bill and keep vs cost based access pricing revisited abstract we study network competition with two part tariffs and termination based price discrimination in the presence of call externalities we show that both the collusive and the welfare maximizing access charges fall below marginal cost moreover bill and keep arrangements are welfare improving compared with cost based access pricing

economics of farmer early retirement policy we estimate the structural effects costs and potential efficiency gains that might arise from the introduction of an early retirement scheme for farmers in northern ireland using data from the farm business survey and a separate survey of 350 farmers aged between 50 and 65 modelling results suggest that farm scale is a significant determinant of profit per hectare but that the age of the operator is not the economic gains from releasing land through a scheme were conditional on transfers bringing about significant farm expansion and changes in land use when these conditions were satisfied pensions payments of only about one third the statutory maximum could be justified survey responses indicated that participation in the scheme would bring forward farmers retirement age by an average of 4 years moreover deadweight payments would equate to about 23 of potential total expenditure overall the economic case for the introduction of an early retirement scheme to northern ireland is judged to be weak

maintaining optimal inventory level by feedbacks abstract in this paper the inventory level is examined under a situation in which the demand function consists of two parts one which is sometimes referred to as the trend of demand is described as a proper polynomial function of time the other is given as a random variable with a finite variance a policy is planned which is to bring the expected value of realized inventory level to the planned level in order to accomplish this purpose some feedbacks are to be introduced the first feedback is realized by estimating the demand level in the future based upon the demand level in the past how much data is necessary depends on the degree of the polynomial function to be estimated the second is obtained by monitoring the realized inventory level the difference between the realized inventory level and the planned level is used as a feedback we will show that by combining these two feedbacks the expected value of difference between two inventory levels planned and realized converges to zero

why farmers quit a county level analysis we identify the effects of alternative explanatory variables on the propensity of u s farmers to cease farming with a particular emphasis on understanding the roles of off farm employment and federal farm program payments conventional ordinary least squares analysis using all counties suggests that off farm employment has no statistical effect on the net number of farmers quitting between 1987 and 1997 ceteris paribus a more refined analysis which separates counties losing farmers from those that gained farmers reveals subtle and less clear cut effects of off farm employment and federal program payments on farm exits copyright 2001 oxford university press

mobile termination network externalities and consumer expectations we re examine the literature on mobile termination in the presence of network externalities externalities arise when firms discriminate between on and o net calls or when subscription demand is elastic this literature predicts that profit decreases and consumer surplus increases when termination charges increase this is puzzling since in reality regulators are pushing termination rates down while being opposed to do so by network operators this puzzle is resolved when consumers expectations are assumed passive but required to be fulfilled in equilibrium as defined by katz and shapiro aer 1985 instead of being responsive to non equilibrium prices as assumed until now

political economy of public policies insights from distortions to agricultural and food markets the agricultural and food sector is an ideal case for investigating the political economy of public policies many of the policy developments in this sector since the 1950s have been sudden and transformational while others have been gradual but persistent this paper reviews and synthesizes the literature on trends and fluctuations in market distortions and the political economy explanations that have been advanced based on a rich global data set covering a half century of evidence on commodities countries and policy instruments the paper identifies hypotheses that have been explored in the literature on the extent of market distortions and the conditions under which reform may be feasible

dynamic uncapacitated lot sizing with random demand under a fillrate constraint abstract this paper deals with the single item dynamic uncapacitated lot sizing problem with random demand we propose a model based on the static uncertainty strategy of bookbinder and tan 1988 in contrast to these authors we use exact expressions for the inventory costs and we apply a fillrate constraint we present an exact solution method and modify several well known dynamic lot sizing heuristics such that they can be applied for the case of dynamic stochastic demands a numerical experiment shows that there are significant differences in the performance of the heuristics whereat the ranking of the heuristics is different from that reported for the case of deterministic demand

network competition and interconnection with heterogeneous subscribers abstract this paper analyses two way access pricing in a telecommunications market where consumers are heterogeneous in their demand for calls and firms are allowed to use non linear tariffs we first investigate how the presence of access charges affects the tariffs offered by firms in symmetric equilibrium next we show that under certain conditions each firm s profit is independent of the level of reciprocal access charge and therefore collusion using access charges is not sustainable this result suggests that efficient call allocations can be achieved under a minimal regulatory intervention i e recommending firms set access charges equal to call termination cost

