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on Microeconomics |
| By: | Luciano Fanti; Nicola Meccheri |
| Abstract: | This paper compares Cournot and Bertrand equilibria in a differentiated duopoly (with imperfect substitutes), total wage bill maximizing unions and labour decreasing returns. It is shown that the standard result, that equilibrium profits are always higher under Cournot, may be reversed even for a fairly low degree of product differentiation. Moreover, the presence of labour decreasing returns tends to reinforce the mechanisms that contribute to the reversal result, making this event possible for a wider range of situations, with respect to those identified by the earlier literature. |
| Keywords: | Cournot-Bertrand profit differential, unions, labour decreasing returns. |
| JEL: | J43 J50 L13 |
| Date: | 2010–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2010/107&r=mic |
| By: | Kazuo Ueda (Faculty of Economics, University of Tokyo,) |
| Abstract: | This paper compares the three recent episodes of boom and bust cycles in asset prices: Japan in the late 1980s to the 1990s; the U.S. since the mid 1990s; and China during the last decade. Although we have not yet seen a collapse of Chinese property prices, the increases so far are comparable to those in the other two episodes and seem to warrant a careful comparative study. I first examine the behavior of asset prices, especially, property prices in the three cases and point out some similarities. I then go on to discuss some backgrounds for the behavior of asset prices. I emphasize the role played by extremely easy monetary policy for generating bubble like asset price behaviors in the three cases. Monetary policy was shown to be easier than standard policy rules like the Taylor rule indicates. The reason for easy monetary policies is investigated. In the U.S. case the monetary authority was concerned over the risk of deflation in the early to mid 2000s. The experiences of Japan and China are quite similar in that the authorities of both countries were seriously concerned with possible deflationary effects of exchange rate appreciation on the economy. Japan let the exchange rate appreciate, while China has resisted a large scale intervention. It is shown, however, that the behavior of real exchange rates has not been that different. Implications of such a finding for the future of the Chinese economy are also discussed. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2010cf774&r=mic |
| By: | Anindya Banerjee; Markus Eberhardt; J. James Reade |
| Abstract: | The recent blossoming of panel econometrics in general and panel time-series methods in particular has enabled many more research questions to be investigated than before. However, this development has not assuaged serious concerns over the lack of diagnostic testing procedures in panel econometrics, in particular vis-a-vis the prominence of such practices in the time-series domain: the recent introduction of residual cross-section independence tests aside, within mainstream panel empirics the combination of ‘model’, ‘spefication’ and ‘testing’ typically refers to the distinction between fixed and random effects, as opposed to a rigorous investigation of residual properties. In this paper we investigate these issues in the context of non-stationary panels with multifactor error structure, employing Monte Carlo simulations to investigate the distributions and rejection frequencies for standard time-series diagnostic procedures, including tests for residual autocorrelation, ARCH, normality, heteroskedasticity and functional form. |
| Keywords: | Panel time-series, residual diagnostic, common factor model |
| JEL: | C12 C22 C23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:514&r=mic |
| By: | Fabio Pieri; Enrico Zaninotto (DISA, Faculty of Economics, Trento University) |
| Abstract: | This paper analyzes the relationship between firm efficiency and vertical integration in the Italian machine tool (MT) industry. A theoretical model of entry and competition within an industry has been set up. In this model firms can choose either to be vertically integrated or not: the most efficientfirms self-select in being vertically integrated, while less efficientfirms prefer a disintegrated structure and they both coexist in equilibrium. In the second part of the paper the relationship between efficiency and vertical integration has been tested using a stochastic frontier framework in an novel panel dataset including around 500 MT builders. The theoretical prediction is confirmed: outsourcing seems a rational choice for less efficient firms to make positive operating profits and stay in the market; on the other hand, more efficient firms exploit their efficiency advantage to control a greater part of the production chain, possibly benefiting from greater coordination among different phases and tailored intermediate inputs. |
