Kazunobu Hayakawa (Institute of Developing Economies), Kuo-Feng Kao (Tamkang University), Hiroshi Mukunoki (Gakushuin University)
"Optimal Trade Policies on a Monopoly Platform in Two-sided Markets"
 Review of International Economics
https://doi.org/10.1111/roie.12806

This study examines the determination of import policies imposed on a monopoly platform product in a two-sided market. The platform facilitates interaction between consumers and service providers with the entry of service providers influencing product demand and, consequently, encouraging more entries. The study finds that optimal import policies are influenced by network externalities and an increase in the number of importing countries. Specifically, the optimal import policies are import tariffs with a small degree of externalities. The optimal tariffs increase when externalities are small but decrease when they are large. In case of large externalities, countries’ optimal import policies become import subsidies. Additionally, when importing countries non-cooperatively establish their import policies, an increased number of importing countries increases the optimal tariffs with a small degree of network externalities. However, when importing countries cooperatively determine their import policies, an increase in the number of importing countries consistently decreases the optimal tariffs or increases the optimal import subsidies. Furthermore, an increased degree of the network externalities always decreases optimal import tariffs or increases optimal import subsidies. These results underscore the significance of policy cooperation among importing countries in advancing trade liberalization for platform products.

Hiroshi Goto (Chiba University of Commerce), Yan Ma (Kobe University), Nobuyuki Takeuchi (University of Marketing and Distribution Sciences)
"Offshoring and the distribution of skills"
 Journal of Economic Theory
https://doi.org/10.1016/j.jet.2025.105994

We develop a two-sector model to explore how skill distribution affects trade in final goods and offshoring. We show that when countries differ in skill abundance, wage disparities create opportunities for offshoring. In contrast, when countries vary in skill diversity but share the same median skill, symmetric skill distributions render offshoring infeasible. We also find that offshoring can result in the relative price under offshoring being lower than each country's autarky relative price if the gap between the median skill levels of the two countries is sufficiently large. Finally, we demonstrate that an individual's industry of employment primarily determines how they are affected by trade in final goods, whereas their occupation (tasks) shapes how they are impacted by offshoring.

Keisaku Higashida(Kwansei Gakuin University), Jota IshikaWa(Gakushuin University), Nori Tarui(University of Hawaii)
"Carrying Carbon? Negative and Positive Carbon Leakage with International Transport"
 Journal of Economics & Management Strategy

This paper studies how carbon pricing affects greenhouse gas (GHG) emissions from international transport, production, and consumption of traded goods by modeling the international transport sector explicitly. Strategic behaviors of a transport firm generate a novel mechanism of carbon leakage across borders and sectors. The effectiveness of carbon pricing depends on whether the backhaul problem (i.e., the imbalance of shipping volume in outgoing and incoming routes) is present. If the backhaul problem is absent, carbon pricing is effective in reducing the global GHG emissions. With the backhaul problem, carbon pricing on goods production results in cross-border carbon leakage. However, strategic freight-rate setting by the transport firm mitigates this leakage. The opportunity of foreign direct investment (FDI) also affects carbon pricing effectiveness because the transport firm tries to deter FDI. Surprisingly, carbon pricing in the transport sector may not affect GHG emissions at all. Moreover, domestic carbon pricing on goods production may decrease GHG emissions from both transport and foreign production even if there is no domestic production under FDI.

Keisaku Higashida(Kwansei Gakuin University), Yuki Higuchi(Sophia University), Mohammad Mosharraf Hossain(University of Chittagong), Mohammad Sujauddin(North South University), Ryo Takahashi(Waseda University), Kenta Tanaka(Musashi University)
"Are social norms an obstacle to honest behavior? Theory and experimental evidence"
Journal of Asian Economics
https://doi.org/10.1016/j.asieco.2024.101875

This study theoretically and experimentally investigates the effects of intrinsic dishonesty costs and other-regarding preferences reflecting social norms on honest behavior when people have the opportunity to act collaboratively and conduct mutual monitoring. We set up a theoretical model to clarify this effect and, then, report the results of a series of lab-in-the-field experiments conducted in two communities of Bangladesh, villages in the Chittagong Hill Tracts and the University of Chittagong. The participants played a trust game and a confidential die-roll game. Our experimental results show that mutual monitoring helped to increase honest behavior in both the traditional and university communities, but worked more effectively in the latter compared to the former. As predicted by our theoretical model, other-regarding preferences worked differently by significantly discouraging honest behavior among the community leaders but encouraging honest behavior among the students.

