(with Arunava Sen), in K. Basu and P. Nayak (eds.), Economic Theory and Development, Oxford University Press, 1992.
Summary. We study when quantity controls are needed for decentralization of Pareto-optima.
Learning-by-Doing and Industrial Competition
(with Dilip Mookherjee), in B. Dutta et al. (eds.), Theoretical Issues in Economic Development, Oxford University Press, 1992.
Profitability and Concentration
(with Bhaskar Dutta, Shubhashis Gangopadhyay and Kunal Sengupta), in B. Dutta et al (eds.), Theoretical Issues in Economic Development, Oxford University Press.
On Decentralization Under Increasing Returns
(with Tapan Mitra), in M. Majumdar (ed.), Decentralization and Economic Growth, Westview Press, 1992.
Summary. In a model of economic growth with nonconvex technology, we characterize infinite-horizon optimality in terms of short-run optimality and a transversality condition.
Adapting to Undernourishment: The Biological Evidence and Its Implications
(with Partha Dasgupta), in J. Drèze and A.K. Sen (eds.), The Political Economy of Hunger, Clarendon Press, Oxford, 1991.
Summary. We critically survey the clinical literature on the possibility of adaptation to a state of undernutrition, as proposed by P. V. Sukhatme and others.
Why Does Asset Inequality Affect Unemployment? A Study of the Demand Composition Problem
(with Jean-Marie Baland), Journal of Development Economics 35, 69-92, 1991.
Summary. This paper is devoted to a general equilibrium analysis of the relationship between the inequality in asset holdings and the aggregate levels of output and employment in a developing economy. Since luxuries and basic goods compete for the use of the same scarce resources, unemployment is conceived as a mechanism whereby the market demand for basic goods can be limited to a sufficiently low level so that the high demand for luxuries can be met. The ambiguous effects of capital accumulation on employment are also examined.
On the Competitive Pressure Induced by the Diffusion of Innovations
(with Dilip Mookherjee), Journal of Economic Theory 54, 124-147, 1991.
Summary. We consider the decision of a dominant firm to adopt a sequence of potential cost-reducing innovations, where the latest technology adopted diffuses to a competitive fringe at an exogenous rate. With price competition on the product market, the leader optimally spaces apart the adoption dates of successive innovations, so the industry is characterized by cycles of alternating innovation and diffusion. These results may, however, be reversed in the case of quantity competition.
Collusive Market Structure Under Learning-by-Doing and Increasing Returns
(with Dilip Mookherjee), Review of Economic Studies 58, 993-1009, 1991.
Summary. Learning-by-doing and increasing returns are often perceived to have similar implications for market structure and conduct. We analyze this assertion in the context of an infinite-horizon, price-setting game.
Constrained Egalitarian Allocations
(with Bhaskar Dutta), Games and Economic Behavior 3, 403-422, 1991.
Summary. This paper proposes a constrained egalitarian solution concept for TU games which combines commitment for egalitarianism and promotion of individual interests in a consistent manner. The paper shows that the set of constrained egalitarian allocations is nonempty for weakly superadditive games. The solution is “almost” unique if the desirability relation between players is complete.
The Economics of Orchards: An Exercise in Point-Input, Flow-Output Capital Theory
(with Tapan Mitra and Rahul Roy), Journal of Economic Theory 53, 12-50, 1991.
Summary. This paper is concerned with the qualitative properties of optimal intertemporal programs in a model of point-input flow-output capital theory, when future utilities are discounted. Under a mild condition on the flow-output vector, we establish that optimal programs for every discount factor and every initial state (other than a unique stationary optimal state) will exhibit non-convergence.