a simple approach for assessing the cost of system nervousness abstract a well known problem in coordinating supply chain inventories is that replenishment decisions are revised due to stochastic demands this issue is often referred to as system nervousness the literature distinguishes between two types of nervousness setup oriented and quantity oriented it is widely accepted that cost of nervousness is difficult to measure we argue that this cost can be evaluated by means of three well established inventory control strategies static uncertainty dynamic uncertainty and static dynamic uncertainty these strategies reflect extreme cases with regard to the setup and the quantity oriented nervousness and provide a simple yet an objective measure to assess the cost of system nervousness our results are of practical importance we highlight that the setup oriented nervousness which is considered to be the most critical in practice can be eliminated with a minor cost penalty this is however not the case for the quantity oriented nervousness

critical number policies for inventory models with periodic data we consider an infinite horizon in problem with stochastic demands where the data vary periodically karlin karlin s 1960a dynamic inventory policy with varying stochastic demands management sci 6 231 258 karlin s 1960b optimal policy for dynamic inventory process with stochastic demands subject to seasonal variations j siam8 611 629 shows that a periodic critical number policy is optimal and presents an algorithm for computing the critical numbers assuming discounted costs here we develop an alternative conceptually simpler approach to these problems the results include a proof of the optimality of such policies for the average cost case and a qualitative description of the behavior of the optimal policy as smoothing fluctuations in the data

the eu budget battle assessing the trade and welfare impacts of cap budgetary reform abstract there is a paucity of quantitative impact assessments of the sectorial and macroeconomic impacts of cap budget reform for eu member states to fill this gap the current study employs a sophisticated agricultural variant of the gtap model to evaluate the recently agreed cap spending limits for the financial period 2014 2020 as well as a more radical 50 cut to the cap budget proposed by the uk government the study incorporates methodological innovation in terms of the modelling of cap budgetary mechanisms furthermore official eu auditing statistics are employed to i greatly improve the existing representation of agricultural support payments in the gtap benchmark data and ii implement a detailed contemporary cap baseline for member states to capture both the decoupled coupled split of support payments and the distribution of support across both pillars in general cap expenditure cuts have muted impacts on eu and world agricultural markets whereas changes in net transfer payments have implications for real income and macro trade balances in eu member states this observation is particularly pertinent when assessing conciliatory reductions in the uk rebate in exchange for deeper cap budget cuts

using bill and keep interconnect arrangements to soften network competition abstract this paper demonstrates that low below marginal cost interconnect or access charges can be used to sustain high subscription prices under network competition with two part tariffs and price discrimination this result stands in contrast to other results in the literature suggesting that high interconnect charges can play a collusive role

on the replenishment policy when the market demand information is lagged we consider a situation where the most up to date information on the market demand and the inventory levels is not available to a replenishment decision maker in a single echelon of a supply chain the objective of the decision maker is to minimise the sum of the inventory and the production costs an intuitively attractive strategy under this setting might be to reduce the information time lag as much as possible by utilising information technologies such as rfid we call this strategy the time lag elimination strategy tes however this course of action requires investment in information systems and will incur a running cost we propose an alternative strategy that has similar economic consequences as the tes strategy but it does not require new information systems we call this strategy the controlling dynamics strategy cds the benefit coming from cds is quantified and is compared to that from tes we also quantify the benefits gained from the combined use of these two strategies a new ordering policy is introduced that is easy to implement without any forecasting systems and can reduce the production cost significantly

optimal policies and approximations for a serial multiechelon inventory system with time correlated demand since clark and scarf s pioneering work most advances in multiechelon inventory systems have been based on demand processes that are time independent this paper revisits the serial multiechelon inventory system of clark and scarf and develops three key results first we provide a simple lower bound approximation to the optimal echelon inventory levels and an upper bound to the total system cost for the basic model of clark and scarf second we show that the structure of the optimal stocking policy of clark and scarf holds under time correlated demand processes using a martingale model of forecast evolution third we extend the approximation to the time correlated demand process and study in particular for an autoregressive demand model the impact of lead times and autocorrelation on the performance of the serial inventory system

optimal policies for multiechelon inventory problems with markov modulated demand this paper considers a multistage serial inventory system with markov modulated demand random demand arises at stage 1 stage 1 orders from stage 2 etc and stage n orders from an outside supplier with unlimited stock the demand distribution in each period is determined by the current state of an exogenous markov chain excess demand is backlogged linear holding costs are incurred at every stage and linear backorder costs are incurred at stage 1 the ordering costs are also linear the objective is to minimize the long run average costs in the system the paper shows that the optimal policy is an echelon base stock policy with state dependent order up to levels an efficient algorithm is also provided for determining the optimal base stock levels the results can be extended to serial systems in which there is a fixed ordering cost at stage n and to assembly systems with linear ordering costs

