the role of noise in alliance formation and collusion in conflicts many real world conflicts are to some extent determined randomly by noise the way in which noise is modeled in contest success functions csfs has has important implications both for the possibility of forming cooperative relationships as well as for the features of such relationships in a one shot conflict we find that when noise is modeled as an exponential parameter in the csf there is a range of values for which an alliance between two parties can be beneficial whereas that is not the case for an additive noise parameter in an infinitely repeated conflict setting with additive noise sustaining collusion via nash reversion strategies is easier the more noise there is and more difficult the larger the contest s prize value while an increase in the contest s number of players can make sustaining collusion either more or less difficult all in marked contrast to the case of an exponential noise parameter which noise specification is appropriate is therefore an important consideration for modeling any conflict situation

the big push natural resource booms and growth a simple application of big push reasoning suggests that natural resource booms can be important catalysts for development in poorer countries in this paper we present evidence from seven latin american countries that natural resource booms are sometimes accompa nied by declining per capita gdp we present a model with natural resources increasing returns in the spirit of big push models and expectations to clarify some of the reasons this may happen q 1999 elsevier science b v all rights reserved

retail competition in electricity markets abstract the introduction of competition into retail electricity supply gave rise to great expectations however to date its performance has proven less than stellar owing primarily to the theoretical concepts underpinning this reform which draw heavily on the austrian school neither consumers decision processes nor this sector s technical paradigm were adequately accounted for leading to an uncorrect estimation of the expected impact of opening to competition short and medium term prospects for the evolution of retail markets must be reconsidered from the perspective of greater stability not a generalization of competition but rather a persistent segmentation between active and inactive clients not a large and rapid diffusion of radical innovations in commercialisation with the potential for undermining the incumbents positions

a neo schumpeterian model of health services innovation the paper presents and empirically applies a neo schumpeterian model of innovation capable of studying interactions between service providers patients and policy makers and how these complex interactions determine the timing direction and success of innovations in the public sector the model is tested using a case study that traces the introduction and development of ambulatory surgery in a spanish hospital the multi agent model applies the ideas of schumpeter to services encompassing schumpeter s five types of innovation and re introducing the policy maker as a key agent in the innovation process the model has a number of advantages over previous reduced form models first it can analyse the interactions between the economic social and political spheres that make up the complex selection environment of innovations second it captures the recursive impact of radical innovations on agents competences and preferences and their relative power this brings politics power and rhetorical persuasion to the fore third it provides an improved set of definitions for radical and incremental innovation these are not only important for understanding the sources and drivers of innovation but also for the accurate measurement of innovation

the bear s lair index credit default swaps and the subprime mortgage crisis during the recent financial crisis abx he index credit default swaps cds on baskets of mortgage backed securities were a benchmark widely used by financial institutions to mark their subprime mortgage portfolios to market however we find that prices for the aaa abx he index cds during the crisis were inconsistent with any reasonable assumption for mortgage default rates and that these price changes are only weakly correlated with observed changes in the credit performance of the underlying loans in the index casting serious doubt on the suitability of these cds as valuation benchmarks we also find that the aaa abx he index cds price changes are related to short sale activity for publicly traded investment banks with significant mortgage market exposure this suggests that capital constraints limiting the supply of mortgage bond insurance may be playing a role here similar to that identified by froot 2001 in the market for catastrophe insurance the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

innovation and employment a reinvestigation using revised pavitt classes the relationship between innovation and employment is addressed in this article through a model and empirical test at industry level for eight european countries in 1994 2004 we investigate this relationship for manufacturing and services and propose a revised pavitt taxonomy covering both of them in order to identify specific patterns of technological change and job creation and loss the contrasting effects of strategies of technological or cost competitiveness are investigated using innovation variables from cis2 and cis3 together with demand wages and industry dynamics they account for changes in employees and hours worked the diversity in these relations across industries is also explored when the model is applied to each revised pavitt class different mechanisms of technological change and effects on jobs emerge

on the origins of property rights conflict and production in the state of nature i analyse the emergence of property rights in a model of conflict and production in the absence of institutions of enforcement the population of agents evolves dynamically through conflicts for possession of factor goods among pairs of randomly matched agents conflicts are incomplete information wars of attrition with an agent s type consisting of his or her independently drawn valuation of the prize and cost of competing for it i prove equilibrium existence and show that in the steady state of the game the population sorts into two stable groups resource haves and have nots in accordance with a known function of their primitive types

fragmenting global business processes a protection for proprietary information this study shows that when sourcing business services in foreign countries the fragmentation of processes across production units acts as an operational level adjustment variable for firms to adapt their information protection approach to the regulative environment of the host country they have selected and to the possibility to use internal controls over the activities performed abroad we hypothesize that when the above mechanisms are not available firms are more likely to fragment processes across multiple foreign production units instead of collocating all process tasks in the same unit thanks to it enabled integration capabilities firms can exploit the complementarities between the dispersed fragments of a process while reducing the misappropriation hazard of individual fragments empirical results and robustness tests are strongly congruent with these hypotheses we find also that the propensity to turn to the process fragmentation protection mechanism increases with firm host country specific experience and with the alternative value of the proprietary information involved in the activity sourced abroad

