ASSET 2000 Euroconference

Lisbon, November 3 and 4, 2000

Faculdade de EconomiaUniversidade Nova de Lisboa

Travessa Estêvão Pinto (Campolide)1099-032 Lisboa

Portugal

Sponsored by

European CommissionFundação Calouste Gulbenkian

Banco de PortugalFundação Luso-Americana para o Desenvolvimento

Caixa Geral de Depósitos

Conference Programme

Friday, November 3, 2000

Time Event Place

8:00 – 9:00 Registration Welcome Desk9:00 – 9:15 Opening Session Amphitheatre 2249:15 – 11:00 Parallel Sessions:

Applied Econometrics Room 241Finance I Room 217Game Theory I Room 219Growth I Room 215Industrial Organization I Room 221Industrial Organization V Room 223Resource Economics I Room 209

11:00 – 11:30 Coffee Break Main Lobby11:30 – 13:00 Panel: Post Graduate Education in Economics in Europe Amphitheatre 22413:00 – 14:30 Lunch Faculty Restaurant14:30 – 15:30 ASSET Lecture: Xavier Sala-I-Martin Amphitheatre 224

The Empirical Determinants of Growth15:30 – 16:00 Coffee Break Main Lobby16:00 – 17:45 Parallel Sessions:

Econometric Theory Room 219General Equilibrium Room 209Industrial Organization II Room 221Labour Economics I Room 223Macro Room 215Mechanism Design Room 217Political Economy Room 241

18:15 -- Reception Ventura Terra Palace

Saturday, November 4, 2000

Time Event Place

9:00 – 10:00 PARETO Lecture: Ehud Kalai Amphitheatre 224Private Information in Large Games.

10:00 – 10:30 Coffee Break Main Lobby10:30 – 12:15 Parallel Sessions:

Financial Markets Room 219Growth II Room 241Social Choice I Room 209Industrial Organization III Room 217Labour Economics II Room 221Monetary Economics I Room 215Resource Economics II Room 223

12:15 – 14:00 Lunch Faculty Restaurant14:00 – 15:30 Panel: Water Management in Southern Europe Amphitheatre 22415:30 – 16:00 Coffee Break Main Lobby16:00 – 17:45 Parallel Sessions:

Finance II Room 241Game Theory II Room 223Social Choice II Room 209Industrial Organization IV Room 217International Economics Room 215Monetary Economics II Room 221Health Economics Room 219

20:00 -- Dinner Ventura Terra Palace

Parallel Sessions

Friday, November 3, 2000, 9:15 – 11:00

Applied Econometrics (CHAIR: Sakellaris, Plutarchos)

Agundez-Garcia, Ana Universidad de Extremadura (SPAIN) Fiscal Revenue Decentralization andand University of York (UK) Regional Economic Growth

Picci, Lucio Universita' di Bologna Institution Building and EconomicActivity

Lamorgese, Andrea R. Ente Einaudi (Rome) and ECARES The geography of intercity risk-sharing- Universite Libre de Bruxelles

Sakellaris, Plutarchos University of Maryland and Patterns of Plant AdjustmentUniversity of Iioaninna

Finance I (CHAIR: Antão, Paula)

Ebell, Monique Universitat Pompeu Fabra Why are Asset Returns more VolatileDuring Recessions? ATheoreticalExplanation

Muermann, Alexander Financial Markets Group,l Pricing Catastrophe InsuranceLondon School of Economics Derivatives

Antão, Paula Universidade Nova de Lisboa Market Illiquidity and the Bid-AskSpread of Derivatives

Game Theory I (CHAIR: Moreno, Emma)

Revilla, Pablo University of Alicante Strategy-Proofness and the CoalitionFormation Problem

Papai, Szilvia Universidade Nova de Lisboa Unique Stability in Simple CoalitionFormation Games

Moreno, Emma University of Salamanca Non-Manipulability in Walrasian CostGames

Growth I (CHAIR: Morales, Fuensanta)

Moro-Egido, Ana I. University of Alicante Existence of an Invariant Distributionof Income

