London School of Economics and Political Science

About: London School of Economics and Political Science is a education organization based out in London, United Kingdom. It is known for research contribution in the topics: Population & Politics. The organization has 8759 authors who have published 35017 publications receiving 1436302 citations.

Non-Cooperative Bargaining Theory: An Introduction

Abstract: The paper provides an informal introduction to some of the main themes of the recent literature on "non-cooperative" or "sequential" bargaining models. It focuses in particular on the relationship between the new approach and the traditional axiomatic approach exemplified by "Nash bargaining theory". It illustrates the new insights offered by the non-cooperative approach, by reference to a detailed analysis of the manner in which the presence of an outside option available to one of the parties will affect the negotiated outcome. Finally, the difficulties which arise in extending this analysis to two-person bargaining with incomplete information, and to n-person bargaining, are discussed. This is a revised version of the fourth Review of Economic Studies Lecture presented in April 1985 at the joint meeting of the Association of University Teachers of Economics and the Royal Economic Society held in Oxford. The choice of lecturer is made by a panel whose members are currently Professors Hahn, Mirrlees and Nobay, and the paper is refereed in the usual way. This paper aims to provide an informal and elementary introduction to an approach to bargaining which has received a great deal of attention over the past few years. The approach involves writing down some particular sequence of moves (offers and replies) to be made over time in the course of negotiations, and then looking for a non-cooperative equilibrium in the game thus specified (in practice, a perfect equilibrium, or in games of incomplete information, a sequential equilibrium). While the approach appears at first sight to be very different in spirit from the traditional axiomatic approach-in which a bargaining solution is specified by appealing to a number of general requirements which are deemed appropriate on the basis of some a priori considerations-the two approaches are in fact complementary. While the

Economic analysis for ecosystem service assessments

Abstract: The paper seeks to contribute to the expanding literature on ecosystem service assessment by considering its integration with economic analyses of such services. Focussing upon analyses for future orientated policy and decision making, we initially consider a single period during which ecological stocks are maintained at sustainable levels. The flow of ecosystems services and their contribution to welfare bearing goods is considered and methods for valuing resultant benefits are reviewed and illustrated via a case study of land use change. We then broaden our time horizon to discuss the treatment of future costs and benefits. Finally we relax our sustainability assumption and consider economic approaches to the incorporation of depleting ecological assets with a particular focus upon stocks which exhibit thresholds below which restoration is compromised.

The Risk Game and the Blame Game

Abstract: Economists Say There Is No Such Thing As A Free Lunch. The burgeoning ‘risk industry’ – no doubt set for further expansion after the terrorist attacks on US heartlands in 2001 – says there is no such thing as a risk-free lunch. Anthropologists say there is no such thing as a blame-free risk. And political scientists know blame is central to politics. The growth of the ‘risk industry’, the associated explosion in discussion of safety and hazard issues and the search for better ways of assessing and managing risk, has been much commented on. The BSE issue, highlighted in the UK by the blockbuster sixteen-volume Phillips report in 2000, is taken by Ulrich Beck as emblematic of what he claims to be a ‘risk society’. Michael Power says an age of ‘new risk management’ has dawned in corporate governance, sparked by high-profile business failures and accidents. Much academic and media attention has been paid to risks from food, electric power lines, mobile phones, dangerous people, even dangerous dogs (ostensibly a rather traditional risk, but one that in recent years has been the subject of draconian new regulatory regimes in several countries, including France, Spain and Germany). Such developments in the ‘risk game’ have been described by best-selling sociologists like Beck and Giddens (who make much of their world-historical significance in an era of ‘high modernity’) and by social psychologists interested in what shapes risk perception or ‘amplification’.

Risk and Return in an Equilibrium Apt: Application of a New Test Methodology

Abstract: We use an asymptotic principal Components technique to estimate pervasive factors influencing asset returns and to test the restrictions imposed by static and intertemporal equilibrium versions of the arbitrage pricing theory (APT) on a multivariate regression model. The empirical techniques allow for fairly arbitrary time variation in risk premiums. We find that the APT provides a better description of the expected returns on assets than the capital asset pricing model (CAPM). However, some statistically reliable mipricing of assets by the APT remains.