decomposing productivity growth in the u s computer industry in this paper we examine the sources of the productivity growth in the u s computer industry from 1978 to 1999 we estimate a joint production model of output quantity and quality that distinguishes two types of technological changes process and product innovations based on the estimation results we decompose total factor productivity tfp growth rate into the contributions of process and product innova tions and scale economies we find that product innovation associated with better quality accounts for about 30 of the tfp growth in the computer industry furthermore the tfp acceleration in the computer industry in the late 1990s is mainly derived from a rapid increase in product innovation

competition and industrial policies in a history friendly model of the evolution of the computer industry abstract in this paper we explore some problems that industrial policy faces in industries characterized by dynamic increasing returns on the basis of a history friendly model of the evolution of the computer industry how does policy affect industry structure over the course of industry evolution is the timing of the intervention important do policy interventions have indirect and perhaps unintended consequences on different markets at different times we focus on two sets of policies antitrust and interventions aiming at supporting the entry of new forms in the industry the results of our simulations show that if strong dynamic increasing returns are operative both through technological capabilities and through customer tendency to stick with a brand there is little that antitrust and entry policy could have done to avert the rise of a dominant firm in mainframes on the other hand if the customer lock in effect had been smaller either by chance or through policies that discouraged efforts of firms to lock in their customers the situation might have been somewhat different in the first place even in the absence of antitrust or entry encouraging policies market concentration would have been lower albeit a dominant firm would emerge anyhow second antitrust and entry encouraging policies would have been more effective in assuring that concentration would decrease the leading firm would continue to dominate the market but its relative power would be reduced

standard setting committees consensus governance for shared technology platforms voluntary standard setting organizations ssos use a consensus process to create new compatibility standards practitioners have suggested that ssos are increasingly politicized and perhaps incapable of producing timely standards this article develops a simple model of standard setting committees and tests its predictions using data from the internet engineering task force an sso that produces many of the standards used to run the internet the results show that an observed slowdown in standards production between 1993 and 2003 can be linked to distributional conflicts created by the rapid commercialization of the internet jel c78 l15 l86

industrial evolution through complementary convergence the case of it security the article addresses the dynamics through which product markets become derailed from early product life cycle plc tracks and engaged in complementary convergence with other product markets or industries we compare and contrast the theories that can explain respectively the plc and the derailing of this cycle into a process of complementary convergence the article challenges the standard industry conception and proposes a distinction between the emergent industrial sector the emergent product market or niche and the industry as a more well established entity based on empirical evidence from the it security sector two trajectories of complementary convergence are identified lower order integration the integration of different product markets in a sectoral context and higher end integration the integration of product markets into the offerings of established industries while young ventures dominate lower order integration incumbents in established industries dominate higher order integration for both trajectories mergers and acquisitions represent a central means for realizing convergence copyright 2011 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

clearinghouse banks and banknote over issue abstract the paper presents a model of banks as clearinghouses of private debt where money is used as the means of payment implications of the model include i the private provision of banknotes or a discount window may be needed to avoid the insufficient debt clearing that results from an inflexible currency stock and ii an uncontrolled total money stock may result in a multiplicity of equilibria including an inflationary banknote over issue

history friendly models of industry evolution the computer industry the model presented in this paper is the first of a new generation of evolutionary economic models history friendly models history friendly models are formal models that aim to capture in stylized form qualitative and appreciative theories about the mechanisms and factors affecting industry evolution technological advance and institutional change put forth by empirical scholars of industrial economics technological change business organization and strategy and other social scientists in this paper we have analyzed the long term evolution of the computer industry in particular we have examined the emergence of a dominant firm in mainframes the introduction of a major innovation microprocessor the opening up of a new market segment personal computers ad the competition there between newcomers and diversified old established firms we have taken a body of verbal appreciative theorizing developed a formal representation of that theory and found that the formal version of that theory is consistent and capable of generating the stylized facts the appreciative theory purports to explain going through this analytic exercise has significantly sharpened our theoretical understanding of the key factors behind salient aspects of the evolution of the computer industry copyright 1999 by oxford university press

