the birth of a new industry entry by start ups and the drivers of firm growth the case of encryption software the paper analyses the birth of the encryption software industry esi a new niche in the software industry using a chandlerian perspective this work reports the main facts about fir entry and growth with a particular focus on start up strategies and actions since scale economies do not play a major role in esi the paper investigates the different sources of fir competitive advantages this work shows that innovation and product differentiation along with investments in co specialised assets are variables strongly correlated to young fir probability to survive and grow in doing so we have collected highly detailed information on product introduction us patents granted worldwide alliances and biographical data of fir founders 2004 elsevier b v all rights reserved jel classificatio m13 l86 o32

antecedents and outcomes of modular production in the brazilian automobile industry a grounded theory approach our paper focuses on how foreign automobile manufacturers in brazil have implemented and benefited from strategic modularization based on our case studies and in depth interviews we developed a theoretical framework to examine the antecedents and outcomes of strategic modularization our theoretical framework suggests that strategic modularization may help improve a firm s positional advantage by reducing the cost of managing tacit knowledge in addition the adoption of strategic modularization influences the nature of relationships with major suppliers further blurring the boundaries of the firm

a study on the cost of operational complexity in customer supplier systems this paper reports on the application of the operational complexity index frizelle g woodcock e 1995 measuring complexity as an aid to developing operational complexity international journal of operations and production management 15 5 26 39 the aim is to address what is the relationship between costs and the complexity index the investigation carried out measurements on two types of supplier customer systems in the uk one is make to stock with low product variety but high volume while the second is make to order with high variety but low volume the research found some evidence that inventory costs are associated with operational complexity moreover while the index is generic to both case studies there seemed to be a direct link between the index value and cost only in the make to stock case

assortment planning in fashion retailing methodology application and analysis abstract assortment planning is the process conducted by the retailer to determine the number and types of products in a line key questions that arise in this process include choosing the inventory depth and variety breadth and the mix between basic and fashion merchandise of the assortment to maximize expected profits we describe a method for resolving these questions using demand forecasts derived from historical sales patterns we use a nonlinear integer programming model to make the assortment choice efficient heuristics are developed to solve this problem we applied our method at a large catalog retailer specializing in women s apparel we compared our method to the existing rules used by this retailer and found that it could choose the assortment in a manner that reduces markdowns due to excessive inventory and lost margins due to stockouts by enough to increase profits by at least 40 insights are developed to better understand why products are included in an assortment and the implications of this choice on the realized profit we extend our model to include shelf space constraints and the effect of assortment choice on product demand

competitive search equilibrium in this paper i construct an equilibrium for markets with frictions which is competitive in the sense that all agents are price takers and maximize utility subject to a set of market parameters i show that the equilibrium allocation is socially optimal i also show how the competitive search equilibrium can be achieved if employers with vacancies can advertise publicly the wages they pay

pricing market coverage and capacity can green and brown products co exist abstract environmental strains are causing consumers to trade up to greener alternatives and many brown products are losing market coverage to premium priced green rivals in order to tackle this threat many companies currently offering only brown products are contemplating the launch of a green product to complement their product portfolio this paper provides strategic insights into and tactical ramifications of expanding a brown product line with a new green product our analysis explicitly incorporates a segmented consumer market where individual consumers may value the same product differently the economies of scale and the learning effects associated with new green products and capacity constraints for the current production system it is shown that a single pricing scheme for the new green product limits a firm s ability to appropriate the value different customers will relinquish in a segmented market and or to avoid cannibalization a two level pricing structure can diminish and even completely avoid the salience of cannibalization however when resources are scarce a firm can never protect his products from the threat of cannibalization by just revising the pricing structure which can spell the end of his brown product s presence in the market or preclude the firm from launching the green product at this point the degree of cannibalization is higher for the brown product when the green product offers a sufficiently differentiated proposition to green segment consumers

