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on Business Economics |
| By: | Juan D. Carrillo; Mathias Dewatripont |
| Date: | 2005–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:172782000000000058&r=bec |
| By: | Robert E. Hall; Paul R. Milgrom |
| Abstract: | When a job-seeker and an employer meet, find a prospective surplus, and bargain over the wage, conditions in the outside labor market, including especially unemployment, may be irrelevant. The job-seeker's threat point in the bargain is to delay bargaining, not to terminate bargaining and resume search at other employers. Similarly, the employer's threat point is to delay bargaining, not to terminate it. Consequently, the outcome of the bargain depends on the relative costs of delay to the parties, not on the results of irrational threats to disclaim any bargain. In a model of the labor market that otherwise adopts all of the features of the standard Mortensen-Pissarides model, unemployment is much more sensitive to changes in productivity than in the standard model, because feedback through the wage is absent. We also present models where the wage bargain is in partial contact with conditions in the labor market. |
| JEL: | E24 E32 J64 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11245&r=bec |
| By: | Fousseni Chabi-Yo; René Garcia; Eric Renaul |
| Abstract: | The authors examine the ability of economic models with regime shifts to rationalize and explain the risk-aversion and pricing-kernel puzzles put forward in Jackwerth (2000). They build an economy where investors' preferences or economic fundamentals are state-dependent, and simulate prices for a market index and European options on that index. Based on the original nonparametric methodology, the risk-aversion and pricing-kernel functions obtained across wealth states with these artificial data exhibit the same puzzles found with the actual data, but within each regime the puzzles disappear. This suggests that state dependence potentially explains the puzzles. |
| Keywords: | Financial markets; Market structure and pricing |
| JEL: | G12 G13 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:05-9&r=bec |
| By: | Ellickson, Paul |
| Abstract: | This paper uses a model of endogenous sunk cost (ESC) competition to explain the industrial structure of the supermarket industry, where a few powerful chains provide high quality products at low prices. The predictions of this model accord well with the features of the supermarket industry documented here. Using a novel dataset of store level observations, I demonstrate that 1) the same number of high quality firms enter markets of varying sizes and compete side by side for the same consumers and 2) quality increases with the size of the market. In addition to documenting a local structure of competition consistent with the ESC framework, I demonstrate that the choice of quality by rival firms behaves as a strategic complement. This key finding, which is consistent with an ESC model of quality enhancing sunk outlays, eliminates several alternative explanations of concentration in the supermarket industry, including most standard models of cost-reducing investment and product proliferation. These results suggest that the competitive mechanisms sustaining high levels of concentration in the supermarket industry are inherently rivalrous and unlikely to lead to the emergence of a single dominant firm. |
| Keywords: | endogenous sunk costs, vertical product differentiation, oligopoly, retail, supermarkets, market concentration, dartboard, complementarity |
| JEL: | L13 L22 L81 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:duk:dukeec:05-04&r=bec |
| By: | Jesús Fernández-Villaverde; Juan F. Rubio-Ramirez; Thomas J. Sargent |
| Date: | 2005–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:172782000000000096&r=bec |
| By: | Juan D. Carrillo; Denis Gromb |
| Date: | 2005–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:172782000000000053&r=bec |
| By: | Nooteboom,Bart (Tilburg University, Center for Economic Research) |
| Abstract: | Trust is full of puzzle and paradox. Trust is both rational and emotional. Trust can go beyond calculative self-interest, but has its limits. People may want to trust, while they may also feel threatened by it. If trust is not in place prior to a relationship, on the basis of institutions, prior experience, or reputation, it has to be built up, in specific relations. For that one needs to learn, in the sense of building empathy, and perhaps a certain degree of identification. In an attempt at a better understanding of the puzzles and processes of trust, this chapter applies the perspective of 'embodied cognition', and insights from mental 'framing' and decision heuristics from social psychology. |
| JEL: | B52 D23 D83 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200547&r=bec |
| By: | Nooteboom,Bart (Tilburg University, Center for Economic Research) |
| Abstract: | This article connects theory of learning with theory of governance, in the context of inter-firm relations. It recognizes fundamental criticism of transaction cost economics (TCE), but preserves elements from that theory. Two kinds of relational risk are identified: hold-up and spillover risk. For the governance of relations, i.e. the control of relational risk, the article presents a set of instruments that includes trust, next to instruments adopted and adapted from TCE. It also includes roles for gobetweens. Some references to empirical evidence are included. |
| JEL: | D23 D83 L14 L24 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200538&r=bec |
| By: | Nooteboom,Bart (Tilburg University, Center for Economic Research) |
| Abstract: | The literature on entrepreneurship recognizes a variety of entrepreneurial roles, and the question arises what roles are played when and by whom. In this article, roles are attributed to different stages of innovation and organizational development. A central theme is the relation between discontinuity, in radical innovation (exploration), and continuity, in application, diffusion and adaptation (exploitation). Use is made of a concept of a 'cycle of discovery', which seeks to explain how exploration leads on to exploitation, and how exploitation may yield exploration, in a step-by-step development towards radical innovation. Parallel to this there are processes of organisational development. |
| JEL: | D83 M13 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200543&r=bec |
| By: | Nooteboom,Bart; Gilsing,Victor A. (Tilburg University, Center for Economic Research) |
| Abstract: | Taking into account both competence and governance issues, and six dimensions of tie strength, this article argues that in networks for exploration there are good reasons, counter to the thesis of the 'strength of weak ties', for a dense structure of ties that are strong in most dimensions. By contrast, in exploitation networks there are good reasons for structures that are non-dense, with ties that are strong in other dimensions than in networks for exploration. |
| JEL: | L14 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200540&r=bec |
