collusion collective action and protection theory and evidence this paper provides a novel explanation forthe formation of protectionist lobby groupsin imperfectly competitive sectors thelevel of collusion is shown to be a crucialdeterminant of the ability of firms tosustain lobbying we show that greatercollusion reduces firm contributionsto tariff lobbying when the governmentvalues welfare sufficiently and thecross price elasticity between the domesticand foreign goods is sufficiently high the empirical evidence from the u s supports the theory greater collusionreduces the level of pac contributions

campaign contributions and congressional voting a simultaneous probit tobit model m any citizens and scholars have been troubled by the influence that special interest groups appear to exert over policymaking as a result of their roles in the financing of political campaigns these concerns inspired the enactment of a number of election law reforms in the 1970s and have led to increasing popular support for public financing of electoral campaigns despite the public attention these issues have attracted few social scientists have attempted to analyze the financial relationships between interest groups and policymakers empirically 1 one such study was reported by durden and silberman 1976 who included contributions from the afl cio political action committee as an independent variable in an equation explaining congressional voting on minimum wage legislation their results indicated that campaign contributions significantly affected voting on that issue the work i have done differs substantially from that of durden and silberman in two ways first i have chosen to examine issues which were of considerably narrower concern than the minimum wage issue in the interest of simplicity i examine issues of concern to just one or a few groups i have also used a different econometric technique if campaign contributions are actually endogenous as seems plausible the single equation estimation technique employed by durden and silberman is subject to a possible simultaneous equations bias for each issue studied i have therefore jointly estimated a two equation system explaining both votes on the bill and contributions from an associated interest group the simultaneous probit tobit model which i use takes into account the dichotomous nature of the variable indicating a congressman s vote the non negativity constraint imposed on the contribution variable and the possibility of correlation between the error terms for the equations explaining these two variables 2 full information maximum likelihood fiml estimates for the model are consistent and asymptotically efficient

market entry strategy under firm heterogeneity and asymmetric payoffs how should a firm decide whether or not to enter an untested market when a competing firm is vying for the same market should a firm always speed to the market in an effort to capitalize on pioneering advantages we address those questions by developing a simple game theoretical model that captures the most essential factors in a firm s market entry decision such as market uncertainty firm heterogeneity competition cannibalization and order of entry effects our analysis shows that in a competitive context both pioneering advantages and laggard s disadvantages can motivate a firm to speed to an untested market therefore pioneering advantages alone are not an adequate guide for a firm to formulate its market entry strategy the optimal decision may call for a firm to be a prudent laggard when pioneering advantages to the firm are substantial or to become a market pioneer when facing pioneering disadvantages we characterize different patterns of market entry as equilibrium outcomes for different configurations of the market reward structure and offer a conceptual framework for formulating market entry strategies that go beyond the conventional dichotomy speed or wait we show that the paradoxical phenomenon of disadvantaged pioneers can arise in a competitive context as the outcome of rational firms making rational choices to show that pioneering advantages alone are not the right litmus test for market entry decisions we apply our general framework to a concrete case where consumer preference or the premium that consumers are willing to pay for the pioneering brand gives rise to pioneering advantages and laggard s disadvantages we conclude that the firm with a larger pioneering premium may choose to wait while a firm with a smaller pioneering premium speeds to the market our analysis also sheds light on empirical research on pioneering advantages because firms may race into a market solely to avoid laggard s disadvantages rather than to capture pioneering advantages pioneers are not necessarily the firms best positioned to establish exploit and maintain pioneering advantages therefore it is not surprising that a significant percentage of pioneers fail as documented by recent empirical research our normative investigation further suggests that this predicament in empirical research will not disappear even if we have complete data use the right measurements and employ perfect statistical techniques therefore it is perhaps more fruitful to redirect our research effort in the search for pioneering advantages finally we extend our analysis to incorporate the effect of cannibalization on an incumbent firm s market entry strategy we conclude that cannibalization can motivate an incumbent firm to wait as the conventional wisdom suggests but it can also be an impetus for a firm to become a market pioneer we offer supporting evidence for our analysis and discuss managerial implications of our conclusions

electoral outcomes with probabilistic voting and nash social welfare maxima abstract this paper provides unexpected support to nash s view of how bargaining determines the social choice we first present a spatial model of electoral competition with probabilistic voting and a very close relation between voters preferences and their choice probabilities the outcome of the electoral competition game is then shown to be precisely the social alternative that maximizes a nash type social welfare function theorem 1 this electoral outcome is also interpreted as a unanimity likelihood maximum corollary 1 within our framework existence and uniqueness of such an outcome are guaranteed corollaries 2 and 3

chapter 4 competitive marketing strategies game theoretic models publisher summary this chapter reviews the key developments in the understanding of competitive marketing strategies product price advertising and distribution competition are all addressed while the emphasis is on models the chapter surveys the empirical literature as well there is a significant amount of empirical work to report but the ratio of theoretical to empirical work is nevertheless unpleasantly large much progress has been made in the last ten years or so in the study of competitive marketing strategies most of this chapter has been theoretical using simple models of firm and consumer behavior these models serve the function of demonstrating rigorously the existence of certain effects factors which need to be considered in analyzing real world competition