Jensen, Martin Kaae University of Copenhagen Competitive Balanced GrowthEquilibria

Kollintzas, Tryphon Athens University of Economics and Rent seeking, corruption and growth:Business, CEPR and IMOP A simple model

Morales, Fuensanta Universitat Autonoma de Barcelona Research Policy and EndogenousGrowth

Industrial Organization I (CHAIR: Peitz, Martin)

Motta, Massimo European University Institute Buyers' coordination and entry

Hoernig, Steffen Universidade Nova de Lisboa Existence and Comparative Statics inHeterogeneous Cournot

Nocke, Volker Nuffield College, University of Oxford Market Size and Firm Turnover

Peitz, Martin Universidad de Alicante On price competition withHeterogeneous consumers

Industrial Organization V (CHAIR: Ellman, Mathew)

Casado-Izaga, F. Javier Universidad del País Vasco Should owners of firms delegate long-run decisions?

Auriol, Emmanuelle University of Toulouse Incentives Hierarchies

López-Cuñat, Javier M. University of Alicante Adverse selection and managerialincentives

Ellman, Matthew Universitat Pompeu Fabra Employment versus Outsourcing: aContractual Theory of the Firm

Resource Economics I (CHAIR: Alpay, Savas)

Brasão, Ana Universidade Nova de Lisboa A Coalition Approach to theManagement of High Seas Fisheries inthe Presence of Externalities

Cunha-e-Sá, Maria Ant. Universidade Nova de Lisboa Experimentation with Accumulation

Alpay, Savas Bilkent University International Competitiveness andEnvironmental Regulation

Friday, November 3, 2000, 16:00 – 17:45

Econometric Theory (CHAIR: Fernandez-Macho, Javier)

Vera Hernández, Ángel Marcos Universitat Autonoma de Barcelona A Semi-Nonparametric Estimator forCounts with an Endogenous DummyVariable

Archontakis, Fragiskos European University Institute Wald Tests on Hypotheses forIntegrated Processes

Ferreira Machado, José Universidade Nova de Lisboa Quantile Regression Analysis ofTransition Data

Fernandez-Macho, Javier University of the Basque Country Cyclical common factors inCointegrated systems

General Equilibrium (CHAIR: Zenginobuz, Unal)

Villar, Antonio University of Alicante On the Efficiency of MarketEquilibrium in Production Economies

Alcantud, J. C. R. University of Salamanca On the representability of consumer'sbehavior

Andre, Viviane European University Institute Liberalization of the Frenchagricultural sector following the CAPreforms: A welfare assessment in ageneral equilibrium framework

Zenginobuz, Unal Bogazici University Private Provision of Public Goods,Non-Neutrality of Taxes, CrowdingOut Effects and Welfare Analysis

Industrial Organization II (CHAIR: Sabater Grande, Gerardo)

Garella, Paolo Universita di Bologna Advertising and Prices as Signals ofQuality in a Regime of Price Rivalry

Fabra, Natalia European University Institute Collusive Behaviour with CapacityConstraints

Sabater Grande, Gerardo Universitat Jaume I Product Design Announcement andthe Stability of Collusion

Labour Economics I (CHAIR: Spadaro, Amedeo)

Petrakis, Emmanuel University of Crete The Political Economy of the NationalMinimum Wage Institution

Ceroni, Carlotta Berti University of Bologna Compulsory schooling laws and thecure against child labor

Fugazza, Marco European University Institute Search Bonuses: An alternative toDeclining Unemployment Benefits?

Spadaro, Amedeo Delta Paris, Redistribution and Labour SupplyUniversitat de les Illes Balears Incentives: A Simple Application of

the Optimal Tax Theory

Macro (CHAIR: Lebre de Freitas, Miguel)

Modesto, Leonor Universidade Católica Portuguesa Unions, Increasing Returns andEndogenous Fluctuations

Gallegati, Marco University of Ancona Business Cycles Fluctuations inEurope (1960-1998)

Sideris, Dimitrios Bank of Greece and University of Crete Testing Long-run Purchasing PowerParity under Exchange Rate Targeting

