one man one bid abstract we compare two mechanisms to implement a simple binary choice e g adopt one of two proposals we show that when neither alternative is ex ante preferred simple majority voting cannot implement the first best outcome we introduce a simple bidding mechanism where votes can be bought at a quadratic cost and voters receive rebates equal to the average of others payments this mechanism is budget balanced individually rational and fully efficient in the limit moreover the mechanism redistributes from those that gain from the outcome to those that lose and everyone is better off under bidding compared to voting we test the two mechanisms in the lab using an environment with moderate and extremist voters the observed efficiency losses under voting are close to theoretical predictions and significantly larger than under bidding because of redistribution the efficiency gain from bidding benefits mostly the moderate voters

total factor carbon emission performance of the chinese transportation industry a bootstrapped non radial malmquist index analysis this paper proposes a non radial malmquist co2 emission performance index nmcpi for measuring dynamic changes in total factor co2 emission performance over time this index enables the consideration of non radial slacks in the conventional malmquist co2 emission index mcpi the nmcpi is calculated based on a non radial directional distance function derived by several data envelopment analysis dea models furthermore nmcpi could be decomposed into an efficiency change ec index and technological change tc index a bootstrapping approach is conducted to introduce statistical inferences into the nmcpi and its decompositions based on the proposed indices the dynamic co2 emission performance change and its decompositions of the chinese regional transportation industry from 2002 to 2010 are investigated the empirical results demonstrate that the total factor carbon emission performance of the transportation industry as a whole decreased by 32 8 over the period and this reduction was primarily caused by technological decline

a note on the malmquist productivity index in recent years the malmquist index has gained in popularity as a measure of productivity change we demonstrate that in the presence of non constant returns to scale the malmquist productivity index does not accurately measure productivity change the bias is systematic and depends on the magnitude of scale economies

convergence in oecd countries technical change efficiency and productivity the aim of this study is to analyse labour productivity convergence in the oecd countries over the period 1975 90 a nonparametric frontier approach is used to calculate the malmquist productivity index by breaking it down the contribution in the growth of labour productivity of technical progress of changes in efficiency and of the accumulation of inputs per worker are quantified unlike other studies the results obtained show that technical change has worked against labour productivity convergence since it has always been greater in the countries with higher labour productivity

capacity and pricing policies with consumer overflow behavior we analyze consumers choice and overflow behavior between two potential market segments with different fares capacity allocated and then develop the optimal capacity and pricing polices assuming

productivity growth and biased technological change in hydroelectric dams abstract this paper analyses productivity growth and the nature of technical change in a sample of portuguese hydroelectric generating plants over the period 2001 to 2008 in a first step we employ the luenberger productivity indicator to estimate and decompose productivity change a malmquist productivity index is also used for a comparative purpose the results paint a picture of mixed productivity performance in the portuguese energy sector the first decomposition underlines that in average the productivity variation is explained by the technological change then in a second step we analyse the nature of this technical change by using the recent concept of parallel neutrality briec et al 2006 we observe a global shift in the best practice frontier as well as in the evidence of input bias in technical change

compatibility and bundling of complementary goods in a duopoly this paper presents a simple model of compatibility and bundling in industries where consumers assemble several necessary components into a system that is close to their ideal the authors show that for a wide range of parameters firms will choose to produce compatible components but will offer discounts to consumers who purchase all components from the same firm however firms would be better off if they could commit not to provide such discounts furthermore the equilibrium tends to involve socially excessive bundling finally mixed bundling strategies tend to increase the range of parameters over which socially excessive standardization occurs copyright 1992 by blackwell publishing ltd

measuring heterogeneous reservation prices for product bundles this paper develops a model for capturing continuous heterogeneity in the joint distribution of reservation prices for products and bundles our model is derived from utility theory and captures both within and among subject variability furthermore it provides dollarmetric reservation prices and individual level estimates that allow the firm to target customers and develop customized and nonlinear pricing policies our experiments show that regardless of whether the products are durables or nondurables the model captures heterogeneity and predicts well models that assume homogeneity perform poorly especially in predicting choice of the bundle furthermore the methodology is robust even when respondents evaluate few profiles self stated reservation prices do not have any informational content beyond that contained in the basic model the direct elicitation method appears to understate overstate the variation in reservation prices across consumers for low priced high priced products and bundles hence this method yields biased demand estimates and leads to suboptimal product line pricing policy the optimization results show that the product line pricing policy depends on the degree of heterogeneity in the reservation prices of the individual products and the bundle a uniformly high price strategy for all products and bundles is optimal when heterogeneity is high otherwise a hybrid strategy is optimal