spatial monopoly non zero profits and entry deterrence the case of cement at least since kaldor 1935 a number of economists have argued that indivisibilities and accompanying economies of scale in spatially extended economies can negate the zero profit result generally associated with free entry the essential argument is that if there are industries in which transportation costs are non negligible and size economies call for firms that are large relative to local demand even the most intense competition need not result in a zero profit equilibrium recently eaton and lipsey 1978 have provided the analytical underpinnings for kaldor s largely intuitive argument and demonstrate that pure profits can remain even with free entry of new firms and price competition eaton and lipsey 1978 p 467 suggest that their result depends critically on the existence of the following conditions 1 the average total cost curve is declining over some initial range 2 customers are geographically spread out and intermingled with firms 3 transport is costly and 4 once the firm enters the market it has location specific sunk costs 2 this paper offers an empirical investigation of the non zero profit argument as applied to the u s cement industry on a priori grounds the cement industry appears to meet the necessary conditions for existence of positive site associated profits the existence or at least the belief that the a priori conditions are satisfied has provided a basis for using the industry as a representative case scherer 1980 pp 252 258 for instance offers a textbook example of entry deterrence through plant location strategy that combines elements of space and the standard deterrence argument 3 scherer then notes that in an interview study of plant size and location decisions in 12 industries across six nations the author observed by far the strongest emphasis on geographic space packing as an entry deterring strategy in the cement industry p 257 scherer s example of entry deterrence via strategic plant proliferation is an extension of the kaldor non zero profit argument however the non zero profit argument has at least one major drawback profits in the cement industry have not been significantly above normal for any sustained period the first section of this paper considers the evidence of the cement industry s approximation to the eaton and lipsey conditions and its historical profitability given the contradictory results between apparent satisfaction of the a priori conditions and the lack of supernormal profits a reformulation of the basic model is presented an explanation offered here for the absence of supernormal profits is derivable from the property rights paradigm the usual procedure in analyzing the reaction to new entrants in a spatially extended model has been to assign either initial locations to a set of firms or provide for a prearranged pattern of sequential entry both procedures implicitly assign property rights to locational rents and ignore the vital element that there will be competition to be the first plant in a given location 4 with demand for the product growing competition to be first at a given location will insure that the timing of construction of the

lobbying as legislative subsidy professional lobbyists are among the most experienced knowledgeable and strategic actors one can find in the everyday practice of politics nonetheless their behavioral patterns often appear anomalous when viewed in the light of existing theories we revisit these anomalies in search of an alternative theory we model lobbying not as exchange vote buying or persuasion informative signaling but as a form of legislative subsidy a matching grant of policy information political intelligence and legislative labor to the enterprises of strategically selected legislators the proximate political objective of this strategy is not to change legislators minds but to assist natural allies in achieving their own coincident objectives the theory is simple in form realistic in its principal assumptions and counterintuitive in its main implications empirically the model renders otherwise anomalous regularities comprehensible and predictable in a later section we briefly bring preferences back in examining the important but relatively uncommon conditions under which preference centered lobbying should occur

order of entry as a moderator of the effect of the marketing mix on market share order of entry has been demonstrated to have a significant effect on market share a number of explanations for this effect have been suggested in the marketing and strategy literatures to date the market share advantage gained by pioneers has typically been treated as a main effect an automatic regularity treating order of entry as a main effect implies that there is no penalty on the effectiveness of a brand s marketing instruments for late entry and that a late entrant can compensate for being late by dedicating sufficient marketing resources to their product in this study we investigate the influence of order of entry into a market on the effectiveness of a firm s marketing mix decisions by asking the question can followers compensate for not being first by their marketing mix decisions also even if they can compensate for being late does this effort become increasingly more difficult with later entry that is are there asymmetries in the effectiveness of a brand s marketing mix variables that relate to its order of entry into the market or as has been typically assumed to date is order of entry strictly a main effect an asymmetry exists for example if the market response to advertising is different for the first entrant versus the second or third entrant an asymmetry also exists if the effects of say a price change by the first entrant on the second entrant are different than the effects on the third entrant we develop a market share attraction model where the parameters vary as a function of order of entry our main contribution is in modeling the sources of order of entry advantage as asymmetries in the effectiveness of a brand s marketing instruments hence distinct from previous research we explain why there are inherent order of entry effects this paper is potentially of interest to researchers developing market share models and studying the effectiveness of marketing mix variables the substantive implication of our results concern directly academics interested in marketing strategy as well as the practicing marketing strategists we model asymmetries in the market response of early entrants versus late entrants using data from two durables and three nondurables categories with one exception all data sets are established from the inception of the category and hence do not suffer from the possible bias of excluding pioneers who have failed results show that asymmetries in the effectiveness of a brand s marketing mix variables are an essential source of order of entry effects we find that the main effects of order of entry are minimal order of entry effects do not necessarily lead to lower shares but overcoming these effects is not without substantial cost to the late entrant our results support previous research that has demonstrated advantages to early entry in addition we provide guidelines for how late entrants should compete later entry tends to reduce a competitor s price sensitivity suggesting that they not instigate in a price war with earlier entrants in order to gain share order of entry tends to decrease response to quality and to promotion to achieve the same impact on market share later entrants need a bigger change in quality and need to spend more on promotion our data did not support an asymmetric effect on advertising

finance and politics the wealth effects of special interest group influence during the nationalisation and privatisation of conrail conrail nationalised in 1976 and privatised in 1987 was the most significant nationalisation and privatisation by the us government in recent years it was created from six bankrupt railroads under the pressure of interest groups formed by customers existing claimants employees and related companies we document the gains and losses to these special interest groups at key points in the nationalised and privatised time periods over this period the us government had outlays of 6 59 billion and cash inflow of 6 15 billion and internal return of 6 4 the paper provides evidence that a state owned firm with good governance could deliver superior performance

