cores of inventory centralization games abstract consider a set of n stores with single item and single period demands assume an option of centralized ordering and inventory with holding and penalty costs only in this case a cooperative inventory centralization game defines allocations of the cost we examine the conditions under which such an inventory centralization game has a nonempty core we prove the existence of nonempty core for demands with symmetric distributions and the existence of nonempty core for joint multivariate normal demand distribution we establish the equivalency of four different nonempty core conditions for the newsboy problem and demonstrate their efficacy for discrete independent and identically distributed iid demands journal of economic literature classification numbers c44 c62 c71

collaborative replenishment in the presence of intermediaries in complex supply chains downstream buyers would often replenish individually from intermediaries instead of directly dealing with original manufacturers although collaborative replenishment from intermediaries might generate benefits significant cost reductions could be achieved when direct replenishments from manufacturers are considered this paper constructs a general model to study collaborative replenishment in multi product chains with alternative sources of supply i e manufacturers and intermediaries a collaborative organization determines the optimal choices of replenishment sources on behalf of its members to minimize collective costs we introduce a class of cooperative games associated with these situations and give sufficient conditions for their concavity we investigate the choice of allocation rule and its effect on supply chain efficiency when buyers strategically participate in the collaborative organization we prove that the shapley value coordinates the supply chain i e it makes complete participation the best strategy for buyers even under asymmetric information this setting is compared with an alternative structure where buyers can only collaborate in source specific replenishment organizations that purchase all requested products either from intermediaries or manufacturers although there are always participation strategies that result in minimum collective cost it is impossible to find allocation rules for source specific replenishment organizations that always motivate the buyers to choose such strategies

information sharing in dea a cooperative game theory approach abstract in this paper a cooperative dea game is proposed based on the idea that different organizations can gain if they share data on the input consumption and output production of their processing units a larger data sample allows a more complete description of the production possibility set and consequently of the efficient frontier however since not all organizations will benefit in the same way it is convenient to use cooperative game theory in order to share the benefits of the cooperation the proposed cooperative dea game is shown to be subadditive and balanced models for computing the value of the game and checking its stability taking into account the exponential number of coalitions that exist when the number of organizations is large are also presented the approach is illustrated with a dataset from the literature

testing alternative theories of the firm transaction cost knowledge based and measurement explanations for make or buy decisions in information services firms boundary choices have undergone careful examination in recent years particularly in information services while transaction cost economics provides a widely tested explanation for boundary choice more recent theoretical work advances competing knowledge based and measurement cost explanations similar to transaction cost economics these theories examine the impact of exchange attributes on the performance of markets and hierarchies as institutions of governance these theories however offer alternative attributes to those suggested by transaction cost economics or offer alternative mechanisms through which similar attributes influence make buy choices traditional empirical specifications of make buy models are unable to comparatively test among these alternative theories by developing and testing a model of comparative institutional performance rather than institutional choice we examine the degree of support for these competing explanations of boundary choice hypotheses are tested using data on the governance of nine information services at 152 companies our results suggest that a theory of the firm and a theory of boundary choice is likely to be complex requiring integration of transaction cost knowledge based and measurement reasoning 1998 john wiley sons ltd

coalitional game theory approach to modeling suppliers collaboration in supply networks abstract suppliers collaboration is a new paradigm to improve the utilization of collective intelligence in supply networks although existing literature advocates the notion of cooperation in supply networks there is a dearth of studies quantitatively analyzing cost and benefit of cooperation in this study we first develop a model for suppliers dynamic coalition formation using coalitional game theory the proposed cost structure influences the utility of each possible coalition and restricts the coalition size and search space for finding possible coalitions to distribute the profit earned by cooperation in a fair manner a criterion named shared capacity index is developed according to suppliers capacity share in the corresponding coalition a suppliers cooperation algorithm is then proposed to resolve possible conflicts among network members whereby each supplier is able to explore coalitional structures autonomously the efficiency of the proposed approach is evaluated through simulation studies and compared to other solution methods including shapley value and proportional fairness results demonstrate that long term cooperation among suppliers leads to enhanced average individual profit in the network

the impact of centralization on pharmaceutical procurement prices the role of institutional quality and corruption abstractthe impact of centralization on pharmaceutical procurement prices the role of institutional quality and corruption regional studies this paper deals with the open issue regarding centralized versus decentralized public procurement strategy using a unique dataset on tender prices of selected drugs for hospital usage provided by a sample of 52 italian local health service providers aziende sanitarie locali asls between 2009 and 2012 the paper tests which procurement system centralized decentralized or hybrid performs better controlling for several covariates including measures of institutional quality and corruption it finds that centralized and hybrid procurers pay lower prices than decentralized units moreover the results show that in areas in which institutional quality is lower or corruption is higher the effect of centralization in terms of negotiating lower prices is much stronger with savings of up to 60 of the price paid by asls that procure independently

operations research models for coalition structure in collaborative logistics abstract given a set of players and the cost of each possible coalition the question we address is which coalitions should be formed we formulate mixed integer linear programming models for this problem considering core stability and strong equilibrium the objective function looks for minimizing the total cost allocated among the players concerned about the difficulties of managing large coalitions in practice we also study the effect of a maximum cardinality constraint per coalition we test the models in two applications one is in collaborative forest transportation and the other one in inventory of spare parts for oil operations in these situations collaboration opportunities involving significant savings exist but for several reasons it may be better to group the players in different sub coalitions rather than in the grand coalition the models we propose are thus relevant for deciding how to partition the set of players we also prove that if the strong equilibrium model is feasible its optimal cost is equal to the optimal cost of the core stability model and consequently a coalition structure that solves one problem also solves the other problem we present results that illustrate this property we also present results where the core stability problem is feasible and the strong equilibrium problem is infeasible setting an upper bound on the maximum cardinality of the coalitions allows us to study the marginal savings of enlarging the cardinality of the coalitions we find that the marginal savings of allowing one more player significantly decreases as the bound increases

