Resource Allocation Theory Research Articles

The Private Production of Public Goods: Organizational Maintenance, Managers' Objectives, and Collective Goals

I reformulate Mancur Olson's by-product theory of collective action as a theory of resource allocation by interest group managers. I then test alternative hypotheses about managers' objectives drawn from exchange theory and commitment theory. Financial data for 16 environmental citizen groups show that the production of public goods is subsidized by other activities, and revenues from member dues are not affected by spending on public goods. Spending on selective incentives and information generates revenues but also may contribute to the pursuit of collective goals. Estimated marginal revenues from fund-raising and selective incentives show that environmental citizen group managers are not preoccupied with maximizing revenues. Rather, they seek to maximize either spending on public goods or net resources available for influencing public policy and the environment, subject to a budget constraint.

Social choice and resource allocation: a topological perspective

This volume brings together a collection of papers in an area which has evolved rapidly in recent years. This is the area of continuous or topological approaches to the study of social choice, and the analysis of what have come to be known as “Chichilnisky rules”. Initiated by Chichilnisky in a paper in Advances in Mathematics in 1980 [14], the field has quickly evolved from a separate and distinct area of social choice to one which is integrated into the mainstreams of both social choice and the general equilibrium approach to markets, and which in turn has come to integrate and bridge these previously disparate areas, revealing deep and unexpected connections between them. Many of the papers in this volume were first presented either at a conference on “Ethics, Economics and Business” held at Columbia Business School in March 1993, or at a workshop on “Geometry, Topology and Markets” held at the Fields Institute for Mathematical Sciences in July 1994. These two meetings were important in catalyzing the growth of this area. My aim in this introduction is to place the papers in this volume in the context of the development of the area in general, and then to give some personal reflections and observations on the growth of this area, its future, and its role in economic theory. Three of the sections of this introduction, “Topological Social Choice”, “Incentives”, “Infinite Populations”, match the three sections into which the papers that follow have been organized. Section 2 of this introduction, on “Social Choice and Resource Allocation”, surveys recent results on the relationship between social choice theory and resource allocation theory, a field covered in more detail in Chichilnisky’s paper [18] in Sect. 1.

Resource allocation in auditory processing of emphatically stressed stimuli in aphasia

Kimelman and McNeil (1987) suggested that improved auditory comprehension for emphatically stressed information might be attributed to recruitment of additional processing resources. This study investigated effects of emphatic stress when it was applied to target words during a semantic judgement task on the auditory processing of non-stressed targets for a lexical decision task. Response time and accuracy were analysed for this dual-task experiment. It was first established that the stimuli contained appropriately placed stressed lexical items and that all subjects benefited from the emphatic stress. Next it was established that all subjects were able to voluntarily trade processing resources in the dual task under investigation, and were able to generate a performance operating curve (POC). Normal subjects showed the predicted performance decrement on the non-stressed word in the context of the preceding stressed word; subjects with aphasia did not. Results are discussed relative to resource allocation theory with normal subjects, and a working memory explanation for aphasic subjects' performance.

Attention allocation during a dual task paradigm by bilingual speakers

AbstractCognitive resource allocation theories and an impressive accumulation of empirical research suggest that humans selectively allocate their mental attention. When faced with two concurrent tasks, human performance on a variety of cognitive and language tasks can be significantly affected. Whilst the nature of performance trade-off during a dual task paradigm is being studied with increasing vigour in subjects with hemispheric damage, little is known about attentional allocation during linguistic tasks by bilingual speakers. The present study employed the dual task technique to investigate the nature and effectiveness of language processing across two languages in bilingual subjects. Twenty-nine volunteer subjects were selected for this study. All were fluent English/Greek bilingual speakers with Greek being their first language (L1) and English their second language (L2). Subjects were presented with two highly demanding verbal tasks (auditory comprehension and category fluency) in English (L2) and...

Optimal resource allocation for novelty detection in a human auditory memory.