if you cannot block you better run small firms cooperative innovation and appropriation strategies abstract this empirical study examines small firms strategies for capturing returns to investments in innovation we find that small firms strategies are qualitatively different from those found in earlier studies of both small and large firms most of the small firms examined here find informal means of protection such as speed to market or secrecy more important than patenting only firms with university cooperation typically r d intensive and science based small firms were likely to identify patents as the most important method of appropriating innovation returns in their field thus the strategic choice for most small firms is between secrecy and speed to market firms that cooperate in innovation with horizontal partners or significantly depend on vertical partners tend to prefer speed whereas process innovators with modest r d investments or few cooperative r d activities display a preference for trade secrets indeed cooperation activities greatly influence the choice of intellectual property strategy for small firms earlier research has emphasized patents and trade secrets as key strategies of appropriation yet these strategies do not appear to be very beneficial for small firms engaged in cooperative innovation these results raise policy questions regarding the functionality of the existing system of intellectual property rights

energy consumption in service industries challenging the myth of non materiality abstract this paper addresses the issue of energy consumption in service industries official energy statistics show that the amount of energy consumed in service industries is quite small and this is explained in the theoretical literature by the presumed intangibility of services our hypothesis however is that the energy consumed by services has been underestimated after identifying and analyzing the full range of sources of energy consumption in service industries we show that official energy statistics account for only a part of this consumption our work is based on a thorough rereading of the economics literature on services especially concerning the definition of services and the specificities of the service provision process done in light of our knowledge about energy consumption eventually using the 2007 french national transportation and travel survey we estimate one of the overlooked sources of energy consumption the one pertaining to mobility

international pollution control cooperative versus noncooperative strategies abstract international pollution control involving two neighboring countries is modeled as a simple two player dynamic game each country produces a good that is consumed by domestic households production of each consumption good results in emissions of pollutants households in each country derive utility from the consumption of the domestically produced good but incur costs through the total stock of pollution stock externality in this setting we characterize cooperative as well as noncooperative pollution control strategies of the governments of the two countries that maximize the discounted stream of net benefits of a representative consumer it turns out that when the governments are restricted to use linear strategies noncooperative behavior results in overall losses for both countries if on the contrary governments use nonlinear markov perfect strategies and the discount rate is small enough a pareto efficient steady state pollution stock can be supported as a differentiable subgame perfect equilibrium thus the emergence of first best solutions cooperative outcomes does not require any institutional arrangements threats retaliation etc but can be brought about through the use of nonlinear markov perfect equilibrium strategies

does short selling amplify price declines or align stocks with their fundamental values critics of short selling argue that short sellers amplify price declines by targeting firms with falling prices in an unwarranted manner contrary to this viewpoint we find that increases in short interest for firms following a price decline are associated with measures of overpricing based on financial statement analysis our results extend to short selling activity following marketwide declines we also find evidence consistent with the profitability of short selling following price declines being driven by valuation based positions overall our findings suggest short sellers primarily undertake valuation based strategies following price declines and have implications for regulators limiting short selling following price declines is likely to impede efficient price discovery this paper was accepted by mary barth accounting

economic incentives for tourism firms to undertake voluntary environmental management abstract the management of natural assets at tourism destinations has relied strongly on the traditional assumption that agents free ride tourism firms are expected to overuse resources for their private interest and be subject to a trade off between being green and being competitive however there are many examples of voluntary environmental actions undertaken by the tourism industry the present paper reviews the literature on the economic consequences of voluntary environmental action taken by tourism firms and presents three challenges to the commonly held tragedy expectations these results suggest the viability of alternative environmental policymaking that takes potential voluntary action under consideration

a dynamic model of conflict and appropriation abstract this paper presents an extension of a static model of economic conflict analyzed by hirshleifer 1991 1995 and skaperdas 1992 to an infinite horizon differential game our aim is to highlight the strategic role of appropriation among a smaller group of agents in an intertemporal context the model yields the conclusion that there exists a unique linear nonlinear markov perfect equilibrium strategy even when strategies are defined over the entire state space we demonstrate that partial cooperation can be seen as a long run response to conflict moreover a decrease in the effectiveness of appropriation the depreciation rate of a common pool stock the rate of time preferences or an increase in the degree of noise improves the degree of partial cooperation and thus welfare in an anarchic society

arming as a strategic investment in a cooperative equilibrium to develop a positive economic theory of military spending this analysis focuses on a game theoretic general equilibrium model of international conflict in which consumption peaceful investment and military spending are endogenously determined the analysis illustrates that when there is repeated interaction between nations a game of threats and punishments generally will not support a disarmament outcome and that fluctuations in military spending can be an endogenous result of fluctuations in aggregate economic activity furthermore the analysis shows how the relation between aggregate economic activity and military spending qualitatively depends on whether governments are acting opportunistically or cooperatively copyright 1990 by american economic association