filling a gap in traditional transaction cost economics towards transaction benefits based analysis abstract this paper analyzes dyadic partnership formation between asymmetric buyers and specialized suppliers in the first part of the paper different economics of organization based approaches are evaluated their basic implications concerning the rise of partnerships are derived in the second part a dynamized transaction cost and benefit model is introduced to analyze the most critical elements of a typical partnership decision the final part is based on insights from practice and in depth interviews among 12 specialized suppliers and their four large incumbent partners in the information and telecommunications industry

strategy research governance and competence perspectives business strategy is a complex subject and is usefully examined from several perspectives this paper applies the lenses of governance and competence to the study of strategy both the governance and the competence perspectives have had the benefit of distinguished antecedents they have also had to deal with tautological reputations i begin with the governance perspective with emphasis on the six key moves through which it has been operationalized i then examine the competence perspective in these same six respects governance challenges the competence perspective to apply itself more assiduously to operationalization including the need to choose and give definition to one or more units of analysis of which the routine is a promising candidate the research challenges posed by competence to which governance can and should respond include dynamic transaction costs learning and the need to push beyond generic governance to address strategy issues faced by particular firms with their distinctive strengths and disabilities a lively research future for these two perspectives individually and in combination is projected copyright 1999 john wiley sons ltd business strategy is an expansive enterprise not only do all of the functional areas in the business school relate but strategy is by nature interdisciplinary all of the social sciences especially economics and organization theory plus contract law are implicated indeed in the high technology arena where some of the most difficult strategy issues reside engineering and the law on intellectual property rights also have a bearing of the various approaches to the study of strategy this paper focuses on the governance and competence perspectives both perspectives combine economic reasoning with organization theory as between these two the governance

resources transactions and rents managing value through interfirm collaborative relationships this paper offers a theoretical explanation for why interfirm collaborations form yet fail and further suggests how firms might manage them for a more positive outcome based on a perspective of value we explain how a more inclusive and integrative perspective one which combines elements from transaction costs and resource based theory provides more robust insight into collaboration formation management and instability in doing so we differentiate rent yielding firm specific assets at the core of the resource based view from the transaction specific assets at the core of transaction cost theory the paper makes a crucial distinction between the potential value attainable through collaborations and its actual realization the crux of our argument is that firms enter into collaborative relationships because these are expected to yield superior value relative to alternate organizational forms in certain situations offering potentially synergistic combinations of complementary resources and capabilities yet such relationships are frequently prone to failure because the partner firms tend not to recognize ex ante the nature and extent of transaction specific investment that is required in the collaborative relationship to attain these synergies in our argument critically the relationship between organizations is seen not simply as a governance structure of a hybrid nature but more importantly as a productive resource for value creation and realization in this light transaction specific investment in what we term relational specificity becomes imperative in the search for value we explain why the transaction costs incurred in the exchange of resources are not independent of the nature of resources to be transacted and similarly why the returns realized from these resources are not independent of the relationship and transaction specific expenditures incurred in effectively combining them and maintaining the combination the interdependence between the two mediated by the quality of the relationship has direct implications for the earning of rents through collaborations these relationship specific expenditures can be of an internally generated nature endogenous to the alliance form itself and need not exceed alternative forms while the associated benefits have the capacity to potentially exceed the alternatives this translates into potentially superior value the paper contributes in three key related ways a the explicit recognition of the relationship as a value bearing asset embedded in a larger and endogenous institutional context namely a system of resource relationships both intraorganizational and inter organizational among partner firms and the collaboration b the recognition of the evolving relationship between production and exchange which at the level of the collaboration is directly dependent on the nature evolution and dynamics of the relationship among the parties to the transaction and c the provision of a nontrust explanation for why firms might knowingly forego opportunities to take advantage of their partners drawing from this the paper occasions a a shift in focus from the form to the process of governance which has direct implications for value creation and realization and b a shift in the primary identity of transaction specific and relationship specific expenditures from cost to investment in future value

security analyst superiority relative to univariate time series models in forecasting quarterly earnings abstract this paper provides evidence of security analyst sa superiority relative to univariate time series ts models in predicting firms quarterly earnings numbers and shows that sa forecast superiority in our sample is attributable to 1 better utilization of information existing on the date that ts model forecasts can be initiated a contemporaneous advantage and 2 use of information acquired between the date of initiation of ts model forecasts and the date when sa forecasts are published a timing advantage

the newsvendor game has a nonempty core we settle an open conjecture regarding the newsvendor game we prove that its core is always non empty for all possible joint distributions of the random demands we give sufficient conditions under which the core is a singleton or it contains non negative elements

