ECONOMIC DETERMINANTS OF THE TIMING OF PREFERENTIAL TRADE AGREEMENT FORMATIONS AND ENLARGEMENTS

Preferential trade agreements (PTAs) have proliferated over the past 60 years. While a small number of recent studies have examined empirically the economic determinants of the likelihood of a pair of countries having a PTA, this study explains empirically the timing of all PTA formations and enlargements from 1950 through 2006 using duration analysis. Our main and novel goal is to predict (in‐ and out‐of‐sample) a substantive share of these 1,560 PTA events using a parsimonious model with mainly economic variables, taking selection dynamics into account. Our analysis reveals that we can predict correctly in‐sample the actual year of entry into force for 26% of the 1,560 bilateral PTA formations/enlargements in the period 1950–2006 among 10,518 pairings of 146 countries using only a few economic and political variables. Moreover, we can predict correctly in‐sample 57% of these PTA events within a 10‐year window leading up to the event using this model. The model also performs well out‐of‐sample for the near term (82%), but not if the out‐of‐sample period is very long. We conclude with an evaluation of the model's ability to predict the timing of the North American Free Trade Agreement, the European Union's formation and enlargements, and the model's ten most likely post‐2006 PTA events. (JEL F14, F15)     

Negotiating the Unknown: The Role of Uncertainty in Social Exchange

This article documents the role of uncertainty in social exchange. Specifically, it reviews how social exchange theorists incorporate uncertainty when explaining psychological processes and social behaviors. After identifying and examining the structural roots of uncertainty, the article addresses how uncertainty affects actor behavior and attitude formation, from curbing power use to promoting the development of more committed, trusting and cohesive exchange partnerships. By assessing the consequences of uncertainty and risk for social exchange, this article contributes to sociological knowledge about the nature and form of relationships in an uncertain world.     

The firm and managerial misdirection of worker effort

This article models how a level of management between workers and the owner of a firm can affect the owner's decision either to internally integrate a function to make inputs or to contract out to buy inputs from an independent supplier. In the model, a self-serving manager can direct her workers to perform activities that serve her interests rather than those of the firm. This reduces the effectiveness of worker performance incentives intended to promote efforts that benefit the owner. Incentives may have to be increased to a level such that the owner prefers to buy inputs rather than make them internally.     

Market stability: backward-bending supply in a laboratory experimental market. 1999 Presidential address Western Economic Association

This article investigates the stability properties of markets with backward-bending supply curves. Parameters are chosen so that the two classic models of price dynamics, the Walrasian model and the Marshallian model, give opposite predictions. The results are (1) market instability can be observed, and (2) in the backward-bending case stability is captured by the Walrasian model and the Marshallian model of dynamics is rejected. Previous experiments have demonstrated that the Marshallian model works in the forward-falling case. Thus, which theory of dynamics is appropriate for a market depends on the underlying reasons for demand and supply shapes.     

Compensation and Community Corrosion: Perceived Inequalities,Social Comparisons,and Competition Following the Deepwater Horizon Oil Spill

After disasters, victim compensation programs are typically associated with individual healing and community rebuilding. But postdisaster compensation systems also have the potential to introduce confusion and competition, further fraying the social fabric of communities affected by trauma. To assess the perceived effects of disaster compensation processes on community social relations, as well as the mechanisms that underlie such effects, we turn to the case of the Deepwater Horizon oil spill, after which BP implemented one of the largest compensation systems in U.S. history. Using data from interviews of residents of four Gulf Coast communities, we examine the extent to which this claims process hindered efforts to recover from this disaster. Our data suggest that while BP money helped some residents in the Gulf during a difficult economic time, many interviewees perceived uncertainty, randomness, and unevenness in the compensation process, which led to negative social comparisons and competition among community members. Because of this animosity, we argue that BP's compensation system was a disruptive mechanism that contributed to community corrosion and introduced another source of psychological stress into already‐traumatized areas.     

Balance of care—a user's view of a new approach to joint strategic planning

Planning for care of the Elderly has to face the problems of an increasing elderly population; a wide range of alternative ways of caring for them (at widely differing costs); the fact that services are provided by several different organisations all facing difficult financial constraints; a range of professional opinion about the desirability or otherwise of alternative patterns of care and use of resources; a lack of data on how care is at present distributed; the lack of a structure for organising such data as are available; and the lack of an appropriate computer-based model for manipulating the large number of data elements necessary to describe and help to evaluate alternative plans for the future. The Balance of Care approach to the Joint Strategic Planning of Health and Social Services provision for the Elderly, is being used in pilot applications in two Areas in the UK. Its contribution to the solution of the problems outlined above is described by authors from the two Areas. The approach and the underlying model can be extended to strategic planning for other client groups requiring non-acute care.