| Keywords: | vertical integration; technical efficiency; firm heterogeneity; heteroskedastic frontier model |
| JEL: | D24 L23 L25 L64 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:trt:disawp:1006&r=mic |
| By: | Marc ARTZROUNI; Patrice CASSAGNARD |
| Abstract: | The Discrete Nerlove-Arrow Model: Explicit Solutions |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:tac:wpaper:2010-2011_3&r=mic |
| By: | Ossi Korkeamäki; Tomi Kyyrä |
| Abstract: | We use matched employer-employee data from Finland to model transitions out of work into sick leave and disability retirement. To identify the role of institutional factors we exploit reforms that changed medical requirements for disability pension eligibility and experience-rated employer contributions. We find that transitions to sick leave and disability pension benefits are relatively rare in growing establishments, but rather common in establishments with a high degree of excess worker turnover. We also show that transitions to disability retirement depend on the stringency of medical screening and the degree of experience rating applied to the employer. |
| Keywords: | Disability pension, sick leave, experience rating |
| JEL: | J26 J23 J14 |
| Date: | 2010–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:16&r=mic |
| By: | Ciuiu, Daniel |
| Abstract: | In this paper we will generate queueing systems with c stations where the inter-arrival time and the c service times depend through a c+1 copula C. We will consider two models: first when the customer does not know the order of service times for the free service channels (he/she chooses the service channel randomly), and the second when he/she knows this order (he/she chooses the fastest free service channel). The marginals can be exponential, Erlang or hyper-exponential. |
| Keywords: | Queueing systems; copula; simulation. |
| JEL: | C02 C15 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27018&r=mic |
| By: | Walter, Sascha G.; Schmidt, Arne; Walter, Achim |
| Abstract: | This study explores why academic entrepreneurs patent their inventions before and after creating a firm. Drawing on start-up data combined with patent data, we specifically examine the impact of five, relatively under-researched factors (scientific field, pace of technological development, technological uncertainty, entrepreneurial orientation, and patent effectiveness. The study shows that some scientific fields, technological uncertainty, and patent effectiveness are positively related to patent propensity, both before and after founding. The effects of pace of technological development and entrepreneurial orientation were timespecific. Our study suggests that patenting by academic entrepreneurs is driven by special rationales and that prior research on full-time scientists and established firms does not necessarily generalize to them. We discuss the implications of our findings both in terms of contribution to the current literature and technology transfer policies. -- |
| Keywords: | academic patenting |
| Date: | 2010–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:37083&r=mic |
| By: | Felix Bierbrauer (Max Planck Institute for Research on Collective Goods, Bonn); Pierre C. Boyer (University of Mannheim, Department of Economics) |
| Abstract: | We study Downsian competition in a Mirrleesian model of income taxation. The competing politicians may differ in competence. If politicians engage in vote-share maximization, the less competent politician's policy proposals are attractive to the minority of rich agents, whereas those of the competent politician are attractive to the majority of poor agents. The less competent politician wins with positive probability, which gives rise to a political failure in the sense of Besley and Coate (1998). Political failures are avoided if politicians maximize winning probabilities. Nevertheless, the two equilibria cannot be Pareto-ranked, the minority may be better off under vote-share maximization. |
| Keywords: | Electoral Competition, Non-linear Income Taxation, Candidate Quality |
| JEL: | H21 C72 D72 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2010_45&r=mic |
| By: | Maurizio Iacopetta (Observatoire Français des Conjonctures Économiques) |
| Abstract: | Do policies that alter the allocation of human capital across individuals affect the innovation capacity of an economy? To answer this question, I extend Romer's (1990) growth model to allow for individual heterogeneity. I find that the value of an invention rises with equality. If skills and talents are evenly distributed, inventions are more widely adopted in production and users are willing to bid a higher price. Therefore, more equality is associated with a larger share of the population employed in the business of invention. However, inventors of an equal society are not as creative as those of an unequal one. As a result an inverted-U curve relating inequality and the innovation rate emerges, indicating that departures from extreme forms of equality or inequality are growth-enhancing. I discuss evidence that agrees with the main implications of the analysis, namely that the market size and the number of inventors are negatively affected by inequality. Finally, a calibration exercise suggests that in recent decades the U.S. has been in the ascending portion of the inequality-growth curve. |