search theoretic models of the labor market a survey we survey the literature on search theoretic models of the labor market we show how this approach addresses many issues including the following why do workers sometimes choose to remain unemployed what determines the lengths of employment and unemployment spells how can there simultaneously exist unemployed workers and unfilled vacancies what determines aggregate unemployment and vacancies how can homogeneous workers earn different wages what are the tradeoffs firms face from different wages how do wages and turnover interact what determines efficient turnover we discuss various modeling choices concerning wage determination and the meeting process including recent models of directed search

variations in r d investments of family and nonfamily firms behavioral agency and myopic loss aversion perspectives the behavioral agency model suggests that to preserve socioemotional wealth loss averse family firms usually invest less in r d than nonfamily firms however behavioral agency model predictions a

sensitivity of job destruction to vintage and tenure effects matching models with endogenous job destruction typically deliver excessively volatile job destruction and moderate volatility of vacancies in our model vintage and tenure eects promote the creation of new matches that are temporarily more productive while reducing the survival of temporarily less productive matches this cleansing eect pro duces a counter cyclical in ow into unemployment removes the strong response of job destruction to productivity shocks and generates a downward sloping beveridge curve as in the data the model also generates more volatility in vacancies the job nding rate and labour market tightness

pioneering plus a broad product line strategy higher profits or deeper losses previous research suggests firms can build a market share advantage by preempting later entrants with a broad product line and expanding rapidly into related markets whether such a strategy leads to a pioneering profit advantage relative to followers also depends on its cost effects in this paper we examine when the market share advantage of a pioneering firm with a broad product line strategy translates into a profit advantage by examining the cost effects of this strategy using the profit impact of marketing strategies data and an estimation method that controls for various unobserved factors we find significant differences between different industry settings from these contrasting findings we generate an emerging theoretical framework that we subject to empirical testing we conjecture and empirically verify that creating a broad product line with a versioning strategy creating variety from a standard product in anticipating customer demand does not increase the pioneering cost disadvantage and thus results in a pioneering profit advantage on the other hand with a tailoring strategy creating variety by customizing a product to actual customer demand a broad product line substantially increases the pioneering cost disadvantage thereby making a preemption strategy counterproductive

job search and unemployment insurance new evidence from time use data article i nfo this paper provides new evidence on job search intensity of the unemployed in the u s modeling job search intensity as time allocated to job search activities the major findings are 1 the average u s unemployed worker devotes about 41 min to job search on weekdays which is substantially more than their european counterparts 2 workers who expect to be recalled by their previous employer search substantially less than the average unemployed worker 3 across the 50 states and d c job search is inversely related to the generosity of unemployment benefits with an elasticity between 1 6 and 2 2 4 job search intensity for those eligible for unemployment insurance ui increases prior to benefit exhaustion and 5 time devoted to job search is fairly constant regardless of unemployment duration for those who are ineligible for ui

a cost and operations based product heterogeneity index abstract coping with product variety forces a manufacturing firm to solve a fundamental trade off the increased revenue that results from more variety versus increased costs through the loss of production scale economics decision making about product variety often results into a conflict between the marketing department and the production department we are particularly interested in the cost consequences and operational performance of a production system when considering product variety therefore we need to measure heterogeneity inherent to our production system and the operational performance of it the interaction between these two aspects needs to be linked to the product costs we extend the traditional product variety index of de groote towards a multi factor index including operational characteristics product mix demand frequency production and set up times and production parameter variances and product costs using analytic experiments we investigate the relationship with lead times and how product costs interrelate with the factors constituting the index in our paper we will introduce the lead time concept and the conceptual framework next we analyse the operational performance of a production system confronted with a change of product variety linked to the unit cost of production we explain how our performance measure can be of practical use

