On Ibn Ezra's Procedure and Shapley Value

We examine ibn Ezra's procedure (Rabinovitch 1973; O'Neill 1982) historically used to solve the Rights Arbitration problem in the general framework of bankruptcy problems. When the greatest claim is larger than or equal to the estate, the procedure is a maximal game (Aumann 2010). However, when the greatest claim is smaller than the estate, the axioms of efficiency (the whole estate is distributed) and satiation are difficult to satisfy simultaneously. We discuss both axioms to show that their importance and necessity are radically different. From then, for the part of the estate not covered by the greatest claim, we examine four possible procedures: the minimal overlap rule, Alcalde et al.…

Industrial organization with profit rate maximizing firms

We study the impact on industrial organization of the switching of objective function, from pure profit to profit rate maximization. The output level of firm is lower at optimum. This lead to a new conception of efficiency. Cases of no coordination are considered. In perfect competition, price signal disappears; factors remain paid at their marginal productivity, but modified. In imperfect competition, reaction functions may vanish even if collusion remains possible; limit of oligopoly remains perfect competition of profit rate; the paradox of Bertrand may remain; a new concept is studied: mixed duopoly, where firms can choose and change their objective.

L'impact des grands équipements sur la Bourgogne : le cas du T.G.V.

National audience

Profit Margin Ratio, Markup, Profit Margin Per Unit, Economic Profit, and Profitability as Objectives for the Firm: An Economic Point-of-View

We study five operational objectives for the firm: three marketing objectives (maximizing profit-margin ratio, maximizing markup, and maximizing profit-margin-per-unit), and two financial objective (maximizing economic profit (i.e., EVA) and maximizing profitability), as alternatives to the scholarly objective of maximizing profit. We prove that (i) Sales are lowest for profit-margin-per-unit, intermediate for profit-margin ratio and markup, and highest for profit maximization. Input consumption, including labor, is lower. Prices are in the reverse order. In terms of profit, profit-margin ratio, markup, and profit-margin-per-unit are necessarily less efficient than the classical profit maxi…

The Asynchronous Leontief Model

International audience; The traditional dynamic Leontief model is synchronous: every vertex acts simultaneously. A model with delays of action has been proposed, but it still remains synchronous. In this paper we propose an asynchronous version of the model that allows realistic computations. We fiurnish an algorithm and a program.

What is the Best Method of Matrix Adjustment? A Formal Answer by a Return to the World of Vectors

The principle of matrix adjustment methods consists into finding what is the matrix which is the closest to an initial matrix but with respect of the column and row sum totals of a second matrix. In order to help deciding which matrix-adjustment method is the better, the article returns to the simpler problem of vector adjustment then back to matrices. The information-lost minimization (biproportional methods and RAS) leads to a multiplicative form and generalize the linear model. On the other hand, the distance minimization which leads to an additive form tends to distort the data by giving a result asymptotically independent to the initial matrix. The result allows concluding non-ambiguou…

Justice et inégalités: un amendement à la théorie de John Rawls

National audience; On se demande si les principes de justice de Rawls ne sont pas exagérément inégalitaires, malgré leur côté "juste". On examine donc ce qu'il advient de l'optimum de Rawls, le maximin, quand de l'aversion pour l'inégalité" apparaît. Le maximin consiste à se placer sur un certain point de la courbe d'efficience, en admettant une certaine dose d'inégalité, pourvu que l'on donne le maximum possible aux plus défavorisés. On tient compte d'externalités en reprenant la notion d'envie sous la forme d'une aversion pour l'inégalité, essentiellement de la part des plus défavorisés. On ne peut plus raisonner sur la courbe frontière des rémunérations possibles et on démontre la validi…

Multi-Authored Manuscripts and Speedup in Academic Publishing

It is unfair to count a n-authored paper as one paper for each coauthor, i.e., as n papers: this is “feeding the multitude”. Sharing the credit among coauthors by percentages or by simply dividing by n is fairer but somewhat harsh. So, we propose to take into account the productivity gains of parallelization by introducing a team bonus function that multiplies the allocation thereby increasing the credit allocated to each coauthor.The degree of parallelization cannot be determined exogenously discipline by discipline. So, one may propose that each team of coauthors indicates how the labor was organized to produce the paper. Unfortunately, the coauthors may systematically bias their answers …

Beyond Viner: Smoothed Cost Curves and Co-Detetermination of Output and Production Capacity