| Keywords: | human capital, inequality, innovation JEL Classification: O15; O31; O41; H52; J24. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1032&r=mic |
| By: | Luca Benzoni; Pierre Collin-Dufresne; Robert S. Goldstein |
| Abstract: | The 1987 market crash was associated with a dramatic and permanent steepening of the implied volatility curve for equity index options, despite minimal changes in aggregate consumption. We explain these events within a general equilibrium framework in which expected endowment growth and economic uncertainty are subject to rare jumps. The arrival of a jump triggers the updating of agents' beliefs about the likelihood of future jumps, which produces a market crash and a permanent shift in option prices. Consumption and dividends remain smooth, and the model is consistent with salient features of individual stock options, equity returns, and interest rates. |
| Keywords: | Asset pricing ; Prices ; Markets |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-2010-10&r=mic |
| By: | Parry, Ian W.H. (Resources for the Future); Evans, David A.; Oates, Wallace E. |
| Abstract: | This paper develops and parameterizes an overarching analytical framework to estimate the welfare effects of energy efficiency standards applied to automobiles and electricity-using durables. We also compare standards with sectoral and economywide pricing policies. The model captures a wide range of externalities and preexisting energy policies, and it allows for possible “misperceptions”—market failures that cause underinvestment in energy efficiency.Automobile fuel economy standards are not part of the first-best policy to reduce gasoline: fuel taxes are always superior because they reduce the externalities related to vehicle miles traveled. For the power sector, potential welfare gains from supplementing pricing instruments with efficiency standards are small at best. If pricing instruments are not feasible, a large misperceptions failure is required to justify efficiency standards, and even in this case the optimal reductions in fuel and electricity use are relatively modest. Reducing economywide carbon dioxide emissions through regulatory packages (combining efficiency and emissions standards) involves much higher costs than pricing instruments. |
| Keywords: | standards, energy taxes, market failure, climate, power sector, gasoline |
| JEL: | Q48 Q58 H21 R48 |
| Date: | 2010–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-59&r=mic |
| By: | Carlo Benetti; Christian Bidard; Edith Klimovsky; Antoine Rebeyrol |
| Abstract: | We build a bisector reproduction model with classical features in which the capitalists aim at maximizing accumulation of their profits. At variance with gravitation models, it is assumed that they invest their profits in their own industry. Their plans are based on actual productions and expected prices. Effective prices and effective allocations of resources are determined by a market-clearing mechanism. A simple law on the formation of expectations allows us to define the dynamics of disequilibria, which let appear endogenous self-sustained fluctuations, around a long-run path. The long-run rate of growth and the amplitude of the fluctuations depend on the initial conditions. |
| Keywords: | Classical Reproduction, Market prices, Disequilibrium, Growth, Cycle |
| JEL: | E11 E30 E32 O41 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2010-23&r=mic |
| By: | S. J. Rey; L. Anselin; D. C. Folch; M. L. Sastre-Gutierrez |
| Abstract: | This paper introduces a new approach to measuring neighborhood change. Instead of the traditional method of identifying “neighborhoods†a priori and then studying how resident attributes change over time, our approach looks at the neighborhood more intrinsically as a unit that has both a geographic footprint and a socioeconomic composition. Therefore, change is identified when both as- pects of a neighborhood transform from one period to the next. Our approach is based on a spatial clustering algorithm that identifies neighborhoods at two points in time for one city. We also develop indicators of spatial change at both the macro (city) level as well as local (neighborhood) scale. We illustrate these methods in an application to an extensive database of time-consistent census tracts for 359 of the largest metropolitan areas in the US for the period 1990-2000. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:asg:wpaper:5&r=mic |