the impact of the potential duration of unemployment benefits on the duration of unemployment abstract this paper examines the impact of the potential duration of unemployment insurance ui benefits on unemployment in the united states first we use a large sample of household heads to examine differences in the unemployment spell distributions of ui recipients and nonrecipients sharp increases in the escape rate from unemployment both through recalls and new job acceptances are apparent for ui recipients around the time of benefits exhaustion such increases are not apparent at similar points of spell duration for nonrecipients second our analysis of accurate administrative data from 12 states indicates that a one week increase in potential benefit duration increases the average duration of the unemployment spells of ui recipients by 0 16 to 0 20 weeks

the effect of standardized information on firm survival and marketing strategies we argue that standardized information disclosure information using a common format and uniform metrics creates asymmetric opportunities for firms which affects their strategies and survival we test our predictions using a longitudinal quasi experimental field study involving the nutrition labeling and education act of 1990 nlea and we focus on firm market share within a category as a key asymmetry findings indicate that in general the nlea had no effect on firm responses however when accounting for firm differences we observe that the nlea led to 1 an increase in small share firm exits and 2 a greater increase in distribution for large share firms no concurrent increase in price by large share firms following the nlea was observed we conclude by discussing the implications of these effects for firm strategy the design of public policy and theories regarding the impact of information on markets

proactive and reactive product line strategies asymmetries between market leaders and followers to what extent do firms engage in product line actions simultaneously with actions in other marketing variables what are the determinants of product line actions to what extent are product line actions proactive to what degree are they reactive how can a firms product line action elasticity percent change in product line length with respect to percent change in competitors past and anticipated actions be decomposed into reaction and anticipation elasticities are product line actions and elasticities symmetric across market leaders and followers to address these questions we develop a conceptual framework comprising determinants of product line and other marketing actions in a single framework we formulate hypotheses about the asymmetries between market leaders and followers regarding product line actions based on extended expectancy valence and competitive demand elasticity theories we develop a simultaneous equation model of demand and supply with product line and other marketing actions which can be used to identify reaction and anticipation elasticities through the rational expectations approach we estimate the model using data from the computer printer market comprising the market leader hewlett packard hp and followers epson canon and lexmark the results show that the market leader practices a product proliferation strategy and rarely fights on price in contrast market followers adopt a price fighting strategy a firm is more likely to engage in product line actions when its competitors changed their product lines in the past when the firm is large and when its price is high product line reaction and anticipation elasticities are asymmetric between themselves and across the firms for the market leader followers product line reaction elasticity is higher lower than product line anticipation elasticity these differences are related to product line demand elasticities which are higher for the market leader than they are for the followers

product line expansion and resource cannibalization abstract diversification research argues that new products are more successful when they leverage a firm s intangible resources which may support multiple activities without engendering rivalry for their use however numerous complementary resources may also be needed to exploit a firm s intangibles if these resources are in limited supply or if it takes time to acquire and assimilate additional resource capacity then new products may impose costs on existing products by cannibalizing the services of firm resources our analysis of product introductions within the pharmaceutical industry provides evidence of resource cannibalization and suggests that product market experience helps offset some of these costs

job matching and propagation in the u s labor market the vacancy unemployment ratio and employment react sluggishly to productivity shocks we show that the job matching model in its standard form cannot reproduce these patterns due to excessively rapid vacancy responses extending the model to incorporate sunk costs for vacancy creation yields highly realistic dynamics creation costs induce entrant firms to smooth the adjustment of new openings following a shock leading the stock of vacancies to react sluggishly

vrp revisited the impact of behavioural costs in balancing standardisation and variety abstract the objective of this paper is to bring a new element to the academic and industrial debate concerning the optimum level of variety in component design in mass production companies many authors have explored the trade off between functional and variety costs and this could be considered as a well acknowledged management issue at least from an engineering perspective nevertheless while defining the theoretically optimal level of component variety there are other elements more related to operators attitude or to operative conditions which may intervene and prevent effective exploitation of the existing variety these elements have been given scant attention in literature while they may play a relevant role in real organisations in this paper we will present a case study and an analytic model for these behavioural costs in manufacturing environments so as to show how the theoretically optimal amount of variety changes if one takes into account these aspects researchers and practitioners might leverage on this contribution in order to rejuvenate the variety reduction paradigm and to increase their awareness in designing and managing mass production manufacturing processes