managing channel profits a channel of distribution consists of different channel members each having his own decision variables however each channel member s decisions do affect the other channel members profits and as a consequence actions a lack of coordination of these decisions can lead to undesirable consequences for example in the simple manufacturer retailer consumer channel uncoordinated and independent channel members decisions over margins result in a higher price paid by the consumer than if those decisions were coordinated in addition the ensuing suboptimal volume leads to lower profits for both the manufacturer and the retailer this paper explores the problems inherent in channel coordination we address the following questions what is the effect of channel coordination what causes a lack of coordination in the channel how difficult is it to achieve channel coordination what mechanisms exist which can achieve channel coordination what are the strengths and weaknesses of these mechanism what is the role of nonprice variables e g manufacturer advertising retailer shelf space in coordination does the lack of coordination affect normative implications from in store experimentation can quantity discounts be a coordination mechanism are some marketing practices actually disguised quantity discounts we review the literature and present a simple formulation illustrating the roots of the coordination problem we then derive the form of the quantity discount schedule that results in optimum channel profits this article was originally published in marketing science volume 2 issue 3 pages 239 272 in 1983

predisclosure information firm capitalization and security price behavior around earnings announcements several studies on the relationship between earnings reports and security price behavior provide evidence suggesting that a significant portion of the information revealed through earnings reports is reflected in security prices prior to the report month e g ball and brown 1968 and brown and kennelly 1972 this has been attributed at least partly to the existence of other more timely sources of information which allow market agents to forecast earnings prior to their release the evidence above reflects an average finding across all firms one question of interest is whether there are significant systematic crosssectional differences in the security price reactions to earnings announcements of firms which are associated with specific firm characteristics that lead to differential amounts of predisclosure information this study focuses on firm size capitalization as one such characteristic a firm

centralized vs decentralized procurement does dispersed information call for decentralized decision making abstract should the government procure equipment for its agencies or let them run their own procurement auctions suppose the agency has private information about product quality but is inclined to favour local suppliers decentralization saves bureaucracy and agency costs costs tied to truthful revelation of quality information but leads to biased decisions a discriminatory auction i show that the costs associated with discrimination may increase when the quality differences or the probability that the agency knows the quality increase moreover this effect may be dominant implying that increased importance of local information may be an argument for centralization

a capacitated single item lot size model abstract wagner and whitin s inventory model is generalized to incorporate a limited production rate the model is conspicuous amongst related models in the literature as wagner and whitin s original algorithm may be applied the result requires restrictions on the cost coefficients that make conventional material requirements planning the model s natural field of application

the impact of replacement cost disclosure on security prices new evidence abstract a number of studies have tested for information content in the asr 190 disclosure by comparing the conditional and unconditional distribution of abnormal security returns around the time of disclosure since no differences were observed it was concluded that asr 190 had no information content the study reported below performs a similar test by estimating the regression function of the conditional distribution of abnormal returns this test procedure controls for the information content in contemporaneous historical cost disclosure and uses a conditioning variable not considered in earlier tests it finds statistically significant stock price effects however because most of the effects appear to precede the official announcement date by several months it is unclear whether stock prices were responding to the leakage of the information content of asr 190 prior to disclosure to private production of information contained in asr 190 or to a variable omitted from the study which happens to be correlated with replacement costs

inventory centralization games with price dependent demand and quantity discount consider a distribution system consisting of a set of retailers facing a single period price dependent demand of a single product by taking advantage of the risk pooling effect and the quantity volume discount provided by suppliers or third party carriers the retailers may place joint orders and keep inventory at central warehouses before demand realization and allocate inventory among themselves after demand realization to reduce their operating costs under rather general assumptions we prove that there is a stable allocation of profits among the retailers in the sense that the resulting inventory centralization game has a nonempty core we also show how to compute an allocation in the core

note on risk aversion and sharing of firm specific information in duopolies this note extends earlier work on the effects of risk aversion on the preferences of duopolists to share information it is shown that the common finding that cournot duopolists prefer to share firm specific information no longer obtains for some parameterizations in particular the greater the aversion to risk the larger the parameter regions in which not sharing information is preferred copyright 1993 by blackwell publishing ltd

active and passive waste in government spending evidence from a policy experiment we propose a distinction between active and passive waste as determinants of the cost of public services active waste entails utility for the public decision maker whereas passive waste does not we analyze purchases of standardized goods by italian public bodies and exploit a policy experiment associated with a national procurement agency we find that i some public bodies pay systematically more than others for equivalent goods ii differences are correlated with governance structure iii the variation in prices is principally due to variation in passive rather than active waste and iv passive waste accounts for 83 percent of total estimated waste

an empirical study of third party purchase new zealand users perspective abstractthis article investigates the potential for third party purchase 3pp services offered by third party logistics 3pl providers from the perspective of 3pl users based on transaction cost analysis we conducted a survey of new zealand 3pl users and received 163 usable responses structural equation modelling was used to test the conceptual model we found that 3pl users are more likely to adopt 3pp service when there is greater uncertainty asset specificity frequency and transaction size do not have a significant relationship with 3pp service adoption however 3pp service is significantly related to the value to client and benefit to 3pl provider this study is pioneering research on 3pp service as a value added service offered by 3pl providers from the perspective of 3pl users the findings suggest that offering 3pp service will provide mutual benefits and value for both 3pl users and their 3pl providers