food aid pitfalls and potential abstract in this article the author asks if it is possible to use food aid so that it meets short run needs while supporting and not undermining the achievement of long term goals of self reliance at household and national level the pitfalls and possibilities to elucidate methods of achieving this are explored after looking at the specific effects on nutrition and incentives to local agriculture it is concluded that most objectives are better achieved by the use of cash rather than food aid

the economics of food aid under subsistence farming with an application to malawi abstract we investigate how food aid affects price and production of staple food with a partial equilibrium model with non separable production and consumption the model captures the key characteristics of sub saharan africa subsistence economies simulations generate negative but also positive food aid elasticities of production conditions are identified which mitigate the negative impact and support a positive impact the share of domestic food production in total staple food demand and the share of income from staple food production in total household income are key determinants price and production equations estimated with a panel of district data of the malawi maize market for the period 1999 2010 show a small positive impact of food aid large negative impacts of food aid are not likely given production and income shares and behavioural responses

adoptions and orphans in the early microcomputer market in this paper we examine the development of the microcomputer market in the early 1980s cp m a widely adopted operating system was orphaned by the user and the development communities a new operating system dos and a new hardware platform the ibm pc became the predominant industry standard we examine the statistical relationship between data that reflects hardware and software sales for the competing platforms we conclude that the economic processes underlying the development of dos differed from those underlying cp m and that many of these differences related to the role of software development

mobile computing the next platform rivalry all modern information and communications technology ict industries use the platform organization a platform is a reconfigurable base of compatible components on which firms and users build applications applications share the general purpose components thereby exploiting increasing returns at an industrywide level bresnahan and trajtenberg 1995 platforms sometimes compete for developers who create applications which make the platform valuable for users we consider such competition in mobile computing different mobile platforms are supplied by firms such as microsoft google apple nokia and research in motion who employ different approaches the approaches vary in the use of hierarchy which frames a seemingly simple question why doesn t one form of platform governance emerge as superior dominating most markets in which platforms play an essential role this essay will stress the reasons for differ entiation and proposes a new argument a platform s hierarchy can help at one moment but then get in the way at a later time hierarchical organization helps coordinate supply and the invention of complements avoids postinvention holdup through contracting and other forms of

real investment options with multiple sources of rare events abstract we value real investment options when the underlying asset follows a mixed jump diffusion process involving various types sources of rare events jumps these jumps are assumed independent of each other with each type having a log normally distributed jump size and a random poisson distributed arrival time they may represent uncertainties about the arrival and impact on the underlying investment of new information concerning technological innovation competition political risk regulatory effects and other sources an analytic solution is presented for european claims call or put options with multiple sources of jumps a discrete time markov chain methodology implemented within a finite difference scheme is proposed for the valuation of american as well as european options the approach is also applicable to financial options with multiple types of rare events the approach is illustrated through valuing complex real options with compound features involving interactions between optimal investment and subsequent operating decisions specifically we value a growth option and an extension option

the monetization of project and emergency food aid project level efficiency first abstract the level of food aid monetization has increased sharply particularly in africa and especially to cover the transport and non food costs of food aid projects monetization to raise cash is not wrong in principle and increases the efficiency of cash starved projects however the focus on generating counterpart funds has obscured a more important debate about whether and when food is more appropriate than cash at the project level there can be no general predisposition to use either food or cash but guidelines must be applied in each case

bank regulation as an antidote to price level instability abstract we use an overlapping generations model with a risky storage technology to describe a new type of sunspot equilibrium characterized by excessive price level volatility and overinvestment in stored goods the features of this equilibrium lead us to interpret it as involving speculation and as arising when banks create excessive quantities of money this interpretation provides welfare justification for imposing quantity limits on the bank money stock we argue that the monetary regime established in england under peel s act imposed such a quantity limit our findings support quantity theorists traditional view that the possibility of overissue provides a rationale for bank regulation

