooperative game, with coalitions is introduced in Section 1.2. The agents organize themselves in coalitions which form a partition (i.e., each agent belongs to one and only one coalition). Each coalition, endowed with a production set, produces public and private goods. Each agent consumes the public goods produced by the coalition to which he belongs, and private goods. His preferences are represented by a utility function which is strictly increasing in private goods and continuous in private as well as public goods, but which depends upon the coalition in an arbitrary way. Our initial interest was to study the of coalitions in this model. Section 3 is devoted to that topic. However, in the course of our study, we encountered an