the role of bounded rationality and imperfect information in subgame perfect implementation an empirical investigation in this paper we conduct a laboratory experiment to test the extent to which moore and repullo s subgame perfect implementation mechanism induces truth telling in practice both in a setting with perfect information and in a setting where buyers and sellers face a small amount of uncertainty regarding the good s value we nd that moore repullo mechanisms fail to implement truth telling in a substantial number of cases even under perfect information about the valuation of the good this failure to implement truthtelling is due to beliefs about the irrationality of one s trading partner therefore although the mechanism should in theory provide incentives for truth telling many buyers in fact believe that they can increase their expected monetary payo by lying the deviations from truth telling become signicantly more frequent and more persistent when agents face small amounts of uncertainty regarding the good s value our results thus suggest that both beliefs about irrational play and small amounts of uncertainty about valuations may constitute important reasons for the absence of moore repullo mechanisms in practice

total factor productivity and the measurement of technological change tfp is interpreted in the literature in different mutually contradictory ways changes in tfp are shown to measure not technological change only the super normal returns to investing in such change returns that exceed the full opportunity cost of the activity thus in the limit technological change can proceed with unchanged tfp measuring the effects of technological change instead requires counterfactual estimates reasons why changes in tfp are imperfect measures of super normal returns are also studied reasons connected with the timing of output responses the treatment of r d in the national accounts the omission of resource inputs and two types of aggregation la productivite totale des facteurs et la mesure du changement technologique la productivite totale des facteurs ptf est interpretee dans la litterature de manieres differentes et mutuellement contradictoires on montre que les changements dans la ptf ne mesurent pas le changement technologique mais seulement les rendements supra normaux sur les investissements dans de tels changements des rendements qui depassent le plein cout d opportunite de cette activite donc a la limite le changement technologique peut proceder sans que la ptf change mesurer les effets du changement technique reclame des evaluations d hypotheses de rechange les raisons pour lesquelles les changements dans la ptf sont des mesures imparfaites des rendements supra normaux sont aussi etudiees raisons connectees avec la reponse des niveaux de production le traitement de la r d dans les comptes nationaux l omission des intrants de ressources et deux types d agregation

has china s fast industrial growth been efficient an industry level investigation with a newly constructed data set we adopt contemporaneous nonradial and variable returns to scale assumptions in a data envelopment analysis dea exercise to address the inefficiency problem in chinese industries in different policy regimes using a newly constructed data set for 24 chinese manufacturing industries in 1952 2008 while confirming that the central planning period was indeed a graveyard for productivity that entailed severe technical regress and efficiency losses we do not find a steady improvement in efficiency during the reform period despite strong technical progress we argue that the resurgent prominence of the government and the state sector since the late 1990s especially following china s world trade organization accession has obstructed the efficiency improvement

a simulation based approach to price optimisation of the mixed bundling problem with capacity constraints abstract in this paper we analyse a service provider s mixed bundling problem for services such as sporting events or holiday packages pursuing the objective of maximising total revenue the service provider has to determine static prices for each single product at the beginning of the selling period additionally an optimal package price has to be chosen for the bundle that comprises one unit of each single product because of capacity constraints the availability of products can change over time such that consumers are forced to switch from their preferred subset of products to an alternative following dynamic substitution we propose two mixed integer linear programmes based on reservation prices that appropriately model the consumer choice process to address the bundling problem it becomes evident that the determination of the optimal prices is computationally expensive even for small problem classes therefore we develop metaheuristics using variable neighbourhoods to evaluate their performance we propose the following new approach our extensive computational study is performed using especially generated scenarios for which the optimal product prices are known for this purpose we present a set of conditions for the generation of reservation prices that guarantee the optimality of the predefined prices based on our computational results managerial insights are derived

bundle pricing of inventories with stochastic demand we consider a retailer selling a fixed inventory of two perishable products over a finite horizon assuming poisson arrivals and a bivariate reservation price distribution we determine the optimal product and bundle prices that maximize the expected revenue our results indicate that the performances of mixed bundling pure bundling and unbundled sales strategies heavily depend on the parameters of the demand process and the initial inventory levels bundling appears to be most effective with negatively correlated reservation prices and high starting inventory levels when the starting inventory levels are equal and in excess of average demand most of the benefits of bundling can be achieved through pure bundling however the mixed bundling strategy dominates the other two when the starting inventory levels are not equal we also observe that an incorrect modeling of the reservation prices may lead to significant losses the model is extended to allow for price changes during the selling horizon it is shown that offering price bundles mid season may be more effective than changing individual product prices

