We give necessary conditions for a neutral social choice function to be partially implementable by means of a strong equilibrium (i.e., implementable by cooperative agents): the veto power of the various coalitions should be maximally distributed. If moreover the social choice function is veto-anonymous, then the veto power of a coalition must be (roughly) proportional to its size: x per cent of the agents have the power to veto x per cent of the candidates. The procedure of "voting by successive veto" is an example of a neutral and (nearly) veto-anonymous social choice function which is implementable.

Recent economic literature has given a great deal of attention to the behavior of the firm under a regulatory constraint. Such efforts include theoretical extensions of the classic article by Averich and Johnson (1962) by Kennedy (1977), as well as empirical tests of the overcapitalization hypothesis by Leland (1974), Smithson (1978) and Spann (1974). In addition, there have been notable attempts to provide a general theory of regulation by Stigler (1971) and Peltzman (1976). Against this background, surprisingly little attention has been paid to the effect of regulation on the compensation of chief executive officers. The effect of regulation on executive rewards strikes at the heart of why regulated firms appear to behave differently than their less regulated counterparts. The only explicit attempts to relate executive compensation to the presence of regulation appear to be the work of Smyth, Boyes and Peseau (1975) and Ciscel (1977). The apparent oversight of this issue is perhaps best explained by the persistence of the controversy over the nature of the objective function of corporate decision makers introduced as the maximization' hypothesis by Baumol (1967). For the last two decades, the debate over whether corporate decision makers maximize sales or maximize profits has been couched in either-or terms. Proponents of each side of the debate, like Smyth, Boyes and Peseau (1975) and Ciscel (1974) on the managerialist side, and Lewellen and Huntsman (1970) and Masson (1971) on the neoclassical side, have produced evidence for their respective positions. Ciscel and Carroll ( 1980) provide an econometric resolution of the conflict, pointing out the compatibility of the data with both hypotheses, given a proper specification of the compensation-performance equations. Consideration of the impact of regulation on executive rewards has significance for understanding the different rewards in the regulated sectors and it illuminates the implicit incentives for executive behavior in regulated and unregulated firms. Maximum profits or optimal sales can never be directly observed. All that can be measured is whether or not the pattern of executive compensation is consistent with such maximization objectives. This aspect of economic analysis is particularly important when gauging the effect of regulation on executive pay. The impact of the absence of regulation on compensation can be contrasted to two alternatives: regulation establishes maximum prices as is the case in utilities, while regulation prescribed minimum prices as was the case in the transportation sector (see Jordan, 1972). Executive compensation reflects not only incentive changes brought about by the existence of regulation, but also the form regulation takes.

A recent survey on models of agricultural supply equations listed over 500 studies in which variants of Nerlove's adaptive expectations model were employed.' One might naively assume that the scientific evidence overwhelmingly favored the adaptive expectations hypothesis, but this inference would not be warranted. In particular, there have been very few studies which have even attempted to estimate a expectations version of the traditional agricultural supply models and none that have explicitly tested the expectations hypothesis.2 In this paper we estimate a model of agricultural supply and demand for the chicken broiler industry under the maintained assumption of expectations in the sense of Muth (1961) and provide a series of tests of the model specification. We find that, in this case, the hypothesis of Muth rationality receives strong support. In recent years there has been increasing interest in models in which economic actors are assumed to form expectations of variables rationally. For the most part, empirical applications of the expectations hypothesis have employed single-equation econometric methods. These methods have permitted consistent estimation of equations under the assumption of the expectations hypothesis but do not allow for any explicit testing of the maintained hypothesis of rationality. This paper presents estimates of a simultaneous equation model of the chicken broiler industry using maximum likelihood methods and provides a joint test of the expectations hypothesis and the model specification. Our econometric procedure is related to the recent theoretical work of Wallis (1980) and combines time series analysis with traditional econometric estimation techniques. Under the assumption of expectations, the model can be solved for the expected price as a function of the expected values of the exogenous variables. This function can then be substituted into the model leading to a specification which contains the original endogenous and exogenous variables plus the expected values of the exogenous variables. In general, following this substitution, the model will contain overidentifying restrictions. Time series analysis is utilized to generate the necessary forecasts of the exogenous variables. The complete system of equations is estimated by full-information maximum likelihood, and the constraints are tested by a log-likelihood ratio test. The overidentifying constraints arise in the model because the suppliers are assumed to act as if they know both the underlying structure of the model and the stochastic processes governing the exogenous variables, the two requirements of expectations. While the expected price enters only the supply equation of our model, it is necessary, in the econometric formulation, to specify the demand equation. The instrumental variable procedures of McCallum (1976) and Nelson (1975b) are single-equation methods and do not permit a test of the expectations hypothesis. By specifying the complete model, the additional structure imposed on the problem allows us to estimate the coefficients and test the implied restrictions. There has not been universal agreement that the expectations hypothesis is the best theoretical device to model rational behavior. According to Muth's original formulation, economic actors forecast endogenous variables according to the true reduced form equations of the model. DeCanio (1979) and Friedman (1979) have argued that the economic actors actually Received for publication August 24, 1981. Revision accepted for publication March 2, 1982. ' University of New Mexico and University of California, Davis, respectively. We wish to thank G. King, R. L. Huntzinger, R. Pope, and L. Wegge for advice on this project. A. Nelson and E. Shaw contributed useful research assistance. I The paper by Askari and Cummings (1977) provides references for these studies. 2 Huntzinger's (1979) paper is one of the first attempts at estimatitng a expectations model of agricultural supply.

This paper examines the relative importance of timing and persistence elements in explaining cyclical fluctuations in labour supply. Data from the natural experiment provided by World War II and cross-sectional data on American local labour markets, as well as aggregate time-series data are used in the empirical work. We find little evidence that timing effects play an important role in labour market dynamics. The evidence suggests that views emphasizing persistence are more accurate, and that previous employment tends to raise the probability of subsequent employment.

Nils H. Hakansson, To Pay or Not to Pay Dividend, The Journal of Finance, Vol. 37, No. 2, Papers and Proceedings of the Fortieth Annual Meeting of the American Finance Association, Washington, D.C., December 28-30, 1981 (May, 1982), pp. 415-428

This paper analyzes the impact, on both welfare and equilibrium prices, of changes in the financial market in a general equilibrium, two‐period context. Previous papers have focussed on the “securities effect,” tending to essentially ignore the equally important “endowment effect” that arises when market structure changes are implemented. Two forms of endowment neutrality and market structure changes which either preserve, expand, or shift allocational feasibility differentiate the main theorems, which are based on arbitrary preferences and beliefs and substantially extend and modify extant results; in particular, earlier statements identified with value conservation are sharply moderated. Very roughly, the paper yields the following implications for some of the more common changes in the market: nonsynergistic corporate spinoffs and the opening of option markets have, on balance, strongly positive welfare effects; nonsynergistic mergers tend to have strong negative welfare effects, while the welfare effects of alternative risky debt structures tend to be ambiguous. All of the preceding, however, may under plausible conditions be redistributive.