Keisaku Higashida(Kwansei Gakuin University), Shoichi Kiyama(Kyoto University), Kofi Otumawu-Apreku(Solomon Islands National University), Satoshi Yamazaki(University of Tasmania)
"Informal pricing in formal fish markets: Evidence from the Solomon Islands"
Canadian Journal of Fisheries and Aquatic Sciences
https://doi.org/10.1139/cjfas-2024-0117

How are fish prices determined in the largest formal market in the Solomon Islands? The Honiara Central Market is the country’s primary fresh produce market, serving as an important conduit between rural food producers and urban consumers. One distinctive characteristic of this market is that despite a diverse range of reef fish species being available, all reef fish are traded nominally as homogeneous goods with no price differentiation. Using transaction-level data collected from the market, we show the prevalence of informal pricing, wherein the unit price of fish is implicitly differentiated based on fish species groups, quality, and buyers’ attributes. This result aligns with our expectation that diverse species groups and qualities are traded in a competitive environment with many vendors and buyers, where reef fish are indeed traded as heterogeneous products. Although fish provide a vital source of food and income for Pacific Island countries, the pricing of this vital natural resource is poorly understood. Our study provides new insights into how fish prices are determined in a formal market within the context of small island developing states.

Keisaku Higashida(Kwansei Gakuin University), Yuki Higuchi(Sophia University), Mohammad Mosharraf Hossain(University of Chittagong), Ryo Takahashi(Waseda University), Mohammad Sujauddin(North South University)
"Becoming a Chief through Leadership Experience: Evidence from a Lab-in-the-Field Experiment in Chittagong Hill Tracts, Bangladesh"
Atlantic Economic Journal
https://doi.org/10.1007/s11293-024-09807-x

This study examines whether the preferences and behaviors of traditional community leaders change depending on their leadership experience. Using data from a lab-in-the-field experiment conducted in the Chittagong Hill Tracts in Bangladesh, in which participants were village leaders in traditional communities of these tracts, this study focused on competitiveness, dishonest behavior, and altruism, which are crucial factors in the fair governance of communities. The results of a pedometer-shaking game to measure competitiveness, a dice-casting game to extract dishonest behavior, and a simple dictator game are reported. The experimental results reveal that the longer the leader’s term, the less competitive they are and the less likely they are to engage in dishonest behavior, although experience as a leader does not have any significant effect on altruism. This study contributes to the literature as it adds experimental evidence regarding the preference change of leaders in traditional communities. Preferences change in the direction of conformity to the norms and benefits of other community members as leaders gain experience. Thus, changes in leader preferences should be considered when evaluating the governance systems of traditional communities.

Jared Desello (Japan University of Economics)
"Constructing a Multidimensional Index for Financial Well-Bein"
International Journal of Economics and Finance
https://doi.org/10.5539/ijef.v17n1p84

The research presents a new index that measures financial well-being by incorporating three dimensions: financial confidence, financial resilience, and uncertainty. It employs a two-stage principal component analysis to come up with a single indicator for each representative economy, which is then ranked from highest to lowest. Thereafter, the cross-country impact of the financial well-being index against poverty, income inequality, and unemployment were calculated.

Hiroshi Mukunoki (Gakushuin University), Hirofumi Okoshi (Okayama University)
"Wake Not a Sleeping Lion: Free Trade Agreements and Decision Rights in Multinationals"
Review of International Economics

Free trade agreements with rules of origin affect the location of input production for vertically integrated multinational enterprises. The relocation induced by a free trade agreement changes the allocation of decision rights within multinational enterprises and the purpose of transfer pricing from avoiding high taxes to strengthening their productmarket competitiveness. This study shows that a free trade agreement with rules of origin may hurt both a multinational enterprise and a local firm, despite tariff elimination, when the relocation occurs and the decision rights change from centralization to decentralization. Moreover, such a free trade agreement can hurt consumers. Nevertheless, rules of origin increase the feasibility of free trade agreements due to larger tax revenues.