exploring the green total factor productivity of china s metallurgical industry under carbon tax a perspective on factor substitution abstract the characteristics of high emissions and high energy consumption in metallurgical industry have brought great challenges to the green and low carbon transition in china as a low carbon economic instrument carbon tax is generally considered to be an effective way to reduce co2 emissions through raising energy cost but whether it will promote the green total factor productivity gtfp of china s metallurgical industry is still unanswered under this background this paper uses provincial panel data over years 2000 2015 to investigate the impact of carbon taxation on gtfp of metallurgical industry from the perspective of inter fuel and inter factor substitution the lock in mechanism is also incorporated in the three stage estimation model to better reflect the asymmetric price response of factors and fuels the results reveal that the slow marketization process of energy price and the rigid demand for energy in china s metallurgical industry hinder the substitution effect of energy the implementation of carbon tax has limited effect on energy saving and co2 reduction in the metallurgical industry of china and levying a carbon tax has a negative effect on gtfp during the research period therefore the government should not achieve co2 reduction targets at the expense of green economic growth gtfp is suggested to be considered in future assessment criteria in the process of transforming to low carbon economy

learning dynamics for mechanism design an experimental comparison of public goods mechanisms in a repeated interaction public goods economy incomplete information and dynamic behavior may affect the realized outcomes of mechanisms known to be efficient in a complete information oneshot game an experimental test of five public goods mechanisms indicates that subjects with private information appear to best respond to recent observations this provides predictions about which mechanisms will generate convergence to their efficient equilibrium allocations these predictions match the experimental result that globally stable efficient mechanisms realize the highest efficiency in practice the simplicity of the suggested best response model makes it useful in predicting stability of mechanisms not yet tested

measuring sectoral productivity across time and across countries abstract this paper examines the problem of measuring the evolution of productivity changes over time and across the 14 countries included in the oecd s international sectoral data base of two sectors considered essential to the economic growth of any nation namely manufacturing and services the basic units of analysis are generalized malmquist productivity indices these in turn can be decomposed into several components associated to the various sources of productivity change included here are productivity fluctuations due to economies of scale being constant or variable to technical change and technical efficiency change the computational procedure is based upon the concept of distance function computed through the use of variations of data envelopment analysis

exploring the scope of neurometrically informed mechanism design a basic goal in mechanism design is to construct mechanisms that simultaneously satisfy efficiency voluntary participation and dominant strategy incentive compatibility previous work has shown that this is impossible unless the agents and planner have sufficient information about each other and common knowledge these results have remained largely theoretical because the required information is generally not available in practical applications however recent work has shown that these limitations can be overcome in simple settings using neurometric technologies that provide noisy signals of subjects preferences that can be used in the mechanism design problem here we build on this work by carrying out two new experiments designed to test the extent to which these neurometrically informed mechanisms nims can be applied to more complicated and realistic environments we find robustness to large type and action space and to the degrees of loss and risk aversion observed in most of our sample

the sources of productivity change in spanish banking abstract in this paper we examine the pattern of productivity change in spanish banking over the period 1986 1993 two sectors dominate spanish banking commercial banks and the faster growing savings banks we begin by examining productivity change separately within each sector however since the two sectors are gradually becoming more competitive we continue by merging the two sectors and by examining productivity change in the industry the merging procedure follows a methodology originally proposed by charnes cooper and rhodes 1981 in which intra sectoral managerial inefficiency is eliminated prior to merging this procedure allows us to distinguish differences in managerial efficiency within each sector from differences in the institutional efficiency of the two sectors it also enables us to decompose potential productivity change into institutional efficiency change technical change and the impact of scale economies we find the commercial banks to have had a slightly lower rate of productivity growth but a slightly higher rate of potential productivity growth we attribute this phenomenon to differences in both managerial efficiency and institutional efficiency to differences in the rate of technical progress and to the adverse impact of diseconomies of scale in the commercial banking sector