We address two problems of traditional cost functions: the discontinuity caused by the production capacity (the marginal cost abruptly becomes infinite when production capacity is reached) and the production capacity is artificially exogenous. So, we introduce a smoothed form of marginal cost function. It progressively tends to infinity when it approaches to the production capacity. Then, we prove that it is perfectly possible to determine directly output, fixed costs and production capacity simultaneously, even if this could lead to a system of equations that is not so elementary to solve because it includes a Lambert function. We also show that the smoothed cost function prevails in both …

A propos des économies de marché

National audience

Computing Difficulties for Deriving Poverty Indices from Some Functional Forms of Lorenz Curves

We examine three families of classical one-parameter functional forms for estimating a Lorenz curve: the power form (Pareto, elementary form), the exponential form (Gupta, elementary form) and fractional form (Rohde). For the first time, we systematically study these functions not for their ability to be estimated but on the point of view of the possibility of deriving poverty indices, which implies first determining the headcount ratio (i.e., the percentage of poor). We show that computing difficulties have been largely underestimated. Two forms, the most simple ones, pose no problem: the elementary power and exponential forms. However, the Pareto functional form poses problem with a restr…

Understanding the shortcomings of commodity-based technology in input-output models: an economic-circuit approach

International audience; The Make-Use Model serves as a basis for most national accounting systems as the System of National Accounts (SNA) and is acknowledged as the most suitable model for interregional analysis. Two hypotheses are traditionally made featuring either industry-based technologies (IBT) or commodity-based technologies (CBT). While industry-based technologies can be easily interpreted in terms of a demand-driven economic circuit, it will be shown that: (1) commodity-based technologies cannot be interpreted as a demand-driven economic circuit because this involves computing the inverse of a matrix (the matrix of industry output proportions), which is either impossible or genera…

Revisiting Bicausative Matrices: The Swiss Cheese of Chaos

This paper returns to de Mesnard's paper of 2000, which has exposed the so-called method of bicausative matrices. This method was created to analyze the structural change between two matrices, as an improvement of the causative method of Jackson and al. (1990). In its 2000 paper, de Mesnard has shown that chaos affects the bicausative method: two solutions are found with a brutal switching between both. This new paper demonstrates that the chaos can be largely circumvented, is essentially localized in a small interval and is only a transitory effect between two non-chaotic "regimes", is not always observed, is limited to relatively small matrices.

Accessibility as a quantity signal in decentralized rationing and distribution schemes

Un marché dans lequel on supprime l'hypothèse de pôle distributeur central ne peut pas à priori fonctionner, parceque, dans la théorie traditionnelle, tous les biens sont supposés transiter par le centre, ce qui assure deux fonctions: la formation d'un prix unique et la distribution des biens. Nous allons examiner ce qui se passe quand on lève cette hypothèse:- en nous plaçant dans le cadre de la théorie du déséquilibre où le prix est donné. Nous renoncerons donc à la première fonction, mais nous n'étudierons que le cas des prix uniques.- en abandonnant l'hypothèse du pôle central. Nous enlèverons ainsi la seconde fonction. Nous proposerons alors un schéma de distribution décentralisé, dans…

Un professeur de l’université de Bourgogne rebat les données de l’épidémie

National audience

A True Extension of the Markov Inequality to Negative Random Variables

The Markov inequality is a classical nice result in statistics that serves to demonstrate other important results as the Chebyshev inequality and the weak law of large numbers, and that has useful applications in the real world, when the random variable is unspecified, to know an upper bound for the probability that an variable differs from its expectation. However, the Markov inequality has one main flaw: its validity is limited to nonnegative random variables. In the very short note, we propose an extension of the Markov inequality to any non specified random variable. This result is completely new.

A computational approach for the extended ibn Ezra problem: The Conditional Unanimity Rule

Réforme de la SNCF : « La mise en concurrence du transport de voyageurs est largement illusoire dans l’activité ferroviaire »

International audience

The paradox of endogenous poverty line in the poverty indices

february 23-25, 2007; When measuring poverty, the poverty line is considered to be relatively determined as a percentage of the median income or as a percentage of the average income so as to allow international comparisons. The poverty line relative to the median income may be described as endogenous in contrast with the poverty line relative to the average income which may be described as exogenous because it is independent of the normalized distribution of incomes. As the existing literature is focused on the properties of the indices but not on the respective interest of the endogenous and exogenous poverty lines, this paper compares the two definitions of the relative poverty. The Rela…

Interpretation of the RAS method : absorption and fabrication effects are incorrect.