A theory of resource allocation for neuronal low-level filtering is presented, based on an analysis of optimal resource allocation in simple environments. A quantitative prediction of the theory was verified in measurements of the magnetic mismatch response (MMR), an auditory event-related magnetic response of the human brain. The amplitude of the MMR was found to be directly proportional to the information conveyed by the stimulus. To the extent that the amplitude of the MMR can be used to measure resource usage by the auditory cortex, this finding supports our theory that, at least for early auditory processing, energy resources are used in proportion to the information content of incoming stimulus flow.

CUSTOMER POWER, STRATEGIC INVESTMENT, AND THE FAILURE OF LEADING FIRMS

Why might firms be regarded as astutely managed at one point, yet subsequently lose their positions of industry leadership when faced with technological change? We present a model, grounded in a study of the world disk drive industry, that charts the process through which the demands of a firm's customers shape the allocation of resources in technological innovation—a model that links theories of resource dependence and resource allocation. We show that established firms led the industry in developing technologies of every sort—even radical ones—whenever the technologies addressed existing customers' needs. The same firms failed to develop simpler technologies that initially were only useful in emerging markets, because impetus coalesces behind, and resources are allocated to, programs targeting powerful customers. Projects targeted at technologies for which no customers yet exist languish for lack of impetus and resources. Because the rate of technical progress can exceed the performance demanded in a market, technologies which initially can only be used in emerging markets later can invade mainstream ones, carrying entrant firms to victory over established companies.

Mood, reasoning, and central executive processes.

How positive induced mood states affect reasoning was investigated in three experiments. In Experiment 1, consistent with resource allocation theory (H. C. Ellis & P. W. Ashbrook, 1987), both positive and negative mood suppressed performance on a deontic version of Wason's selection task (P. W. Cheng & K. J. Holyoak, 1985)—participants confirmed where they normally falsify. Experiment 2 revealed the same confirmatory responses for participants performing a concurrent distracter task, indicating that induced mood states suppress reasoning by depleting central executive resources. This hypothesis was directly tested in Experiment 3. Participants in a positive, but not in a negative, mood state showed suppressed performance on the Tower of London task (T. Shallice, 1982)—the classical central executive task. The robust positive mood effects and the confirmation effects are discussed in terms of the D. A. Norman and T. Shallice (1986) model of central executive function and recent accounts of selection task performance (L. Cosmides, 1989; K. I. Manktelow & D. E. Over, 1991; M. Oaksford & N. Chater, 1994).

A robust theory of resource allocation

The theory of social choice introduced in [5, 6] is robust: it is completely independent of the choice of topology on spaces of preferences. This theory has been fruitful in linking diverse forms of resource allocation: it has been shown [17] that contractibility is necessary and sufficient for solving the social choice paradox; this condition is equivalent [11] to another — limited arbitrage — which is necessary and sufficient for the existence of a competitive equilibrium and the core of an economy [13, 14, 15, 16, 17]. The space of monotone preferences is contractible; as shown already in [6, 17] such spaces admit social choice rules. However, monotone preferences are of little interest in social choice theory because the essence of the social choice problem, such as Condorcet triples, rules out monotonicity.

Drought Water Rationing and Transferable Rations

Water rationing is a common, but little studied, technique for managing urban water supplies during drought. This paper reviews a wide range of approaches for implementing water rationing for urban drought management. These rationing approaches are assessed in terms of practical and theoretical performance. The paper then examines the potential benefits of allowing drought water rations to be transferable or marketable. Transferable rights have become a common suggestion for allocating scarce resources for a wide range of water-quantity and water-quality problems. Although attractive in terms of economic theories of resource allocation, transferable drought water rations often will be uneconomical for small transactions, due to likely high costs of completing transactions. However, transferable drought water rations might be useful for allocating scarce water among large industrial, commercial, and institutional users and among residential users with very different water demands. The equity effects of transferable drought rations would vary with the initial allocation of water rations. Legal aspects of how transferable rations might be implemented for public water-supply systems remain to be explored.

Within-Population Variation in Sexual Resource Allocation in Mimulus guttatus

The theory of sexual resource allocation in plants assumes that trade-offs occur between the resources allocated to male, female and attractive structures, and that genetic variation occurs, or has occurred, within populations upon which natural selection could act to optimize the relative investment in each structure. These assumptions were tested in a study of 10 clones of Mimulus guttatus isolated from a natural population, which varied in the proportion of viable pollen they produced. The experiment was designed to investigate whether plants which invest less in viable pollen can reallocate the resources released to other functions within the same or subsequent flowers or fruits. This study has failed to find any significant difference in other floral characters associated with the variation in pollen quality (...)

