In a recent paper on behavior in experimental securities markets, Plott and Sunder ( 1982) concluded that the rational expectations (RE) model was superior to the traditional prior information (Pl) model in predicting equilibrium prices and holdings. In particular, given a market with one commodity, three possible states of the world, and three groups of trader "types," each with differing valuations on the commodity per state, initially uninformed traders were able to infer the underlying state from the current market price and act accordingly. In a related paper, Friedman, Harrison, and Salmon (1984) observed that, given the existence of a futures market, the RE model outperformed the PI model in multiperiod, single-commodity markets as well. One source of potential misinterpretation, however, comes from the fact that, although one-half of the traders of each type were informed of the true state at the beginning of each period in Plott and Sunder (1982) and one-third of the traders of each type in Friedman, Harrison, and Salmon (1984), the same traders were informed in almost every period. In a more recent paper, Plott and Sunder (1983) constructed markets where all traders received partial information (i.e., given possible states X, Y, and Z, a trader's private information would be either "not X" or "not Y" if the state were Z), yet the combinations of traders receiving a certain message in any period were determined randomly.

This paper examines the Tokyo Round negotiation (1973-1979) under various cooperative game solution concepts. Out of the many tariff-cutting proposals in the Tokyo Round, the Swiss proposal was finally agreed upon by all major players. The choice of the Swiss proposal suggested that egalitarian considerations are important for this type of cooperative game. Since the Kalai-Smorodinsky solution, the Shapley value (modified) and the nucleolus solution have this egalitarian property, they all predict the outcome of the negotiation very well. THIS paper investigates the types of cooperative game solution concepts that best describe the tariff reduction negotiations in the Tokyo Round (1973-1979). Since the objective is to infer the type of game that can closely model the actual negotiation, the best game concept for our purposes is the one which predicts the actual outcome (the Swiss tariff-cutting formula) most successfully under periodic resurgence of protectionist ideology as occurred during the Tokyo Round negotiations. There are various cooperative solution concepts: Some emphasize the egalitarian nature of the outcome, some the efficiency nature of the outcome and some emphasize both aspects (see section II). The present paper concludes that when the change in a country's trade balance becomes an important consideration for negotiators, the egalitarian aspect emerges as the most important cooperative game solution concepts. An interesting finding of the present paper is the bargaining powers of the four major players (United States, EEC, Japan, and Canada) were roughly equal. As shall be explained, this is because each of these players was equally destructive to the Tokyo Round negotiation. There are currently four simulation studies on the impacts of the Tokyo Round (Deardorff and Stern (1983), Baldwin et al. (1980), Brown and Whalley (1980), and Cline et al. (1978)). The present paper uses the simulation studies by Cline et al. for our analysis for three reasons: (1) The Brookings study is based on Keynesian short-run impacts of the Tokyo Round, which seems to fit the objectives of negotiators; (2) it represents the most complete welfare analysis of various proposals; and (3) it was the most influential study done around that time; perhaps it can reflect the conventional wisdom of negotiators in that period.' The present paper is organized as follows: Section I discusses the basic assumptions. Section II examines various game solution schemes or concepts. Section III presents the case of the five major proposals. Section IV extends the result of section III to twelve proposals. Section V discusses the robustness of various assumptions followed by a conclusion in section VI.

A bstractUsing the trucking industry as an example, this paper extends the empirical research on multiproduct firms to analyze the efficient numbers of firms in the industry. The paper first considers the issue of size related economies and argues that although there are limited economies of scale, economies of scope appear to be sufficiently strong to explain the observed large number of mergers and acquisitions that have occurred in the industry. The paper then considers the efficient number of firms in the industry. Using the concept of ray-average cost, it shows that for the output combinations observed in the industry, the efficient number of firms required to serve industry output is quite large.

Journal Article Reward Structures in a Planned Economy: Some Difficulties Get access H. S. E. Gravelle H. S. E. Gravelle Queen Mary College, University of London Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 100, Issue 1, February 1985, Pages 271–278, https://doi.org/10.2307/1885746 Published: 01 February 1985