setting the stakes in environmental contests abstract firms are frequently in conflict with environmental groups over planning and other decisions standard contest models assume that stakes are exogenously defined which is inappropriate in settings such as application for building permission in which one player also acts as proposer assuming that proposers foresee environmental opposition they will adjust their proposals strategically by introducing an additional stage to the lobbying game the full impact of the dispute process can be reckoned the structure of the game the order in which the players move is shown to have a significant impact on social welfare and may warrant intervention among other things there may be social gains to forcing the developer to move last in planning disputes

the evolution of engel curves and its implications for structural change theory the tendency for expenditure engel curves to flatten out at high income levels is frequently cited as evidence that major shifts in household spending patterns take place as households become more affluent empirically little has been done to examine i how pervasive this tendency is across the engel curves of different goods and services ii whether the rate at which engel curves flatten out may significantly change over time and iii how robust engel curves are in the face of changes in the income distribution of households using data from the uk family expenditure survey we find evidence that the tendency for engel curves to flatten out which we dub saturation is indeed widespread across a wide range of goods and services however a tendency for their shape to shift over time and for these shifts to co move with changes in the income distribution of households casts some doubt on whether the declining slope of engel curves can be used to predict slowdowns in the growth rate of demand for particular goods and services

exploring the dynamics of water innovation foundations for water innovation studies the urgent need for innovation to address multifaceted and intertwined water related challenges is becoming increasingly clear acknowledged and responded to with cumulating sources and amounts of funding nevertheless the water sector has been claimed to be less innovative than other sectors this special volume on the dynamics of water innovation is based on the realization that in general there is a striking absence of academic studies on the dynamics of water innovation this sv is therefore designed to lay the foundations for the field of water innovation studies in an effort to integrate the emerging insights together the contributions in this sv capture the current understanding of the dynamics of water innovation and provide insights into how the water innovation process can be fostered the purpose of this introductory article is threefold namely to frame the discussion on water innovation dynamics in order to contextualise the contributions of this sv to provide systematic guidance for studying water innovation dynamics and to suggest the way forward for water innovation studies it captures the extent of the field of water innovation studies with a review of the literature of the last three decades and frames water innovations based on five decades of innovation research and drawing on three areas management strategy and policy we provide an innovation studies taxonomy that consists of four organising dimensions type of innovation stage of innovation level of analysis and measurement this taxonomy enables researchers to study the dynamics of water innovation from different combinations of conceptual and thematic angles drawing on the field of innovation studies in a systematic fashion finally we reflect on the way forward for water innovation studies with suggestions for future research 2017 the authors

nonlinear strategies in dynamic duopolistic competition with sticky prices abstract we discuss nonlinear strategies in an infinite horizon duopoly game with sticky prices where firms maximize their discounted sum of profit we construct a stationary feedback equilibrium without guessing value functions and feedback strategies that solve the hamilton jacobi equation for this purpose we study the auxiliary equation that is derived from the hamilton jacobi equation we show that the domain of the state space plays an crucial role in characterizing feedback equilibria and discuss several implications of this observation in particular we find that when the upper bound of the state space is not very high previously unknown feedback equilibria emerge

the temporal trajectories of innovative search insights from public hospital services abstract this article explores the temporal trajectories of innovative search drawing on conceptual ideas from the behavioural theory of the firm it proposes that the level of temporal persistence in organisations innovative search activities is affected by four key factors these include i the mode of innovative search as well as organisations ii strategic aspirations iii slack resources and iv performance feedback this conceptual model is tested in the context of public hospital services in england results from dynamic panel data analyses reveal stronger temporal persistence in science than in practice based innovative search activities findings also suggest that specialist hospitals relying on a continuous stream of new products services and processes to meet their strategic aspirations are better positioned to sustain science based innovative search activities than their generalist counterparts similarly results uncover a positive association between the availability of financial slack and hospitals ability to continuously engage in superior levels of science based innovative search contrary to theoretical expectations however positive performance feedback does not appear to have any persistence enhancing effect

innovative capacity of italian manufacturing firms in the current scenario of h igh technological co mpetitiveness and environmental co mp lexity the innovation capacity of manufacturing firms is one of the principal key driver for co mpeting on the global markets the context is increasingly dominated by strong and growing competition between companies fro m all over the world so manufacturing firms are forced to move the focus of competitive advantage on innovation this paper focuses on innovative capacity of italian manufacturing firms over the period 2007 2009 fro m three different points of view first the investments in technological equipment plant machinery and ict second the rd third the way that firms finance their innovation activity and investments analyzing a samp le of 524 euro pean manufacturing firms fro m these three different points of view several findings emerge fro m the co mparison of firms in different countries most italian co mpanies have a good basic ict supply but they invest relatively less than the average in new in frastructure mach inery and equip ment investments in innovation and r d are stronger although funding strategies are unbalanced towards traditional debt instruments and they are more undifferentiated considering the final ob jectives of the investment the research concludes with interesting managerial implications wh ich provide a conceptual interpretation of the phenomena and prescribe actions to policy makers