George J. Stigler: Midcentury Neoclassicalist with a Passion to Quantify

Previous articleNext article No AccessGeorge J. Stigler: Midcentury Neoclassicalist with a Passion to QuantifyHarold DemsetzHarold Demsetz Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 101, Number 5Oct., 1993 Article DOIhttps://doi.org/10.1086/261902 Views: 15Total views on this site Citations: 21Citations are reported from Crossref Copyright 1993 The University of ChicagoPDF download Crossref reports the following articles citing this article:Craig Freedman The Protestant Father as Economist, (May 2020): 1–58.https://doi.org/10.1057/978-1-137-56815-1_1Neil Hart George Stigler: Marshall’s Loyal but Faithless Follower, (May 2020): 391–420.https://doi.org/10.1057/978-1-137-56815-1_13Craig Freedman The Dulcinea Complex: Defending the Unobtainable, (May 2020): 553–557.https://doi.org/10.1057/978-1-137-56815-1_18M. Ali Khan, Edward E. Schlee Textual and Scientific Exegesis: George Stigler and Method in Economic Science, (May 2020): 649–719.https://doi.org/10.1057/978-1-137-56815-1_21Peter J. Boettke, Rosolino A. Candela Stigler on the Science of Economics: A Tale of Two Knights, (May 2020): 721–753.https://doi.org/10.1057/978-1-137-56815-1_22Craig Freedman The Way Things Work: The Empirical Bent of Economists—Ronald Coase on George Stigler, (May 2020): 133–163.https://doi.org/10.1057/978-1-137-56815-1_5Marek Hudik Two interpretations of the rational choice theory and the relevance of behavioral critique, Rationality and Society 31, no.44 (Aug 2019): 464–489.https://doi.org/10.1177/1043463119869007David M. Levy, Sandra J. Peart Stigler, George Joseph (1911–1991), (Feb 2018): 13061–13068.https://doi.org/10.1057/978-1-349-95189-5_1717Peter J. Boettke, Rosolino Candela Stigler on the Science of Economics: A Tale of Two Knights, SSRN Electronic Journal (Jan 2018).https://doi.org/10.2139/ssrn.3109015Craig Freedman The Heart Is a Lonely Hunter: Chicago’s Climb to Glory, (Nov 2016): 75–121.https://doi.org/10.1057/978-1-137-58974-3_3Craig Freedman The Chicago School of Anti-Monopolistic Competition: Stigler’s Scorched Earth Campaign Against Chamberlin, (Nov 2016): 165–342.https://doi.org/10.1057/978-1-137-58974-3_5Peter J. Boettke, Rosolino Antonio Candela Price Theory as Prophylactic Against Popular Fallacies, SSRN Electronic Journal (Jan 2015).https://doi.org/10.2139/ssrn.2710201Michael Perelman Retrospectives: X-Efficiency, Journal of Economic Perspectives 25, no.44 (Nov 2011): 211–222.https://doi.org/10.1257/jep.25.4.211Edward Nik-Khah George Stigler, the Graduate School of Business, and the Pillars of the Chicago School, (Oct 2011): 116–148.https://doi.org/10.1017/CBO9781139004077.010Marek Loužek 100 Years Since the Birth of George Stigler, Politická ekonomie 59, no.33 (Jun 2011): 407–424.https://doi.org/10.18267/j.polek.790CRAIG FREEDMAN SOUTH SIDE BLUES: AN ORAL HISTORY OF THE CHICAGO SCHOOL, Journal of the History of Economic Thought 32, no.44 (Dec 2010): 495–530.https://doi.org/10.1017/S1053837210000453DAVID R. KAMERSCHEN, DEEPA J. SRIDHAR THE THEORY OF [COMPETITIVE] PRICE ACCORDING TO GEORGE J. STIGLER, Journal of the History of Economic Thought 31, no.22 (Jun 2009): 181–200.https://doi.org/10.1017/S105383720909018XDavid M. Levy, Sandra J. Peart Stigler, George Joseph (1911–1991), (Mar 2017): 1–8.https://doi.org/10.1057/978-1-349-95121-5_1717-2Arthur M. Diamond Measurement, incentives and constraintsin Stigler's economics of science, The European Journal of the History of Economic Thought 12, no.44 (Aug 2006): 635–661.https://doi.org/10.1080/09672560500370292C. M. Sashi The Division of Labor in Distribution and Industry Growth, Journal of Marketing Channels 12, no.22 (Sep 2008): 53–81.https://doi.org/10.1300/J049v12n02_04Craig Freedman No End to Means: George Stigler’s Profit Motive, Journal of Post Keynesian Economics 20, no.44 (Nov 2015): 621–648.https://doi.org/10.1080/01603477.1998.11490171