kingpins bottlenecks and value dynamics along a sector this paper explores the dynamics of value distribution within a sector using data on the u s computer industry as an illustration it provides exploratory quantitative evidence for the way in which conditions within the segments of a sector s value chain affect the profitability of those segments compared with the sector as a whole to consider how value shifts from one part of the sector such as computer assemblers to another such as software and microprocessor makers we look at how conditions within a segment such as software developers affect changes in the value share of that segment compared with the entire sector in terms of market capitalization we find that the presence of what we call kingpins firms with superior capabilities modeled in our study as having superior market capitalization and as being disproportionately important in terms of research and development r d is correlated with a higher share of total sector value suggesting that kingpins can help a segment to become a bottleneck sales concentration and the level of r d expenditure are not always reliable predictors kingpins exert a positive externality on their direct competitors yet their segments display increasing internal inequality over time making the presence of kingpins a double edged sword for their peers our findings extend recent work on industry architectures highlighting the interconnectedness of different segments within a sector they also provide a structure to help study the dynamics of value migration which has not yet attracted much academic scrutiny

does food aid have disincentive effects on local production a general equilibrium perspective on food aid in ethiopia this paper examined impacts of food aid on domestic food production employing a computable general equilibrium modelling technique and using data from ethiopia the simulation experiments have shown that food aid has unambiguous disincentive effects on domestic food production the removal of food aid caused a modest increase in food prices but this stimulated food production employment and income generation effects of the latter outweighed the adverse effect of the former consequently the removal of food aid led to improvements in aggregate household welfare contrary to some concerns in the food aid literature that any reduction in food aid would hurt the poor the simulation experiments suggested that actually poor rural households and urban wage earners are the ones who benefit most in absence of food aid but entrepreneurs are more likely to encounter a marginal welfare decline we have distinguished between in kind food aid and cash equivalent transfers in order to isolate the disincentives that in kind transfers would make to domestic production from those that are related to household purchasing power problem the expansionary effect of removing food aid becomes significantly larger when it is accompanied by cash equivalent payments because the latter would provide demand side stimulus to agriculture while the removal of in kind transfers would stimulate supply side with the supply and demand side effects reinforcing each other in our modelling framework the only adverse effect would be a modest deterioration in the external current account because the expansionary effects of food aid would cause imports to rise but exports to fall

antitrust issues in schumpeterian industries a half century ago joseph schumpeter 1950 chapters 5 8 presented a vision of modern capitalism in which monopolies are common but frequently swept aside by a perennial gale of creative destruction p 84 this gale is driven not by price competition but by competition from the new commodity the new technology competition which strikes not at the margins of the profits of the existing firms but at their foundations and their very lives p 84 i focus here on the personal computer pc software hereafter simply software industry which resembles this vision i discuss some important issues this industry poses for antitrust policy and in the final section illustrate with examples from the microsoft case

innovation and idiosyncratic risk an industry and firm level analysis recent studies find that idiosyncratic risk ir the degree to which firm specific returns are more volatile than aggregate market returns has increased since the 1960s and attribute this to economy wide factors such as the role of the it revolution yet no innovation data is used in these studies to gain further insights into the relationship between technology and ir our aricle studies whether firms and industries that are more r d intensive are in fact characterized by higher ir due to how innovation affects the uncertainty of expected future profits while the industry level results prove inconclusive a clear relationship is found between firm level r d intensity and firm level volatility of returns

large cash transfers to the elderly in south africa we examine the social pension in south africa where large cash sums about twice the median per capita income of african households are paid to people qualified by age but irrespective of previous contributions we present the history of the scheme and use a 1993 nationally representative survey to investigate the redistributive consequences of the transfers documenting who receive the pensions their levels of living and those of their families we also look at behavioural effects particularly the effects of the cash receipts on the allocation of income to food schooling transfers and savings in south africa a large social pension about twice the median per capita income of african households is paid in cash to people qualified by age irrespective of previous contributions we present the history of the scheme and explain how such large transfers could come about in an economy in which the recipients were not only politically weak but without any political representation whatsoever we then use a 1993 nationally representative survey to investigate the redistributive consequences of the transfers documenting who receive the pensions their levels of living and those of their families we also look at behavioural effects particularly the effects of the cash receipts on the allocation of income to food schooling transfers and savings the pressing policy issue for south africans is whether it makes sense to target seven billion rand nearly 2 billion of social expenditure through the current pension schemes our analysis contributes to the discussion by documenting the redistributive and behavioural effects of the transfers we find that at least as far as immediate incidence is concerned and without allowance for behavioural effects the social pension is an effective tool of redistribution and that the households it reaches are predominantly poor because so many of the elderly among south africa s african population live with children the social pension is also effective in putting money into house