| By: | Nooteboom,Bart (Tilburg University, Center for Economic Research) |
| Abstract: | This paper presents elements of a cognitive theory of the firm, from the perspective of embodied cognition. It entails the notion of 'cognitive distance' between people that have developed their cognition in different environments. This yields the notion of the firm as a 'focusing device', to reduce cognitive distance for the sake of efficient collaboration and for the resolution of conflict. This focus yields organisational myopia, which needs to be compensated by outside relations, between firms, at some cognitive distance. Next, on the basis of principles derived from cognitive science, this paper tries to resolve the problem of combining structural stability and change, which in economics is known as the problem of combining exploitation and exploration. This provides the basis for a theory of learning and innovation in organisations and economies. The theory is elaborated on the basis of the notion of 'scripts', also derived from cognitive science. |
| JEL: | D21 D83 M13 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200546&r=bec |
| By: | Nooteboom,Bart (Tilburg University, Center for Economic Research) |
| Abstract: | This paper reconstructs the long-term development of retailing, including industrial, economic and social antecedents and consequences. Among other things, it includes innovation in the form of the emergence and diffusion of successive novel types of shop (including self-service), relations between large and small firms in innovation and diffusion, change of demand conditions, institutional change concerning the opening time of shops, increase of scale and concentration, and social effects. For the analysis of the process and costs of retailing, use is made of queuing theory rather than customary production functions. The reconstruction is conducted in evolutionary terms of selection, variety generation and transmission. Scripts with nodes for component activities are used in analogy to chromosomes composed of genes. The paper concludes with a discussion of the usefulness of evolutionary economics, and offers suggestions for its development. |
| JEL: | B52 L22 L81 M13 O31 O33 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200548&r=bec |
| By: | Jenkins , Alan (ESSEC Business School) |
| Abstract: | This paper reviews existing literatures on the analysis of performance appraisal (PA) paying special attention to those which try to take into account the “social context” of appraisal systems and processes. The special place of political action within these processes is underlined and the different levels at which politics need to be considered in research are outlined. Research on politics is considered and shown to lack an adequate consideration of the social relations involved in the reciprocal interactions between PA tools and processes and users interpretation and manipulation of them. |
| Keywords: | Performance appraisal; Social context; Politics |
| JEL: | M12 M54 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-05004&r=bec |
| By: | Nadja Kamhi; Danny Leung |
| Abstract: | The authors document the recent evolution of the self-employment rate in Canada. Between 1987 and 1998, the self-employment rate rose 3.5 percentage points from 13.8 per cent to 17.3 per cent. In contrast, over the 1999 to 2002 period, the self-employment rate fell by 1.9 percentage points, returning the self-employment rate in 2002 to a level only 0.2 percentage points higher than in 1992. The authors explore the possible explanations for this reversal. They describe trends in self-employment by age, gender, and types of self-employment, and then decompose the changes in the self-employment rate into the fraction due to shifts in the industrial structure and the proportion due to changes within each industry. The authors also examine the role of the business cycle and other macroeconomic factors, such as tax rates. |
| Keywords: | Labour markets |
| JEL: | J23 J24 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:05-8&r=bec |
| By: | Olubunmi Faleye; Vikas Mehrotra; Randall Morck |
| Abstract: | Equity ownership gives labor both a fractional stake in the firm's residual cash flows and a voice in corporate governance. Relative to other firms, labor-controlled publicly-traded firms deviate more from value maximization, invest less in long-term assets, take fewer risks, grow more slowly, create fewer new jobs, and exhibit lower labor and total factor productivity. We therefore propose that labor uses its corporate governance voice to maximize the combined value of its contractual and residual claims, and that this often pushes corporate policies away from, rather than towards, shareholder value maximization. |
| JEL: | G3 J0 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11254&r=bec |
| By: | Nicola Boccella |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:ufg:qdsems:08-2005&r=bec |
| By: | Mário Rui Silva (CEDRES, Faculdade de Economia do Porto); Hermano Rodrigues (Faculdade de Economia do Porto) |
| Abstract: | Public-private partnerships (PPP) are a recent instrument for social and economic development policies. Within the framework of competitiveness policy, PPP are an adequate instrument to promote collective entrepreneurship. Through this instrument, some market failures can be overcome and a better provision of strategic services can be afforded to firms. Also, PPP can be able to promote co-ordination between public and private partners and lead to specific innovative networks. PPP correspond to a more decentralised policy and they are supposed to increase focus and effectiveness and to involve agencies that are closer to firms and that have a more narrow range of objectives. In this contribution, we analyse the pattern of the so-called partnerships projects, approved between 2000 and the 30th june of 2003 in the framework of the Portuguese Operational Program for the Economy. By using HOMALS and K-means cluster analysis, we were able to characterise PPP and to identify typical clusters for the PPP projects. On one hand, the results show that policy decentralization brought by partnerships has promoted or reinforced a more specialized institutional framework (mainly national, sectoral or regional entrepreneurial associations). But, on the other hand, PPP had a small impact in the promotion of specific networks and/or in innovation. Collective entrepreneurship induced by PPP instrument has presented a clear bias toward the provision of services that have a public or semi-public nature, by the fact that firms that can use these services are in a large number (all the firms of a sub sector or even larger universes). But technological projects and/or projects addressed to specific networks of firms were very few. In particular, the impact of PPP on structural change seems to have been short. |
| Keywords: | Public-private partnerships; Competitiveness policy; Entrepreneurship; Collective entrepreneurship |
| JEL: | M13 H50 O20 C14 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:172&r=bec |