on the optimal product assortment comparing product customer based strategies this paper deals with the following general question which products should be in our product assortment portfolio if part or all of the potential customers only order if we can deliver on time the desired quantities for all or a predefined subset of the products that the customers desire one stop shopping concept in this context two strategies are compared a product based assortment in which products are included based on their expected individual contribution to the total net profit and a customer based assortment in which customers are included based on their expected contribution to the total net profit mathematical models are presented to calculate the net profit for each of the above two strategies for a manufacturer confronted with limited production capacity setup times setup cost and holding cost the results of a case study from practice show that an assortment made up of products selected based on their individual contribution may lead to a much lower expected total net profit than a customer based assortment suggestions for further research are given

managing product families the case of the sony walkman abstract success in fast cycle industries e g consumer electronics can depend both on rapid model replacement and on model longevity although sony was as fast as any of its chief competitors in getting new models to market an important explanation for the wide variety of models offered by the firm is the greater longevity of its key models this finding adds an important insight to the conventional literature on time based competition which emphasizes rapid innovation exclusively sony s special understanding of the us market enabled it to respond more effectively to life style differences by locating industrial designers in its key markets sony s strong design capability and effective division of labor engineers lead generational and incremental projects industrial designers and market personnel lead topological projects allow for parallel model development investment in manufacturing flexibility amortized over multiple models within the product family make the rapid model changeover possible

firms governments and wto adjudication japan s selection of wto disputes what explains the selection of cases for wto adjudication this article explores the business conditions under which industries lobby their home government to use the wto adjudication process and the political factors that influence government decisions it explains the industry pattern of selection for international trade disputes as a function of the velocity of the business environment while wto adjudication is seen as costly and slow a positive ruling brings broad benefits in terms of deterrence against future discrimination firms in static industries will invest in wto dispute settlement to achieve these benefits but firms in industries shaped by dynamic competition have high opportunity costs that make them less willing to pursue adjudication this argument accounts for why there are fewer wto cases about electronics industry issues than there are likely incidences of protectionist measures since japan is a leading exporter and provides a government report with unique data on potential wto disputes it was chosen to test the argument in greater depth interviews with japanese business officials and statistical analysis of an original data set provide support for the argument the authors conclude that the passive attitude toward wto adjudication by japan s largest export industry electronics and the sensitivity of japan s diplomatic relations with china have constrained the cases that japan files these findings suggest that the effectiveness of the wto for dispute settlement is conditional upon the time horizon of the industry and the political relations among members

equilibrium search with time varying unemployment benefits we show how time varying unemployment benefits can generate equilibrium wage dispersion when identical firms post wages and homogeneous risk averse workers search for jobs we model a two tier system similar to real world ui programmes the unemployed initially receive benefit b eventually if a worker does not find a job the benefit falls to s the duration of high benefits is treated as an exponential random variable so the model is stationary we characterise the equilibrium and derive the comparative statics effects of changes in the two benefit levels and the expected duration of the high benefit state on equilibrium wages and unemployment in this article we analyse the implications of time varying unemployment insurance in an equilibrium search model we consider a two tier system i e a system with a high and a low benefit level this is the form taken by most real world ui programmes unemployed workers initially receive unemployment compensation but eventually if a worker does not find a job in the meantime this benefit is terminated the worker then has access only to lower social assistance benefits or in some countries to no benefits at all specifically we consider an economy in which newly unemployed workers initially receive unemployment benefits at rate b eventually if a worker does not find and accept a job in the meantime the unemployment benefit falls to a lower level s we assume the event that triggers the fall from b to s occurs at poisson rate k 1 this allows us to do our equilibrium analysis in a stationary framework while focusing on the most important aspect of time varying unemployment compensation namely that after some point the benefit falls this representation of time varying unemployment compensation enables us to derive a two point equilibrium wage distribution in a simple stationary setting we derive this equilibrium distribution using a wage posting model of sequential search we allow for free entry and exit of jobs and for matching frictions in the sense that the rate at which unemployed workers and vacant jobs contact one another depends on overall labour market tightness the use of a matching function to determine the job contact rate for workers and the worker contact rate for jobs is relatively unusual in wage posting models which typically assume a fixed contact rate our model can thus be viewed we thank participants at the tinbergen institute s conference on search and assignment for useful comments in particular we thank gerard van den berg who shared notes with us on an alternative approach to the topic of this paper we also thank lucas navarro for valuable research assistance 1 our model can be interpreted as one in which the search activity of unemployed workers is imperfectly monitored by a government agency suppose unemployed workers are punished by a reduction in their benefits from b to s when found to be putting forth less search effort than required and that detection of insufficient search effort occurs at poisson rate k if all workers choose to put forth less than the required effort and this is a plausible assumption given that workers are homogeneous then this sanctions model is equivalent to our model with time varying benefits that is our model can