a general equilibrium model of congressional voting in this paper we specify a model in which congressmen constituents and campaign contributors simultaneously decide on behavior constituents and contributors desire to influence the voting behavior of congressmen congressmen on the other hand want to be elected and vote accordingly we empirically test this model using roll call voting on eight bills dealing with economic regulation and find support for the model our results indicate that part of the voting behavior of congressmen may be explained by noneconomic factors we also find that unions and businesses as campaign contributors are sometimes influential unions are more often influential than is business ideological factors are also important in explaining voting

product innovation a tool for competitive advantage abstract this paper assesses the overall contribution of product innovation to competitive advantage analyzes the conditions under which such a contribution is likely and discusses how this likelihood can be increased through company action it concludes that pioneering is not riskier than following and that successful pioneers enjoy substantial and lasting competitive advantages success depends on the innovation s relative advantage compatibility complexity and the strength of the accompanying marketing effort lead time allows pioneers to build up resources that contribute to sustainability but customer and technological changes may destroy the competitive value of these resources

corporate campaign contributions repeat giving and the rewards to legislator reputation abstract are politicians who follow a strategy of reputational development rewarded with high levels of corporate campaign contributions reputational clarity could help to reduce uncertainty about a candidate and lead to greater campaign contributions from favored interests alternatively such clarity could alienate those who disagree and prevent the politician from obtaining contributions from groups on both sides of an issue we outline an approach that considers conditions under which a politician would or would not prefer reputational development and policy stance clarity and consistency in the context of repeat dealing with special interests our proxy for reputational development is the percentage of repeat givers to a legislator using data on corporate political action committee pac contributions to members of the u s house during the seven electoral cycles from 1983 84 to 1995 96 we explore a variety of alternative hypotheses and find that greater reputational development is rewarded with g

do political action committees give money to candidates for electoral or influence motives this paper examines the motivation ofpolitical action committees in theircampaign contributions the paper estimatesthe effect of contributions on the 1996house of representatives elections and onthe candidates policy stances contributions to challengers have a largeimpact on election outcomes but incumbentreceipts do not on four of the five issuesexamined interest groups responded tocandidate positions rather than givingfunds to influence them these results areconsistent with an electoral motive forcontributions some evidence is presentedthat contributions to incumbents may begiven to secure unobservable services forthe pac

some talk money in politics a partial review of the literature the financing of political campaigns is an area of active scholarly study i review some of the recent literature and discuss important methodological issues that arise in empir ical research on campaign expenditures and campaign contributions the effects of campaign expenditures and advertising on candidate and ballot measure elections are summarized as are the impacts of contributions on contributors welfare many states have changed their campaign finance laws in the past few years and i describe work that exploits variations in these laws a discussion of the strategies used by interest groups to allocate their campaign contributions provides insights into contributors motives

committee assignments constituent preferences and campaign contributions committee assignments constituent preferences and campaign constributions the familiar economic model of regulation as developed by stigler 1971 peltzman 1976 and becker 1983 posits an essentially frictionless market process for regulatory policy formation in which a single regulator legislator chooses policy to maximize net support from competing groups in this paper we extend the supply side of this model by considering the effect of legislative institutions and unorganized constituent preferences on the ability of incumbents in the house of representatives to serve specific interest groups we then test this formulation by examining the recent history of interest group campaign contributions to these legislators our theoretical model concentrates on how a legislator allocates time between serving specific interest groups outside his district and serving his constituency we do not model interest group decisions directly assuming simply that they purchase their desired amount of service from the lowest cost suppliers our model sorts legislators by the supply price at which they can serve a particular group this price depends on the preferences of the voters in the legislators district and the productivity of the legislator in producing policy service for each group 1 the empirical section tests the model by examining the pattern of interest group campaign contributions to house incumbents from 1978 through 1984 our regression analysis tends to confirm both implications of the theory first the pattern of campaign contributions from specific interest groups to legislators is shaped by the division of substantive legislative and regulatory jurisdictions represented by the system of house standing committees second voter preferences influence the pattern of contributions by affecting the supply price at which a legislator can offer policy to interest groups legislators with sympathetic or indifferent constituencies are able to offer a lower price and are therefore able to attract larger sums than those with hostile constituencies these results are important for two reasons first the influence of congressional institutions such as committees on policy is not widely accepted while several studies faith levins and tollison 1982 weingast and moran 1983 weingast 1984 grier 1989 and robert 1990 have documented the effects of changes in a particular committee on policies under its jurisdiction this work considers the jurisdiction of only a single committee in each case 2 by examining the linkages between congressional committees and political action committees pacs we investigate whether interest groups act as if committees have power second while the chicago model of regulation emphasizes correctly in our view that policy is the result of vote maximizing calculations and the incremental balancing nature of any equilibrium the model is imprecise about which sets of preferences are most important in determining the levels of policy or the size of changes in policies focusing on committees promotes a parsimonious specification of both the political players members of the relevant committee rather than the entire congress and the pivotal voters committee members constituencies more than the nation determining specific policy outcomes the paper is organized as follows section i reviews some issues on the nature and sources of committee influence in the u s congress the second section incorporates committee assignments into a theory of decision making by interest group investors sections iii and iv describe our data and estimation technique and present the empirical results the fifth and final section discusses some implications and conclusions of this research i committee power in congress legislators differ substantively by virtue of their committee assignments committees in congress and particularly in the house of representatives possess disproportionate power over the policy areas in their respective jurisdictions have the right to hold hearings and recommend budget allocations for the bureaus in their jurisdiction goodwin 1970