Lebre de Freitas, Miguel Universidade de Aveiro Challenging an established vehicle: theeuro and the dollar

Mechanism Design (CHAIR: Kast, Robert)

Sanchez, M.Carmen Universidad de Murcia A KKM-Result and an Application forBinary and Non-Binary ChoiceFunctions

Sanver, Ipek Bogazici University Tradeproofness and the MatchingMarket

Luchini, Stéphane Université de la Méditerranée Number of preferred attributes,practices and heterogeneity

Kast, Robert CNRS Welfare economics and Political Risk:A Public Decision Procedure

Political Economy (CHAIR: Falconieri, Sonia)

Aragones, Enriqueta Universitat Pompeu Fabra Campaign Rhetoric: a model ofreputation

Hauk, Esther Univeristat Pompeu Fabra Economic Integration and Corruption:"The Corrupt Soul of the EuropeanUnion”

Rosselló, Joan Universitat Illes Balears Non-Institutional Federalism

Falconieri, Sonia University of Amsterdam and The Impact of Lobbying on theEnte Einaudi Allocation of Political Authority

Saturday, November 4, 2000, 10:30 – 12:15

Financial Markets (CHAIR: Páscoa, Mário)

Carceles Poveda, Eva Universitat Pompeu Fabra Asset Prices and Business CyclesUnder Market Incompleteness

Gaffeo, Edoardo University of Udine Financial Market Imperfections,Heterogeneity and Growth

Stahn, Hubert University of Strasburg Sunspots and Incomplete FinancialMarkets: A Numeraire Asset Approach

Páscoa, Mário Universidade Nova de Lisboa Arbitrage, Equilibrium and Collateral

Growth II (CHAIR: Romero, Laura)

Brito, Paulo Universidade Técnica de Lisboa Spatial heterogeneity and growth

Alvarez-Pelaez, Maria Jose Universidad de Malaga y Too little or too much R&D?Universidad de Alicante

Romero, Laura Universitat Autónoma de Barcelona Education Financing and IncomeInequality when Ability is Inherited

Social Choice I (CHAIR: Koray, Semih)

Bevia, Carmen Universitat Autonoma de Barcelona Self-Selection Consistent choices

Ahmet, Alkan Sabanci University Discrete Revealed Preference andLattice of Stable MultipartnerMatchings

Koray, Semih Bilkent University A Characterization of OligarchicChoice Rules

Industrial Organization III (CHAIR: Santos Ferreira, Rodolphe dos)

Pereira, Pedro University Complutense de Madrid Electronic Commerce, ConsumerSearch and Cost Reduction

Camacho-Cuena, Eva Universitat Jaume I Optimal Retailing in a VerticallyDifferentiated Market

Santos Ferreira, Rodolphe dos University of Strasburg Competition for market shares or formarket

Labour Economics II (CHAIR: Alvarez, Begoña)

Vuri, Daniela European University Institute Fertility and Divorce

Messina-Granovsky, Julian European University Institute The Role of Product MarketRegulations in the Processof Structural Change

Alvarez, Begoña Universidade de Vigo Can we identify fraudulent behaviour?An application to sickness absencesin Spain

Monetary Economics I (CHAIR: Boinet, Virginie)

White, Lucy Universite de Toulouse Inflation Uncertainty and the WageBargain

Pereira Adão, Bernardino Bank of Portugal Gaps and Triangles

Boinet, Virginie CEDERS-Université d'Aix-Marseille Contagion and Coordination in amodel of Currency Crises

Resource Economics II (CHAIR: Pintassilgo, Pedro)

Nunes, Paulo Free University of Amsterdam Measuring Warm Glow in ContingentValuation

Murillas, Arantza Universidad del País Vasco Sole Ownership and Common Propertyunder Management Flexibility:Optimal Exploitation and Regulation

Roseta Palma, Catarina Universidade Nova de Lisboa Joint Quantity/Quality Management ofGroundwater

Pintassilgo, Pedro Universidade Nova de Lisboa The Stability Problem in theManagement of Renewable Resources

Saturday, November 4, 2000, 16:00 – 17:45

Finance II (CHAIR: Fabbri, Daniela)