can we improve the structure of financial systems 1993 the main theme of this paper is that several of the characteristics of our present western monetary and banking systems have been crucially dependent on the particular temporal process of historical development and are not an essential feature of more fundamental preferences or technological conditions they exist in part because we take them for granted it is the purpose of this paper to examine what might change in both theory and practice if some of these inessential characteristics were to be changed

the real bills doctrine versus the quantity theory a reconsideration two competing monetary policy prescriptions are analyzed within the context of overlapping generations models the real bills prescription is for unfettered private intermediation or central bank operations designed to produce the effects of such intermediation the quantity theory prescription in contrast is for restrictions on private intermediation designed to separate money from credit although our models are consistent with quantity theory predictions about money supply and price level behavior under these two policy prescriptions the models imply that the quantity theory prescription is not pareto optimal and the real bills prescription is

an empirical model of mainframe computer investment this paper introduces a dynamic model of investment decisions in mainframe computer systems i estimate and test the model using detailed micro data from a company in the telecommunications industry the model accounts for technological depreciation which distinguishes computers from other investment goods where physical depreciation is typically a key factor underlying replacement investment decisions the company increased its installed mainframe computer capacity by over 30 fold over the 10 year sample period part of this growth was undoubtedly due to the huge increase in performance and the corresponding drop in the per unit cost of processing capacity of mainframes a consequence of moore s law however there was also tremendous growth in the need for computers for billing account processing and other tasks due to the rapid growth in the telecommunications industry over this same time period i estimate the unknown parameters of the investment model using a nonlinear least squares nested fixed point algorithm nls nfxp which solves the bellman equation underlying the dynamic model of investment and replacement of mainframe computers by nonlinear least squares i demonstrate that it is feasible to estimate this model on an ordinary pc whereas standard discretization approaches to solving the firm s optimal investment policy might not even be feasible using supercomputers i show that the estimated model fits the data very well and accurately captures the large growth in installed mainframe capacity the timing and magnitude of replacement investment as well as periodic upgrades of existing mainframe units i use the model to decompose how much of the 30 fold increase in mainframe computer capacity is due to moore s law i e the huge drop in the unit cost of installed mainframe capacity and how much is due to the growth in demand for services of mainframes due to the rapid growth in demand for telecommunications services particularly cell phone accounts by the firm s customers copyright 2010 john wiley sons ltd

invention under uncertainty and the threat of ex post entry abstract this article proposes a theoretical framework for studying the invention of new products when demand is uncertain in this framework under general conditions the threat of ex post entry by a competitor can deter invention ex ante asymmetric market power in the ex post market exacerbates the problem the implications of these general results are examined in a series of examples that represent important markets in the computer industry the first is a model that shows how an operating system monopolist by its mere presence can deter the invention of complements to its own detriment as well as that of society the implications of policies such as patent protection price regulation and mandatory divestiture are considered three additional examples consider the ability of a monopolist in one market to commit to bundling an unrelated product a pair of horizontally differentiated firms that can add a new feature to their products and a platform leader that can be challenged in its base market by the supplier of a complementary product

vertical integration and dis integration of computer firms a history friendly model of the co evolution of the computer and semiconductor industries in this article we present a history friendly model of the changing vertical scope of computer firms during the evolution of the computer and semiconductor industries the model is history friendly in that it attempts at replicating some basic stylized qualitative features of the evolution of vertical integration on the basis of the causal mechanisms and processes which we believe can explain the history these factors are identified in the coevolution of capabilities the size of markets and the structure of industries in particular the basic assumption is that the principal force behind the patterns of vertical integration and disintegration of computer firms was the differential development of capabilities for designing and producing semiconductors among firms on this basis the changing boundaries of firms are analyzed in the context of dynamic and uncertain technological and market environments characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress the model illustrates how the patterns of vertical integration and specialization in the computer industry change as a function of the evolving levels and distribution of firms capabilities over time and how they depend on the coevolution of the upstream and downstream sectors specific conditions in each of these markets the size of the external market the magnitude of the technological discontinuities the lock in effects in demand exert critical effects and feedbacks on market structure and on the vertical scope of firms as time goes by copyright 2008 oxford university press