secure implementation experiments do strategy proof mechanisms really work strategy proofness requiring that truth telling is a dominant strategy is a standard concept used in social choice theory saijo et al 2003 argue that this concept has serious drawbacks in particular announcing one s true preference may not be a unique dominant strategy and almost all strategy proof mechanisms have a continuum of nash equilibria for only a subset of strategy proof mechanisms do the set of nash equilibria and the set of dominant strategy equilibria coincide for example this double coincidence occurs in the groves mechanism when preferences are single peaked we report experiments using two strategy proof mechanisms where one of them has a large number of nash equilibria but the other has a unique nash equilibrium we found clear differences in the rate of dominant strategy play between the two

augmenting conjoint analysis to estimate consumer reservation price consumer reservation price is a key concept in marketing and economics theoretically this concept has been instrumental in studying consumer purchase decisions competitive pricing strategies and welfare economics managerially knowledge of consumer reservation prices is critical for implementing many pricing tactics such as bundling tar get promotions nonlinear pricing and one to one pricing and for assessing the impact of marketing strategy on demand despite the practical and theoretical importance of this concept its measurement at the individual level in a practical setting proves elusive we propose a conjoint based approach to estimate consumer level reservation prices this approach integrates the preference estimation of traditional conjoint with the economic theory of consumer choice this integration augments the capability of traditional conjoint such that consumers reservation prices for a product can be derived directly from the individuallevel estimates of conjoint coefficients with this augmentation we can model a consumer s decision of not only which product to buy but also whether to buy at all in a category thus we can simulate simultaneously three effects that a change in price or the introduction of a new product may generate in a market the customer switching effect the cannibalization effect and the market expansion effect we show in a pilot application how this approach can aid product and pricing decisions we also demonstrate the predictive validity of our approach using data from a commercial study of automobile batteries

foreign direct investment spillovers and technical efficiency in the indonesian pharmaceutical sector firm level evidence the spillovers of foreign direct investment fdi on domestic firms performances have been highly debated for many years this article contributes to this debate by analysing spillovers effects on technical efficiency of indonesian pharmaceutical sector using a unique unbalanced panel of highly disaggregated at five digit international standard industrial classification isic 210 firms over the period 1990 1995 1001 observations the stochastic production frontier spf and the data envelopment analysis dea based on malmquist productivity indices mpi have been used to test the spillovers effects of fdi on technical efficiency the empirical results from the spf show that foreign firms are more efficient than domestic competitors and the presence of the former increases the inefficiency of the latter similarly the results from the mpi demonstrate that fdi has a negative and significant impact on technical efficiency changes in domestic competitors but generate positive spillovers to domestic s

the role of bundling in price competition abstract we focus on price competition between several multiproduct firms which produce differentiated systems each consisting of two complementary products firms offer their products separately and or as a bundle consumers are homogeneous but assign different values to different systems we find that equilibrium always exists unlike the case where bundling strategies are excluded and consumers purchase socially best systems consumers extract the entire surplus unless a firm produces at least one of the components of every socially best system we show that bundling may increase consumer surplus a sufficient condition for a system to be sold as a bundle at a discount price is provided

multi period efficiency and malmquist productivity index in two stage production systems abstract conventional two stage data envelopment analysis dea models measure the overall performance of a production system composed of two stages processes in a specified period of time where variations in different periods are ignored this paper takes the operations of individual periods into account to develop a multi period two stage dea model which is able to measure the overall and period efficiencies at the same time with the former expressed as a weighted average of the latter since the efficiency of a two stage system in a period is the product of the two process efficiencies the overall efficiency of a decision making unit dmu in the specified period of time can be decomposed into the process efficiency of each period based on this decomposition the sources of inefficiency in a dmu can be identified the efficiencies measured from the model can also be used to calculate a common weight global malmquist productivity index mpi between two periods in that the overall mpi is the product of the two process mpis the non life insurance industry in taiwan is used to verify the proposed model and to explain why some companies performed unsatisfactorily in the specified period of time

relative performance of two simple incentive mechanisms in a public goods experiment we compare the performance of two incentive mechanisms in public goods experiments one mechanism the falkinger mechanism rewards and penalizes agents for deviations from the average contributions to the public good falkinger mechanism the other the compensation mechanism allows agents to subsidize the other agents contributions compensation mechanism it is found that both mechanisms lead to an increase in the level of contributions to the public goods however the falkinger mechanism predicts the average level of contributions more reliably than the compensation mechanism