the stabilizing effect of inventory in supply chains this paper presents a hierarchical model framework for the analysis of the stabilizing effect of inventories in multiechelon manufacturing distribution supply chains this framework is used to compare the variance of demand to the variance of replenishment orders at different echelons of the system e g retailer wholesaler empirical data and experience with management games suggest that in most industries inventory management policies can have a destabilizing effect by increasing the volatility of demand as it passes up through the chain the bullwhip effect our model helps to explain these observations and indicates mechanisms that can promote stabilization the analysis results also define sufficient conditions for the existence of stabilization and relate these conditions to the optimality of myopic control policies

optimal policy for a two stage assembly system under random demand this paper considers an inventory system in which an end product is assembled from two components each of which is ordered from an external supplier only the end product has final demand which is assumed to be random using the functional equation approach of dynamic programming we characterize the forms of both the optimal order policy for the components and the optimal assembly policy of the end product for a multiperiod problem of arbitrary but finite length we believe that this work represents the only exact analysis of an mrp type assembly system when demand is stochastic

lower bounds for multi echelon stochastic inventory systems we establish lower bounds on the minimum cost of managing certain production distribution networks with setup costs at all stages and stochastic demands these networks include serial assembly and one warehouse multi retailer systems we obtain the bounds through novel cost allocation schemes we evaluate the bounds performance for one warehouse multi retailer systems by comparing them with simple heuristic policies the bounds are quite tight for systems with a small number of retailers we also present simplified proof of known optimality results for serial and assembly systems

network competition ii price discrimination our companion article developed a clear conceptual framework of negotiated or regulated interconnection agreements between rival operators and studied competition between interconnected networks under the assumption of nondiscriminatory pricing this article relaxes this assumption and allows networks to charge different prices for calls terminating on the subscriber s network and those terminating on a rivals network this creates a price differential between services that are identical for the consumer and generates network externalities despite network interconnection we show that in both the mature and entry phases of the industry the nature of competition is substantially affected by such price discrimination

a capacitated production inventory model with periodic demand for a single product single stage capacitated production inventory model with stochastic periodic cyclic demand we find the optimal policy and characterize some of its properties we study the finite horizon the discounted infinite horizon and the infinite horizon average cases a simulation based optimization method is provided to compute the optimal parameters based on a numerical study several insights into the model are also provided

inventory control in a fluctuating demand environment we present an inventory model where the demand rate varies with an underlying state of the world variable this variable can represent economic fluctuations or stages in the product life cycle for example we derive some basic characteristics of optimal policies and develop algorithms for computing them in addition we show that certain monotonicity patterns in the problem data are reflected in the optimal policies

short and long run credit constraints in french agriculture a directional distance function framework using expenditure constrained profit functions this empirical application investigates the eventual presence of credit constraints using a panel of french farmers the credit constrained profit maximization model proposed by fare grosskopf and lee is extended in three ways first we rephrase the model in terms of directional distance functions to allow duality with the profit function second we model credit constraints in the short run and investment constraints in the long run using short and long run profit functions third we lag the expenditure constraint one year to account for the separation between planning and production we find empirical evidence of credit and investment constraints financially unconstrained farmers are larger perform better and seem to benefit from a virtuous circle where access to financial markets allows better productive choices

information distortion in a supply chain the bullwhip effect this article originally appeared in management science april 1997 volume 43 number 4 pp 546 558 published by the institute of management sciences consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

the effects of changes in capital gains taxes on land sales empirical evidence from finland we estimate the landowner response to and fiscal effects of a temporary reduction in capital gains taxes imposed on land sales the underlying normative decision rules are first derived and solved numerically using stochastic dynamic programming the landowner preferences and willingness to sell land are then estimated in the reduced form using survey data from finland the results suggest that the timing of land sales and land sales quantities respond significantly to tax incentives certain temporary tax waiver programs could maintain the current tax revenues with fewer trade distorting effects on the land market