The r and s vectors of the RAS method of updating matrices are presented often as corresponding to an absorption effect and a fabrication effect. Here, it is proved that these vectors are unidentified, so their interpretation in terms of fabrication and absorption effect is incorrect..

La dominance régionale et son imprécision : traitement dans le type général de structure

Les notions d'influence et de dominance ont pour champ d'existence les structures d'échange, pas nécessairement économiques. Elles visent à mettre en évidence, par delà l'interdépendance, les relations de dépendance existant entre les éléments d'une structure. En économie, leur intérêt est essentiellement d'être un instrument pour le décideur. Elles lui permettent d'orienter la Politique Economique qu'il doit mener (relance, planification, restructuration, etc...) grâce à la détection des sous-ensembles stratégiques"de la structure .

About the Ghosh Model: Clarifications

We examine the consistency of the Ghosh supply-d riven input-output model (SM) by respect to the traditional Leontief demand-drive n input-output model (LM); the variants considered are: primal and dual, quantity and value ; input prices are not considered. SM offers solutions of limited interest, being incapab le to separate quantities and prices or values and price indexes. Comparing the dual value SM to the primal of LM is wrong. Even if the agents are forced to buy inputs in SM, the interpre tation of SM as a centrally planned economy must be rejected but SM may serve for modeling interfirm relations or analyzing the structural interindustry change when the production function is not sp…

On the Marketization of the Academic Review Process

Pressure to change the academic reviewing system is growing. We discuss two groups of proposals for introducing market mechanisms. First, Prufer and Zetland (2009), based on Havrilesky (1975), create an auction system: manuscripts are submitted and auctioned to editors in "academic dollars", while citations earn credits for authors. Second, Fox and Petchey (2010), after Riyanto and Yetkiner (2002), create a "PubCred" currency, in which referees are paid and can then pay for their own submissions, while Aarssen (2008) and White and Ernest (2010) introduce hard cash remuneration for reviewers. These systems would adversely affect editors, referees, and authors alike, and would soon prove econ…

Is the French mobile phone cartel really a cartel?

International audience; France Telecom (FT), SFR and Bouygues Telecom (BT) have been fined by France's Conseil de la Concurrence (CC) for organizing a mobile phone cartel with stable market shares (one-half, one-third and one-sixth, respectively) and for directly exchanging commercial information. While not contesting the legal decision, it is argued here that the economic reasoning is flawed. (1) As the CC made much of the firms' stable market shares, we have first followed this line of reasoning by considering that the market shares are quotas under uniform costs. Even if there is a general incentive to form a monopolistic cartel, BT was too small for it to be worth its while to join it; it i…

Biproportional Method for Analysing Interindustry Dynamics: the case of France

Two elements are being presented in this paper: (1) A new and original method for analysing matrix dynamics, called the synthetical biproportional projector method (SBP), which can be used to project input–output tables and compare one with another. (2) Some results for France for the important period 1970–85. The paper starts with the observation that no systematic study of the change in the French productive structure as displayed In the input–output tables (tableaux entries-sorties in France) has ever been made. This is unfortunate, since a complete series of data is now available concerning a key period of the French economic evolution including the petroleum crisis, European integratio…

On Inverse Distance Weighting in Pollution Models

When evaluating the impact of pollution, measurements from remote stations are often weighted by the inverse of distance raised to some nonnegative power (IDW). This is derived from Shepard's method of spatial interpolation (1968). The paper discusses the arbitrary character of the exponent of distance and the problem of monitoring stations that are close to the reference point. From elementary laws of physics, it is determined which exponent of distance should be chosen (or its upper bound) depending on the form of pollution encountered, such as radiant pollution (including radioactivity and sound), air pollution (plumes, puffs, and motionless clouds by using the classical Gaussian model),…

Poverty Reduction: The Paradox of the Endogenous Poverty Line

When evaluating poverty, the relative poverty line may be considered as a percentage of the median income or it may be a percentage of the average income. It is proved that, with a poverty line relative to the median income, reducing poverty may become less costly in proportion to the total income as poverty increases (measured by the Sen, the Sen-Shorrocks-Thon or the Foster-Greer-Thorbecke poverty indexes) by passing from a Lorenz concentration curve to another curve associated with more poverty. This is obviously a paradox, although a largely overlooked one. However, it is shown that the paradox vanishes if the poverty line is relative to the average income. The demonstration is both exp…