sectoral change catching up and slowing down oecd post war economic growth revisited abstract regression analysis of gdp growth since 1950 on pooled oecd cross sections indicates uniform technological catch up in all sectors but lower marginal labour productivity in agriculture the decline in opportunities to reallocate labour explains some of the post 1973 productivity slowdown

productivity and efficiency change and shareholder value evidence from the spanish banking sector productivity change and shareholder value have been analysed in the banking sector in the last few years although it should be noted that these two important aspects have been studied separately in this regard the main contribution of our study is to link these two lines of research by verifying whether those banks characterized by higher levels of efficiency and productivity change have a higher shareholder value to measure changes in efficiency and productivity we use the malmquist nonparametric technique which is calculated from data envelopment analysis dea linear programming approach the malmquist total factor productivity index enables separation of the catching up effect i e changes over time in technical efficiency from technological change i e the shift of best practice frontier over time due to technological progress our results for a sample of listed spanish banks in the period 2000 to 2004 confirm that those banks with higher efficiency and productivity changes have a higher

the impact of environmental expenditures on performance in the u s chemical industry abstract this study analyzes chemical industry companies with environmental expenditures to determine which ones have better financial performance in addition this study uses data envelopment analysis to evaluate the efficiency of firms with and without environmental expenditures this study also utilizes the malmquist productivity index mpi to analyze firms productivity change and a bootstrap method to test whether the indexes are statistically significant finally this study divides chemical industry companies into three main categories based on their products the results of this study provide significant evidence of a relationship between environmental expenditures and financial performance the findings suggest that firms with environmental expenditures have better efficiency and productivity hence the study encourages companies in the industry to put more effort into protecting the environment that can be through practicing cleaner production to create higher benefits

a probabilistic approach to pricing a bundle of products or services the authors propose a probabilistic approach to optimally price a bundle of products or services that maximizes seller s profits their focus is on situations in which consumer decision making is o

the role of environmental factors in growth accounting this paper explores a relatively new methodology the directional distance function method to analyse productivity growth the method allows us to explicitly evaluate the role that undesirable outputs of the economy such as carbon dioxide and other greenhouse gases have on the frontier production process which we specify as a piecewise linear and convex boundary function we decompose productivity growth into efficiency change catching up and technology change innovation we test the statistical significance of the estimates using recently developed bootstrap methods we also explore implications for growth of total factor productivity in the oecd and asian economies copyright 2004 john wiley sons ltd

technological change technological catch up and capital deepening relative contributions to growth and convergence we decompose labor productivity growth into components attributable to 1 technological change shifts in the world production frontier 2 technological catch up movements toward or away from the frontier and 3 capital accumulation movement along the frontier the world production frontier is constructed using deterministic methods requiring no specification of functional form for the technology nor any assumption about market structure or the absence of market imperfections we analyze the evolution of the cross country distribution of labor productivity in terms of the tripartite decomposition finding that technological change is decidedly nonneutral and that both growth and bipolar international divergence are driven primarily by capital deepening jel o30 o47 d24

estimating most productive scale size using data envelopment analysis abstract the relation between the most productive scale size mpss for paparticular input and output mixes and returns to scale for multiple inputs multiple outputs situations is explicitly developed this relation is then employed to extend the applications of data envelopment analysis dea introduced by charnes cooper and rhodes ccr to the estimation of most productive scale sizes for convex production possibility sets it is then shown that in addition to productive inefficiencies at the actual scale size the ccr efficiency measure also reflects any inefficiencies due to divergence from the most productive scale size two illustrations of the practical applications of these results to the estimation of most productive scale sizes and returns to scale for hospitals and stem electric generation plants are also provided emphasize the advantage of this method in examining specific segments of the efficient production surface

