The notion of a Perfect Equilibrium in a multi-stage game is used to characterize industry equilibrium under Monopolistic Competition, where products are differentiated by quality. Central to the problem of providing adequate foundations for the analysis of monopolistic competition, is the problem of describing market equilibria in which firms choose both the specification of their respective products, and their prices. The present paper is concerned with a-very particular-model of such a market equilibrium. In this equilibrium, exactly two potential entrants will choose to enter the industry; they will choose to produce differentiated products; and both will make positive profits.

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There are two views as to why people stay poor. The equal opportunity view emphasizes that differences in individual traits like talent or motivation make the poor choose low productivity jobs. The poverty traps view emphasizes that access to opportunities depends on initial wealth and hence poor people have no choice but to work in low productivity jobs. We test the two views using the random allocation of an asset transfer program that gave some of the poorest women in Bangladesh access to the same job opportunities as their wealthier counterparts in the same villages. The data rejects the null of equal opportunities. Exploiting small variation in initial endowments, we estimate the transition equation and find that, if the program pushes individuals above a threshold level of initial assets, then they escape poverty, but, if it does not, they slide back into poverty. Structural estimation of an occupational choice model reveals that almost all beneficiaries are misallocated at baseline and that the gains arising from eliminating misallocation would far exceed the costs. Our findings imply that large one-off transfers that enable people to take on more productive occupations can help alleviate persistent poverty.

Five lactating dairy cows with a permanent cannula in the rumen were given (kg DM/d) a normal diet (7.8 concentrates, 5.1 hay) or a low-roughage (LR) diet (11.5 concentrates, 1.2 hay) in two meals daily in a two-period crossover design. Milk fat (g/kg) was severely reduced on diet LR. To measure rates of production of individual volatile fatty acids (VFA) in the rumen, 0.5 mCi 1-(14)C-acetic acid, 2-(14)C-propionic acid, or 1-(14)C-n-butyric acid were infused into the rumen for 22 h at intervals of 2 to 6 d; rumen samples were taken over the last 12 h. To measure rumen volume, we infused Cr-EDTA into the rumen continuously, and polyethylene glycol was injected 2 h before the morning feed. Results were very variable, so volumes measured by rumen emptying were used instead. Net production of propionic acid more than doubled on LR, but acetate and butyrate production was only numerically lower. Net production rates pooled across both diets were significantly related to concentrations for each VFA. Molar proportions of net production were only slightly higher than molar proportions of concentrations for acetate and propionate but were lower for butyrate. The net energy value (MJ/d) of production of the three VFA increased from 89.5 on normal to 109.1 on LR, equivalent to 55 and 64% of digestible energy, respectively. Fully interchanging, three-pool models of VFA C fluxes are presented. It is concluded that net production rates of VFA can be measured in non-steady states without the need to measure rumen volumes.

1. The basic assumptions involved in one-and two-compartment models with age-independent distributed residence times (exponential, G1) for describing digesta flow are reviewed as the bases for describing families of one-and two-compartment models which assume age-dependent distributions (Gn) of residence times.2. The two-compartment, age-independent model with exponentially distributed residence times (GIGI) yielded estimates of essentially equal rate parameters when fitted to faecal values for all four cows receiving a diet of 500 g coarsely chopped, sodium hydroxide-treated straw /kg and one of four cows receiving the same diet but with ground and pelleted straw. The incorporation of progressively higher orders of age dependency (G2-G6, Gn) into the faster turnover compartment of two-compartment models (GnGl) resulted in a resolution of equal rate parameters estimated by the GlGl model and a reduction in standard errors for the rate and the initial concentration parameters.3. The occurrence of equal rate parameters in two-compartment models indicated an age-dependent process ; a process which could equally well be described by a one-compartment, age-dependent compartment having an order of age dependency equal to the sum of these orders in the two-compartment model with equal rate parameters.4. The age-independent models overestimated time of first appearance in the faeces of a meal's particles. The association of age dependency with the faster turnover compartment resulted in earlier estimates for first appearance of the marked particles; estimates which were more consistent with observed first appearance.5. The faecal excretion pattern from cows fed on the ground and pelleted straw diet exhibited an ageindependent distribution of longer residence times which dominated approximately 80 YO of the later residence times. Age-dependent, one-compartment models gave a poor fit to such data from these cows fed on ground and pelleted straw. In contrast, age-dependent, one-compartment models provided an excellent fit to data from cows fed on chopped straw; data which indicated that age-independent distributions of residence times were much delayed in appearing or were totally absent.6. The mean residence time for the slower turnover, age-independent compartment estimated from faecal excretional of stained particles from either diet was similar to that estimated from duodenal concentrations of the stained particles. This suggests that the slower turnover model compartment was confined to preduodenal sites.7. The mean residence time for the faster turnover, age-dependent compartment estimated from duodenal data was 58-62 % that estimated from faecal data and suggests that the site of this model compartment was both preand post-duodenal.8. It is emphasized that the slow and imperfect mixing of particulate matter that occurs in reticulo-rumen digesta is inconsistent with the assumptions of instantaneous and homogeneous mixing made by models having age-independent distributions of residence times. The use of age-dependent ...

In the economic modeling of bargaining, outside options have often been naively treated by taking them as the disagreement payoffs in an application of the Nash bargaining solution. The paper contrasts this method of predicting outcomes with that obtained from an analysis of optimal strategic behavior in a natural gametheoretic model of the bargaining process. The strategic analysis predicts that the outside options will be irrelevant to the final deal unless a bargainer would then go elsewhere. An experiment is reported which indicates that this prediction performs well in comparison with the conventional predictor.