Median vs. Mean in Poverty Alleviation

When evaluating poverty, the relative poverty line may be taken as a percentage of either normalized median or normalized mean income. It is proved that, for any family of non-intersecting Lorenz curves, when the poverty line is set relative to the normalized median income, reducing poverty become less costly in proportion to the total income when inequality is great and increasing; a counter-example proves that such a change may be associated with greater poverty. However, when the poverty line is set relative to the normalized mean income, the relative cost of poverty alleviation always increases with inequality and poverty, as expected. One concludes that the poverty line should be taken…

« La situation dans la région est aussi sévère qu’en Île-de-France »

National audience

Book review of: "Economic structure and maturity: collected papers in input-output modelling and applications"

International audience

Is the Ghosh model interesting?

International audience; The overall value of the Ghosh model is appraised. Its treatment of quantities and prices is scrutinized by examining the variant with data in quantities and prices, and the variant with data in value and price indexes. The methodology involves returning to the accounting equations and shows that: (i) the Ghosh model offers solutions of limited interest, being incapable of providing prices or price indexes separately from quantities; (ii) what is taken to be the equation of Ghosh's value model is actually that of Ghosh's physical model; (iii) the Ghosh model may serve for cost-push exercises, but the dual of the Leontief model performs the same task in a much simpler…

Forecast Output Coincidence and Biproportion: Two Criteria to Determine the Orientation of an Economy. Comparison for France (1980-1997)

International audience; The method of forecast output coincidence used to determine if sectors are demand-sided or supply-sided in an input-output framework mixes two effects, the structural effect (choosing between demand and supply side models) and the effect of an exogenous factor (final demand or added-value). The note recalls that another method is possible, the comparison of the stability of technical and allocation coefficients, generalized by the biproportional filter: if for a sector, after biproportional filtering, column coefficients are more stable than row coefficients, then this sector is declared as not supply-sided (but one cannot decide that it is demand-sided anyway), and …

Evaluation de la concurrence généralisée : un outil matriciel

Input-output matrices and structural analysis are applied to the analysis and forecast of consequences of offensive actions in the case of multiproduct multimarket large firms.

« Doubler le salaire des professeurs conduirait à revoir toute la grille de rémunération des fonctionnaires »

International audience

Face à la 2ème vague de covid-19, la stratégie d'austérité à l'hôpital et de contrainte sur la population est erronée

International audience

Les méthodes biproportionnelles, un outil de reconstitution ou de comparaison de tableaux de contingence

Un tableau de nombres dont on connaît le total de ses colonnes et lignes (ou « marges ») est appelé « tableau de contingence ». Un tel tableau se rencontre quand on étudie les échanges entre pays ou régions, les flux migratoires ou financiers, etc. Le premier problème qu’on étudie est la reconstitution du tableau quand on ne connaît que ses marges, mais pas les données du tableau elles-mêmes, sachant que celles-ci sont néanmoins proches de celles d’un autre tableau. C’est le cas par exemple quand on veut prévoir l’origine des échanges entre pays en connaissant seulement le total de ce qu’ils vont exporter et importer. Le deuxième problème étudié est l’évaluation de ce qui a changé entre deu…

Recension de : "Changement climatique, flux technologiques, financiers et commerciaux. Nouvelles directions d'analyse d'entrée-sortie"

National audience

A Note on Qualitative Input-Output Analysis

International audience; The paper discusses qualitative input—output methods. It is shown that information is lost. Because the binaiy relationship constructed by qualitative methods is not transitive, the model lacks economic consistency. Qualitative methods are tending to become more sophisticated, but some problems of economic interpretation are raised.

EVA(®) vs. ROE as strategic corporate goals. A microeconomic approach

International audience

Pollution in strategic multilateral exchange: taxing emissions or trading on permit markets?