Altruism and the Allocation of Resources

Modern resource allocation theory is used to consider certain issues raised by the concept of altruism. Both state action and individual altruism may compensate for deficiencies in resource allocations. Both the state and individuals incur information costs, and these costs determine whether individual altruism or state action is used. Justice in the public realm makes altruism in the private realm unnecessary. I also show how what appears to be altruistic behavior may be an intertemporal resource allocation mechanism.

Rapid changes in pollen production in experimental outcrossing populations of wheat

AbstractFor evolutionary reasons, pollen production is expected to be modified when changes occur in plant mating systems. In this study, outcrossing was enforced through male‐sterility in usually autogamous populations of winter wheat. The correlated changes in pollen production were studied after a 6‐year period of natural evolution. Both the disappearance of individuals with the lowest pollen production and the increase in the production of fertile pollen per spike were observed in male‐fertile plants. The results are interpreted as a selection on male function. Some morphological differences also appeared in evolved populations between male‐fertile and male‐sterile plants. These differentiations are discussed in light of resource allocation theory.

A possible explanation of problem-solving deficits based on resource allocation theory

Abstract This investigation examined non-verbal problem-solving abilities. Two groups of visual-spatial puzzles were administered to 10 left-CVA patients, 10 right-CVA patients and 10 normal subjects. The puzzles were divided into named and unnamed groups to examine the effects of non-language stimuli on test performance. Results indicated significant differences, with right-CVA patients having the greatest difficulty on all puzzles, left-CVA patients having the greatest difficulty with unnamed puzzles and making errors on some named puzzles and normal subjects making significantly fewer errors but having a response pattern similar to the left-CVA patients. The findings imply that, in terms of resource allocation theory, when the task utilized the competence of the left hemisphere for naming in conjunction with the visual-spatial competence of the right hemisphere, each hemisphere's resources were utilized and scores on the puzzles increased.

The exchange and allocation of decision power

Traditional theories of multi-person choice takes as exogenous data the allocation of decision power, that is, they assume the answer to the question of who-decides-what. This paper applies the standard economic theory of scarce resource allocation to explain observed allocations of decision power using as an illustrative example the allocation of power across committees in the U.S. Congress.

Scheduling parallelizable tasks

In this paper we formulate the following natural multiprocessor scheduling problem: Consider a parallel system with P processors. Suppose that there are N tasks to be scheduled on this system, and that the execution time of each task j ε {1,…, N } is a nonincreasing function t j (β j ) of the number of processors β j ε {1,…, P } allotted to it. The goal is to find, for each task j , an allotment of processors β j , and, overall, a schedule assigning the tasks to the processors which minimizes the makespan, or latest task completion time. The so-called shelf strategy is commonly used for orthogonal rectangle packing, a related and classic optimization problem. The prime difference between the orthogonal rectangle problem and our own is that in our case the rectangles are, in some sense, malleable: The height of each rectangle is a nonincreasing function of its width. In this paper, we solve our multiprocessor scheduling problem exactly in the context of a shelf-based paradigm. The algorithm we give uses techniques from resource allocation theory and employs a variety of other combinatorial optimization techniques.