network competition in nonlinear pricing previous research assuming linear pricing has argued that telecommunications networks may use a high access charge as an instrument of collusion i show that this conclusion is difficult to maintain when operators compete in nonlinear pricing i as long as subscription demand is inelastic profits can remain independent of the access charge even when customers are heterogeneous and networks engage in second degree price discrimination ii when demand for subscriptions is elastic networks may increase profits by agreeing on an access charge below marginal cost relative to cost based access pricing welfare is typically increased by setting the access charge above marginal cost

the bullwhip effect progress trends and directions the bullwhip effect refers to the phenomenon where order variability increases as the orders move upstream in the supply chain this paper provides a review of the bullwhip literature which adopts empirical experimental and analytical methodologies early econometric evidence of bullwhip is highlighted findings from empirical and experimental research are compared with analytical and simulation results assumptions and approximations for modelling the bullwhip effect in terms of demand forecast delay replenishment policy and coordination strategy are considered we identify recent research trends and future research directions concerned with supply chain structure product type price competition and sustainability

an arima supply chain model this paper presents a multistage supply chain model that is based on autoregressive integrated moving average arima time series models given an arima model of consumer demand and the lead times at each stage it is shown that the orders and inventories at each stage are also arima and closed form expressions for these models are given the paper also discusses the causes of the bullwhip effect a phenomenon in which variation in demand produces larger variations in upstream orders and inventory this discussion reveals how different modeling can lead to different insights because they make different assumptions about the cause of the bullwhip effect these observations are used to develop managerial insights about reducing the bullwhip effect

scarf s state reduction method flexibility and a dependent demand inventory model we consider a finite horizon inventory model with linear holding shortage and ordering costs the demand random variables are dependent and average demand is described by an exponential smoothing formula this model can be formulated as a two state variable inventory level weighted past demands dynamic program using a procedure first developed by scarf for a bayesian inventory model we are able to reformulate the model as a one state variable dynamic program resulting in a considerable computational saving over the two state variable formulation we also show that this dependent demand model orders less than or equal the amount ordered by a comparable independent demand model we establish this result under the assumption that demand represents failures that are repaired by the beginning of the next period

benefits of leadtime information and of its combination with demand forecast information abstract this paper studies both the benefits of leadtime information and the interrelationships among demand forecast information leadtime uncertainty and leadtime information for improving inventory control performance to this end it explicitly incorporates both leadtime information and demand forecast information into an inventory model although they have conventionally been dealt with individually in the literature specifically it considers a periodic review inventory model with uncertain leadtimes in which both leadtime information and demand forecast information are available the leadtime information is modeled as the information of the arrival of outstanding orders and the demand forecast information as the martingale model of forecast evolution mmfe the paper analyzes the way to use both leadtime information and demand forecast information for inventory control operations specifically under certain conditions the optimality of the state dependent base stock policy is shown and an effective heuristic policy is developed it also derives some managerial insights for exploiting both leadtime information and demand forecast information in the case where leadtimes are uncertain for instance while leadtime information itself significantly improves inventory control performance it also enhances the benefits of demand forecast information specifically the benefits of demand forecast information may significantly decrease as leadtime uncertainty increases however the decrease of the benefits of demand forecast information may be alleviated with leadtime information

order quantities for perishable inventory control with non stationary demand and a fill rate constraint abstract we study the practical decision problem of fresh food production with a long production lead time to decide every period e g week how many items to produce when a batch is ready for use its items have a fixed shelf life after which the items become waste in the sense that they cannot be sold anymore the demand for fresh food products is uncertain and highly fluctuating mainly caused by price promotions of retail organisations we focus on cases where a so called cycle fill rate service level requirement applies we investigate the generation of a production plan that fixes the timing and quantity of the production for a finite time horizon to minimise waste one issues the oldest items first i e a fifo issuing policy in case of out of stock sales are lost we model this decision problem as a stochastic programming sp model the objective of our study is to find order quantities for the sp model that approximately meet cycle fill rate service level requirements while keeping outdating low to find approximate solutions for the sp model an milp model is developed the milp model is a deterministic approximation that generates feasible replenishment quantities in less than a second with a scenario based minlp approach optimal solutions are generated for a large sample of demand paths as a benchmark for the milp solutions we show that the milp model is suitable for practical use if the setup cost is such that the replenishment cycles in the production plan are close to or of the same length as the maximum shelf life in those cases the expected total costs are close to the costs of the optimal solution and the average fill rate is close to the required one