We introduce polluting emissions in a sequential noncooperative oligopoly model of bilateral exchange. In one sector a leader and a follower use polluting technologies which create negative externalities on the payoffs of strategic traders who belong to the other sector. By modeling emissions as a negative externality, we show that the leader pollutes more (less) than the follower when strategies are substitutes (complements). Then, we consider the implementation of public policies to control the levels of emissions, namely two taxation mechanisms and a permit market. We study the effects of these public policies. Moreover, we determine the conditions under which these public policies can i…

Je suis professeur et mes étudiants à distance deviennent des "zoombies"

International audience

Le paradoxe du seuil de pauvreté endogène dans les indices de pauvreté

Unicity of biproportion

International audience; The biproportion of S on margins of M is called the intern composition law, K: (S,M) -> X = K(S,M) / X = A S B. A and B are diagonal matrices, algorithmically computed, providing the respect of margins of M. Biproportion is an empirical concept. In this paper, the author shows that any algorithm used to compute a biproportion leads to the me result. Then the concept is unique and no longer empirical. Some special properties are also indicated.

Biproportional Methods And Interindustry Dynamics: The Case of Energy in France

About the criteria of output coincidence for forecasts to determine the orientation of the economy (application for France, 1980-1997)

This note indicates that the method of output coincidence for forecasts used to determine if sectors are demand-driven or supply-driven in an input-output framework mixes two effects, the structural effect (choosing between demand and supply driven models) and the effect of an exogenous factor (final demand or added-value). The note recalls that another method is possible, the comparison of the stability of technical and allocation coefficients, generalized by the biproportional filter: if for a sector, after biproportional filtering, column coefficients are more stable than row coefficients, then this sector is declared as not supply-driven (but one cannot decide that it is demand-driven a…

« Nommer le capitaine Dreyfus général à titre posthume est malheureusement une fausse bonne idée »

International audience

On the Talmud Division: Equity and Robustness

The Talmud Division is a very old method of sharin g developed by the rabbis in the Talmud and brought to the fore in the modern area s ome authors, among them are Aumann and Maschler. One compares the Talmud Division to other methods, mainly here the most popular, Aristotle's Proportional Division, but also to the equal division. The Talmud Division is more egalitarian than the Proportional Division for smal l levels of estate and conversely and it protects the weakest -those who cannot place a non-zero clai m-. This suggests that claimants may choose among the claiming methods depending on their interest, what implies a metagame. Unlike other methods as the Proportional Division, the Talm…

Réforme des retraites : « Le contrat social intergénérationnel est fragile »

International audience

A new concept to reduce CO2 emissions: Carbon profitability

Infected persons by the fact of a public organism : is a fair compensation by the community realistic ? A graph-theory pproach

The paper focuses on indirectly infected persons (persons infected by a person, infected by a person, etc., itself infected by a public organism, for AIDS, hepatitis C, etc.). It is assumed that fairness implies the national community to indemnify them. Graph theory is used to explain what is indirect infection. The concept of chains of infection, and their length is central. Re-infections are considered also because even individuals that are initially infected by another cause could become later indirectly infected by the public agent. The number of persons to be indemnified is larger than for direct infection, so the cost of compensation is higher, unless if compensation per capita is low…

Bicausative matrices to measure structural change: Are they a good tool?

The causative-matrix method to analyze temporal change assumes that a matrix transforms one Markovian transition matrix into another by a left multiplication of the first matrix; the method is demand-driven when applied to input-output economics. An extension is presented without assuming the demand-driven or supply-driven hypothesis. Starting from two flow matrices X and Y, two diagonal matrices are searched, one premultiplying and the second postmultiplying X, to obtain a result the closer as possible to Y by least squares. The paper proves that the method is deceptive because the diagonal matrices are unidentified and the interpretation of results is unclear. Keywords : Input-Output ; Ch…

Shareholders behavior, economic profit, profitability: New teachings from optimization theory

A biproportional filter to compare technical and allocation coefficient variations

International audience; In input-output analysis there are two alternate possibilities between Leontief's mechanism (fixed technical coefficients) and Ghosh's mechanism (fixed allocation coefficients). Testing the long term consistency of these mechanisms entails comparing input-output matrices over time. This paper challenges the value of proportional filters (separate comparison of column and row coefficients) and introduces the biproportional filter which allows simultaneous comparison of column and rows. An application is proposed using French input-output tables for 1980 and 1993. The stability of column coefficients cannot be taken for granted and generally, for any sector, both rows …

NoteAbout the Concept of “Net Multipliers”

Net multipliers, as introduced by Oosterhaven and Stelder (2002) accept outputs as entries instead of final demand. They are found by multiplying ordinary multipliers by the final demand ratio over the sector’s output. This pragmatic solution suffers from ratio instability over time. The alternative net multipliers proposed here are based on the interpretation of the Leontief inverse matrix for the effects generated at each round. The new solution is not sensitive to the size of impacts. Now net multiplier is equal to the corresponding ordinary multiplier minus one, and the ordering of multipliers is unchanged.