the dynamic capabilities of firms an introduction an expanded paradigm is needed to explain how competitive advantage is gained and held firms resorting to resource bas ed strategy attempt to accumulate valuable technology assets and employ an aggressive intellectual property stance however winners in the global marketplace have been firms demonstrating timely responsiveness and rapid and flexible product innovation along with the management capability to effectively coordinate and redeploy internal and external competences this source of competitive advantage dynamic capabilities emphasizes two aspects first it refers to the shifting character of the environment second it emphasizes the key role of strategic management in appropriately adapting integrating and re configuring internal and external organizational skills resources and functional competences toward changing environment 3 only recently have researchers begun to focus on the specifics of developing firm specific capabilities and the manner in which competences are renewed to respond to shifts in the business environment the dynamic capabilities approach provides a coherent framework to integrate existing conceptual and empirical knowledge and facilitate prescription this paper argues that the competitive advanis tage of firms stems from dynamic capabilities rooted in high performance routines z operating inside the firm embedded in the firm s processes and conditioned by its history it offers dynamic capabilities as an emerging paradigm of the modern business j firm that draws on multiple disciplines and advances with the help of industry studies in the usa and elsewhere

evidence on the effect of bond covenants and management compensation contracts on the choice of accounting techniques the case of the depreciation switch back abstract provisions of bond indenture agreements and management compensation contracts are examined to derive testable implications concerning management s incentives to choose among alternative accounting techniques the hypotheses are subjected to empirical examination by investigating the voluntary change from accelerated to straight line depreciation for financial reporting purposes only the methodology utilized incorporates an expectations model of accounting earnings in an attempt to separate out of the effects of earnings announcements from accounting change announcements which are often concurrent the evidence from both price and non price data is not consistent with the general hypothesis that bond covenants and management compensation contracts are important determinants of the decision to change depreciation techniques five potential explanations for the results are offered

transaction cost economics and beyond towards a new economics of the firm in recent years transaction costs economics have come to dominate the discussion of the nature and organization of firms in transaction costs economics and beyond michael driscoll offers a critical exploration of transaction costs he argues that whilst they have much to offer they are still an inadequate basis for a general theory of the firm drawing on theories of organizational behaviour as well as economics he concludes by offering a theory of the firm that allows for both hierarchical and creative decision making

recent advances in oligopoly theory from a game theory perspective abstract this paper surveys the contribution that recent developments in game theory have made to the understanding of oligopoly theory it is argued that conventional models suffer from the problem that there are a number of solution concepts offered with little guidance as to which should be selected and this is related to the static nature of the models employed one important development in game theory has been the analysis of repeated games and when applied to oligopoly theory this suggests that outcomes may be more cooperative than conventional theory suggests related to this is the requirement that firms employ credible threats to punish cheating from cooperative outcomes and the paper examines the extent to which imperfect information may restrict the scope of firms to employ such punishments one way in which firms may seek to make threats credible is through strategic investments for example in production capacity and the paper explores how competition over price or output is integrated with competition over instruments for strategic investment

discount pricing decisions in distribution channels with price sensitive demand abstract in this paper we evaluate the effectiveness of quantity discounts and volume discounts as coordination mechanisms in distribution channels with demand that is price sensitive we consider a single vendor single retailer distribution channel demand for the product arises only at the retailer the demand faced by the retailer is assumed to be deterministic but price elastic the retailer in turn buys the product from the vendor the vendor and the retailer act independently and rationally each maximizing their own respective profit the equilibrium point that specifies the vendor s and buyer s inventory and pricing policy is determined by the solution to a stackelberg game we consider the cases when quantity discount and volume discount respectively are offered we develop methods to determine the optimal discount policy for these cases we then consider the case where both volume and quantity discounts are offered simultaneously and develop a method to determine the optimal simultaneous discount offer the relative performance of the alternative discount schemes is then evaluated through a numerical study the results of the study demonstrate that the effectiveness of volume discount as a coordination mechanism is higher when the sensitivity of demand to price changes is higher the effectiveness of quantity discount on the other hand is higher with lower price sensitivity of demand finally the results also demonstrate that perfect coordination is achieved when volume and quantity discounts are offered simultaneously

multiplayer allocations in the presence of diminishing marginal contributions cooperative game analysis and applications in management science we use cooperative game theory to investigate multiplayer allocation problems under the almost diminishing marginal contributions admc property this property indicates that a player s marginal c

customs related transaction costs firm size and international trade intensity customs are generally perceived as a time consuming impediment to international trade however few studies have empirically examined the determinants and the impact of this type of government imposed transaction costs this paper analyses the role of firm size as a determinant of customs related transaction costs as well as the effect of firm size on the relationship between these costs and the international trade intensity of firms the results of this study indicate that customs related transaction costs repress international trade activities of firms even at low levels of these costs the paper identifies transaction related economies of scale simplified customs procedures and advanced information and communication technology as main determinants of customs related transaction costs it is shown that when these factors are taken into account firm size has no effect on customs related transaction costs policy implications are considered for firm strategy and public policy

on cross sectional analysis in accounting research abstract this paper examines cross sectional analysis procedures common to many market based accounting research papers both the economic and econometric properties of levels and returns studies are discussed topics covered include the relations between the accounting studies and cash flow valuation models the role of expectations of accounting variables deflators spurious inference risk adjustment and its relation to growth size and leverage residual dependence dependence among explanatory variables and the effect of scale differences across firms major conclusions are that market value is the correct deflator in returns studies and that levels and returns studies are economically but not econometrically equivalent

transaction cost economics in global sourcing assessing regional differences and implications for performance this paper addresses two gaps in current research on transaction cost economics tce first the fundamental claim suggesting that firms that align their governance structure to transactions according to tce perform better than those that do not and second the application of tce to global sourcing transactions a research model is presented and evaluated using a set of 150 relationships between swiss buyers and foreign suppliers the findings suggest that there are significant differences in how transactions and governance structures are aligned with varying performance and with suppliers from western europe as compared to suppliers from other regions