employment fluctuations with downward wage rigidity the role of moral hazard we study the cyclical dynamics of job creation and destruction when workers effort is not perfectly observable the no shirking constraint may amplify fluctuations in hiring by making firms surplus share procyclical and may cause a burst of inefficient firing when a downturn begins but quantitatively it mainly raises the cost of motivating marginal workers in booms since firms cannot commit to keep them in recessions and thereby strongly damps the countercyclical fluctuations in the separation rate this implies a robust beveridge curve but casts doubt on ramey and watson s 1997 contractual fragility mechanism and worsens shimer s 2005a volatility puzzle

recent trends in insured and uninsured unemployment is there an explanation this paper explores the recent decline in the fraction of unemployed workers who receive unemployment insurance benefits using march current population surveys we compare the fraction who are potentially eligible for benefits with the fraction who receive them the decline in insured unemployment is almost entirely due to a decline in the early 1980s in the takeup rate for benefits we analyze the determinants of the takeup rate using both aggregated state level data and micro data at least half the decline is due to an increasing share of unemployment in states with lower takeup rates

broader product line a necessity to achieve success strategic product line breadth decisions evoke differential responses from the manufacturing and the marketing areas manufacturing prefers keeping process disruptions to a minimum and as a result discourages product proliferation however marketing in its attempt to match products to heterogeneous consumer needs and gain market share emphasizes a broader product line we systematically investigate the market benefits and cost disadvantages of broader product lines on a large sample of over 1 400 business units our results indicate significant market share benefits and increases in firms profitability with broader product lines moreover widely held beliefs of increases in production costs are not empirically supported american manufacturing firms may indeed be flexible enough to accommodate product variety without significant detrimental effects on costs

determining the appropriate depth and breadth of a firm s product portfolio abstract some firms have broad product lines others have lean product lines to determine the appropriate number of entries in a specific firm s product line the author develops a model that balances the benefits of increased revenue from a broad product line against production and engineering costs two innovations were central in the development of the model 1 redefining how products are scored on various product attributes so that attribute scores vary normally across the population of products and 2 redefining how the number of entries in a product portfolio is calculated in order to discount the significance of entries that are highly similar to existing products the author also introduces the notion of a centroid time to more easily adjust sales and total development costs for product life cycle and investment life cycle effects these redefinitions enable a firm s profit to be modeled as a simple function of its effective number of product entries the effective number of competitors entrie

unemployment insurance take up rates in an equilibrium search model abstract from 1989 to 2012 on average 23 of those eligible for unemployment insurance ui benefits in the us did not collect them to understand the implications of these unclaimed benefits we develop a directed search model with an endogenous ui take up rate in equilibrium ui collectors have longer unemployment durations relative to non collectors the difference results from two forces a consumption effect and a private information effect as ui collection histories are unobservable we characterize both effects analytically and quantitatively with an endogenous take up rate the unemployment rate and average duration of unemployment respond significantly slower to changes in the ui benefit level relative to the standard model with a 100 take up rate the private information effect on non collector job finding rates plays an important role in this result