Six Matrix Adjustment Problems Solved by Some Fundamental Theorems on Biproportion

After defining biproportion (or RAS) rigorously, we recall two fundamental theorems: unicity of biproportion (any biproportional algorithm leads to the same solution than biproportion, which turns biproportion into a mathematical tool as indisputable than proportion), ineffectiveness of separability (premultiplying or post multiplying the initial matrix by a diagonal matrix does not change the biproportional solution) and its corollary (it is equivalent to do a separable modification of the initial matrix or to do a proportional change of each biproportional factors). We then apply these theorems to show immediately that: i) no difficulties are encountered when solving the biproportional pr…

The three wives problem and Shapley value

We examine the Talmudic three wives problem, which is a generalization of the Talmudic contested garment problem solved by Aumann and Maschler (1985) using coalitional procedure. This problem has many practical applications. In an attempt to unify all Talmudic methods, Guiasu (2010, 2011) asserts that it can be explained in terms of “run-to-the-bank”, that is, of Shapley value in a “cumulative game”. It can be challenged because the coalitional procedure yields the same result as the nucleolus, which corresponds to a “dual game”. As Guiasu's solution is paradoxical (it has all the appearances of truth), my contribution consists in explaining the concepts, particularly truncation, that play …

On the Impossibility of Calculating the Product Technology in the Supply-Use Model

The Supply-Use input-output model of the SNA and Eurostat is examined. For the product-by-product IO tables, two hypothesis are possible: "product technology", largely adopted (Eurostat A) and examined here, and "industry technology" (Eurostat B). One examines the calculability of the model. Negatives are an issue; (i) they are systematical in the inverse supply matrix: negative probabilities are impossible, Markov chains become impossible; (ii) negative flows are nonsense in symmetric matrix of coefficients or in inverse matrices. Matrices must be square what removes much of their interest. Same conclusions can be transposed to industry-by-industry IO tables under fixed-industry-sales-stru…

Biproportional methods of structural change analysis: A typological survey

International audience; Analysts often are interested in learning how much an exchange system has changed over time or how two different exchange systems differ. Identifying structural difference in exchange matrices can be performed using either 'directed' or 'undirected' methods. Directed methods are based on the computation and comparison of column- or row-normalizations of the matrices. The choice of row or column for the normalization implies a specific direction of the exchanges, so that the column-wise normalized results should not be compared to the row-wise normalized results. In this category fall the simple comparison of coefficient matrices and the causative method. Undirected m…

On the Conditions of Price Consistency in the Input-Output Model

The input-ouput model remains the basis of most SAM or CGE models. It actually uses two periods: the prices indexes solve it with the current period coefficients; the corresponding physical model is monoperiodic: the current prices solve it with the base period coefficients. The Leontief model is not consistent --- both models diverge generally --- unless the interindustry matrix of direct and indirect quantities of labor is stable over time. This implies that the vertically integrated labor coefficients are stable. This assumption is satisfied when the physical production coefficients and the physical labor coefficients are stable over time, two very strong assumptions.

Pollution models and inverse distance weighting: some critical remarks

International audience; When evaluating the impact of pollution, measurements from remote stations are often weighted by the inverse of distance raised to some nonnegative power (IDW). This is derived from Shepard's method of spatial interpolation (1968). The paper discusses the arbitrary character of the exponent of distance and the problem of monitoring stations that are close to the reference point. From elementary laws of physics, it is determined which exponent of distance should be chosen (or its upper bound) depending on the form of pollution encountered, such as radiant pollution (including radioactivity and sound), air pollution (plumes, puffs, and motionless clouds by using the cl…

Failure of the normalization of the RAS method : absorption and fabrication effects are still incorrect

The r and s vectors of the RAS method of updating matrices are presented often as corresponding to an absorption effect and a fabrication effect. Here, it is proved that these vectors are not identified, so their interpretation in terms of fabrication and absorption effect is incorrect and even if a normalization was proposed to remove underidentification, this normalization fails and poses many difficulties.. Keywords : Input-Output ; RAS ; Biproportion