quantity discounts managerial issues and research opportunities marketing managers frequently administer pricing policies involving substantial quantity discounts however our understanding of the precise role of these discounts and their design is quite limited this paper reviews and integrates the economics and marketing literature and presents a detailed analysis of the policies of four firms in order to i specify the variety of motivations for quantity discounts ii provide guidelines to managers in designing quantity discount schedules and iii set out the most fruitful directions for future research

cooperation between multiple news vendors with transshipments we study a situation with n retailers each of them facing a news vendor problem i e selling to customers over a finite period of time product with a short life cycle such as fashion groups of retailers might improve their expected joint profit by coordinating their orders followed by transshipments after demand realization is known we analyze these situations by defining a cooperative game called a general news vendor game for such a situation with n retailers we concentrate on whether it makes sense to cooperate by studying properties of general news vendor games our main result states that general news vendor games have non empty cores

the salesperson as outside agent or employee a transaction cost analysis this descriptive study explores the reasons for integration of the personal selling function i e the use of employee direct salespeople rather than manufacturers representatives reps a hypothesized model is developed based on both transaction cost analysis and the sales force management literature data from 13 electronic component manufacturers covering 159 u s sales districts are used to estimate a logistic model of the probability of going direct in a given district results are shown to be stable across specification and estimation methods and to fit the data well the transaction cost model is generally supported the principal finding is that the greater the difficulty of evaluating a salesperson s performance the more likely the firm to substitute surveillance for commission as a control mechanism i e to use a direct sales force among other findings direct sales forces are also associated with complex hard to learn product lines and with districts that demand considerable nonselling activities several factors prove unrelated including company size the amount of travel a district requires and the importance of key accounts this article was originally published in marketing science volume 4 issue 3 pages 234 254 in 1985

production inventory games a new class of totally balanced combinatorial optimization games in this paper we introduce a new class of cooperative games that arise from production inventory problems several agents have to cover their demand over a finite time horizon and shortages are allowed each agent has its own unit production inventory holding and backlogging cost cooperation among agents is given by sharing production processes and warehouse facilities agents in a coalition produce with the cheapest production cost and store with the cheapest inventory cost we prove that the resulting cooperative game is totally balanced and the owen set reduces to a singleton the owen point based on this type of allocation we find a population monotonic allocation scheme for this class of games finally we point out the relationship of the owen point with other well known allocation rules such as the nucleolus and the shapley value

in search for complementarities partnering of technology intensive small firms abstract technology intensive markets are characterised by high levels of technological and market uncertainty severe competition and globalisation small companies use cooperative relations to meet these uncertainties motivation for partnering has been studied in different contexts but the sme viewpoint is still relatively an unexplored area especially in technology intensive fields the purpose of the paper is to explain how the small firms inadequacies in resources affect their partnering needs on the basis of the theoretical perspectives hypotheses are constructed and empirically tested with data from 87 firms from the finnish infocom sector the results support the hypotheses only partly but some interesting conclusions can be drawn from the data

governance forms drivers in bio pharmaceutical inter firm relationships abstract since the first theoretical papers on transaction cost economy several studies have addressed the problem of designing governance forms in inter firm relationship scholars have deeply investigated the problem and several theories have been proposed to face with it the biopharmaceutical industry is one of the most interesting testbeds for understanding dynamics and rationality of governance forms in ifrs indeed in this industry the advent of the biotechnology has not been disruptive as in other industries so that the newcomers the biotech companies and the incumbents the pharmaceutical ones have incurred in several types of ifrs such as licensing agreements non equity alliances equity alliances and mergers and acquisitions thus several papers have tried to investigate what kind of drivers influence the choice of the governance form in this industry but most of them have focused on general characteristics of inter firm agreements such as the investment specificity the number of prior ties the technology distance and so forth differently from other researches in this paper we focus on specific characteristics of ifrs in the biopharma industry and we build a theoretical framework consisting of 13 drivers that are able to influence the governance mode of ifrs in this industry we test our theoretical framework through an explorative empirical analysis even if more confirmative empirical analysis is needed the empirical results evidence the validity of the theoretical framework proposed in this paper and provide some interesting managerial implications

shipment consolidation who pays for it and how much this paper examines the subject of cost allocation in a multiple product inventory system allowing for consolidation of shipments if we order multiple items using an economic order quantity eoq policy and consolidate shipments part of the ordering cost is shared and part is specific to each item we want to find the consolidation choice with optimal total cost and divide the cost fairly among the individual items such a fair division is central to a costing system in which no group of items subsidizes the others there are no free riders we use a cooperative inventory game to determine when this can be done this game is usually not concave so we want to know what consolidation combinations determine when this cost can be fairly divided using the core of the game we prove that consolidation of all the items is cheaper exactly if there are fair cost allocations core of the game is not empty which happens when the portion of the ordering cost common to all items is not too small we further show how sensitive the nonempty core result is to adjustments in the cost parameters and show how to determine a threshold value for the shared ordering cost which assures the existence of a fair cost allocation

