Mathematical Modelling in Economics : Essays in Honor of Wolfgang Eichhorn

Wolfgang Eichhorn was born on August 18, 1933 in Ansbach, Germany - most likely, under a lucky star (if not, fate must have made a mistake). Everything in his life - be it childhood, education, academic career, or private life - developed in a pleasurable and successful way. But it would be a mistake and an injustice to credit his achievements to a lucky star. First, the success and recognition he earned (in particular, for his academic achieve­ ments) are due to the motivation and the capabilities that he has possessed from a very early age on. His abilities are reflected in over a hundred publications in leading academic journals. All of them share the unmistakable clarity, the precision, and the originality that he is known for. He has become one of the leading and most successful advocates of a model-based approach to economic problems, a methodology that has a long tradition in the natural (but not in the social) sciences. The rigor and the tools which are char­ acteristic of his work make it clear that he never denied his academic background as a mathematician. Therefore, the choice of the title for this volume was an obvious one. Second, he always shares his enthusiasm and his high spirits with many people. This may be even more remarkable than the above mentioned achievements, because this fea­ ture is a very rare one. Front Matter....Pages I-XXVII Front Matter....Pages 1-1 Constituent-Sensitive Public Fund Sharing....Pages 3-10 A Production Function for Scientific Interaction....Pages 11-17 An Approximation Method for Evolutions of Exchange Economies Making the Evolving Equilibrium Set Nice....Pages 18-34 Samuelson’s “Shibboleth” Revisited: Proportional Budgeting Among Agents and Rank-Two Demand Systems....Pages 35-46 Connections between Taxation, Wage Rate and the Affection to Leisure....Pages 47-55 Social Preferences as Optimal Compromises....Pages 56-64 An Alternative Characterization of Paretian Generalized Median Social Welfare Functions....Pages 65-74 Tax Deductibility of Economic Depreciation to Ensure Invariant Valuations: The Johansson-Samuelson Theorem Reconsidered....Pages 75-83 Workers’ Optimal Shares and Tax Rates in a Neo-Classical Model of Distribution and Wealth....Pages 84-94 Closed-Form Solutions of General Intertemporal Consumption-Maximization Models....Pages 95-109 Modelling Product Differentiation: An Application of the Theory of Functional Equations....Pages 110-120 Financing of Public Goods by Pigouvian Taxes....Pages 121-129 Stochastic Interpretation of the Cornfield-Leontief Multiplier Process....Pages 130-141 Nonparametric Tests for Cost Constrained Technologies....Pages 142-148 Strange Addictive Behaviour: Periodic and Chaotic Binges....Pages 149-162 How to Achieve Consistent Paired Ratio Comparisons....Pages 163-176 Rights and Game Forms, Types of Preference Orderings, and Pareto Inefficiency....Pages 177-187 On the Compatibility of Generalized Hicks and Wage-Output-Neutral Technical Progress....Pages 189-193 Growth Models in Comparison....Pages 194-206 Aggregation and Graphical Representation of Input-Output Tables....Pages 207-220 Front Matter....Pages 1-1 Just Intergenerational Resource Sharing: An Axiomatic Approach....Pages 221-231 Robust Assessment of Preference Functions....Pages 232-242 Bounds for the Frobenius Root of Non-Negative Matrices and an Economic Application....Pages 243-248 The Dependence of the Price Level on the Expansion of the Money Supply in Closed Economies....Pages 249-259 Income Tax Progression and Inequality Reduction....Pages 260-270 Different Economic Theories with the Same Formal Structure: Risk, Income Inequality, Information Structures, etc.....Pages 271-277 Endowment Changes in Economic Equilibrium: The Dutch Disease Revisited....Pages 278-287 Efficiency Measures and Input Aggregation....Pages 288-294 Fundamental Properties of a Surplus Function....Pages 295-302 Factor Augmenting Representations of