direct estimation of synergy a new approach to the diversity performance debate this study examines the linkages between relatedness and synergy in the context of diversification among u s pharmaceutical firms for the period 1960 1980 rather than assume as in the entropy herfindahl and concentric indices of diversification that the levels of synergy generated by different related combinations of business units are identical we estimate synergy directly using a modified version of the concentric index in addition to estimating synergy using capital market performance of the firm as a whole we examine the effects of nondrug diversification on the innovative productivity of firms pharmaceutical divisions alone our two main findings are that production relatedness such as that between drugs and chemicals in fact did not imply synergy over the period of our study and that the patterns of synergy for different types of relatedness shifted over time with the industry life cycle

a quality adjusted price index for personal computers this study estimates quality adjusted price indexes for personal computers three separate hedonic models are estimated using data from 1 841 personal computers over the period 1984 1991 in addition to the traditional linear model a nonlinear model is developed and estimated the nonlinear model is parsimonious in parameters allows time varying attribute prices and can be estimated using a pooled data set the results indicate that nominal quality adjusted prices of mail order firms declined at an average annual rate of 24 62 quality adjusted prices of major manufacturers declined at a slower rate

pricing and financial resources an analysis of the disk drive industry 1980 88 this paper empirically examines the long purse hypothesis formalized by patrick bolton and david scharfstein 1990 that incumbents may drive out entrants through aggressive pricing the author analyzes the pricing of 733 disk drives between 1980 and 1988 drives that are adjacent to those manufactured by thinly capitalized undiversified rivals are priced lower than other drives during the later years in the sample when little equity financing was available to these firms the results are robust to controls for alternative hypotheses and to other specifications of the hedonic regression copyright 1995 by mit press

hedonic price indexes for spreadsheets and an empirical test for network externalities in this article i first estimate hedonic price equations for computer spreadsheet programs and then use the analysis to empirically test whether network externalities exist in this industry the study shows that consumers are willing to pay a significant premium for spreadsheets that are compatible with the lotus platform and for spreadsheets that offer links to external databases and a similar premium for spreadsheets that offer local area network externalities finally the quality adjusted real price of computer spreadsheets declined by approximately 15 per year from 1986 to 1991

a lorenz pareto measure of pure diversification several diversification and concentration measures have been proposed these measures play an important role in both research and practice in the fields of strategic management industrial economics antitrust regulation and organizational studies two problems with popular existing measures are their inappropriate performance on a benchmark example of the industrial organization literature and their lack of normalization into the unit interval this note proposes a measure that overcomes these deficiencies a distinction is drawn between two separate dimensions of diversification that we call scope and pure diversfication respectively we call attention to how such pure measures can be recombined with scope for the construction of special purpose multiattribute indices our proposed measure is simply related to the well known gini index but is entirely novel a convenient relationship to pareto s principle permits flexible description and interpretation

measurement of firm diversification is it robust this study investigated the convergent validity of rumelt s categorical classification of types of business diversification across different data sources and variations from rumelt s method the st

choosing a common project experimental evidence on the multibidding mechanism abstract perez castrillo d wettstein d 2002 choosing wisely a multibidding approach american economic review 5 1577 1587 and veszteg r f 2004 multibidding game under uncertainty working paper 14 04 universidad de navarra propose the use of a multibidding mechanism for situations where agents have to choose a common project examples are decisions involving public goods or public bads we report experimental results that test the practical tractability and effectiveness of multibidding mechanisms in environments where agents hold private information concerning their valuation of the projects the mechanism performed quite well in the laboratory providing the ex post efficient outcome in roughly three quarters of the cases across the treatments moreover the largest part of the subject pool formed their bids according to theoretical bidding behavior

diversification strategy and r d intensity in multiproduct firms this study provides empirical evidence that choice of diversification strategy systematically affects r d intensity in large multiproduct firms research and development intensity in dominant busin

chained exact and superlative hedonic price changes estimates from microdata scanner data are used to calculate chained exact and superlative hedonic price indexes for television sets the data source is available for a wide range of goods the application providing an example of how this method can be more widely applied the indexes correspond to constant utility hedonic cost of living indexes the approach improves on the existing direct method which takes its estimates directly from the coefficients on time dummies in a hedonic regression it also improves on the matched model method used by statistical agencies the differences between actual price changes and exact hedonic quality adjusted price changes are found to be substantial base period and current period weighted exact hedonic indexes are similar thus providing good approximations to a superlative index estimates from the direct dummy variable approach were compared to the superlative indexes the disparities between the results argue for caution in the use of the direct dummy variable approach to estimating

consumer prices the consumer price index and the cost of living after presenting major findings and recommendations the cpi commission reiterates the estimate of a 1 1 percentage point per annum upward bias it rejects the contention that the bls already makes substantial corrections for quality change that quality improvements and new products accrue only to the rich and that procedures to make more extensive quality adjustments valuations of new products and adjustments for commodity and outlet substitution are impractical the bias in the cpi can be sharply reduced as the authors detail in this paper coauthors are ellen r dulberger robert j gordon zvi griliches and dale w jorgenson

estimating consumer preferences using market data an application to us automobile demand this paper explores the possibility of using market data to identify consumer preferences a utility function composed of homogeneous characteristics and goods specific effects is used as a basic link between the goods space and the characteristics space the functional form for the hedonic price equation the data requirements and issues of measurement errors for estimating demand and supply of characteristics are discussed we illustrate the methodology by considering the us automobile demand using 1969 86 data compiled from consumer reports and ward s automotiveyearbook