on bullwhip in a family of order up to policies with arma 2 2 demand and arbitrary lead times a number of papers have recently appeared that investigate the bullwhip effect the variance amplification of ordering decisions in the supply chain produced by the order up to replenishment policy an adapted policy with a proportional inventory position feedback controller has shown improved bullwhip behaviour the dynamic behaviour of this so called proportional order up to policy has been investigated for arbitrary lead times and several demand models such as i i d demand and autoregressive moving average ar 1 and arma 1 1 models it has been shown that for a correct choice of the feedback parameter the bullwhip effect can always be avoided however less attractive properties of this policy have also become clear herein we investigate the behaviour of the proportional order up to policy for arma 2 2 demand with arbitrary lead times in order to compensate for possible weaknesses of the proportional out policy we propose another replenishment rule that accounts for the characteristics of the demand in a superior manner the characteristics of both policies are compared for several parameter settings of the arma 2 2 model finally the consequences of our full state feedback order up to policy are discussed

common agricultural policy effects on dynamic labour use in agriculture abstract the aim of this study is to investigate the effects of direct payments and rural development measures of the eu s common agricultural policy cap on employment in agriculture we work with a dynamic labour demand equation augmented by the full set of policy instruments of the cap which is estimated on a panel dataset of 69 east german regions we present results for four estimators which differ in how they eliminate the fixed effects and how they address the endogeneity of the lagged dependent variable the results suggest that there were few desirable effects on job maintenance in agriculture while there is some indication that investment subsidies have halted labour shedding on farms a rise in the general wage level reduced labour use in agriculture changes in direct payments had no employment effects generally labour adjustment exhibits a strong path dependency

calling circles network competition with non uniform calling patterns we introduce a flexible model of telecommunications network competition with nonuniform calling patterns accounting for the fact that customers tend to make most calls to a small set of similar people equilibrium call prices are distorted away from marginal cost and competitive intensity is affected by the concentration of calling patterns contrary to previous predictions jointly profit maximizing access charges are set above termination cost in order to dampen competition if calling patterns are sufficiently concentrated we discuss implications for regulating access charges as well as on and off net price discrimination

the stochastic dynamic production inventory lot sizing problem with service level constraints abstract this paper addresses the multi period single item inventory lot sizing problem with stochastic demands under the static dynamic uncertainty strategy of bookbinder and tan manage sci 34 1988 1096 in the static dynamic uncertainty strategy the replenishment periods are fixed at the beginning of the planning horizon but the actual orders are determined only at those replenishment periods and will depend upon the demand that is realised their solution heuristic was a two stage process of firstly fixing the replenishment periods and then secondly determining what adjustments should be made to the planned orders as demand was realised we present a mixed integer programming formulation that determines both in a single step giving the optimal solution for the static dynamic uncertainty strategy the total expected inventory holding ordering and direct item costs during the planning horizon are minimised under the constraint that the probability that the closing inventory in each time period will not be negative is set to at least a certain value this formulation includes the effect of a unit variable purchase production cost which was excluded by the two stage bookbinder tan heuristic an evaluation of the accuracy of the heuristic against the optimal solution for the case of a zero unit purchase production cost is made for a wide variety of demand patterns coefficients of demand variability and relative holding cost to ordering cost ratios the practical constraint of non negative orders and the existence of the unit variable cost mean that the replenishment cycles cannot be treated independently and so the problem cannot be solved as a stochastic form of the wagner whitin problem applying the shortest route algorithm

jobs and agricultural policy impact of the common agricultural policy on eu agricultural employment abstract this paper investigates the relationship between eu agricultural subsidies and the outflow of labor from agriculture we use more representative subsidy indicators and a wider coverage panel data from 210 eu regions over the period 2004 2014 than has been used before the data allow to better correct for sample selection bias than previous empirical studies we find that on average cap subsidies reduce the outflow of labor from agriculture but the effect is almost entirely due to decoupled pillar i payments coupled pillar i payments have no impact on reducing labor outflow from agriculture i e on preserving jobs in agriculture the impact of pillar ii is mixed our estimates predict that an increase of 10 percent of the cap budget would prevent an extra 16 000 people from leaving the eu agriculture sector each year a 10 percent decoupling would save 13 000 agricultural jobs each year however the budgetary costs are large the estimated cost is more than 300 000 per year or more than 25 000 per month per job saved in agriculture

termination fees revisited we reconsider the question of the optimal level of termination fees between communication networks in the context of heterogeneous usage and elastic participation the interaction between these two features yields new insights in our model i the profit maximizing reciprocal termination fee is above marginal cost ii the welfare maximizing termination fee is also above cost iii the welfare maximizing termination fee is below the profit maximizing one in the absence of termination based price discrimination but can be above it otherwise