retail featuring as a strategic entry or mobility barrier in manufacturing abstract the fact that in certain circumstances grocery retailers may prefer to feature a dominant brand is shown to have competitive implications for competing food processors in particular featuring by retailers can provide strategic advantages to a dominant manufacturer in fending off a new entrant or a smaller established competitor that tries to expand moreover the long term value of dominance in a market where featuring is important may make socially wasteful responses to entry privately profitable these theoretical considerations are discussed and then applied to a case study of maxwell house s responses to folger s entry into eastern united states coffee markets

order of market entry established empirical generalizations emerging empirical generalizations and future research three established and four emerging empirical generalizations are identified below the first established generalization is that there is a negative relationship between order of market entry and market share second for consumer packaged goods and prescription anti ulcer drugs the entrant s market share divided by the first entrant s share roughly equals one divided by the square root of order of market entry third in mature markets market pioneer share advantages slowly decline over time while the emerging generalizations require additional research support the initial findings suggest 1 for consumer packaged goods order of market entry has a stronger negative relationship with trial penetration than with repeat purchase 2 market pioneers have broader product lines than late entrants 3 skill and resource profiles differ across market pioneers early followers and late entrants and 4 order of market entry is not related to long term survival rates future research topics are also dis

campaign finance reform and electoral competition comment campaign finance regulation is an important issue for democracies proponents of stricter contribution limits believe it will improve competitiveness opponents argue that contribution caps are just a mask for incumbency protection this paper comments on john lott s 2006 article in campaign finance reform and electoral competition in public choice

adoption and diffusion of an innovation of uncertain profitability the argument has frequently been made that the pattern of diffusion associated with most new innovations will typically have certain characteristics a diffusion curve for an innovation is usually defined as the proportion of its potential users who have already adopted as a function of time measured from the first adoption many empirical studies by both economists and other social scientists have shown that diffusion curves nearly always have two distinct characteristics i they are s shaped the proportion adopted is an increasing function of time which is initially convex but eventually becomes concave and ii they tend to be right hand skewed the inflection point occurs at a time corresponding to a proportion adopted which is less than one half so that the function is concave over the greatest amount of time in fact this skewing is occasionally severe enough to make the diffusion curve appear concave everywhere the focus of most empirical studies of innovation diffusion has centered on identification of either the major determinants of the speed of diffusion or the characteristics of firms which determine how long they delay adoption the seminal contributions are griliches 6 study of hybrid corn and mansfield s 121 study of 12 industrial innovations these studies and most of the similar ones following conclude that diffusion is faster for innovations with higher profitability and that large firms tend to be the earliest adopters some studies e g mansfield 121 herregat 71 have attempted to ascertain

some inconvenient truths about climate change policy the distributional impacts of transportation policies abstract climate policy has favored costly measures that implicitly or explicitly subsidize lowcarbon fuels we simulate four transportation sector policies cap and trade cat ethanol subsidies a renewable fuel standard rfs and a lowcarbon fuel standard our simulations confirm that alternatives to cat are 2 5 to 4 times more costly but are amenable to adoption due to right skewed distributions of gains we analyze voting on the waxman markey wm cat bill conditional on a district s cat gains a district s rfs gains are negatively correlated with the likelihood of voting for wm our analysis supports campaign contributions as a partial mechanism

the development of policy instruments in supporting low carbon governance in china abstract this paper examines the development of policy instruments that support the low carbon governance in china the instruments are analysed in five aspects in relation to the key policies in low carbon governance in china including energy conservation developing new energy reforestry developing circular economy and industry restructuring each aspect is discussed in three instrument groups which are 1 law and regulations 2 industry standard and 3 finance and taxation this research suggests that law enforcement for the new established laws should be further strengthened and stricter supervision systems should be in place to safeguard effective implementation of low carbon policies measures and standards especially for those energy condensed sectors more rigorous industry standards regarding energy efficiency should be considered to help eliminate outdated equipments in industries and promote the introduction of more climate friendly technologies the industrial standards should be given strong legal support in accountability in order to enforce their complete application once in operation new policies and instruments need to be introduced in order to reduce carbon print by landfill the backward law and industrial standards in china should be upgraded more regularly therefore to support the low carbon development strategy

the survival of international new ventures international new ventures invs are a popular mode of entry into foreign markets invs those companies that enter foreign markets at inception often suffer the two liabilities of newness and foreignness which may increase the odds of their failure this paper empirically examines the survival of invs by comparing them with other sequential modes of international operations e g acquisitions data from 275 british firms show that invs have lower unconditional survival probabilities than other modes of foreign market entry our analyses also show that differences in survival probabilities disappear when the firms competitive strategies are considered