| By: | Tymofiy Mylovanov (Penn State University); Andriy Zapechelnyuk (Queen Mary, University of London) |
| Abstract: | This paper studies optimal decision rules for a decision maker who can consult two experts in an environment without monetary payments. This extends the previous work by Holmström (1984) and Alonso and Matouschek (2008) who consider environments with one expert. In order to derive optimal decision rules, we prove a "constant-threat" result that states that any out-of-equilibrium pair of recommendations by the experts are punished with an action that is independent of their reports. A particular property of an optimal decision rule is that it is simple and constant for a large set of experts' preferences and distribution of their private information. Hence, it is robust in the sense that it is not affected by errors in specifying these features of the environment. By contrast, the constructions of optimal outcomes absent commitment or with only one expert are sensitive to model details. |
| Keywords: | Communication, Information, Noise, Experts, Constant threat |
| JEL: | C72 D82 D83 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp674&r=mic |
| By: | Averil Cook (School of Economics, The University of Queensland) |
| Abstract: | First year statistics is one of the 'problem' subjects in many institutions. At the University of Queensland in the School of Economics it is a compulsory course with a large enrolment, offered in both first and second semesters, and also across two campuses in semester one. Even though the course content, lecturing staff, mode of delivery, tutorials, PASS and online assessment are essentially the same in the two semesters, the outcomes to 2007 have been different. At the St Lucia campus the failure rate in semester 2 was over 10% higher than in semester 1. This paper explores some possible explanations for the difference as well as assessing the success of some of the changes that were implemented from 2007 to 2009. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:415&r=mic |
| By: | Månsson, Jonas (Centre for Labour Market Policy Research (CAFO)); Olsson, Mikael (Swedish International Development Cooperation Agency (SIDA)) |
| Abstract: | In this study the 2004 labor market attainment of all immigrants of working age from Estonia, Latvia, Lithuania and Poland on the Swedish labor market is investigated. The analysis is conducted in three steps. Step one investigates labor force participation at the time of observation by estimating the probability of being part of the labor force in 2004. In step two we estimate the probability of employment among those included in the labor force. In the third step we analyze the earnings of those employed while controlling for both types of selection. The data is a special delivery from Statistics Sweden and comprise all immigrants to Sweden from these countries from 1944 onwards. Comparisons are made with a stratified (on age and gender) random sample of persons born in Sweden. The results show that immigrants are less likely to be part of the labor force; that they are overrepresented among the unemployed and that the positive effects from higher education is less than for native Swedes. However, among those being employed the income differences are relatively minor. |
| Keywords: | Migration; Integration; Labor market attainment; Estonia; Latvia; Lithuania; Poland; Sweden |
| JEL: | J21 J23 J31 J61 |
| Date: | 2010–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2010_006&r=mic |
| By: | Ale Ebrahim, Nader; Ahmed, Shamsuddin; Taha, Zahari |
| Abstract: | Small and medium-sized enterprises (SMEs) are indeed the engines of global economic growth. Their continued growth is a major subject for the economy and employment of any country. Towards that end, virtual research and development (R&D) could be a viable option to sustain and ease the operations of SMEs. However, literature shows there has not been a great deal of research into the diverse characteristic of virtual R&D teams in SMEs. This article provides a comprehensive literature review on different aspects of virtual R&D teams collected from the reputed publications. The purpose of the literature review is to provide an outline on the structure and dynamics of R&D collaboration in SMEs. Specifying the rationale and relevance of virtual teams, the relationship between virtual R&D team for SMEs and new product development (NPD) has been examined. It concludes with identifying the gaps and feebleness in the existing literature and calls for future research in this area. It is argued to form of virtual R&D team deserves consideration at top level management for venturing into the new product development within SMEs. |
| Keywords: | Virtual teams; small and medium enterprises; new product development; R&D |
| JEL: | M5 L17 O32 M12 O1 M11 M1 M54 P42 P23 O3 |
| Date: | 2010–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26989&r=mic |