Eléments d'économie managériale

Handbook on Supply, Use and Input-Output Tables with Extensions and Applications

International audience

A Note on added information in the RAS Procedure: reexamination of some evidence

International audience; An example in Miernyk (1977) presented a rather counterintuitive result, namely that introducing accurate exogenous information into an RAS matrix estimating procedure could lead to an estimate that was worse than one generated by RAS using no exogenous information at all. This became an oft-cited black mark against RAS. Miller and Blair (1985) included a different (and small) illustration of the same possibility. It was recently pointed out by one of us that the Miller/Blair numerical results are wrong. For that reason, we decided to reexamine all the empirical evidence we could find on the subject. While figures in both Miernyk and Miller/Blair appear to be wrong, …

Revisiting the Mathematical Difficulties in Patinkin Cartel Model and Joint Profit Maximization

We discuss the mathematical difficulties encountered in Patinkin's classical cartel model. It may be impossible to derive Patinkin's cartel by finding the reciprocal marginal cost functions: it could be impossible for cartel members to compute a solution, unless certain assumptions are made to simplify the problem, such as quasi-linear marginal costs or constant marginal costs. The total cost function is incoherent with respect to the sum of members' total cost. The model cannot handle constant marginal costs but we remind that de Mesnard's (2009, 2011) model of cartel with exogenous market shares allow solving the problem. We conclude that the Patinkin model of cartel is not so self-eviden…

Dynamique de la structure industrielle française

More firms, more competition? The case of the fourth operator in France's mobile phone market

Accepted, Forthcoming; International audience; To foster competition the French government authorized a fourth operator, ‘Free', to enter the country's mobile phone market at the end of 2009 alongside Orange, SFR and Bouygues Telecom (BT), who held respectively one-half, one-third and one-sixth of the market. By using a stylized model of France's phone market, we have examined what we call the regulator's nightmares and dreams. If Cournot competition is in place before Free's entry, minimizing the total profit fails to maximize the consumer surplus and the total surplus; the maximum most realistic price fall is 6.7% compared to three-way competition and could be 1.7% only; if Orange, SFR an…

On some flaws of university rankings: The example of the SCImago report

International audience; Using France as our main example, we show there is a much scope for improving the SCImago ranking. We detect problems of nomenclature, double affiliation, aggregation and of bias toward large public-funded research organizations. The output per scholar is more important than the output per organization. The examples we cite suggest that only detailed knowledge of the situation can help in addressing the issue and take us beyond any automatic reading of the metadata.

Note about the concept of ‘Net Multipliers'

International audience; Net multipliers, as introduced by Oosterhaven and Stelder (2002) accept outputs as entries instead of final demand. They are found by multiplying ordinary multipliers by the final demand ratio over the sector's output. This pragmatic solution suffers from ratio instability over time. The alternative net multipliers proposed here are based on the interpretation of the Leontief inverse matrix for the effects generated at each round. The new solution is not sensitive to the size of impacts. Now net multiplier is equal to the corresponding ordinary multiplier minus one, and the ordering of multipliers is unchanged.

On Boolean topological methods of structural analysis

The properties of Boolean methods of structural analysis are used to analyze the intern structure of linear or non linear models. Here they are studied on the particular example of qualitative methods of input-output analysis. First, it is shown that these methods generate informational problems like biases when working in money terms instead of percentages, losses of information, increasing of computation time, and so on. Second, considering three ways to do structural analysis, analysis from the inverse matrix, from the direct matrix and from layers (intermediate flow matrices), these methods induce topological problems; the adjacency of the adjacency cannot be defined from the inverse ma…

Two alternate means to internalize companies' CO2 emissions: Carbon Value Added and Profitability

EVA / SVA / MVA vs. ROE as corporate financial objectives

Tableau de bord économique urbain

Fair Executive Compensation: Is Kalai-Smorodinsky More Just than Nash ?

By considering Phelps' curve, the best disagreement point (BATNA) and the gains of negotiation, we examine what a fair distribution of executive wages should be. Beyond equality and Rawls' maximin, we focus on equality-of-gains (Nash) and on relative-equality-of-gains (Kalai-Smorodinsky). Equality-of-gains is close to maximin; executives may not accept to bargain. Relative-equality-of-gains allows executives and workers to obtain equal gains in percentage; executive compensation is not intolerably high to the price of a higher total payroll.