the rise and fall of small worlds exploring the dynamics of social structure this paper explores the interplay between social structure and economic action by examining some of the evolutionary dynamics of an emergent network that coalesces into a small world system the study highlights the small world system s evolutionary dynamics at both the macro level of the network and the micro level of an individual actor this dual analytical lens helps establish that in competitive and information intensive settings a small world system could be a highly dynamic structure that follows an inverted u shaped evolutionary pattern wherein an increase in the small worldliness of the system is followed by its later decline as a result of three factors 1 the recursive relationship between the evolving social structure and individual actors formation of bridging ties which eventually homogenizes the information space and decreases actors propensity to form bridging ties creating a globally separated network 2 self containment of the small world network or increasing homogenization of the social system which makes the small world less accepting of and less attractive to new actors thereby limiting formation of bridging ties to outside clusters and 3 fragmentation of the small world network or the small world system s inability to retain current clusters the study uses data on interorganizational tie formation in the global computer industry in the period from 1996 to 2005 to test the hypothesized relationships

stochastic inflation and government provision of indexed bonds abstract this paper examines the consequences of using indexed bonds as one of the government financing instruments along with money and taxes it is shown that open market operations between money and indexed bonds do not matter in a real sense despite their different risk characteristics increasing the share of indexed bonds in the government portfolio increases the volatility and the conditional mean of real rates of return on money when provided by means other than open market operations indexed bonds can affect the allocation of resources but these reallocations cannot be pareto improving

cooperative r d under uncertainty with free entry abstract this paper analyzes the effects of cooperative r d arrangements in a model with stochastic r d and output spillovers our main innovation is to allow for free entry in both the r d race and product market moreover in contrast with the literature we assume that cooperative r d arrangements do not have to include all the firms in the industry we show that sharing of research outcomes is a necessary condition for the profitability of cooperative r d arrangements with free entry the profitability of rjv cartels depends on their size subsidies may be desirable in cases of larger rjvs since they are the ones which are less likely to be profitable

the new industrial organization and small business the small business sector is an important part of the american economic landscape in both absolute and relative terms despite its absolute growth however the sector accounts for a diminishing share of private sector activity but its importance and changes in importance vary across industrial sectors of the economy drawing on the theoretical and empirical insights developed in recent books by john sutton we suggest that the presence or absence of endogenous strategic behaviors of the larger firms with respect to advertising promotion research and development and other sunk cost expenditures may well play an important role in explaining the differing levels of small business importance both cross sectionally and over time we conclude the paper with suggestions for research directions that could shed further light on these ideas copyright 2001 by kluwer academic publishers

snowball a dynamic oligopoly model with indirect network effects abstract allowing for innovation dynamics in the software market this paper studies the conditions under which standardization in the hardware market arises and persists over time in the model software firms repeatedly invest in quality upgrades compete in the product market and make exit as well as entry decisions the results show that in general excess inertia does not occur a platform becomes the standard in a market only if it is better than the competing platforms furthermore low overall rates of innovation always lead to variety conversely the higher the speed of innovation the more likely standardization is

social protection 2 0 exploring issues evidence and debates in a globalizing world abstract this paper reviews the growing literature on social protection while not new the concept evolved remarkably in recent years it is approached from a multitude of perspectives and intersects with broader bodies of literature particularly around public policy pro poor growth rights humanitarian strategies and aid effectiveness as well as feeding into specific programmatic issues e g conditionality targeting and transfer selection this blend of challenges and approaches has often made debates elusive and polarized the paper examines the evolution and definitions of social protection and unbundles critical policy institutional and implementation quandaries taken together these considerations shape a set of context specific models of social protection the paper s five core conclusions may help chart future directions for social protection research and practice