standard vs custom products variety lead time and price competition in this paper we study the standardization and customization decisions of two firms in a competitive setting along with variety lead time and price decisions we incorporate consumer heterogeneity both in firm preference or store convenience and in product attribute preferences we find that the equilibrium outcome depends on the cost efficiencies of the production technologies as well as the consumer sensitivity to product fit and lead time we develop an index that signifies the relative attractiveness of the standardization and customization strategies and the potential outcomes we identify the strategic roles of product variety and lead time in the competition in contrast to the previous literature we find that increasing the variety will not intensify the price competition if there is sufficient firm differentiation rather it relieves the price pressure for the firm as it satisfies consumer needs better and enables higher price premiums we also analyze the impact of asymmetric variable costs fixed costs and brand reputation on the equilibrium decisions

the role of unemployment insurance in an economy with liquidity constraints and moral hazard the potential welfare benefits of unemployment insurance along with the optimal replacement ratio are studied using a quantitative dynamic general equilibrium model to provide a role for unemployment insurance agents in our economy face exogenous idiosyncratic employment shocks and are unable to borrow or insure themselves through private markets in the absence of moral hazard replacement ratios as high as 65 are optimal and the welfare benefits of unemployment insurance are quite large however if there is moral hazard and the replacement ratio is not set optimally but is instead set to an empirically plausible value the economy can be much worse off than it would be without unemployment insurance

unemployment insurance takeup rates and the after tax value of benefits the recent decline in the unemployment insurance ui takeup rate has puzzled researchers using administrative data with accurate information on the potential level and duration of benefits we examine whether a separating employee receives ui we find a strong positive effect of the benefit level on takeup and smaller effects of the potential duration and the tax treatment of benefits simulations indicate that the recent inclusion of ui in the income tax base can account for most of the previously unexplained decline in ui receipt

optimal unemployment insurance in search equilibrium should unemployment benefits be paid indefinitely at a fixed rate or should the rate decline or increase over a worker s unemployment spell we examine these issues using an equilibrium model of search unemployment the model features worker firm bargaining over wages free entry of new jobs and endogenous search effort among the unemployed the main result is that an optimal insurance program implies a declining benefit sequence over the spell of unemployment numerical calibrations of the model suggest that there may be nontrivial welfare gains associated with switching from an optimal uniform benefit structure to an optimally differentiated system

moral hazard optimal unemployment insurance and experience rating abstract this paper is concerned with evaluating alternative unemployment insurance ui schemes in a dynamic economy with moral hazard we consider changes in the size and duration of ui benefits and the effects of experience rating and use a dynamic contracting approach to determine a benchmark optimal allocation radical changes in the current ui system increase welfare but not by much a move to full experience rating has distributional effects but the aggregate effects are negligible

unemployment fluctuations over the life cycle abstract in this paper we show that i the volatility of worker flows increases with age in us cps data and ii a search and matching model with life cycle features endogenous separation and search effort is well suited to explain this fact with a shorter horizon on the labor market older workers outside options become less responsive to new employment opportunities thereby making their wages less sensitive to the business cycle their job finding and separation rates are then more volatile along the business cycle the horizon effect cannot explain the significant differences between prime age and young workers as both age groups are far away from retirement a lower bargaining power on the youth labor market brings the model closer to the data

screening and labor market flows in a model with heterogeneous workers we construct a monetary model in which workers are heterogeneous and productivity is worker specific resulting in time varying deviations between the average productivity of employed and unemployed workers we assume the worker specific component of productivity which we label as the worker s efficiency level is unobservable ex ante by firms and job search is nondirected by interviewing an unemployed worker firms can observe the worker s efficiency level workers with low overall productivity may be interviewed but not hired as firms screen these workers out during the interview process we show that screening amplifies the volatility of the exit rate from unemployment capturing the idea that firms become more selective in a recession reducing the vacancy yield relative to a model with homogeneous levels of efficiency following a negative productivity shock the