experimenting towards a low carbon city policy evolution and nested structure of innovation abstract cities can play a key role in the low carbon transition with an increasing number of cities engaging in carbon mitigation actions the literature on urban low carbon transition shows that low carbon urban development is an inevitable trend of urban sustainable future there is a great potential albeit with some limitations for cities to reduce its carbon footprints and there are diverse pathways for cities to achieve low carbon development there is however a limited understanding in terms of the internal mechanism of urban low carbon transition especially in rapidly developing economies this paper attempts to address this gap we examine how low carbon policies emerge and evolve and what are the enabling mechanisms taking shanghai as a case study we developed an analytical framework drawing on system innovation theory and sustainability experiments for this purpose a total of 186 relevant policies were selected and analyzed which is supplemented by the interviews with stakeholders in the government to gain a deeper insight into the policy contexts in shanghai we found that the city s low carbon initiatives are embedded and integrated into its existing policy frameworks a strong vertical linkage between the central and the local governments and more importantly a nested structure for innovative policy practices were identified where a top down design is met with bottom up innovation and proactive adoption of enabling mechanism the structure includes two layers of experiments that facilitate learning through policy experiments across scales the uniqueness effectiveness applicability and limitations of these efforts are discussed the findings provide new theoretical and empirical insights into the multilevel governance of low carbon transition in cities

determinants of automobile pac contributions to house incumbents own versus rival effects this paper examines pac contributions by the big threeu s automakers and japanese auto dealers to houseincumbents a regression model is estimated where paccontributions are a function of a firm s own ties toan incumbent s district as measured by firmemployment and those of rivals for the big three own and u s rival effects are positive further theresults do not indicate the presence of a free ridereffect employment by a foreign subsidiary has no neteffect on u s contributions for the japanesedealers japanese plant employment has a positiveimpact on contributions and that of the big three anegative

dynamics of experimental governance a meta study of functions and uses of climate governance experiments abstract societies around the world are faced with wicked problems such as climate change in this context experimental governance approaches have emerged as tools with potential utility in both top down and bottom up governance efforts at the same time experimental governance has gained momentum as a desirable policy goal in its own right as the various experimental approaches differ in their origins and serve different purposes there is a need to organize the field if more experimental development processes are desired what can be expected from certain kinds of experiments how can the field be organised in a way that benefits those designing conducting and evaluating experimental governance processes in attempting to answer these questions we carried out a meta study of 25 articles on experimental climate governance on the basis of the results and the previous work on experiments we have built a triangle model of experimental governance that proposes both vertical and horizontal dynamics within and between different functions and uses of experiments

what do campaign contributions buy deciphering causal effects of money and votes in the 1987 1988 election cycle political action committees pacs spent 176 6 million on candidates who competed for a seat in the house of representatives what do pacs buy when contributing this money if campaign contributions are rational allocations of a contributor s income campaign expenditures could increase both the probability that the contributor s preferred candidate is elected and the likelihood that if elected the candidate will vote in the interest of the contributor most studies do not find that incumbents expenditures have a significant positive effect on the number of votes incumbents receive 11 14 15 17 29 the evidence that contributions influence congressional votes is mixed most studies find weak or no support for this hypothesis for example kau rubin and keenan 17 find that contributions from businesses mattered in only two of the eight votes they analyzed others argue that campaign expenditures play no important role in the voting decision of congressmen 5 9 12 31 the lack of finding of significant effects of money on votes has been explained with the need for better models to explain campaign contributions 5 however the theoretical developments of for example ben zion and eyton 4 bental and ben zion 3 and baron 2 have not been incorporated in the empirical analysis of the effect of campaign contributions on the voting behavior of legislators empirical models that test this relationship must allow for the endogeneity of campaign contributions for the dichotomous nature of the dependent vote variable and the nonnegativity constraint of campaign contributions most empirical work in this area utilize models that do not incorporate these restrictions in this study i plan to incorporate these aspects of the data generating process into a more detailed model of the effects of campaign contributions on congressional votes of all the reported empirical studies on this issue only chappell 5 uses a model which can properly assess the impact of money on votes chappell finds that campaign contributions do not affect votes in congress when his more detailed econometric technique is used the best test of the theory results if votes have a clear economic payoff to contributors benefits of the votes are concentrated and costs are

is the first to market the first to fail empirical evidence for industrial goods businesses abstract when entering a new market the first entrant typically faces the greatest market and technological uncertainties memorable phrases reflect the associated survival risk such as the first to market is the first to fail and the pioneer is the one with the arrows in its back although research estimates the market pioneer s survival rate the typical pioneer survival rate has not been compared with that of early followers the authors study compares survival rates for 167 first entrant market pioneers versus 267 early followers for these industrial goods businesses 66 of the pioneers versus 48 of the early followers survived at least ten years the main conclusion is that the pioneer s temporary monopoly over the early followers plus its first mover advantages typically offset the survival risks associated with market and technological uncertainties these results are consistent with previous research in the sense that first mover advantages that increase a pioneer s market share also hel

the cotton influence index an examination of u s cotton subsidies given the lack of a bill or amendment specific to cotton we introduce a cotton influence index to capture legislators influence in championing the cause of the cotton growers during the hearings of the farm security and rural investment act of 2002 regression analyses reveal a relationship between cotton influence index and campaign contributions cotton farmland party affiliation and ideology tobit analysis indicates a significant relationship between different actions and participations by representatives to advance the interest of cotton that is components of this index and their future cotton political action committees pacs contributions to them copyright 2006 oxford university press

strategy complexity and economic rent this paper discusses important friction forces that future theories of strategy must incorporate some of these are technological and environmental but the most important ones it is argued are psychological the view is developed that strategy at its core concerns the development and testing of heuristics for high stake decisions in environments too unstable and complex to be optimized the paper especially highlights the behavioral dimension in the belief that strategies should incorporate both the rational and suboptimal aspects of human behavior the rational approach is in many ways the easier as there may be only one way to be right yet the great variety in which people and companies can err gives strategy its creative and real world challenge the tension between the rational and behavioral components is what the field of strategy should seek to exploit

