This paper considers a general version of the hold-up problem where n agents first make relation-specific investments and then must agree on some collective action. It is shown that first-best solutions exist under a variety of different assumptions about the nature of information asymmetries.

As a consequence of aggregation over markets, the observed quantity may be less than the quantity demanded and less than the quantity supplied. To deal with such situations, a new technique is proposed for estimating demand and supply curves and the extent of shortage and slack. The technique is applied to the consumption goods markets of Czechoslovakia, the German Democratic Republic, Hungary, Poland, and Yugoslavia. It is found that shortage, even corrected for a discouraged consumer effect, is seldom as great as slack.

Arguments in favour of self-enforced bans on advertising by professionals often rely on the stylized fact that advertising can communicate information about price but not about quality. This being the case, it is argued that allowing professionals to advertise runs the risk that firms will compete vigorously over price at the expense of the quality of their product. This paper shows that even if price can communicate no information directly about quality, it can do so indirectly because price will be a signal of quality. Because of this, allowing advertising is shown to improve consumer welfare.

Journal Article A Note on the Existence of Single Price Equilibrium Price Distributions in Sequential Search Models Get access William P. Rogerson William P. Rogerson Northwestern University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 54, Issue 2, April 1987, Pages 339–342, https://doi.org/10.2307/2297522 Published: 01 April 1987 Article history Received: 01 May 1986 Accepted: 01 November 1986 Published: 01 April 1987

A social choice procedure is developed for selecting an alternative from a finite set on the basis of paired-comparison voting. Ballot data are used to construct a lottery on the alternatives that is socially as preferred as every other lottery. The constructed lottery is then used to select a winner. An axiomatization of social preferences among lotteries that justifies the procedure is included. The procedure will always select a consensus majority alternative when one exists, and it will never select an alternative that is Pareto dominated by another alternative.

Journal Article A Note on Weak Separability Get access F. P. Murphy F. P. Murphy Trinity College, Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 48, Issue 4, October 1981, Pages 671–672, https://doi.org/10.2307/2297209 Published: 01 October 1981 Article history Received: 01 August 1980 Accepted: 01 July 1981 Published: 01 October 1981

Journal Article A Model of Short-Term Capital Movements, the Foreign Exchange Market and Official Intervention in the UK, 1963–1970 Get access John P. Hutton John P. Hutton University of York Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 1, February 1977, Pages 31–41, https://doi.org/10.2307/2296971 Published: 01 February 1977 Article history Received: 01 August 1974 Accepted: 01 February 1976 Published: 01 February 1977

Journal Article Comments on a Probabilistic Model of Social Choice Get access P. M. Rice P. M. Rice University of Georgia Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 1, February 1977, Pages 187–188, https://doi.org/10.2307/2296984 Published: 01 February 1977 Article history Received: 01 March 1974 Accepted: 01 December 1975 Published: 01 February 1977

Journal Article An Impossibility Theorem for Fixed Preferences: A Dictatorial Bergson-Samuelson Welfare Function Get access Robert P. Parks Robert P. Parks Washington University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 43, Issue 3, October 1976, Pages 447–450, https://doi.org/10.2307/2297221 Published: 01 October 1976 Article history Received: 01 April 1975 Accepted: 01 December 1975 Published: 01 October 1976

The purpose of a recent paper by Herbert Grubel and Peter Lloyd [5] was to examine the nature and magnitude of the bias introduced by the neglect of factor substitution between produced and primary inputs when calculating effective rates of protection (ERP). They concluded that the bias from neglecting substitution possibilities between produced and primary inputs is usually small. The purpose of this paper is to make three comments on their conclusions. Firstly, there is an error, or possibly a misprint, which can be misleading. Secondly, because Grubel and Lloyd restrict their calculations to a narrower range of parameter values than is empirically reasonable their results understate the magnitude of the bias which one might reasonably expect to encounter in empirically grounded calculations. Thirdly, Grubel and Lloyd conclude that the bias from neglecting substitution possibilities is usually small 3 without discussing criteria for determining when a bias becomes significant. It is shown here that the magnitude of the bias encountered when using empirically relevant data is very significant because the ranking of production processes by their calculated ERP can vary greatly with biased estimates. These comments have significant implications for the notion that the elasticity of substitution is not an important parameter in calculating the ERP.