long run profit functions for multiproduct firms a long run specification of the multiproduct profit function is developed from the restricted profit function the multiproduct restricted profit function and the envelope condition are used to estimate the optimal long run levels of the quasi fixed factor formulas for long run marshallian elasticities of substitution and transformation economies of scope product specific and overall economies of scale and economic measures of capacity utilization are developed for the translog functional form the methodology is illustrated by a case study of the new england otter trawl industry

relevant costs congestion and stochasticity in production environments abstract conventional management accounting principles used to evaluate relevant costs have been developed under the assumption of deterministic manufacturing settings manufacturing operations however are complex and stochastic in this paper we examine the impact of stochasticity in the production process on relevant costs based on a dynamic assessment of capacity constraints we develop a model to analyze the behavior of relevant costs with respect to changes in the expected duration and variability in set ups and processing an implication of this analysis is that for profit maximization capacity will exceed expected demand if production rates or demand are stochastic

product development decisions a review of the literature this paper is a review of research in product development which we define as the transformation of a market opportunity into a product available for sale our review is broad encompassing work in the academic fields of marketing operations management and engineering design the value of this breadth is in conveying the shape of the entire research landscape we focus on product development projects within a single firm we also devote our attention to the development of physical goods although much of the work we describe applies to products of all kinds we look inside the black box of product development at the fundamentaldecisions that are made by intention or default in doing so we adopt the perspective of product development as a deliberate business process involving hundreds of decisions many of which can be usefully supported by knowledge and tools we contrast this approach to prior reviews of the literature which tend to examine the importance of environmental and contextual variables such as market growth rate the competitive environment or the level of top management support

unemployment insurance and unemployment spells this paper tests the effects of the level and length of unemployment insurance benefits on unemployment durations the paper particularly studies individual behavior during the weeks just prior to when benefits lapse higher unemployment insurance benefits are found to have a strong negative effect on the probability of leaving unemployment however the probability of leaving unemployment rises dramatically just prior to when benefits lapse individual data are used with accurate information of spell durations and the level and length of benefits the semiparametric estimation techniques used in the paper yield more plausible estimates than conventional approaches and provide useful diagnostics copyright 1990 by the econometric society

on the relationship between inventory costs and variety benefits in retailassortments consider a category of product variants distinguished by some attribute such as color or flavor a retailer must construct an assortment for the category i e select a subset variants to stock and determine purchase quantities for each offered variant we analyze this problem using a multinomial logit model to describe the consumer choice process and a newsboy model to represent the retailer s inventory cost we show that the optimal assortment has a simple structure and provide insights on how various factors affect the optimal level of assortment variety we also develop a formal definition of the level of fashion in a category using the theory of majorization and examine its implications for category profits

public regulation and the structure of production in multiproduct industries an application to the new england otter trawl industry this article considers the problem of managing multispecies fishing industries as one of regulating the production of individual multiproduct firms the multispecies new england otter trawl industry is examined within this framework empirical results derived from estimating a multiproduct profitfunction indicate that management consistent with the structures ofmultiproduct production and costs would directly regulate inputs little support is provided for applying the traditional bioeconomic model to the fishery studied

labor market volatility in matching models with endogenous separations the business cycle behavior of a matching model with endogenous separations is studied in this paper we show that whether aggregate productivity shocks have a larger effect on the vacancy unemployment ratio than in a model with exogenous separations depends on whether worker productivity stochastically increases with tenure the difference in the response is quantitatively small however we also show that the cleansing effect introduced by allowing for endogenous separations can help in reconciling the model with observed fluctuations in the unemployment rate but not with those in the vacancy rate