cross market network effect with asymmetric customer loyalty implications for competitive advantage a cross market network effect exists in many industries e g newspaper publishing media software in which a seller sells both a primary and a secondary product e g a newspaper publisher sells newspapers to readers and advertising space to advertisers and the value of the secondary product depends on the size of the user base of the primary product this paper examines the competitive implications of asymmetric customer loyalty in such markets in traditional markets an advantage in customer loyalty generates a profit advantage we show here however that in the presence of a cross market network effect a midlevel of loyalty advantage in the primary product market can lead to an overall profit disadvantage this surprising result is derived from the interdependence of the two markets whereby a profit in one market may be gained at the cost of the other and by the positive relationship between a larger loyalty segment and a higher opportunity cost of price competition in the product of the primary market extending our model to a two period entry game also shows that under certain conditions the entrant with disadvantage in customer loyalty can outperform the incumbent in profit and market share this result suggests that asymmetry in customer loyalty can be a source of first mover advantage or disadvantage

piling on multilevel government and the fiscal common pool this article discusses the common pool problems that arise when multiple territorially overlapping governments share the authority to provide services and levy taxes in a common geographic area contrary to the traditional tiebout model in which increasing the number of competing governments improves efficiency i argue that increasing the number of overlapping governments results in overfishing from the shared tax base i test the model empirically using data from u s counties and find a strong positive relationship between the number of overlapping jurisdictions and the size of the local public sector substantively the overlap effect amounts to roughly 10 of local revenue

emissions trading in china emerging experiences and international lessons grants by the robert bosch foundation under the program sustainable partners partners for sustainability the australian research council and the australian government supported different parts of the project

using repeat challengers to estimate the effect of campaign spending on election outcomes in the u s house previous studies of congressional spending have typically found a large positive effect of challenger spending but little evidence for effects of incumbent spending those studies however do not adequately control for inherent differences in vote getting ability across candidates high quality challengers are likely to receive a high fraction of the vote and have high campaign expenditures even if campaign spending has no impact on election outcomes to avoid that bias this paper examines elections in which the same two candidates face one another on more than one occasion differencing eliminates the influence of any fixed candidate or district attributes estimates of the effects of challenger spending are an order of magnitude below those of previous studies campaign spending has an extremely small impact on election outcomes regardless of who does the spending campaign spending limits appear socially desirable but public financing of campaigns does not

legislator voting and shirking a critical review of the literature we set out to critically review the progress in answering two related questions what determines how legislators vote and how can shirking by legislators be measured in the first category the hypothesis that legislators shirk in order to indulge their personal ideological preferences has led researchers astray the theoretical underpinning is shaky on two counts first legislators who indulge their preferences at the expense of their constituents preferences put themselves at a competitive electoral disadvantage second the original two stage procedure used to measure ideological shirking is severely flawed among many other problems the residual measure of shirking implicitly assumes that the median voter is the relevant constituent principal for the legislator agent

the political economy of trade liberalization and environmental policy a pressure group model where environmental and industry lobby groups offer political support in return for favorable pollution tax policies is used to explain and predict the equilibrium pollution tax in sectors protected by tariffs the political economy effects of trade liberalization are investigated the pollution tax is shown to decrease if the lobbying effort by the environmental lobby decreases more rapidly than by the industry lobby ceteris paribus the level of political conflict falls with trade liberalization pollution may increase because of a reduction of the pollution tax and tax revenues may fall simultaneously as pollution increases the global trading system is currently undergoing another round of multilateral trade liberalization and regional economic integration is occurring in several parts of the world the trade environment link has become an important part of trade liberalization talks it is commonplace for industry representatives to argue that less stringent environmental regulations give less developed countries ldcs a comparative advantage in pollution intensive goods and that industries with high abatement costs will migrate to ldcs environmentalists argue that international differences in environmental laws and regulations may be reduced to their lowest common denominator through political pressure this is not a fear of trade liberalization itself but of the effects of lower trade barriers on the political determination of environmental regulation

games of survival in the us newspaper industry 1989 games of survival in the us newspaper industry applied economics vol 21 no 5 pp 631 649

judicial lobbying the politics of labor law constitutional interpretation this paper links the theory of interest groups influence over the legislature with that of congressional control over the judiciary the resulting framework reconciles the theoretical literature of lobbying with the negative available evidence on the impact of lobbying over legislative outcomes and sheds light to the determinants of lobbying in separation of powers systems we provide conditions for judicial decisions to be sensitive to legislative lobbying and find that lobbying falls the more divided the legislature is on the relevant issues we apply this framework to analyze supreme court labor decisions in argentina and find results consistent with the predictions of the theory

