Multilateral negotiations over climate change policy

Negotiations in the real world have many features which tend to be ignored in policy modeling. They are often multilateral, involving many negotiating parties with preferences over outcomes that can differ substantially. They are also often multidimensional, in the sense that several policies are negotiated over simultaneously. Trade negotiations are a prime example, as are negotiations over environmental policies to abate carbon dioxide (CO₂). We demonstrate how one can formally model this type of negotiation process. We use a policy-oriented computable general equilibrium model to generate preference functions which are then used in a formal multilateral bargaining game. The case is to study climate change policy, but the main contribution is to demonstrate how one can integrate formal economic models of the impacts of policies with formal bargaining models of the negotiations over those policies.     

Motorist use of safety equipment: Expected benefits or risk incompetence?

Seat belts, child safety seats, and motorcycle helmets are not used all the time by all drivers, parents, or riders when they travel. Since the safety advantages of these types of equipment are well established, nonuse could be due to risk incompetence. This article starts instead with risk competence to see to what extent use can be attributed to the net benefits expected by individual motorists. Logit analysis of microdata from the Nationwide Personal Transportation Study shows that use is more likely with larger perceived net benefits for all three types of motorists. They are therefore risk competent enough to respond to changes in net benefits in ways and degrees that are qualitatively and ordinally correct.This research was supported in part by the Urban Institute and the Federal Highway Administration under contract DTFH-61-85-C-00107. Ted Miller, Urban Institute, was instrumental in facilitating the work, and Charles Calhoun, Urban Institute, ran the logits for child safety-seat use and motorcycle helmet use at the Bureau of Census. My colleagues Dan Black and John Garen helped estimate wages. For comments I am grateful to Alan Dillingham, John Graham, Richard Jensen, Kip Viscusi, an anonymous referee, and participants in the Applied Microeconomics Workshop at the University of Kentucky. Appreciation aside, none of the people or organizations mentioned are responsible for the results and views in this article. That responsibility falls on the author.