eco efficiency of the western taiwan straits economic zone an evaluation based on a novel eco efficiency model and empirical analysis of influencing factors abstract obtaining the most economic benefits while using the least resources and causing the least environmental damage is an urgent and key problem in achieving sustainable development the concept of eco efficiency provides a comprehensive perspective for observing and solving this problem this paper proposes an extended data envelopment analysis model named the win us sbm as a comprehensive eco efficiency evaluation method that can accommodate undesirable outputs all the identification problems of decision making units dmus possible slacks of variables and the problems of an insufficient number of available dmus and intertemporal comparability china s western taiwan straits economic zone wts economic zone is an important regional economic growth center by applying win us sbm and arcgis software we investigated data on the temporal and spatial evolution characteristics of eco efficiency in the wts economic zone for the years 2009 2016 later the global malmquist luenberger index was used to decompose the sources of growth in eco efficiency finally the main driving factors of eco efficiency were explored through a tobit regression analysis the empirical results show that 1 the overall eco efficiency of the wts economic zone had greatly improved increasing by 11 46 annually and the cumulative growth rate of eco efficiency was 110 84 from 2009 to 2016 2 the eastern area had the highest average eco efficiency followed by the western area and the middle area in that order also the growth rate of the middle area ranked first 16 68 whereas the eastern area had the slowest growth in eco efficiency 7 22 3 on the whole the growth of eco efficiency was driven mainly by technological progress and was restricted by the decrease in management level which implies that policy makers should focus on improving management and technical levels 4 high levels of economic development population density market openness and industrial structure had positive effects on the eco efficiency of the wts economic zone whereas energy intensity and expenditure on science and technology had negative impacts

radial and non radial decompositions of profit change with an application to indian banking abstract grifell tatje and lovell grifell tatje e lovell c a k 1999 profits and productivity management science 45 1177 1193 made significant contributions to the literature on the extended radial dea framework by decomposing profit change into six mutually exclusive components their approach however poses two basic problems first the radial estimates on these components might give conflicting signals about the direction of profit change after the full radial efficiencies are achieved when slacks are present second evaluations of these components using base period prices as weights can be potentially misleading to address these concerns we first introduce non radial dea models and then provide a few strong theoretical arguments in favor of using as weights either current period prices or an average price covering both periods to value the contributions of each of these components the indian banking sector is taken as a case study to illustrate the radial and non radial decompositions of profit change so as to empirically examine the role of competition on profit change and its drivers our broad empirical results are as follows first radial and non radial models yield diametrically opposite results on the contributions of various components second the increasing efficiency change trends in all ownership groups after 2002 indicate that the government reform process instituted on the banking industry has had a favorable effect on the performance of the indian banking sector third despite the fact that nationalized banks are the oldest banks their output and resource allocation behaviors do not reflect their learning experience

the groves ledyard mechanism an experimental study of institutional design the groves ledyard mechanism theoretically can solve the free rider problem in public good provision in certain environments two questions are of overriding importance in implementing the mechanism the first is related to the actual performance of the mechanism in general the second is the choice of a punishment parameter which is the only parameter that is available for those who may want to actually use the mechanism thus the determination of the role of this variable on mechanism performance is fundamental for any advances along the lines of actual implementation in studying the groves ledyard mechanism we show that the punishment parameter plays a crucial role in the performance of the mechanism by using 1 and 100 we show that under the higher punishment parameter the groves ledyard equilibrium is chosen much more frequently a higher level of the public good is provided and efficiency is higher by examining two behavioral models we show that a higher leads to an increase in the probability of an individual choosing a best response predicted by the model the parameter alone explains nearly 70 of the data in both the cournot and the carlson auster behavioral model we also found that convergence to cournot behavior is faster and more stable under a high than under a low

decomposition of the fisher ideal index of productivity a non parametric dual analysis of us airlines data in this paper we offer a non parametric method of decomposing the fisher ideal index of productivity into individual factors measuring i technical efficiency change ii allocative efficiency change iii shift in the cost function iv scale economies due to output change and v an adjustment factor reflecting change in the output attributes cross section data from the us airline industry for the years i 983 and i 984 are utilised in an empirical application illustrating this method the rate of multifactor productivity growth mfpg over time in the single output multiple input case can be measured by the difference in the rates of growth in the quantity of output and the divisia index of input quantity when no technical inefficiency exists this rate of mfpg can be decomposed into two additive components i the rate of technical change measuring the rate of change in the volume of output holding the input bundle unchanged and ii a returns to scale effect showing change in productivity with changes in the input quantities without technical change when technical efficiency varies over time a part of the measured rate of mfpg would be due to efficiency

assessing productivity changes in uk hospitals reflecting technology and input prices in this study malmquist productivity indexes are used to evaluate the performance of acute hospitals in the uk over the period after the introduction of the internal market in the national health service in 1991 the indexes are computed using nonparametric programming known as data envelopment analysis and they are decomposed into multiple component measures to give insights into the trends in hospital performance overall it is found that productivity regressed in the year after the reforms but progressed thereafter so that overall there was a net progress both as far as the inputs and costs are concerned productivity progress is mainly due to overall efficiency progress which in turn is mostly attributed to allocative efficiency improvements technical change resulted in a small reduction in the amount of inputs used but also at higher production costs because of a worsening in the match between input mixes and relative input prices however it is suggested that the gains in productivity are not