formation of alliances in internet based supply exchanges in different industries such as automobiles chemicals or retailing competitors are joining forces in establishing electronic marketplaces to reduce inefficiencies in the purchasing process and cut costs by combining their buying power joining such an alliance leads to reduced costs including those of possible rivals because members share the development and operating costs a company that joins an alliance agrees to share its suppliers with others which may lead to more intense competition among the increased number of suppliers and it may further benefit an alliance member at the expense of companies left outside the alliance natural questions that could arise then are when would a firm prefer to take part in an electronic marketplace joint venture when would it prefer that other firms possibly rivals join the venture and what are the financial consequences of either joining an alliance or remaining independent in an attempt to gain a better understanding of the issues we have developed a model of three retailers whose products may have a certain degree of substitutability we provide some conditions in terms of product substitutability and compatibility of retailers that would lead to the formation of a three member alliance or a two member alliance or no alliance at all we also study the effect of alliance structure and compatibility of retailers on the profit of a company

innovation and inter firm linkages new implications for policy abstract this article discusses the implications for competition innovation and learning of different forms of inter firm linkage ways to govern them different generic systems of innovation and government policy it employs a transformed theory of transactions that can deal with innovation and learning and brings in trust next to opportunism nooteboom b 1996a trust opportunism and governance a process and control model organization studies 17 6 985 1010 nooteboom b 1996b towards a learning based model of transactions in groenewegen j ed tce and beyond kluwer deventer pp 327 349 nooteboom b 1999a inter firm alliances analysis and design routledge london while trust has its limits and should not be blind it can lower transaction costs for learning and innovation it takes the resource competence perspective supported by a theory of knowledge developed in earlier publications according to this theory people perceive interpret and evaluate the world according to cognitive categories that have developed in interaction with the physical and social environment as a result people will perceive understand and evaluate differently to the extent that they have developed in different environments without interaction nooteboom b 1992 towards a dynamic theory of transactions journal of evolutionary economics 2 281 299 nooteboom 1999a this theory yields the notion of external economy of cognitive scope people and firms need outside sources of cognition and competence to complement their own that is the fundamental reason why inter firm linkages are important especially for innovation in order to produce high added value and novelty by utilizing the opportunities of complementary competencies firms need to make relation specific investments which creates risks of hold up and spill over building on earlier work the article identifies different instruments for the control of those risks nooteboom 1996a nooteboom 1996b nooteboom et al 1997 effects of trust and governance on relational risk academy of management journal 40 2 308 338 nooteboom 1999a it identifies two generic kinds of innovation systems in terms of the mix of instruments for relational governance and discusses their merits and flaws with respect to quality of products diffusion incremental and radical innovation one is close to practices in continental europe and japan another is close to anglo american practice there is a certain tendency for the first to gravitate to the second the article warns about the dangers involved and explores a possible third way

competitive procurement with corruption we study competitive procurement administered by a corrupt agent who is willing to manipulate his evaluation of contract proposals in exchange for bribes with complete information and no corruption the efficient firm will win the contract for sure if the agent is corrupt and has large manipulation power however bribery makes it costly for the efficient firm to secure a sure win so in equilibrium the efficient firm loses the contract with positive probability the optimal scoring rule for the buyer deemphasizes quality relative to price and does not fully handicap and may even favor the efficient firm

risk averse duopolists and voluntary information transmission this paper considers the incentives for risk averse firms to share their private information they show that the introduction of risk aversion in some cases reverses the result in the literature that no such incentives exist further they show that the output level of risk averse cournot duopolists is increasing in the quality of their private information and decreasing in their perception of risk copyright 1989 by blackwell publishing ltd

duopolists don t wish to share information abstract this paper shows that in a full bayes cournot equilibrium duopolists would prefer to keep their market information private rather than share it with their opponent this is in contrast to a fulfilled expectations bayes cournot equilibrium where firms are indifferent to sharing

technology and oliver williamson s transaction cost economics abstract oliver williamson has greatly contributed to refining neoclassical economics by incorporating transaction costs and internal organization yet his new institutional economics too easily dismisses the role of technology in doing so he has replaced the determinism of technological production efficiencies with the determinism of transaction cost efficiencies a review shows that williamson s new institutionalism has evolved through three stages in terms of the focus of his analysis and his views of transactions throughout this evolution however his proposed solutions to organizational failures have actually continued to rely heavily upon technology

the boundaries of the firm revisited why do firms exist what is their function and what determines their scope these remain the central questions in the economics of organization they are also central questions for business executives and corporate strategists the worldwide volume of corporate mergers and acquisitions exceeded 1 6 trillion in 1997 it is hard to imagine that so much time effort and investment bankers fees would be spent on adjusting firm boundaries unless there was some underlying economic gain indeed the exceptional levels of merger and acquisition activity over the past two decades are a strong indication that economically significant forces do determine organizational boundaries the study of firm boundaries originated with the famous essay by coase 1937 who raised the question of why we observe so much economic activity inside formal organizations if as economists commonly argue markets are such powerful and effective mechanisms for allocating scarce resources coase s answer was in terms of the costs of transacting in a world of imperfect information when the transaction costs of market exchange are high it may be less costly to coordinate production through a formal organization than through a market in large part thanks to the work of williamson 1975 1985 recent decades have seen a resurgence of interest in coase s fundamental insight that firm boundaries can be explained by efficiency considerations our understanding of firm boundaries has been sharpened by identifying more precisely the nature and sources of transaction costs in different circumstances in the process the focus of

the cost of corruption in the italian solid waste industry the article investigates the link between corruption and efficiency using a rich micro level data set on solid waste collection activities in 529 italian municipalities observed over the years 2004 2006 to test the impact of corruption on cost efficiency we estimate a latent class stochastic frontier model accounting for technological heterogeneity across units the results of our estimates show that corruption significantly increases inefficiency a finding that is robust to the inclusion of alternative local corruption indicators and other control variables such as geographical demographic and political factors finally we find that the impact of corruption tends to be greater in the southern regions of the country and in those municipalities that are less involved in recycling activities