La financiarisation comme bascule de la maximisation du profit pur à la maximisation de la profitabilité

National audience

About some difficulties with the functional forms of Lorenz curves

We study to what extent some functional form assumption on the Lorenz curve are amenable to calculating headcount poverty, or poverty threshold, the key concept to determine a poverty index. The difficulties in calculating it have been underestimated. We must choose some functional forms for the Lorenz concentration curve. We examine three families of one-parameter functional forms to estimate Lorenz curves: power (elementary and Pareto), exponential (elementary and Gupta) and fractional (Rohde). Computing these numerical functions may be difficult and impose some restrictions on their domain of definition, may impose to use some numerical approximation methods. The elementary power and exp…

On the Fallacy of Forward Linkages: A Note in the Light of Recent Results

Following on from de Mesnard’s (2009) radical criticism of the Ghosh supply-driven model, this paper draws the dramatic consequences for the widespread use of forward linkages in input-output analysis applied to regional science: the practice must be abandoned. The arguments are based on three points: (i) it is impossible simultaneously to choose the Leontief model for the backward effects and the Ghosh model for the forward effects; (ii) it is impossible simultaneously to consider a production function of complementary inputs (Leontief) and a production function of perfectly substitutable inputs (Ghosh); and most importantly (iii) price effects and output effects remain inextricably mixed …

Normalizing biproportional methods

International audience; Biproportional methods are used to update matrices: the projection of a matrix Z to give it the column and row sums of another matrix is R Z S, where R and S are diagonal and secure the constraints of the problem (R and S have no signification at all because they are not identified). However, normalizing R or S generates important mathematical difficulties: it amounts to put constraints on Lagrange multipliers, non negativity (and so the existence of the solution) is not guaranteed at equilibrium or along the path to equilibrium.

Regional Multicriteria Analysis and Influence Relation

A Note on the Flaws of MFA (Minimal Flow Analysis)

MFA (Minimal Flow Analysis) is a method of qualitative input-output analysis used for identifying national of regional industrial clusters. It is based on the analysis of layers (in an input-output model, flow matrices generated at each iteration toward equilibrium). We show through theory that all normalized layers (column-coefficient matrices computed from each layer) are equal in MFA. This is illustrated by an application to France's 2009 input-output table. Therefore, the information brought by one layer is identical to those of another layer: layers bring no specific information, which unfortunately implies that MFA is not a good tool to study intersectoral linkages, despite the intere…

Three Wives Problem and Shapley Value

We examine the Talmudic three wives problem, which is a generalization of the Talmudic contested garment problem solved by Aumann and Maschler (1985) using coalitional procedure. This problem has many practical applications. In an attempt to unify all Talmudic methods, Guiasu (2010, 2011) asserts that it can be explained in terms of “run-to-the-bank”, that is, of Shapley value in a “cumulative game”. It can be challenged because the coalitional procedure yields the same result as the nucleolus, which corresponds to a “dual game”. As Guiasu’s solution is paradoxical (it has all the appearances of truth), my contribution consists in explaining the concepts, particularly truncation, that play …

La maximisation microéconomique du taux de profit

National audience; Dans la théorie microéconomique traditionnelle, les firmes sont supposées maximiser le profit pur. Nous étudions ici l'impact de la prise en compte des actionnaires et d'un profit social rémunérant le capital. On montre les conséquences de l'abandon de la maximisation du profit pour considérer la maximisation du taux de profit social. Les cas de concurrence avec coefficient fixe de capital, monopole avec coefficient fixe de capital, monopole avec coefficient variable de capital sont étudiés. Les solutions fournies par les comportements de maximisation du profit et de maximisation du taux de profit sont comparées. On conclut à une réduction du volume d'investissement dans …

Biproportion et offre dominante (A propos de l'article d'André Torre ‘Sur la signification théorique du modèle d'offre multisectoriel')

One replies here to partisans of the reject of the supply-driven model in input-output analysis and especially to A. Torre (Revue Economique, 5, 44, 951-970). First of all, demand-driven hypothesis (Leontief) and supply-driven hypothesis (Ghosh) are symmetrical and incompatible, what forbidden to reject the second to the motive that it depends on the first. Secondly, the results earlier obtained for France of 1970 to 1985 from the method of the biproportionnal filter show that there is so much instability in the long term in the columns than in the rows of the flow matrix. Thirdly, the assimilation of the usage of allocation coefficients to the adoption of the supply-side model is excessive.