riding the bubble with convex incentives we oer a simple portfolio choice based rationale for the documented failure of institutional investors to trade against mispriced securities in a dynamic model where informed and risk averse money managers face convex i e option like incentives we show that the standard mean variance component and hedging demand that make up their portfolio often imply opposite stances against mispricing the rst component represents managers bets against overpriced securities by contrast managers hedge against the risk of forfeiting an end of period bonus payment can over weigh overpriced securities even with respect to the market portfolio this bubble riding component is more likely to drive the managers portfolio as overpricing increases although we do not model the informed managers price impact our analysis suggests that the incentives of sophisticated investors might drive them to exacerbate security mispricing

dynamic rent seeking games the present paper analyses rent seeking games in which competitors for a rent can act and react finitely or infinitely often it argues for an infinite move model as the most appropriate specification of a model of rent seeking dynamic equilibrium analysis of this game suggests that wasteful expenditures in rent seeking competitions are lower than previously studied static simultaneous move games predict journal of economic literature classification numbers d72 c73

the voracity effect abstract we analyze an economy that lacks a strong legal political institutional infrastructure and is populated by multiple powerful groups powerful groups dynamically interact via a fiscal process that effectively allows open access to the aggregate capital stock in equilibrium this leads to slow economic growth and a voracity effect by which a shock such as a terms of trade windfall perversely generates a more than proportionate increase in fiscal redistribution and reduces growth we also show that a dilution in the concentration of power leads to faster growth and a less procyclical response to shocks jel f43 o10 o23 o40

anarchy and its breakdown anarchy defined as a system in which participants can seize and defend resources without regulation from above is not chaos but rather a spontaneous order however anarchy is fragile and may dissolve either into formless amorphy or into a more organized system such as hierarchy under anarchy each contestant balances between productive exploitation of the current resource base and fighting to acquire or defend resources anarchy is sustainable only when there are strongly diminishing returns to fighting effort the decisiveness parameter is sufficiently low and incomes exceed the viability minimum these considerations explain many features of animal and human conflict

short sale constraints information acquisition and asset prices abstract during financial crises financial market regulators often restrict short selling to support prices and curb volatility however evidence suggests that short selling bans during the turmoil in financial markets in 2007 2009 failed to achieve regulators goals we analyze a model of costly private information acquisition and asset pricing under short sale constraints to examine a possible cause of this failure we show that the constraints increase return volatility by adversely affecting the production of private information when investors are highly risk averse or are holding highly correlated risky assets the distortion in private information production arising from imposing short sale constraints leads to undervaluation implying that imposing short selling bans during economic crises not only fails to curb volatility but also may fail to support prices

organizational innovation and its effects organizational innovation its persistence its relationship with technological innovation and their influence on firm performance remain under researched these issues are investigated using an integrated firm level data set obtained from two recent waves of the norwegian community innovation survey cis 3 and 4 and firms financial accounts a heckman two step estimation to ensure against potential sample selection bias was used to demonstrate that between 1999 and 2004 a number of norwegian firms were persistent in organizational innovation and this persistence raised the positive effects of organizational innovation on their performance the results also reveal that many firms undertook and benefited from different types of organizational innovation and such benefits were increased by the combinative effect of organizational and technological innovation the study also found that older and larger firms are more inclined to attempt organizational change while smaller firms are more able to benefit copyright 2012 the author 2012 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

a generalized model of rent seeking behavior in this paper i present a formal analysis of rent seeking games in which the players valuations for the prize are represented as vectors the players in this game are risk neutral and may not be indifferent to who wins the contestable rent if it is someone else both tullock s original rent seeking model and the public goods rent seeking model by katz et al turn out to be special cases of this more general model

scope and patterns of innovation cooperation in spanish service enterprises abstract examining 2148 innovating service firms from the spanish technological innovation panel 2004 this paper utilizes latent class analysis to appraise the scope of innovation cooperation in services in the spanish economy in accordance with the growing weight of external information flows throughout innovation processes the empirical evidence indicates that the nature of the service activity affects both the partner chosen and the cooperation intensity the results lead to the creation of a typology of cooperation composed of three broad profiles service firms intensive in techno scientific cooperation intensive in interactions with clients and a profile with low intensity in cooperation called lonely innovators the probability that a firm belongs to the latter profile is 59 which makes it reasonable to affirm that innovation cooperation is not a common practice in spanish innovating service enterprises innovation output variables have been included in order to examine the relationship between patterns of cooperation and innovation performance the findings also underline the co existence of different cooperation patterns within the same industry

resource constraints as triggers of radical innovation longitudinal evidence from the manufacturing sector abstract despite the significant role of radical innovation as a driver of firm growth and performance the consequences of resource constraints for radical innovation outcomes remain unknown our paper addresses this gap we combine arguments from entrepreneurship theory and the theory of recombinative innovation to construct an overarching theoretical framework that argues why resource constraints can promote rather than impede radical innovation we then build hypotheses on two specific resource constraints knowledge and financial and test these by a lagged variable random effects tobit model with longitudinal data from an exceptionally large and detailed innovation survey controlling for absorptive capacity firm age and firm growth we find full support for the hypothesis that knowledge constraints spur radical innovation and partial support for the hypothesis that financial constraints spur radical innovation we discuss the theoretical significance of these findings and point to managerial implications and paths for future research