regulatory reforms and productivity an empirical analysis of the japanese electricity industry the japanese electricity industry has experienced regulatory reforms since the mid 1990s this article measures productivity in japan s steam power generation sector and examines the effect of reforms on the productivity of this industry over the period 1978 2003 we estimate the luenberger productivity indicator which is a generalization of the commonly used malmquist productivity index using a data envelopment analysis approach factors associated with productivity change are investigated through dynamic generalized method of moments gmm estimation of panel data our empirical analysis shows that the regulatory reforms have contributed to productivity growth in the steam power generation sector in japan

customized bundle pricing for information goods a nonlinear mixed integer programming approach this paper proposes using nonlinear mixed integer programming to solve the customized bundle pricing problem in which consumers are allowed to choose up to n goods out of a larger pool of j goods prior work has suggested that this mechanism has attractive features for the pricing of information and other low marginal cost goods although closed form solutions exist for this problem for certain cases of consumer preferences many interesting scenarios cannot be easily handled without a numerical solution procedure in this paper we investigate the efficiency gains created by customized bundling over the alternatives of pure bundling or individual sale under different assumptions about customer preferences and firm cost structure as well as the potential loss of efficiency caused by pricing with incomplete information about consumer reservation values our analysis suggests that customized bundling enhances sellers profits and enhances welfare when consumers do not place positive values on all goods and that this consumer characteristic is much more important than the shape of the valuation distribution in determining the optimal pricing scheme we also find that customized bundling outperforms both pure bundling and individual sale in the presence of incomplete information and that customized bundling still outperforms other simpler pricing schemes even when exact consumer valuations are not known ex ante

optimal bundling and pricing under a monopoly contrasting complements and substitutes from independently valued products we develop an analytical model of contingent valuations and address two questions of import to a monopolist i should a given pair of complements or substitutes be sold separately pure components together pure bundling or both mixed bundling and at what prices ii how do optimal bundling and pricing strategies for complements and substitutes differ from those for independently valued products we find that the combination of marginal cost levels and the degree of complementarity or substitutability determines which of the three bundling strategies is optimal complements and substitutes should typically be priced higher than independently valued products

optimal product line pricing in the presence of budget constrained consumers abstract the product line pricing problem is generally defined as a seller s task to determine the optimal prices for each product in a product line while accounting for both demand side and supply side restrictions in this paper we contribute to the existing literature by incorporating consumers budget considerations into the seller s optimisation problem despite playing an important role in many applications such as the pricing of tickets for sporting or theatre seasons budget constraints have not been considered in the academic literature in the context of product line pricing to date by building on the assumptions and the model formulation recently proposed in a previous study by burkart w r et al 2012 product line pricing for services with capacity constraints and dynamic substitution european journal of operational research 219 2 347 359 for standard product line pricing we propose a number of new mixed integer linear formulations assuming budget constrained consumers the formulations differ in terms of how consumers handle their individual budget limitations to solve the underlying problems we propose a customised branch and bound procedure that relies on various novel problem specific bound arguments explicitly exploiting the consumers budget limitations experimental tests show that the branch and bound procedure clearly outperforms ibm ilog cplex which is unable to solve problems for even medium sized instances furthermore based on a number of scenarios we derive managerial insights regarding e g the overall impact of considering budget constraints on the seller s revenue as well as the impact of correctly anticipating the type of consumer purchase behaviour