Technological Progress....Pages 303-311 The Ghost and the Machine....Pages 312-322 The Central Role of Efficiency in Inequality and Welfare Measurement Theory....Pages 323-331 Front Matter....Pages 333-333 Forecasting the Development of a German Building Society — Different Methods of Mathematical Approach and Computer Simulation....Pages 335-344 An Approach to Optimality Conditions in Vector and Scalar Optimization....Pages 345-358 Oligopolies and Aggregate Market Power....Pages 359-369 Alternatives for the Traditional Overhead Cost Allocation....Pages 370-381 Deterministic Dynamic Multi-Stage Uncapacitated Lot-Sizing Problems....Pages 382-391 Product Positioning Based on Knowledge-Oriented Support: A Logical Framework....Pages 392-407 Computation of Optimal Dodge Sampling Plans in Restricted Classes according to the Minimax Regret Criterion....Pages 408-413 Global Optimization and the Geometric Complementarity Problem....Pages 414-422 Front Matter....Pages 333-333 A Heuristic for Multi-Product, Multi-Period, Single-Level Batch Production....Pages 423-433 The Domain of Monotonicity and Concavity of the Transcendental Logarithmic Unit Cost Function....Pages 434-445 Frontier Tales: DEA and FDH....Pages 446-457 The Ecological Disaster of Bitterfeld and Chicken Games....Pages 458-463 Some Remarks on Relational Input-Output-Models....Pages 464-474 A Stopping Problem....Pages 475-484 Front Matter....Pages 485-485 Share Economy: What is the Meaning of “Marginal Revenue Equals Marginal Labor Cost” in a Stochastic Model?....Pages 487-493 Symmetric Means and the Expected Utility Theorem....Pages 494-505 The Design and Implementation of a German Stock Price Research Index (Deutscher Aktien-Forschungsindex DAFOX)....Pages 506-519 On the Rating of Excess of Loss Reinsurance Treaties with Reinstatement....Pages 520-529 The Financial Sector in Systems of National Accounts....Pages 530-536 Modelling Optimal Return of Premiums in Health Insurance....Pages 537-547 J. Wolfowitz’s Method for Constructing Sequential Minimax Estimators....Pages 548-561 On the Importance of Mathematical Models and Methods to the Insurance Business....Pages 562-575 Canonical Correlations in a Two-Blocks LISREL Model....Pages 576-584 On the Influence of Mathematics and Informatics on the Modern Insurance Industry....Pages 585-591 Intertemporal Diversification under the Constraint of Withdrawls or Additional Deposits....Pages 592-600 Front Matter....Pages 601-601 The Economic Impact of Environmental Regulation: An AGE Analysis under Alternative Treatments of Technical Change....Pages 603-615 The Social Market Economy — Present and Future....Pages 616-621 Financial Deregulation and Macroeconomic Stabilization Rules....Pages 622-631 Front Matter....Pages 601-601 A Problem of the Transition from a Planned to a Market Economy: Should Firms Be Subsidized in Order to Avoid Their Bankrupcy?....Pages 632-649 The Monetary Policy of the Deutsche Bundesbank and the German Money Market....Pages 650-664 Models in Scientific Economics — Domain of Entities and Approximation to Reality....Pages 665-672 Experimental Economics....Pages 673-679 Models and Methods....Pages 680-690 On Reasonable Demands for Avoidance and Recycling Regulations....Pages 691-700 The Downward Spiral....Pages 701-713 This volume presents a collection of more than sixty papers on mathematical economics. All papers use a model-based approach. The focus of the book is to demonstrate the state-of-the-art in modelling and research in important areas of economic theory. It is divided into four parts: Part I: Economics; Part II: Operations Research and Models of the Firm; Part III: Risk, Insurance, and Statistics; Part IV: Policy and Methodology. The papers are written by international experts who have dedicated their contributions to Wolfgang Eichhorn on the occasion of his 60th birthday. Researchers as well as graduate students interested in mathematical modelling in economics will find this book a rich source of interesting and novel results