developing a global diversification measure previous measures focusing on either the international market or product dimension of corporate diversification have been unsatisfactory for analyzing global diversification since both dimensions constitute important elements of a firm s global diversification strategy this study constructs a measure in which both dimensions can be captured allowing business strategy researchers to examine corporate diversification in the global context in accomplishing this task this study extends the jacquemin berry entropy diversification measure to the global horizon

a computer software price index using scanner data in the last 20 years the expenditure share of prepackaged software in the national output has grown the large number of characteristics in computer software make hedonic regression techniques impractical for purposes of controlling for quality changes in this study matched model price indices are constructed using monthly scanner data on prices and unit values for various prepackaged computer software titles and categories sold in canada from january 1996 to june 2000 quality differences are controlled for by applying the maximum overlap method results show that prices declined during the period studied at an average annual rate of 5 9 jel classification c43 l86 un indice de prix de logiciel a partir de donnees scanographiques au cours des derniers 20 ans la portion des depenses pour les logiciels dans la depense nationale s est accrue le vaste eventail de caracteristiques des logiciels rend l utilisation des techniques de regression hedonique inutilisable a cause de leur incapacitea normaliser les changements de qualite dans ce texte on construit des indices de prix mensuels a partir de donnees scanographiques sur les prix et valeurs unitaires pour differentes familles de logiciels vendus au canada entre janvier 1996 et juin 2000 les differences de qualite sont controlees en utilisant la methode du maximum de recoupement les resultats indiquent que les prix ont chute au cours de la periode etudiee a un rythme annuel de 5 9

competing compatibility standards and network externalities in the pc software market this paper is an empirical study of the value of four file compatibility standards for transferring data in the personal computer software market the results are that only the lotus file compatibility standard is significant in explaining price variations and it is significant in both the spreadsheet and database management system markets this supports the hypothesis that the personal computer software market exhibits complementary network externalities copyright 1995 by mit press

implementation in undominated strategies a look at bounded mechanisms this paper examines the impact of placing natural restrictions on the mechanisms considered for implementation problems it is shown that if all mechanisms are considered and preferences satisfy a basic condition then any social choice correspondence can be implemented in undominated strategies an example points out that the strength of this result derives from the use of mechanisms with questionable features in part of the message space the agent who announces the highest integer is rewarded this sort of tail chasing construction common in the constructive proofs of the literature is used to assure that undesired strategy combinations do not form an equilibrium if such mechanisms are ruled out then the social choice correspondences which can be implemented in undominated strategies satisfy an incentive compatibility type condition called strategy resistence for social choice functions this is equivalent to strategy proofness this contrast suggests that this issue should be examined as it applies to other solution concepts used in implementation theory the last portion of the paper begins to explore the issue as it relates to nash implementation and undominated nash implementation

abreu matsushima mechanisms experimental evidence abstract abreu matsushima mechanisms can be applied to a broad class of games to induce any desired outcome as the unique rationalizable outcome we conduct experiments investigating the performance of such mechanisms in two simple coordination games in these games one pure strategy equilibrium is focal we assess the efficacy of abreu matsushima mechanisms for implementing the other pure strategy equilibrium outcome abreu matsushima mechanisms induce some choices consistent with the desired outcome but more choices reflect the focal outcome moreover strengthening the mechanism has a perverse effect when the desired outcome is a pareto dominated risk dominated equilibrium journal of economic literature classification number c7

an experiment on nash implementation we perform an experimental test of a modification of the controversial canonical mechanism for nash implementation using three subjects in non repeated groups as well as three outcomes states of nature and integer choices we find that this mechanism successfully implements the desired outcome a large majority of the time providing empirical evidence for the feasibility of such implementation in addition the performance is further improved by imposing a fine on a dissident so that the mechanism implements strict nash equilibria while our environment is stylized our results offer hope that experiments can identify reasonable features for practical implementation mechanisms

nash equilibrium and welfare optimality if is a set of social alternatives a social choice rule scr assigns a subset of a to each potential profile of individuals preferences over a where the subset is interpreted as the set of welfare optima a game form or mechanism implements the social choice rule if for any potential profile of preferences 1 any welfare optimum can arise as a nash equilibrium of the game form implying in particular that a nash equilibrium exists and 2 all nash equilibria are welfare optimal the main result of this paper establishes that any scr that satisfies two properties monotonicity and no veto power can be implemented by a game form if there are three or more individuals the proof is constructive

working to improve the consumer price index he recent report of the advisory commission appointed by the u s senatefinance committee begins with one overarching recommendation thebls should establish a cost of living index coli as its objective in mea suring consumer prices u s senate 1996 p 2 this seems basically right to us indeed the bls has long said that the cost of living framework guides operationaldecisions about the construction of the index gillingham 1974 u s bureau oflabor statistics 1984 1988 1992 1997a putting things slightly differently if thebls staff or other technical experts knew how to produce a true cost of living indexon a monthly production schedule that would be what we would produce althoughwe have no fundamental disagreement with the commission about what the objec tive of the cpi program ought to be we may disagree to some extent about theapproaches and methods that are appropriate and feasible in working toward thatobjective this is a point to which we will return below our rst purpose in the present paper is to comment on the advisory com mission s report and the recommendations it contains