informational efficiency and the information content of earnings during the market crash of october 1987 abstract this paper examines the joint hypothesis that stock markets were efficient with respect to announcements of quarterly earnings and that these earnings numbers were important in the determination of equilibrium security prices in four subperiods before during and after the crash of october 1987 results for the complete sample and the nyse subsample strongly support the joint hypothesis in each subperiod except for the worst of the crash october 19 20 1987 in contrast nasdaq firms reacted in the predicted direction during most subperiods including the crash but not all associations were significant

a hybrid milp and benders decomposition approach to find the nucleolus quota allocation for a renewable energy portfolio portfolios of renewable electricity sources are interesting risk management mechanisms for trading in electricity contract markets when formed by players belonging to different companies their stability relies on the way the benefit generated by the optimal portfolio is allocated the challenge of finding a fair and efficient allocation can be mathematically formulated in terms of finding the core of a cooperative game which in turn is stated as an optimization problem with a set of constraints that exponentially grows with the number of participants quickly becoming computationally intractable moreover the right hand side of each constraint relies on a given coalition value which in our case is obtained by a two stage stochastic optimization model this paper presents an efficient methodology based on mixed linear programming and benders decomposition to find the nucleolus share of large scale renewable portfolios case studies are presented with data from the brazilian power system

does eva beat earnings evidence on associations with stock returns and firm values this study tests assertions that economic value added eva is more highly associated with stock returns and firm values than accrual earnings and evaluates which components of eva if any contribute to these associations relative information content tests reveal earnings to be more highly associated with returns and firm values than eva residual income or cash flow from operations incremental tests suggest that eva components add only marginally to information content beyond earnings considered together these results do not support claims that eva dominates earnings in relative information content and suggest rather that earnings generally outperforms eva

motives behind purchasing consortia abstract although purchasing cooperation between independent companies has been practiced for a long time the phenomenon is not extensively researched especially purchasing consortiums formed by industrial companies have received relatively little attention in literature of the discipline in this paper the key results of the larger study concerning industrial consortium purchasing are presented the study was recently conducted and tested in finnish machine manufacturing industry the objective of this paper is to find out the motives behind purchasing consortia as foundations for the empirical study three theories explaining why companies form purchasing consortia are presented the results of the study indicate that two main reasons for the companies to cooperate on purchasing are the expected cost savings and the collection of information on supply markets

transaction cost economics in real time this paper attempts to place the theq of the boundaries of thejirm within the context of the passage of time more precisely it resurrects and places in a modem frame some of the insights of the chsical and marshallian theories of organization the modem reinterpretation of those theories centers around the capabilities view of the jirm taken together with governance costs the capabilities ofjirm and market determine the boundaries of the jirm in the short run ovw time capabilities change as firms and markets learn which implies a kind of information or knowledge cost the cost of trandewing the firm s capability to the market w vice versa these dynamic governance costs are the costs of persuading negotiating and coordinating with and teaching others they arise in the face of change notably txchnological and organizational innovation in fit they are the costs of not having the capabilities you need when you need them dynamic transaction costs provide an explanation for vertical integration that is arguably more general than those dominant in the literature in the face of uncertainty and divwgent views ofthe future common ownership of multiple stages of production is a supwior institutional arrangement for coordinating systemic change asset specrfity is neither necessary nor suffient for this to be true dynamic governance costs may also affit internal organization it may sometimes be costly in 3 terms of persuasion negotiation and teaching to create within the firm capabilities readily available on the market indeed in cases in which systemic coordination is not 4 the issue the market may turn out to be the superior institution of coordination in e 2 genwal the capabilities view of the jirm suggests that we look atfim2 and market as alternative and sometimes overlapping institutions of learning 1 transaction costs in the long rzln and the short 9 x classical and neoclassical perspectives

cooperative game theory approach to allocating benefits of horizontal cooperation abstract logistics costs in general and transportation costs in particular represent a large fraction of the operating costs of many companies one way to try to reduce these costs is through horizontal cooperation among shippers thus when the transportation needs of two or more companies are merged their collective transportation requirements can be met at lower cost the attainable cost savings are due to economies of scale which translate into cheaper rates due to increased negotiation power use of larger vehicles and bundling of shipments in this paper a linear model is presented and used to study the cost savings that different companies may achieve when they merge their transportation requirements on the one hand solving this optimization model for different collaboration scenarios allows testing and quantifying the synergies among different potential partners thus identifying the most profitable collaboration opportunities on the other the problem of allocating the joint cost savings of the cooperation is tackled using cooperative game theory the proposed approach is illustrated with an example in which different cooperative game solution concepts are compared extensive numerical experiments have also been carried out to gain insight into the properties of the corresponding cost savings game and the behavior of the different solution concepts