UNINVITED GUESTS: A THERMODYNAMIC APPROACH TO RESOURCE ALLOCATION

A theory of resource allocation is emerging from the science of nonequilibrium thermodynamics (NET). The deterministic and reductionist version of NET (DARNET), like neoclassical economics, is functionally simple; however, unlike neoclassical economics, it invites structural complexities. Some of these complexities are behaviourial (e.g., nonrational behaviour and ethics) and are implied by the human evolutionary paradigm subsumed within DARNET; other complexities are physical (e.g., environmental degradation) and are implied directly from core propositions of DARNET. The case for a paradigm shift to DARNET is presented.

The pattern of sexual resource allocation in the yellow monkey flower,Mimulus guttatus

The allocation of biomass to female, male and attractive structures was measured in Mimulus guttatus. Four populations of contrasting ecologies were compared. From each population, two plants were assigned to each of three treatments. In one treatment, all flowers were pollinated, allowing total seed production to be measured. In the second, all flowers were removed, preventing any post-anthesis investment (Post - AI). In the third, the daily pattern of investment in capsules was measured by reaping capsules a random number of days after fertilization. This showed that post-AI was complete within fourteen days of fertilization, and competed directly with investment in pollen and attractive structures. The investment in primary female structures exceeds investment in anthers, and the mass of seeds is greater still. Significant between population variation in post-AI is found, with the population with an annual life history and small flowers having the greatest values. The mass of the corolla is a good predictor of ovary and capsule mass, and it is argued that the cumulative corolla mass can thus be used as an indirect measure of parental investment. By using this measure, and including attractive structures as part of the male function of a plant, the sex ratio (male: male + female) of this species is between 34 and 42% . The relationship of these findings to sexual resource allocation theory is discussed.

Sex Ratios of Red Maple (Acer Rubrum) Populations in Northern Lower Michigan

Red maple (Acer rubrum) on nine different sites in northern lower Michigan showed generally male—biased sex ratios across a wide variety of habitats and through time. These ratios were not correlated with moisture or nutrient conditions of the sites and for more mesic sites, ratios did not appear to be affected by age of the stands. The more xeric sites showed greater male bias in sex ratios with age of the stand. Within the xeric sites, the sex ratio of regularly flowering trees was more male biased than the ratio of trees at first reproduction. Although data appear to support resource allocation theory predicting more male—biased ratios in older or poorer habitats, the male—biased sex ratios did not result from measurable differences in sex expression of trees originating from sprouts vs. seeds, sex—related differences in size at first reproduction, or sex—related differential mortality, or because of patterns of sex lability. Differences in sex ratio were of minor importance in reproductive success of individuals in the xeric plots given the lack of reproduction from seed. Reproduction from seed was higher in mesic areas, but sex—related differences in life history characteristics were not evident in these areas. The similarity of ratios in a diversity of habitats and through time suggests that the ratios may reflect the underlying genetic patterns of sex expression, rather than subsequent responses to the environment. These data suggest that sex ratios alone are not sufficient to infer proximate mechanisms for biased sex ratios or sex—related differences in resource allocation.

Maurice Allais and the French Marginalist School

1. During the first decade immediately following World War II, an extremely interesting and important episode in the history of economics occurred in France. This episode, informally identified with the work of the Marginalist School, consisted in the development and imple- mentation of an operational theory of efficient resource allocation. The episode has several distinguishing features which make it a rather unique event and place it among the major instances of definitive progress in our discipline. In short,' the significance of the episode refers to the discovery that the abstract theory of efficient resource allocation could be given a precise general statement, susceptible to interpretation in operational terms and suitable for direct application to a variety of important practical problems. The work under review covers (i) the general statement of the theory and its extension to new areas not previously investigated (in particular, inter- temporal allocation and problems associated with increasing returns to scale or uncertainty); (ii) the translation of general principles into operational guidelines for public policy (in particular, for managing public utilities, implementing marginal cost pricing in situations involving peak loads or indivisibilities, and defining efficient pricing and investment decisions simultaneously); and (iii) the actual application of these guide- lines in the public sector of the French economy. There are not many instances where three successive steps such as these could be carried out almost simultaneously over a short time span. Beyond the event itself, and its immediate by-product in terms of efficiency gains in the French public sector, this episode has exerted a lasting influence on economic thinking at three levels, corresponding to the three steps just outlined.