efficient unemployment insurance this paper constructs a tractable general equilibrium model of search with risk aversion an increase in risk aversion reduces wages unemployment and investment unemployment insurance has the opposite effect insured workers seek high wage jobs with high unemployment risk an economy with risk neutral workers achieves maximal output without any unemployment insurance but an economy with risk averse workers requires a positive level of unemployment insurance to maximize output therefore moderate unemployment insurance not only improves risk sharing but also increases output

the discriminating consumer product proliferation and willingness to pay for quality abstract the authors propose that a crowded product space motivates consumers to better discriminate between options of different quality specifically this article reports evidence from three controlled experiments and one natural experiment that people are prepared to pay more for high quality products and less for low quality products when they are considered in the context of a dense as opposed to a sparse set of alternatives to explain this effect the authors argue that consumers uncertain about the importance of quality learn from observing market outcomes product proliferation reveals that other consumers care to discriminate among similar alternatives and in turn this inference raises the importance of quality in decision making

payroll taxes social insurance and business cycles payroll taxes represent a major distortionary influence of governments on labor markets this paper examines the role of time varying payroll taxes and the social safety net for cyclical fluctuations in a nonmonetary economy with labor market frictions and unemployment insurance when the latter is only imperfectly related to search effort a balanced social insurance budget induces countercyclical payroll taxation renders gross wages more rigid over the cycle and strengthens the model s endogenous propagation mechanism for conventional calibrations the model generates a negatively sloped beveridge curve and countercyclical unemployment as well as substantial volatility and persistence of vacancies and unemployment

delayed collection of unemployment insurance in recessions contrary to assumptions in the unemployment insurance ui literature this paper argues that unemployed workers do not always lose uncollected ui benefits when they start a new job instead they may postpone the collection of leftover benefits to future unemployment spells further using cross time and cross state variations in ui policies the paper finds empirical evidence that allowing unemployed workers to delay the collection of benefits increases their incentives to find a job during recessions when wages are low job separation rates are high and ui benefits are extended i quantify the effects of the policy of allowing delayed collection of benefits on aggregate unemployment by introducing endogenous search effort benefit eligibility and wage indexed benefits into a standard search and matching framework the model demonstrates how the policy increases the future value of employment even though more generous ui benefits in general reduce the net value of employment using a calibrated model i find that allowing delayed benefit collection raises the proportion of unemployed workers receiving benefits and reduces the unemployment rate during 2009 2012

matching models under scrutiny an appraisal of the shimer puzzle abstract two papers have recently questioned the quantitative consistency of the search and matching model shimer has argued that a textbook matching model is unable to explain the cyclical variation of unemployment and vacancies in the us economy costain and reiter have found the existence of a trade off in the model s performance any attempt to change the calibrated values to improve the model s ability to predict the business cycle jeopardizes its predictions of the impact of unemployment benefits on unemployment in surveying the literature originating in these findings i distinguish three different avenues that have been followed to correct the model change in wage formation change in the calibration and changes in the model specification the last approach seems to achieve the best results both from a business cycle and from a microeconomic viewpoint

managing new product definition in highly dynamic environments in highly dynamic environments characterized by changing customer preferences and uncertainty about competitive products managing the development of a new product is a complex managerial task the traditional practice recommended in the literature of reaching a sharp definition early in the new product development npd process may not be optimal desirable or even feasible in such dynamic situations under high uncertainty forcing early finalization of specifications may result in a firm getting locked into an incorrect definition based on our study of npd in the high technology industry we present a model of an approach called real time definition in which a firm adapts its product definition process to the market and competitive environment uncertainty in the product definition is resolved through frequent repeated interactions with customers and using a flexible development process we find that early definition is optimal only in a limited set of situations to maximize its anticipated profits a firm should tune its definition process to the prevailing level of market uncertainty the marginal value of information obtained from the customer during the npd process and its own risk profile and internal development capabilities effects of competition on a firm s definition approach are also examined and implications for managers of a npd process are presented using a conceptual framework