exchange rate volatility in an equilibrium asset pricing model this paper analyzes a stochastic model of exchange rate determination with unrestricted access to capital and currency markets it is shown that the only restriction imposed by the model on the equilibrium exchange rate is that it satisfy a martingale property this implies that for a given real equilibrium allocation which is optimal the model can display varying amounts of exchange rate volatility and that volatility is unrelated to the welfare properties of the equilibrium allocation whether or not volatility is excessive therefore depends on which equilibrium is chosen as the basis for comparison copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

cash versus direct food relief abstract the usual method of providing relief to a famine region is to import food and distribute it to the needy direct food relief if there are markets for food in the region however a relief agency could just as easily distribute money to the needy and let them purchase food in the market cash relief this alternative has been much discussed in the famine literature recently the purpose of this paper is to clarify the conditions under which cash relief will be more or less effective than direct food relief by analyzing the relative effectiveness of the two policies in a formal model

famine in north korea causes and cures in this paper we start from incomplete data ridden with gross measurement errors to construct the underlying data base for a computable general equilibrium model cge of the north korean economy using cross entropy estimation techniques this model incorporates fragmentary information in a rigorous way and allows us to examine the implications of a number of alternative scenarios first we model a production oriented recovery program as the restoration of flood affected lands we then model an external assistance program as the acquisition of all food aid necessary to attain the united nations organizations estimates of minimum human needs the trade oriented recovery program is modeled as a relaxation of agricultural import quotas and the importation of food on commercial terms finally we model a systemic reform program as the elimination of quantitative restrictions on all external trade

relief programs when it may be better to give food instead of cash abstract a standard way to give relief to the needy is to organize employment or public works programs it is often argued that in many situations paying workers in cash instead of food may be the superior option the aim of this paper is to caution that some plausible spillover effects may weaken this argument observe that paying wages in food and in cash can have differential effects on prices a cash for work program would typically enhance the demand for food cause food prices to rise and result in more food in the hands of those who have received the wages this will mean that those who are left out of the program for example the old and the infirm could be worse off

quasifundamental variation in the price level and the inflation rate abstract this paper describes a class of overlapping generations economies that have quasifundamental qf equilibria equilibria in which the price level and inflation rate are positively correlated with a fundamental random variable despite the existence of an alternative pareto dominant equilibrium in which the price level and or inflation rate are constant in qf equilibria the inflation rate is excessively variable using either quantitative or welfare based variability measures these equilibria also provide rational expectations adjustment processes under which the low inflation monetary steady state is dynamically stable journal of economic literature classification numbers e31 e32 e41

irrelevance of open market operations in some economies with government currency being dominated in rate of return this paper describes an environment in which government issued currency is dominated in rate of return and in which there obtains a modigliani miller theorem for government open market operations earlier modigliani miller theorems for government finance have been stated for environments in which government issued currency is not dominated in rate of return in equilibrium since government issued currency is widely observed to be dominated in return it is useful to study how modigliani miller theorems hinge on absence of rate of return dominance

shifting sands the changing case for monetizing project food aid in bangladesh abstract monetization involves local sale of food aid commodities and using the cash to finance other programs to explore the likely consequences of monetization this paper combines a stockpile of recent microeconomic evidence from food and cash for work projects in bangladesh together with a multimarket simulation model results suggest that a switch from food for work s ffw in kind deliveries of wheat to an identical wheat financed cash for work cfw program would unambiguously improve welfare of the poor

legal restrictions sunspots and peel s bank act the real bills doctrine versus the quantity theory reconsidered this paper considers two questions i what is the purpose of legal restrictions intended to separate money from credit markets and ii is such a separation desirable it is argued that historical legal restrictions meant to achieve such a separation were designed to preclude the occurrence of sunspot equilibria it is also shown that a coherent model can be constructed in which sunspot equilibria exist in the absence of legal restrictions but not if money and credit markets are separated nevertheless there is no obvious welfare justification for such a separation