a dynamic conjectural variations model in the private provision of public goods a differential game approach abstract the purpose of this paper is to provide a reasonable microfoundation to justify the concept of a conjectural variations equilibrium which is often used in the literature on private provision of public goods with the help of the differential game by interpreting the steady state conjectures in a dynamic contribution game as the conjectural variations in the corresponding static game we derive explicit forms of nash or non zero conjectural variations depending on the choice of the strategy spaces furthermore we find that there may be uncountable many conjectural variations and the possibility of matching behavior i e positive conjectural variations when non linear markov perfect strategies are used and when the domain of a state variable is appropriately restricted

assessing complementarity in organizational innovations for technological innovation the role of knowledge management practices we empirically investigate the pattern of complementarity among four organizational practices firm level data were drawn from the community innovation survey carried out in luxembourg supermodularity tests confirm the crucial role of organizational innovation in raising firms technological innovation the pattern of complementarity across organizational practices differs according to the type of innovation i e product or process as well as according to whether the firm is in the first stage of its innovation process i e being innovative or not or in a later stage i e sales of new products

measuring innovation in tourism from the schumpeterian and the dynamic capabilities perspectives this paper offers a diagnosis of the state of the issue regarding the measurement of innovation in the tourism industry at the company level and some recommendations for overcoming identified problems the study addresses two central issues how existing secondary databases of innovative activity define the boundaries of the tourism industry and the degree to which these databases reflect the particular characteristics of this economic activity it is concluded that these analyses present serious biases and anomalies hindering the understanding of the situation at the micro level and complicating the issue of international comparability and the analyses do not capture the internal heterogeneity of innovative behavior of tourism companies from specific intra sectoral activities the problems concern inappropriate indicators and the need for survey methods to complement the development of innovation scoreboards in secondary sources the study concludes by detailing a set of proposals that should be considered in the context of a scoreboard to provide a comprehensive view of a tourism firm s technological and organizational innovations as well as its innovative capabilities combining schumpeterian theory and the dynamic capabilities based approach and also making cross national comparisons feasible

a review of innovation research in tourism abstract over the past two decades there has been increasing focus on the topic of innovation in tourism this article reviews the research contributions various categories of innovation product process managerial marketing and institutional are addressed important determinants of innovation are acknowledged including the role of entrepreneurship technology push and the existence of territorial industry clusters representation of knowledge is also identified as a critical factor for both the occurrence and nature of innovations the review reveals that there is still only limited systematic and comparable empirical evidence of the level of innovative activities and their impacts and wider implications for destinations and national economies an agenda for future research is emerging suggesting that there is quest for both formal quantification and for qualitative studies of the foundations processes implications and policies of innovation in tourism

effective property rights conflict and growth abstract this paper shows how the interaction between conflict and growth can give rise to a nonmonotone relationship between property rights and social welfare this interaction is illustrated in a model of endogenous growth in which equilibrium diversion of resources is the cost of securing effective property rights a symmetric equilibrium allocation associated with more secure property rights and faster growth can be pareto dominated by one associated with poorer property rights and slower growth faster growth can exacerbate the problem of diversion whenever property rights are sufficiently poor these results call for caution before a society decides to pursue economic growth independently of the institutional structure of property rights furthermore if this structure is inappropriate piecemeal reform might not be in the interest of society and a substantial reform might be necessary if it is to be welfare improving

efficiency and the bear short sales and markets around the world we analyze cross sectional and time series information from 46 equity markets around the world to consider whether short sales restrictions affect the efficiency of the market and the distributional characteristics of returns to individual stocks and market indices we find some evidence that prices incorporate negative information faster in countries where short sales are allowed and practiced a common conjecture by regulators is that short sales restrictions can reduce the relative severity of a market panic we find strong evidence that in markets where short selling is either prohibited or not practiced market returns display significantly less negative skewness

towards a theory of innovation in services abstract the paper sets out some foundations for a theory of innovation in service industries and indicates the role that such innovation may play in the generation of growth cycles the discussion starts with the origins of a major new technology in the capital goods sector and its subsequent development according to the normal product cycle theory this is followed by a consideration of the transmission process by which the new technology is taken up in user industries within the consumer goods and services sector a reverse product cycle is then proposed to describe the innovation process which takes place in user industries such as services once the new technology has been adopted this cycle starts with process improvements to increase the efficiency of delivery of existing services moves on to process innovations which improve service quality and then leads to product innovations through the generation of new types of services finally the existence of two out of phase innovation cycles in the capital and consumer sectors deriving from a technology transmission process which causes disequilibrium in technical progress between the two is put forward as a mechanisms helping to create the long wave fluctuations in economic development associated with schumpeterian technological revolutions

aggregate short interest and market valuations we examine some basic data on the evolution of aggregate short interest both during the dot com era and at other times in history total short interest moves in a countercyclical fashion for example short interest in nasdaq stocks actually declines as the nasdaq index approaches its peak moreover this decline does not seem to reflect a substitution away from outright short selling and towards put options as the ratio of put to call volume displays the same countercyclical tendency the evidence suggests that i arbitrageurs are reluctant to bet against aggregate mispricings and ii short selling does not play a particularly helpful role in stabilizing the overall stock market this abstract was borrowed from another version of this item