rural population decline in the 1980s impacts of farm structure and federal farm programs federal farm program benefits accrue disproportionately to large scale farm operators and continue largely because of the political influence of their beneficiaries some writers argue that these payments stem the movement of labor out of agriculture ultimately reducing the pace of rural depopulation here a theoretical model linking farm program payments to population loss is presented and empirically estimated for the years 1980 90 larger farm program payments as a share of total cash marketing receipts were associated with greater population losses from rural counties this result holds after controlling for other economic variables affecting population migration from rural areas

foreclosing competition through high access charges and price discrimination this article analyzes competition between two asymmetric networks an incumbent and a new entrant networks compete in non linear tariffs and may charge different prices for on net and off net calls when access charges are high this allows the incumbent to foreclose the market in a profitable way if switching costs are sufficiently large in the absence of termination based price discrimination however such foreclosure strategies are not profitable

optimal policies for multi echelon inventory problems with batch ordering in many production distribution systems materials flow from one stage to another in fixed lot sizes for example a retailer orders a full truckload from a manufacturer to qualify for a quantity discount a factory has a material handling system that moves full containers of parts from one production stage to the next in this paper we derive optimal policies for multi stage serial and assembly systems where materials flow in fixed batches the optimal policies have a simple structure and their parameters can be easily determined this research extends the multi echelon inventory theory in several ways it generalizes the clark scarf model by allowing batch transfers of inventories rosling 1989 shows that assembly systems can be interpreted as serial systems under the assumption that there are no setup costs we show that the series interpretation still holds when materials flow in fixed batches which satisfy a certain regularity condition finally veinott 1965 identifies an optimal policy for a single location inventory system with batch ordering this paper generalizes his result to multi echelon settings

state space investigation of the bullwhip problem with arma 1 1 demand processes using state space techniques we study a myopic order up to policy the policy is myopic because it is optimal at minimising local inventory holding and shortage costs in particular we study the bullwhip effect produced by the replenishment policy reacting to a stochastic arma 1 1 demand processes we reveal that bullwhip is fundamentally caused by the co variance between the inventory level and the demand forecast we go on to highlight the impact of a simple control engineering inspired bullwhip reduction technique a proportional controller in the inventory feedback loop although it can be shown this approach is always able to remove bullwhip we expose that it is not possible to arbitrarily tune the proportional controller without knowing in advance the likely structure of the demand process we conclude with an investigation of trade offs and optimisations in the order and inventory variance and their sum produced by our policy

on the intersectoral migration of agricultural labor labor is the single most important factor in determining national income as economies grow agricultural labor declines as a share of total labor and converges to a level of 2 or 3 percent off farm migration facilitates the development of nonagriculture but historically the process spans decades the authors argue that the pace of the process is a fundamental outcome of a dynamic equilibrium based on expectations of lifetime earnings and the cost of migration the authors present an empirical model of the determinants of intersectoral migration one fundamental determinant is income differences across sectors as such migration should stop when income differences reach a certain level the authors provide a method of measuring the level at which intersectoral migration will cease while there are credible reasons for a permanent difference to exist between sectoral incomes the authors find no empirical evidence of a permanent wedge

land market imperfections and agricultural policy impacts in the new eu member states a partial equilibrium analysis this article analyses how transaction costs and imperfect competition in the land market affect the welfare effects of agricultural subsidies in the new eastern member states of the european union benefits of land subsidies end up with landowners in new eastern member states also with imperfections in the new eastern member states land markets with unequal access to subsidies small tenant farmers may even lose out from the subsidies decoupling of payments shifts policy rents to farmers but constrains productivity enhancing restructuring using reserve entitlements to mitigate this effect reduces the intended benefits on distortions and target efficiency