public policies and changing boundaries of firms in a history friendly model of the co evolution of the computer and semiconductor industries in this paper we explore the effects of alternative policies ranging from antitrust to public procurement open standards information diffusion and basic research support on the dynamics of two vertically related industries in changing and uncertain technological and market environments the two industries are a system industry and a component industry and the evolution of these industries is characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress we have been inspired by the co evolution of the computer and component industries from their inceptions to the 1980s on the basis of that evolution we have developed a history friendly model this co evolution in sum this paper has stressed that various types of policies may sometimes have contrasting effects on the industry mainly on concentration and technical change and innovation it has also shown that the consequences of policies may spillover from one industry to another and from one type of firms to another policies that aim at a specific industry may provoke major changes in a related industry through the product market the changing boundaries of firms or knowledge and technological interdependencies the policy maker has to be aware of that finally a major point of the paper regards the unintended consequences of policies

are sunspots necessary in this paper i show the existence of stationary rational expectations equilibria in a simple two island overlapping generations model of the type first considered by lucas in which all uncertainty is endogenous the result is obtained by first constructing sunspot equilibria on each island separately and then using the equilibrium pricing equations to eliminate the sunspot variable in the resulting equilibrium each island s prices serve as the sunspot for the other island the constructed equilibrium is nontrivially stochastic

technological competition and the structure of the computer industry we examine thirty years of computer industry market structure our analysis explains the persistence of dominant computer firms their recent decline and the changing success of competitive entry it emphasizes the importance of technological competition between computer platforms not firms this aspect of competition has changed little over time two things did change young platforms serving newly founded segments eventually challenged established platforms across segment boundaries through a process of indirect entry vertically disintegrated platforms have led to divided technical leadership in important segments the result is an industry with far more technological competition

product boundary vertical competition and the double mark up problem we develop a model in which a main product called product a provides a performance quality z by itself whereas a complementary product called product b is useless by itself but enhances the main product s performance quality to q z this asymmetric complementarity gives rise to the following results first if z is relatively small then firms a and b behave as if the products are symmetrically complementary with the usual double marginalization problem second if z is sufficiently large then firms a and b price their products as if they are independent third over a certain range of intermediate z no pure strategy nash equilibrium exists

lock in and the costs of switching mainframe computer vendors what do buyers see this paper closely studies the historical experiences of computer users faced with incompatibility problems one key point throughout the discussion is that operating system compatibilities and application software were the principal source of switching costs the larger point here is that vendor specificity is partially a choice variable for the buyer it influences many facets of an organization as well as management and employee behavior foresighted users anticipate that daily decisions regarding programming practices and equipment maintenance influence the costs of switching during a later vendor decision buyers take a wide variety of actions both simple and complex most of the paper is concerned with documenting and analyzing how buyers change investments collect information manipulate bidding procedures and change managements practices either in anticipation of or in response to incompatibility problems copyright 1997 by oxford university press

safety nets and index based insurance historical assessment and semiparametric simulation for northern ghana abstract this article considers index based safety nets aimed at assuring participants a minimum income at the village level set by a prespecified poverty line the participating villages collectively manage a pooled budget offering an index based per capita indemnity to the villages financed from a uniform per hectare premium possibly supplemented by an external subsidy the scheme involves implicit cross subsidies in favor of the poorest villages otherwise it focuses on covariate risk leaving it to mutual arrangements to deal with intravillage idiosyncratic risk its design is obtained from a risk minimizing model for the collective of villages with constraints of two kinds the first is the budget that ensures that payments receive adequate finances the second concerns the set of admissible schedules requiring that payments are triggered by a flexible function of only a few variables for this we propose a semiparametric form from kernel learning noting its capacity to combine a priori on the i

towards a theory of famine relief policy abstract this paper examines how famine mortality is related to the distribution of food consumption a theoretical model is proposed of how individual survival chances are affected by changes in consumption uncertainty in survival prospects arises from the errors made by any observer in assessing health at given current consumption the theory is used to explore two policy issues in famine relief the choice of budgetary rules for allocating emergency aid and the case for price stabilization policies during famines applications to data for two famines in south asia suggest that successful price stabilization would have had substantial benefits in reducing mortality