cooperative rent seeking this paper presents an analysis of cooperation in the context of a repeated rent seeking game which can be thought of as modeling bilateral situations such as military political conflict labor business lobbying gang illegal activities or criminal civil law suits the potential for mutually advantageous agreements is explored using the repeated nature of the game as the mechanism which sustains the cooperation the nash bargaining solution is applied to symmetric as well as asymmetric rent seeking situations the asymmetries can derive from the players valuing the rent differently or choosing sequentially

the benefits of r d and breadth in innovation strategies a comparison of finnish service and manufacturing firms this empirical study compares the determinants of innovation in manufacturing and services through descriptive and regression analyses of sales from innovative products and services a particular focus is on the effects of r d investments and breadth in knowledge sourcing and innovation objectives the results suggest that contrary to earlier research r d investments play a statistically and economically significant role in service innovation we suggest that this results from the growing engagement of service firms in regular r d activity both service and manufacturing firms also benefit from breadth in external knowledge sourcing strategies in contrast breadth in terms of pursuing parallel innovation objectives appears to have detrimental effects on innovation in service industries we interpret the latter results through reference to service firms r d management capabilities managing multiple innovation projects is challenging and some service firms may not have accumulated the requisite managerial processes and capabilities to benefit from these strategies the available data provide support for this conjecture the detrimental effects of breadth in innovation objectives are significantly mitigated by regular r d activities copyright 2012 the author 2012 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

rent seeking for pure public goods in this paper we present a formal analysis of rent seeking for public goods by two or more groups with different numbers of individuals we begin by considering equally wealthy groups under risk neutrality a case which constitutes our basic model several surprising and interesting results emerge from the analysis of this basic case the problem is then extended to deal with a groups with different wealth levels and b risk aversion this last extension brings about a further crop of interesting and useful results

efficient rents 1 rent seeking behavior in the long run we have analyzed long run behavior in rent seeking under several conditions and behavioral hypotheses the question of interest is whether or not the long run expenditures will exactly equal the value of the rents our results depend on the type of competitive response which is assumed to exist in the long run and on the r value governing the probability of winning

stackelberg rent seeking in this paper i present a formal analysis of rent seeking games in which the players do not move simultaneously i consider rent seeking situations where the players are risk neutral and may value the prize differently the subgame perfect equilibrium outcome in this stackelberg game provides several surprising and interesting results i extend the problem to deal with cases of in complete information concerning the value a player has for the politically contestable rent

interactive innovation in financial and business services the vanguard of the service revolution abstract the concept of the reverse product cycle as a theoretical model of innovation in services is developed further in this paper using the vanguard sector of financial and business services as a case study example of how innovation operates as an interactive process the parallels between the emerging service revolution and the nineteenth century industrial revolution are explored in order to identify the key characteristics of the vanguard sectors in each technological revolution the particular nature of the new techno economic paradigm based on information technology is then identified leading to a discussion of the unique conjunction of factors favouring financial and business services as the vanguard sector of the service revolution the central part of the paper then offers an elaboration of the reverse product cycle model stressing the interactive nature of the innovation process as it reflects the prevailing technological opportunities market conditions and industry structures within the adopting sector the example of retail banking is used to illustrate how the innovation cycle proceeds from increases in efficiency through improvements in service quality to the generation of new network service products there is then a discussion of the question of the optimal industry structure for innovation suggestion that in the reverse product cycle large corporations are likely to dominate the early stage of incremental process innovations whereas later in the cycle there is an important role for small entrepreneurial firms to advance more radical process and product innovations the concluding section summarises six major characteristics of the service revolution and suggests how it may proceed from its first to its second phase as the focus of innovation shifts from the vanguard sector of financial and business services to a much broader range of higher level knowledge based services many of which are currently delivered by the public sector

the elixir or burden of youth exploring differences in innovation between start ups and established firms despite the widely acknowledged role of start ups in economic development little is known about their innovative activities compared with those of established firms drawing on a sample of 12 209 uk firms we differentiate between services and manufacturing firms and using a matching estimator approach demonstrate that start ups differ significantly from established firms in their innovation activities we find that in services being a start up increases the likelihood of product innovations however in manufacturing we find no significant differences in the likelihood of product innovation between start ups and established firms when examining the returns to innovation we find that start ups have a significant advantage both in services and in manufacturing we explore the implications of these results for theory and policy

long run equilibrium and total expenditures in rent seeking the lure of excess profits or rents associated with monopoly power gives rise to expenditures to obtain these rents competitive rent seeking behavior is recognized as a factor which must be included among the wastes associated with monopoly power tullock 1967 posner 1975 1 the expenditures are aimed at transferring wealth rather than its creation and the use of resources to obtain this transfer is a loss to society how important rent seeking is as a part of the total monopolistic waste hinges on the size of the total expenditures induced by a given level of excess profits