the impact of information sharing opportunities on market outcomes an experimental study information regarding uncertain demand conditions or industry costs as well as the opportunity to share this information can have an important impact on firm behavior a series of recent game theoretic models have characterized the incentives for firms to share information regarding uncertain parameters 3 7 8 13 14 16 22 26 20 21 provide a comprehensive survey most of the models assume that behavior in the output market is noncooperative regardless of the firms information sharing decisions this paper reports a series of 15 laboratory sessions that test the noncooperative backward induction approach of these models the results suggest that pricing behavior may be influenced by the information sharing decision under most conditions the noncooperative nash model accurately describes average behavior although in certain conditions information sharing appears to facilitate tacit collusion the paper also estimates a simple behavioral model of learning that describes how experimental subjects learn the optimal information sharing decision as an alternative to the theories backward induction assumption the information sharing models tested here have been interpreted as identifying the incentives for competitive firms to form a trade association that reduces their uncertainty thousands of trade and professional associations are active worldwide and the majority collect information from their members that is aggregated and distributed through association statistical programs the theoretical models demonstrate how three variables influence the information sharing incentives 1 the type of competition bertrand or cournot 2 the nature of the goods substitutes or complements and 3 the source of uncertainty demand or cost the first two variables determine the slope of the firms reaction functions and the uncertainty source along with the information sharing decision determines the degree of correlation among the firms strategies the incentive for noncooperative firms to share information shifts as these three variables change because reduced correlation has a negative or positive effect on profit depending upon the slope of the reaction functions

supply chain coordination perspectives empirical studies and research directions supply chains sc are generally complex and are characterized by numerous activities spread over multiple functions and organizations which pose interesting challenges for effective sc coordination to meet these challenges sc members must work towards a unified system and coordinate with each other a systematic literature review is presented in this paper to throw light on the importance of sc coordination the objectives of this paper are to report and review various perspectives on sc coordination issues understand and appreciate various mechanisms available for coordination and identify the gaps existing in the literature a framework is suggested indicating scope for further research

computing core allocations in cooperative games with an application to cooperative procurement abstract cooperative game theory defines several concepts for distributing outcome shares in a cooperative game with transferable utilities one of the most famous solution concepts is the core which defines a set of outcome allocations that are stable such that no coalition has an incentive to leave the grand coalition in this paper we propose a general procedure to compute a core element or to detect that no core allocation exists which is based on mathematical programming techniques the procedure proposed in this paper can be applied to a wide class of cooperative games where the characteristic function is given by the optimum objective function value of a complex optimization problem for cooperative procurement which is an example from the field of supply chain management where some literature on the core concept already exists we prove the applicability and provide computational results to demonstrate that games with 150 players can be handled

dynamic version of the economic lot size model this article originally appeared in management science october 1958 volume 5 number 1 pp 89 96 published by the institute of management sciences a forward algorithm for a solution to the following dynamic version of the economic lot size model is given allowing the possibility of demands for a single item inventory holding charges and setup costs to vary over n periods we desire a minimum total cost inventory management scheme which satisfies known demand in every period disjoint planning horizons are shown to be possible which eliminate the necessity of having data for the full n periods

market reactions to accounting regulations in the savings and loan industry abstract this paper addresses whether events leading to three regulatory accounting principles issued by the federal home loan bank board affected the market value of savings and loan associations s ls the market reaction to these regulations is predicted to be positive since they effectively eased minimum regulatory net worth requirements a significant market reaction is observed for the regulation that allowed s ls to increase regulatory net worth by permitting appraised equity capital however results are inconsistent with the alternative hypothesis associated with the regulations permitting deferral of loan losses and net worth certificates

dynamic capability view in terms of real options abstract in this paper we will make an attempt to open up the black box of the modern basic theory of strategic management i e the resource based view we will launch a dynamized version about it and interpret its usability in terms of real options applications according to the dynamic capability view of the firm the company consists of human physical and financial resources and its knowledge base which in turn consists of already existing and routinely exploited i e static and not yet fully developed or exploited dynamic capabilities which both can be produced either internally by the firm itself or externally through the open market or networks it is widely recognized that in modern firms especially the development creation and management of dynamic capabilities is of utmost strategic importance our paper focuses on the hard issue of managing and valuating dynamic capabilities when designing the strategic boundaries of the firm let us say when making decisions about network relations to be able to do this we will take a broad look at the real options approach as a special method to shed some light on the very aspects of coping with technological and market uncertainty some empirical industry related illustrations about real options applications are launched as well

unfair allocation of gains under the equal price allocation method in purchasing groups certain purchasing groups do not flourish a supposed reason for this is a creeping dissatisfaction among various members of a group with the allocation of the cooperative gains in this paper we analyze unfairness resulting from using the commonly used equal price ep method for allocating gains under the assumption of continuous quantity discounts we demonstrate that this unfairness is caused by neglecting a particular component of the added value of individual group members next we develop two fairness ratios and tie these to fairness properties from cooperative game theory the ratios show among other things that being too big a player in a purchasing group can lead to decreasing gains they can be used to assess if ep is an unfair method in specific situations finally we discuss measures a purchasing group could consider in order to attenuate perceived unfairness thereby the group may improve its stability and prosperity

incorporating quantity discounts and their inventory impacts into the centralized purchasing decision multi site organizations must balance conflicting forces to determine the appropriate degree of purchasing centralization for their respective supplies the ability to garner quantity discounts represents one of the primary reasons that organizations centralize procurement this paper provides methodologies to calculate optimal order quantities and compute total purchasing and inventory costs when products have quantity discount pricing procedures for both all units and incremental quantity discount schedules are provided for four different strategic purchasing configurations scenarios complete decentralization centralized pricing with decentralized purchasing centralized purchasing with local distribution and centralized purchasing and warehousing for ordering decisions under local distribution procedures to determine optimal order quantities and costs are presented in a precise form that could be easily implemented into spreadsheets by practicing managers for the more complicated multi echelon scenarios we introduce a single cycle policy with a tailored aggregation refinement step that performs very well under experimentation when compared to a conservative bound