transition and agricultural labor reforms have strongly affected agricultural employment in transition countries but in remarkably different ways we present a theoretical model and an empirical analysis to explain differences in labor adjustment during transition we show that the differences are due to a combination of variations in initial conditions and differences in reform policies and effects the removal of price distortions and subsidies caused wage and price adjustments during transition and a reduction in labor demand in agriculture surplus labor outflow from agriculture was further stimulated by the privatization of the farm assets as they improve incentives and remove constraints for optimal factor allocation and structural adjustment the shift to individual farms which was especially strong in labor intensive production systems with low labor productivity in agriculture has reduced the outflow of labor from agriculture by improving farm governance and labor efficiency although this effect was mitigated by losses in scale economies due to disruptions and market imperfections in transition in general labor outflow was considerably lower on individual farms than on corporate farms due to a combination of factors related to human capital access to finance and physical capital in the last section of the article we present a general framework for understanding labor adjustments in transition countries specifically we show that there are several patterns of labor transition in one pattern followed by e g the czech republic and hungary there is initially a strong survival of the restructured large scale corporate farms that have laid off many workers in the second phase of transition gradually the importance of individual farms increases in other countries such as romania the opposite has happened in these countries there is an immediate strong shift to individual farms while labor use increases on average in agriculture after this initial phase the shift to individual farms continues albeit more slowly and labor use in agriculture starts to decline finally our analysis shows that in countries such as russia and ukraine much of the surplus labor is still employed by little reformed former collective and state farms major adjustments await more progress in agricultural and general reforms

stopped myopic policies in some inventory models with generalized demand processes this paper considers single item inventory systems with immediate delivery and no economies of scale bounds are provided on the value loss relative to optimal cost for restricting attention to the class of inventory stocking policies that behave myopically up to a specified stopping time the stopping time may be random and may depend on demand histories as well as information exogenous to the firm the bounds are robust to the nature of the demand process faced after the stopping time so are applicable when the statistics of demand after the stopping time are unknown stopping times that are large with high probability imply that near term decisions are completely specified with high probability the general bounding results allow one to consider demand processes that may otherwise be analytically intractable it is shown that the class of demand models for which the assumption of additive i i d shocks is appropriate is the same class admitting effective myopic stocking policies the bounds also make rigorous the intuitive notion that myopic policies are least effective in systems with precipitous drops in demand coupled with an inability to recover cash invested in inventory the option of selling inventory at discount is a reality in many real systems and enhances the attractiveness of the myopic stocking policy in numerical examples the myopic policy is shown to be an effective competitor in a range of systems for which optimal policies are not known the results suggest that for systems with immediate delivery no economies of scale and no currently known optimal policy the myopic stocking rule is a reasonable default policy to adopt

network competition and entry deterrence we develop a model of logit demand that extends to a multi firm industry the traditional duopoly framework of network competition firstly we show that incumbents establish inefficiently the reciprocal access charge below cost when they compete in prices but they behave efficiently if they compete in utilities secondly we study how incumbents determine the industry wide access charge under the threat of entry we show that incumbents may accommodate all possible entrants only a group of them or may completely deter entry when entry deterrence is the preferred option incumbents distort the access charge upwards

network interconnection in telecommunications this paper discusses industries such as telecommunications where firms each have their own customers and must interconnect with other firms to provide a comprehensive service two scenarios are considered i the case of a symmetric unregulated industry and ii the case of an industry with a dominant regulated incumbent in the first provided there is sufficient product differentiation it is shown that firms agree to set interconnection charges above associated costs in order to obtain the joint profit maximising outcome in the second a formula for the welfare maximizing interconnection charge is derived relations with the efficient component pricing rule are discussed

optimal centralized ordering policies in multi echelon inventory systems with correlated demands this paper treats a depot warehouse system in which demand occurs at the warehouse or retail level this work differs from a number of other studies in that we allow item demands to be correlated both across warehouses and also correlated in time our motivation for this generalization arises from our experience with an actual system of this type used by a major national producer and distributor of consumer products we observed both high correlations between successive monthly demands around 0 7 and correlations between demands for an item at different locations also about 0 7 in a given time period we derive an explicit expression for the optimal safety stock as a function of the level of correlation through time the analysis requires two assumptions 1 the allocation assumption and 2 the equal coefficient of variation assumption similar assumptions have been used by other researchers finally numerical evaluations are included to illustrate the impact of the various magnitudes of correlation

network competition i overview and nondiscriminatory pricing we develop a model of unregulated competition between interconnected networks and analyze the mature and transition phases of the industry in this deregulated environ ment networks pay negotiated or regulated access charges to each other and com pete in prices for customers we show that a competitive equilibrium may fail to exist for large access charges or for large network substitutability and that freely negotiated access charges may prevent effective competition in the mature phase of the industry and erect barriers to entry in the transition toward competition last we examine the meaning and impact of policies such as the efficient component pricing rule

