nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2006‒05‒20
two papers chosen by
Bernardo Batiz-Lazo
Bristol Business School

  1. On the Strategic Use of Focal Points in Bargaining Situations By Maarten C.W. Janssen
  2. The Pharmacia Story of Entrepreneurship and as a Creative Technical University - An Experiment in Innovation, Organizational Break Up and Industrial Renaissance By Eliasson, Gunnar; Eliasson, Åsa

  1. By: Maarten C.W. Janssen (Erasmus Universiteit Rotterdam)
    Abstract: This paper argues that the notion of focal points is important in understanding bargaining processes. Recent literature confines a discussion of the usefulness of the notion to coordination problems and when bargaining experiments result in outcomes that are inconsistent with a straightforward interpretation of economic theory, some notion of ‘fairness’ is invoked. This paper uses symmetry requirements to formalize the notion of focal points. By doing so, it explains the focality of equal split division and it re-interprets recent experimental evidence in bargaining games. Experimental economists should try to empirically disentangle the importance of focal points from other explanatory factors (such as fairness). One way to do so, would be to study modal (instead of average) responses more systematically. Future theoretical research should focus on the strategic implications of proposing a frame (focal point) to conceive of the bargaining problem.
    Keywords: Bargaining; Game Perceptions; Focal Points
    JEL: C78 C91
    Date: 2006–04–26
  2. By: Eliasson, Gunnar (The Ratio Institute); Eliasson, Åsa (IBMP, CNRS, Strasbourg and VitiGen AG, Siebeldingen)
    Abstract: While innovative technology supply has been the focus of much neo Schumpeterian modeling, few have addressed the critical and more resource demanding commercializing of the same technologies. The result may have been a growth policy focused on the wrong problem. Using competence bloc theory and a firm based macro to macro approach we abandon the assumed linear relation between technology change and economic growth of such models, and demonstrate that lack of local commercialization competences is likely to block growth even though innovative technology supplies are abundant. The break up, reorganization and part withdrawal of Pharmacia from the local Uppsala (in Sweden) economy after a series of international mergers illustrate. Pharmacia has “released” a wealth of technologies in local markets. Local commercialization competence, notably industrially competent financing has, however, not been sufficient to fill in through indigenous entrepreneurship the vacuum left by Pharmacia. Only thanks to foreign investors, attracted by Pharmacia technologies, that have opted to stay for the long term the local Uppsala economy seems to be heading for a successful future. The Pharmacia case also demonstrates the role of advanced firms as “technical universities” and the nature of an experimentally organized economy (EOE) in which business mistakes are a natural learning cost for economic development.
    Keywords: Competence Bloc Theory; Commercialization of Innovations; Experimentally Organized Economy; Innovation and Entrepreneurship; Pharmaceutical industry
    JEL: L20 L65 M10
    Date: 2006–05–11

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