can the shadow of the future harm cooperation abstract it is generally thought that in long term relationships high valuations of the future are conducive to cooperation in an intertemporal model of conflict however we demonstrate the possibility of the opposite effect a longer shadow of the future may harm cooperation in particular we show that the degree of inefficiency is positively related to i the agents valuation of the future ii potential growth rates in resources iii the size of initial resource endowments and iv the effectiveness of conflict

equilibrium learning in simple contests abstract the paper studies a repeated contest when contestants are uncertain about their true relative abilities when ability and effort are complements a favorable belief about one s own ability stimulates effort and increases the likelihood of success success in turn reinforces favorable beliefs we show that this implies that with positive probability players fail to learn their true relative abilities in equilibrium and one player wins the contest with high probability forever in this case the prevailing player may be the actually worse player and persistent inequality arises we discuss some features of the model when the complementarity assumption is dropped

who co operates for innovation and why an empirical analysis abstract in recent years there has been growing interest in co operative arrangements for innovation with some commentators arguing innovation is no longer the province of individual firms but depends increasingly on collective action this paper examines the response to the uk s version of the second european community innovation survey cis 2 to investigate the patterns of co operation between innovating firms and external partners the analysis shows the relationship between innovation and co operation is not straightforward from a subjective i e firm based perspective it is clear that most firms still develop their new products processes and services without forming formal co operative arrangements for innovation with other organisations however firms that engage in r d and that are attempting to introduce higher level innovations i e new to the market rather than new to the firm innovations are much more likely to engage in co operative arrangements for innovation consequently if an objective i e innovation based perspective is taken which weighs innovations by their significance then it is likely that a significant proportion of high level innovations are developed through co operative arrangements although unfortunately the cis 2 does not indicate the direct significance of these arrangements to the development of the innovations in summary the extent of co operative arrangements for innovation appears to depend on the type of firms being considered and on what is meant by innovation

changing money financial innovation in developed countries preface contributors 1 financial innovations and monetary theory marcello de cecco university of siena and european university institute 2 financial change in the united states albert m wojnilower managing director and chief economist first boston corporation 3 the current status of the regulation of financial services and products in the united states developments and trends meyer eisenberg national center on financial services and professor of law berkeley 4 on the empirical detection of financial innovation donald d hester professor of economics university of wisconsin 5 measuring the opportunity for product innovation meghnad desai professor of economics lse and william low professor of economics lse and essex university 6 financial innovation in britain john h forsyth director morgan grenfell ltd 7 financial innovation in germany hermann josef dudler director deutsche bundesbank 8 financial innovation in italy a lop sided process c caranza and c cottarelli banca d italia 9 lessons from the french experience as compared with some other oecd countries christian de boissieu professor of economics university of paris i 10 financial innovation in japan its origins diffusions and impacts yoshio suzuki director institute for economics and marketing studies bank of japan 11 the private ecu market a case of international financial innovation enrico guglielmotto and giuseppe passatore instituto bancario san paolo di torino

service competitiveness and urban innovation policies in the uk the implications of the london paradox wood p service competitiveness and urban innovation policies in the uk the implications of the london paradox regional studies the policy models currently employed in british cities to promote urban economic innovativeness and competitiveness echo national policies by being science manufacturing and technology based yet the most powerful driver of both modern uk economic success and regional and urban inequality has been london based innovation this does not depend on local technological initiatives but on labour intensive knowledge based processes especially within the financial and business services this paper examines the importance of service based innovation and competitiveness in the english urban system dominated by london and its implications for urban innovation policies these currently offer little support to other uk cities either in gaining from london s experience of service led success or challenging its dominance over the most innovative tradable services wood p les po

convertible bond arbitrage liquidity externalities and stock prices abstract in the context of convertible bond issuance we examine the impact of arbitrage activity on underlying equity markets in particular we use changes in equity short interest following convertible bond issuance to identify convertible bond arbitrage activity and analyze its impact on stock market liquidity and prices for the period 1993 to 2006 there is considerable evidence of arbitrage induced short selling resulting from issuance moreover we find strong evidence that this activity is systematically related to liquidity improvements in the stock these results are robust to controlling for the potential endogeneity of arbitrage activity

demand and innovation in services the case of mobile communications abstract this paper aims to analyse the pricing strategies of mobile communications operators and examine the role of demand characteristics in the development of new tariff plans in so doing we depart from a traditional industrial organization approach to price discrimination and interpret new tariff plans as innovations in the spirit of schumpeter we look at competition in this sector as depending upon this form of innovation and we argue that given the specific features of the industry the development of new tariff plans is strongly related to the users characteristics and behaviour our main point is that in a context of uncertainty demand affects firms innovative strategies in two ways first by providing information on user behaviour and by increasing the capability of market segmentation and second by providing the incentives to innovate this argument is supported by an empirical analysis carried out on the basis of an original dataset which includes all the tariff plans on offer in the history of the italian market between 1992 and 2005 we find that both a firm s installed customer base and the level of market saturation play a role in shaping firms innovative pricing strategies in terms of the number and characteristics of the new tariff plans