transaction costs and coalition stability under majority rule 1 introduction under a majority voting rule representatives of specific political districts must bargain with representatives of other districts to build a coalition for enacting legislation that benefits their narrow constituencies but the theoretical public choice literature warns of potential for unstable majorities minimum winning coalitions divide program benefits just among their members creating incentives for those left out to entice defection by offering rewards to those who leave and form a different coalition as noted in mueller 1989 new coalitions emerge undermining the old ones leading to cyclical majorities short term programs and highly skewed distributions of program benefits 1 despite these dire predictions there is a general consensus in the literature such as tullock 1981 that programs are more stable and allocations more equal than the theory suggests 2 in an effort to explain the discrepancy between prediction and observation researchers have pointed to institutional rules and practices in congress for example as stated in shepsle and weingast 1981a and weingast and marshall 1988 the committee system provides a structure induced equilibrium that limits the possible range of vote trading and thereby helps maintain coalitions further shepsle and weingast 1981b miller and oppenheimer 1982 and collie 1988 argue that universalist sharing of program benefits enlarges the winning coalition and extends its political support 3 in this article we offer additional evidence of broad stable sharing in many programs enacted by congress by describing interstate distributions from the federal highway trusts fund htf the allocation formula for the htf was initiated in 1916 but despite wide divergence across the states in growth of various economic factors over the rest of the twentieth century such as vehicle registration and population that might have led to redirection of highway funds there were comparatively limited htf allocation adjustments analysis of state receipts from the htf relative to tax payments into the fund reveals that some states collect much more than they contribute whereas others pay in more than they receive even so interstate ratios of htf apportionments to payments have remained stable across the years varying less than changes in highway use measures would suggest going beyond this specific program we examine overall federal expenditure and tax shares among the states from 1975 to 1997 and show that there has been a similar continuity in the interstate distribution of federal funds and taxes 4 as with the highway program there is broad stable sharing of federal expenditures across the states with some receiving more than they contribute in taxes to the federal government to better understand this observed stability and use of relatively egalitarian sharing rules and to go beyond existing explanations we emphasize the desire of politicians to minimize the high transaction costs of negotiating and enforcing political coalitions politicians have incentive to prevent unraveling of political agreements to avoid the costs of searching for new coalition partners reaching agreement on the nature and distribution of program benefits and costs and verifying compliance these activities detract from a legislator s ability to address other voter concerns moreover legislators seek to protect constituent benefits accruing from long term programs that would be lost if coalitions unraveled 5 accordingly we argue that politicians assemble greater than minimum sized coalitions to build broad political support for their legislative programs offering benefits to a larger constituency in exchange for additional votes considerable negotiation over the distribution of program benefits a nd costs may be required so that once agreements are reached politicians will be loath to consider a major reallocation that could undermine the coalition

legislators and interest groups how unorganized interests get represented this paper derives a supply price for public policy using a constrained maximization model in the model three sets of agents each have preferences over outcomes organized interest groups offer campaign contributions to improve their own wealth voters offer votes to obtain outcomes closer to their most preferred outcomes and legislators seek both campaign contributions and votes to obtain reelection a given legislator s supply price for policy is shown to depend on the productivity of his effort as determined by committee assignments priority and ability and by the preferences of his unorganized constituency in the home district two extreme assumptions about the effectiveness of campaign spending in eliciting votes are used to illustrate the comparative statics properties of the model the prediction of the model is that interest groups will in general seek out legislators whose voters are indifferent to the policy the interest group seeks thus voters who do have preferences over policy are in effect represented even though they are not organized

pivotal power brokers theory and evidence on political fundraising this study examines the campaign fundraising success of senate incumbents that have a unique pivotal status legislatively in the senate with regards to parliamentary procedures e g the filibuster regression estimates place the fundraising advantage in favor of certain pivotal moderates over all other senators at about 2 12 million in real terms in total contribution per 2 yr election cycle pivotal status is even more significant in explaining variations in pac contribution in the u s senate given that individuals who make contributions are not likely to be as interested as pacs in buying policy the results also suggest that krehbiel s pivotal politics krehbiel k 1988 pivotal politics a theory of u s lawmaking chicago il university of chicago press construct warrants modification given that it offers prediction about policy outcomes and gridlock intervals without fully incorporating interest group politics of the vote buying or policy buying variety

false advertising and experience goods the case of political services in the u s senate this study uses the voter shopping construct to analyze signaling of moderateness in the u s senate we compare legislator provided signals advertising such as membership in the u s senate s centrist coalition with actual voting histories in order to characterize these types of advertising cues as sincere or insincere following recent research indicating that moderate legislators receive greater financial support we test whether or not political action committees pacs are willing to support financially those who send false signals of moderateness our results show that the mean level of real pac contributions garnered by non moderate democrats who send false signals exceeds that of the non moderate democrats who do not do so by 182 078 this figure is about 74 of mean level of real pac contributions for those non moderate democrats who do not send false signals

are contributors rational untangling strategies of political action committees empirical public choice literature and casual observation suggest that the behavior of political action committees is remarkably unsophisticated meaning that pacs give to those legislators who would support their interests anyway thus it is suggested that contributor behavior deviates from rational behavior which is a cornerstone of economic analysis in this paper a switching regression model is estimated that allows for strategies of pacs to vary for different contribution recipients i analyze the behavior of farm pacs over three election cycles in contrast to previous findings i find that contributor behavior is not inconsistent with rational behavior contributors who attempt to influence the voting behavior of members of congress give the most money to legislators whose constituency interest suggests that they are likely to be undecided on how to vote and pacs give less money to legislators who represent districts with larger farm populations because those legislators are likely to vote in con