myopic policies for some inventory models with uncertain demand distributions the majority of papers on stochastic inventory theory make the assumption that the distribution of consumer demand in each time period is known with certainty while this assumption is unsupported in many applied contexts it is conventionally held that more realistic models are more difficult to solve and will not yield simple operational policies this paper shows that a simple inventory policy based upon a critical fractile can be optimal or near optimal in some inventory models with parameter adaptive demand processes in these some parameter of the demand distribution is not known with certainty and estimates of the parameter are updated in a statistical fashion as demand is observed through time examples include exponentially smoothed forecasts and bayesian updating of parameter estimates bounds on the value loss relative to optimal cost when using the critical fractile policy can be calculated directly from the problem data some numerical examples illustrate the technique

the determinants of the migration of labor out of agriculture in the united states 1940 85 the flow of labor out of production agriculture is analyzed using a two sector model of occupational choice a migration equation is specified and tested empirically using aggregate data for the united states the economic determinants of the migration of all farm workers and farm operators are established farm labor is found to be responsive to changes in the returns to agricultural labor relative to nonfarm labor returns given this responsiveness policies intended to increase farm income will affect the level of agricultural employment

dynamic version of the economic lot size model this article originally appeared in management science october 1958 volume 5 number 1 pp 89 96 published by the institute of management sciences a forward algorithm for a solution to the following dynamic version of the economic lot size model is given allowing the possibility of demands for a single item inventory holding charges and setup costs to vary over n periods we desire a minimum total cost inventory management scheme which satisfies known demand in every period disjoint planning horizons are shown to be possible which eliminate the necessity of having data for the full n periods

credit market imperfections and the distribution of policy rents this article shows that credit market imperfections have important implications for the distribution of policy rents in a model with land as fixed factor and credit market imperfections when an area payment is given land rents go up by more than the subsidy on aggregate farms may lose from the subsidy the results depend on the extent to which subsidies have direct and indirect effects on the credit constraints on whether farms rent or own land and on farm heterogeneity

time phased safety stocks planning and its financial impacts empirical evidence based on european econometric data abstract this paper explores the rationale for planning time phased safety stocks we assert that a single safety stock vector for the entire planning horizon typically based on stationary demand forecast errors and stationary replenishment lead times may be insufficient for hedging against uncertainties we argue that planning time phased safety stocks is prudent when faced with non stationary demand and or non stationary supply we scrutinize particularly whenever non stationarity is due to heteroscedastic demand and resulting heteroscedastic demand forecast errors consequently an empirical evidence on a wide basis is provided that such errors for manufactured products are highly heteroscedastic to test the phenomenon and to estimate its impact at stock keeping unit level we have conducted an econometric analysis using the eurostat data from 1985 onwards specifically we analyze new industrial orders across various industries and types of goods manufactured in the five largest european economies by using eviews 7 0 to demonstrate which inventory savings can accrue when safety stock levels are deliberately planned to vary in accordance with the observed heteroscedasticity we estimate potential safety stock savings reusing the same data sets our findings indicate that one realization of non stationarity i e heteroscedastic demand is indeed pervasive in the european industry thus recognition of this demand nature may add to effective inventory management policies reducing unnecessary safety stocks improving service or both relative to a single valued safety stock regimen

measuring and avoiding the bullwhip effect a control theoretic approach an important contributory factor to the bullwhip effect i e the variance amplification of order quantities observed in supply chains is the replenishment rule used by supply chain members first the bullwhip effect induced by the use of different forecasting methods in order up to replenishment policies is analysed variance amplification is quantified and we prove that the bullwhip effect is guaranteed in the order up to model irrespective of the forecasting method used thus when production is inflexible and significant costs are incurred by frequently switching production quantities up and down order up to policies may no longer be desirable or even achievable in the second part of the paper a general decision rule is introduced that avoids variance amplification and succeeds in generating smooth ordering patterns even when demand has to be forecasted the methodology is based on control systems engineering and allows important insights to be gained about the dynamic behaviour of replenishment rules

network competition with income effects i generalize the workhorse model of network competition to include income effects in demand empirical work has shown income effects to be positive and statistically significant income effects deliver theoretical results consistent with regulatory concern about excessive termination rates unregulated network operators competing in nondiscriminatory retail contracts negotiate termination rates above cost for any positive income effect this also holds when operators discriminate between on net and off net calls if networks are differentiated operators profit from increasing termination rates above cost under second degree price discrimination if a sufficient share of consumers prefer on net off net contracts and their subscription demand is relatively inelastic