Cespa, Giovanni Universitat Pompeu Fabra Inventory Effects and TradingHorizons

Cabral, Ines European University Institute A herding approach to merger waves

Sciubba, Emanuela Erasmus University Relative Performance and Herding inFinancial Markets

Fabbri, Daniela Universitat Pompeu Fabra The Legal Enforcement of CreditContracts and the Level of Investment

Game Theory II (CHAIR: Haeringer, Guillaume)

Giamarchi, Marie-Paule GREQAM-Université de la Tournaments and capacity signals withMediterranée heterogeneous agents

Asan, Goksel Istanbul Bilgi University Coalition Structural Games and theVoluntary Provision of Public Goods

Uriarte, Jose Ramon University of the Basque Country Social Evolution

Haeringer, Guillaume Universitat Autonoma de Barcelona Stable Hedonic Cooperation Structures

Social Choice II (CHAIR: Barberá, Salvador)

Kara, Ayca Bogazici University Selecting A Social Choice Rule – AnExploratory Panel Study

Rodríguez, Carmelo Universitat Autónoma de Barcelona Candidate Stability and MultivaluedVoting Procedures

Barberá, Salvador Universitat Autónoma de Barcelona Choosing how to Choose: Self-StableMajority Rules

Industrial Organization IV (CHAIR: Claici, Adina Oana)

Sandonís, Joel Universidad del País Vasco To merge or to license: implicationsfor competition policy

Mumcu-Serdar, Ayse Bogazici University Firm Specific Skills, Wage Bargainingand Efficiency

Corchon, Luis University Carlos III of Madrid To Merge or not to Merge

Claici, Adina Oana Universitat Autónoma de Barcelona Privatization Strategies and the Accessto the International Debt Market

International Economics (CHAIR: Antunes, António)

Dimelis, Sophia Athens University of Economics Productivity advantages and spillovers:The role of FDI and financialConstraint

Cabral, Celia Universidade Nova de Lisboa The Role of Commitment and theChoice of Trade

García-Gallego, Aurora Universitat Jaume I International Mergers vs. ForeignDirect Investment

Antunes, António Universidade Nova de Lisboa Trade, Imported Technology andGrowth: Ideas for a Small Country

Monetary Economics II (CHAIR: Sessa, Luca)

Pappa, Paraskevi Universitat Pompeu Fabra Optimal Monetary Policy in a Two-Country World

Cuadras-Morató, Xavier Universitat Pompeu Fabra Fiat Money, Intrinsic Properties andGovernment Transaction

Sessa, Luca Universitat Pompeu Fabra Can Money Help Generate LocalIndeterminacy?

Health Economics (CHAIR: Machado, Matilde)

Street, Andrew University of York Econometric issues in relativeperformance evaluation of publicorganisations: a case study of theEnglish hospital sector

Xavier, Ana University of York Waiting times for elective surgery:designing the optimal contract forhospital specialists

Mestre-Ferrandiz, Jorge Universitat Autónoma de Barcelona The Effect of Implementing aReference Price System in thePharmaceutical Industry

Machado, Matilde Univ. Carlos III de Madrid Measuring the Relative Performance ofProviders of a Health Service

Panels

Friday, November 3, 2000, 11:30 – 13:00

Post Graduate Education in Economics in Europe

José António Girão (Chair) Universidade Nova de Lisboa

Salvador Barberá Universitat Autónoma de Barcelona

Alain Kirman Universities of Aix-Marseille II and III

Tryphon Kollintzas Athens University of Economics and Business,CEPR and IMOP

Diogo Lucena Universidade Nova de Lisboa

Saturday, November 4, 2000, 14:00 – 15:30

Water Management in Southern Europe

Maria Antonieta Cunha-e-Sá (Chair) Universidade Nova de Lisboa

James Boyd Resources for the Future

Santiago Rubio University of Valencia

Pedro Serra Portuguese Water Regulator Institute

Anastasios Xepapadeas University of Crete

Localization

Acknowledgements

We gratefully acknowledge financial support by our sponsors (see first page).