advancing the experiment to reality perspectives on shanghai pilot carbon emissions trading scheme shanghai as the most advanced mega city in china has launched a pilot carbon emission trading scheme sh ets that is designed to achieve a compromise between the domestic context in shanghai and a need for national policy appeal this paper gives an overview of the latest progress of the sh ets and sheds some light on the features of key design components such as the threshold for inclusion sector coverage cap setting allowance allocation and the monitoring reporting and verification mrv system based on a concern that manipulative principles and economic dynamics may lead to uncertainties and ultimately influence the emission reduction effect of the scheme this paper conducts an evaluation of potential uncertainties such as those caused by changes in patterns of economic growth strategic trading activities related to the bankable allowances carbon leakage risks and insufficient mrv capabilities to advance the experiment to reality this paper suggests some changes are made to the pilot which include adjusting the allowance allocation principles to facilitate change in the domestic energy structure improving the disclosure of emission data to guarantee information symmetry gauging the carbon leakage risks to strengthen compliance and introducing risk management for non regulated players and derivatives products

the determinants of industry political activity 1978 1986 c ampaign contributions made by corporate political action committees pacs are increasingly important and controversial in u s elections influence purchasing is often alleged by pundits and campaign finance reform is continually debated in congress in the academy social scientists have analyzed the allocation of interest group monies and have looked for possible impacts on legislation few however have tried to explain the total contributions of economic interest groups we shall analyze variations in contributions across industries and over time with an empirical model based on organizationally constrained profit maximizing behavior we assume that corporate pac contributions in an industry are raised to enhance industry profits subject to the constraints of organization costs and freeriding incentives our empirical work covers 124 industries over five election cycles from 1978 through 1986 both the costs and benefits of political activity vary across industries we argue that the benefits of political action are determined by direct contact with the government as a regulator or purchaser of industry output by government s ability to ameliorate adverse market conditions and by the industry s ability to solve collective action problems without government assistance the costs of industry political action arise mainly from collective action problems because effective political activity often requires concerted action by the constituent firms in each industry we also make a methodological contribution previous studies use statistical techniques that suffer from sample selectivity bias or else force the probability of acting politically to be explained by the same set of coefficients as is the amount of action taken we explain and employ a technique that accounts for both problems the results are consistent with the theses that industries follow investment oriented goals in deciding the amount of political action to undertake and that collective action problems are important constraints on industry political activity we can explain between 60 and 80 of the variation in contributions in our sample first we review existing work on corporate political activity particularly papers examining patterns of aggregate pac spending by industry then we present an organization cost constrained industryprofit maximizing model based on a comparison between an idealized zero organization cost industry and the more realistic case where organizing collective action is difficult the independent variables used in the analysis are also discussed and defined next we discuss the dependent variable and total industry contributions and explain our statistical method then the results are presented followed by a discussion of industry structure and political activity to make clear how our results can explain different contribution patterns we give examples using five actual industries

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

inter party competition intra party competition and distributive policy a model and test using new deal data this paper presents a theoreticalmodel examining the influence of two stylized types ofvoters loyal voters and swing voters the model showswhy both types of voters will influence thedistribution of benefits by a reelection seekingincumbent and it predicts how their influence willvary with the importance of the general electionrelative to that of the primary closer competitionbetween parties in the general election ceterisparibus increases the influence of swing votersrelative to that of loyal voters county level dataon the allocation of money and jobs by new deal reliefprograms confirm the model s predictions

policy watch congressional campaign finance reform while campaign finance reform attracts a lot of attention it seems unlikely that such reform at least in it current guise will have a large impact on the functioning of the american political system recent studies have called into question the conventional wisdom that challenger campaign spending is especially effective suggesting that attempts to close the gap between incumbent and challenger spending will have a smaller than expected impact on election outcomes while it is safe to conclude that pacs wield some influence it is not clear that limiting cash contributions will have a substantial effect

political action committee spending and senate roll call voting this paper addresses how pac spending affects the roll call voting behavior of u s senators using a theoretical framework which draws broadly on the voting literature we develop models that explain senatorial voting behavior in a pre pac and post pac world testing both models we find weak support for a downs black view of voting participation in the first model the second model supports the alteration of voting incentives resulting from pac spending we find that pacs have a positive effect on voting participation the conjecture remains whether pacs change voting outcomes but it is clear that they buy voting participation

foreign aid and domestic politics voting in congress and the allocation of usaid contracts across congressional districts this paper investigates the relationship between congressional support for foreign aid and the distribution of united states agency for international development usaid contract spending across congressional districts within the united states the extent to which such a relationship matters has become increasingly important in recent years as the end of the cold war and the advent of the republican controlled congress have eroded the traditional base of support for foreign aid we develop a model to illustrate how the distribution of contract spending could be used to increase support for foreign aid but at the expense of development impact in effect trading quality for quantity data on domestic foreign aid contract spending and votes in the 104th congress house of representatives allow us to test whether the geographic distribution of usaid contract spending within the united states is consistent with a systematic attempt to build support for foreign aid in congress econometric results provide little evidence of such attempts apparently because voting on this issue is insensitive to the distribution of contract spending

bailout for sale the vote to save wall street this paper provides a public choice analysis of the 2008 banking bailout in the united states the paper introduces heterogeneity of congressional districts into the common agency problem in special interest politics district heterogeneity implies district specific electoral constraints on legislators ability to collect rents from and cast dissonant votes in support of special interests an empirical analysis examines legislative voting on the initial bailout proposal using campaign contributions to legislators from special interest groups and the importance of financial services for employment within congressional districts as the main explanatory variables the empirical analysis corrects for possible endogeneity bias using valid instruments and considers several intuitive sub sample estimations as alternative methods for addressing the endogeneity issue the paper provides empirical evidence that campaign contributions from the financial services sector influenced legislative voting on the banking bailout