existence and properties of equilibria for a dynamic game on productive assets abstract we consider a model in which two agents share access to the same stock of a productive asset and study the implications of non cooperative consumption behavior over time under standard assumptions on the production function we construct infinitely many nash equilibria all of which consist of stationary markovian strategies these equilibria result in overconsumption so that the uniquely determined long run asset stock is too low as compared to the cooperative solution however in the limit as the discount rate becomes sufficiently small the stead states generated by the markovian nash equilibria converge to the efficient steady state journal of economic literatureclassification numbers c73 o41 q22

swords or plowshares a theory of the security of claims to property this paper develops a general equilibrium model of the allocation of resources among appropriative and productive activities the model emphasizes the distinction between offensive weapons which are the instruments of predation and fortifications which provide defense against predation the analysis of this model shows how the equilibrium security of claims to property is determined the analysis focuses on the possibility of a nonaggressive equilibrium in which no resources are allocated to offensive weapons and claims to property are fully secure we also analyze the complex relation between economic welfare and the security of claims to property we find for example that a relatively poor agent could be better off in an equilibrium with less secure claims to property

interest group competition over policy outcomes dynamics strategic behavior and social costs this paper analyzes a two period model of interestgroup competition between two groups to affect thepolicy outcome the paper characterizes the subgameperfect equilibrium and considers the welfareimplications of the model the subgame perfectequilibrium to this game is allocatively efficient ifand only if the initial equilibrium is allocativelyefficient and interest groups are equally adept atproducing political pressure when rent seeking isconstitutionally protected the notion of rent seekingconstrained efficiency is defined as the cooperativesolution to the rent seeking game it is shown that arent seeking constrained efficient equilibrium isattainable by forcing winners in political competitionto fully compensate losers

identifying innovation in surveys of services a schumpeterian perspective abstract in order to compensate for decades of neglect of services in innovation studies a strand of literature has emerged which emphasises alleged distinctive features of service innovation these studies apply innovation concepts developed especially for services thereby contributing to the existing divide between manufacturing and services the present paper demonstrates that schumpeter s original innovation concept is indeed broad enough to encompass services and manufacturing and that a more direct reference to schumpeter in particular innovation as a contrast to activities based on routine systems in service oriented studies would add a needed theoretical and conceptual strengthening to service innovation studies

service innovation embeddedness and business performance evidence from northern ireland this paper explores the factors that determine innovation by service firms and in particular the contribution of intra and extra regional connectivity subsequently it is examined how service firms innovation activity relates to productivity and export behaviour the empirical analysis is based on matched data from the 2005 uk innovation survey the uk component of the 4th community innovation survey cis and the annual business inquiry for northern ireland evidence is found of negative intra regional embeddedness effects but there is a positive contribution to innovation from extra regional connectivity particularly links to customers relationships between innovation exporting and productivity prove complex but suggest that innovation itself is not sufficient to generate productivity improvements only when innovation is combined with increased export activity are productivity gains evident

services and the business models of product firms an empirical analysis of the software industry some product firms increasingly rely on service revenues as part of their business models one possible explanation is that they turn to services to generate additional profits when their product industries mature and product revenues and profits decline we explore this assumption by examining the role of services in the financial performance of firms in the prepackaged software products industry standard industrial classification code 7372 from 1990 to 2006 we find a convex nonlinear relationship between a product firm s fraction of total sales coming from services and its overall operating margins as expected firms with a very high level of product sales are most profitable and rising services are associated with declining profitability we find however that additional services start to have a positive marginal effect on the firm s overall profits when services reach a majority of a product firm s sales we show that traditional industry maturity arguments cannot fully explain our data it is likely that changes in both strategy and the business environment lead product firms to place more emphasis on services this paper was accepted by christoph loch r d and product development

service innovation in developing economies evidence from latin america and the caribbean abstractthis paper proposes a framework for understanding key aspects of service innovation in developing economies based on four dimensions first the integration of services in national innovation systems second competences and preferences third networking and cooperation and fourth outcomes in terms of socio economic impacts this conceptual framework is matched with new evidence from case studies performed in six different latin america and the caribbean countries argentina chile brazil uruguay costa rica and jamaica and nine sectors tourism software ict outsourcing mining logistics retail creative services sport services and biotech services the results reveal the importance of specificities in service innovation and suggest policy and managerial implications

equilibrium structure in an economic model of conflict four different types of equilibrium are possible within a two player model of society where only armed self enforcement of property rights is possible the main underlying parameters are the total resource endowment and the initial distribution of this endowment between the players the parameter space is partitioned into regions in which the respective types of equilibrium occur the equilibrium types involve positive arms expenditure by respectively neither player the richer player and both players the latter case involves a sub type in which the poorer player s entire endowment is expended on arms jel d30 d72 d74

innovation in services the purpose of this article is to lay the foundations of a theory that can be used to interpret innovation processes in the service sector the hypothesis underpinning this article is based on lancaster s definition of the product in both manufacturing and services as a set of service characteristics the article follows the example of those who have sought to apply lancaster s work to technological phenomena various modes of innovation in the service sectors are highlighted and illustrated