Publications of Andrzej Baniak

Mandating Behavioral Conformity in Social Groups with Conformist Members

Social interaction among individuals with a preference for conformity gives rise to coordination externalities which are not internalized in a non-cooperative setting. Mandating behavioral conformity, by centrally imposing a common, group-wide action, internalizes these coordination externalities, but also comes at a cost of restraining individuals’ selfregarding goals. We explore a framework of social interaction among privately informed individuals with conformist preferences to examine when mandating behavioral conformity improves group welfare. Our analysis elucidates how the desirability of mandating behavioral conformity is shaped by the group’s socio-economic structure. We find that mandating behavioral conformity is not desirable in social groups that are ex ante homogeneous—either with respect to members’ contribution to group welfare or their innate conformist tendency. In contrast, mandating behavioral conformity can be beneficial in those ex ante heterogeneous social groups where the individuals who contribute most to group welfare also exhibit the strongest preference for conformity.

Interjurisdictional Linkages and the Scope for Interventionist Legal Harmonization

We study the desirability of interventionist harmonization of legal standards across multiple, mutually interdependent jurisdictions which strive to adapt law to their local conditions, as well as to synchronize it with other jurisdictions. In a setting where jurisdictions are privately informed about their local conditions, we contrast the regime of decentralized standard-setting with two means of interventionist harmonization: through centralization and through allocation of lawmaking authority to a particular jurisdiction. Our analysis illuminates the importance of patterns of interjurisdictional linkages in delineating the scope for, and the appropriate means of, interventionist harmonization. We find that greater jurisdictional interdependence - the hallmark of globalization -does not per se justify interventionist harmonization, unless increased interdependence results in notable asymmetries in the pattern of jurisdictional interdependence. We also show that, in the presence of cross-jurisdictional externalities, harmonization is, contrary to conventional predictions, not desirable when local preferences are homogeneous across jurisdictions.

La Pléiade and Exchange Rate Pass-Through

We examine the effects of a change in the exchange rate on sales and prices in the framework of a two-country, two-commodity duopoly model with joint production. We distinguish two kinds of reaction. When the firm located in the country whose currency depreciates (appreciates) increases (decreases) sales in both countries, we call it the `firm-specific’ effect. If all sales in the country which appreciates (depreciates) its currency increase (decrease), we call it the `country-specific’ effect. Strategic substitutability, economies of joint production and/or economies of scale lead to the firm-specific effect. Strategic complementarity, diseconomies of joint production and/or diseconomies of scale lead to the country-specific effect.