Numerical Illustration

The numerical illustration makes use of data from Chapter 10 (Table 103, second column for the region allocation, while country level data are taken from the fourth column in Table 11-1 below. For the sub-region level allocation, we chose the example of Southeast Asia. Tables 11-2 and 11-3 present the final allocations in the presence of bargaining power and coalition building. In other words, these represent the payoff function (IFj, ¥2, and ¥3), or power indices, results using the values in the second column in each table as the basis for the initial allocations. Table 11-2 presents the power indices at the world region level that feed into the construction of ¥/3 in Table 11-3. When power parameter ¡3 = 0.5, the countries with the largest base allocations (Mediterranean, West Asia, Central Asia, and Central America) gain at the expense of the other regions. Equity plays a stronger role when /3 = 0.95, with the largest countries losing notable shares and some of the smaller ones gaining.

Table 11-3 uses agricultural GDP from Table 11-1 to determine the country level allocations. Under % the final allocation in Southeast Asia is an egalitarian one, whatever the value of power parameter ß is. Small countries (Brunei, Cambodia, Laos), with respect to their weight in the total GDP of Southeast Asia, prefer an allocation based on Moreover, this preference remains valid whatever the value of power parameter ß. For other countries, however, the picture is different. When the value of power parameter ß is 0.50 or 0.75, large countries (Indonesia and Philippines) prefer an allocation based on but prefer an allocation rule based 1J2 when the value of power parameter rises to 0.95. Thailand and Vietnam prefer an allocation based on W2 when the value of power parameter ß is 0.50 or 0.70, and an allocation based on *P3 when the value of power parameter ß is 0.95. Finally, Malaysia and Burma prefer an allocation based on when the value of power parameter ß is 0.50 or 0.70, and an allocation based on f3 when the value of power parameter ß is 0.95. In practice, one would expect both the egalitarian extreme under and the subsidiarity principle (*F3) when ß is 0.95 to be untenable. However, the ¥3 allocations under the other two power levels seem feasible.

Table 11-1. Country level agricultural indicators for Southeast Asia
0 0

Post a comment