gaussian demand and commodity bundling in an important and widely cited essay adams and yellen 1976 examine the use of package selling as a price discrimination device they consider a monopolist producing two goods with constant unit costs and facing buyers with diverse tastes the marginal utility of a second unit of either good is assumed to be zero for all buyers the two goods are independent in demand for all buyers so that any buyer s reservation price for the first unit of either good is independent of the market price of the other thus the maximum amount any buyer would pay for a bundle consisting of one unit of each good is the sum of the two reservation prices and buyers are completely described by the values of those two prices 2 resale markets are assumed away in order to obtain comparative results for alternative pricing strategies the distribution of reservation prices in the adams yellen framework is assumed to be bivariate normal implications of gaussian demand are explored pure bundling is shown to operate by reducing buyer diversity thus facilitating the capture of consumers surplus it generally makes buyers worse off than unbundled sales it is more profitable if average reservation prices are high enough mixed bundling combines advantages of both pure bundling and unbundled sales and it is generally strictly more profitable than either bundling which treats goods symmetrically seems most attractive under symmetric reservation price distributions i am indebted to severin borenstein for superb research assistance to the ford motor company for research support through a grant to m i t and to the harvard economics department for housing me as a visiting scholar while most of this research was performed of course only i can be held responsible for this essay s shortcomings 1 the first clear recognition of this possibility seems to have been by stigler 1968 but also see burstein 1960 2 paroush and peles 1981 relax the assumption that consumers purchase at most one unit of each good but they consider only two types of buyers both with linear demand functions they retain the assumption that demands are independent for all buyers telser 1979 and phillips 1981 use different frameworks to analyze bundling policies spence 1980 explores the relation between bundling across commodities as here and bundling multiple units of the same

total factor productivity growth in agriculture a malmquist index analysis of 93 countries 1980 2000 in this paper we examine levels and trends in agricultural output and productivity in 93 developed and developing countries that account for a major portion of the world population and agricultural output we make use of data drawn from the food and agriculture organization of the united nations and our study covers the period 1980 2000 due to the non availability of reliable input price data the study uses data envelopment analysis dea to derive malmquist productivity indexes the study examines trends in agricultural productivity over the period issues of catch up and convergence or in some cases possible divergence in productivity in agriculture are examined within a global framework the paper also derives the shadow prices and value shares that are implicit in the dea based malmquist productivity indices and examines the plausibility of their levels and trends over the study period

an experiment in the demand revealing process the principal findings of this experiment are it is somewhat time consuming but not otherwise difficult to employ the demand revealing process in groups of 10 to 60 the ability of the demand revealing process to take account of intensities of preferences is appreciated by many of the persons who have used the process but the departure from one man one vote is strongly resisted by others the outcomes reached by demand revealing differed from majority rule in about one tenth of the cases the improvement in efficiency associated with these reversals of majority rule was 2 25 percent of the net benefit of making the efficient decisions the clarke taxes which would decline in percentage terms as group size increased were 3 04 percent of the net value of efficient decisions for the decisions studied

optimal bundling under imperfect competition abstract this paper examines the profitability of bundling for a two product seller of differentiated products facing competition from a one product rival in the presence of imperfect competition pure bundling emerges as the optimal pricing strategy other than ensuring the monopoly product can only be purchased in a bundle pure bundling s additional advantages stand in its ability to i prevent consumers from forming their own bundle using the single product seller s product ii reduce aggressiveness in pricing and iii smooth over the variation in valuations consumers have for the two types of products however the profit maximizing strategy is not welfare maximizing consumers are best off when all products are available a la carte only the competitor maximizes profits under mixed bundling and total welfare would be highest if the two product supplier were to offer only the monopoly product a la carte

modelling technical efficiency in cross sectionally dependent stochastic frontier panels summary this paper proposes a unified framework for accommodating both time and cross sectional dependence in modelling technical efficiency in stochastic frontier models by combining the exogenously driven factor based approach and an endogenous threshold efficiency regime selection mechanism this approach is able to deal with both weak and strong cross sectional dependence in a flexible manner using a dataset of 26 oecd countries over 1970 2010 we provide satisfactory estimation results for the production technology parameters and the associated efficiency ranking of individual countries we find a positive spillover effect on efficiency supporting the hypothesis that knowledge spillover is more likely to be induced by technological proximity furthermore our approach enables us to identify efficiency clubs endogenously

human capital and convergence a production frontier approach using nonparametric production frontier methods we decompose labor productivity growth into components attributable to technological change shifts in the world production frontier technological catch up movements toward or away from the frontier and physical and human capital accumulation movements along the frontier we find that 1 technological change is decidedly nonneutral 2 productivity growth is driven primarily by physical and human capital accumulation 3 the increased international dispersion of productivity is explained primarily by physical capital accumulation and 4 international polarization the shift from a unimodal to a bimodal distribution is brought about primarily by efficiency changes technological catch up

the effect of incentive reforms upon productivity evidence from the vietnamese rice industry in this study we use region level panel data on rice production in vietnam to investigate total factor productivity tfp growth in the period since reunification in 1975 two significant reforms were introduced during this period one in 1981 allowing farmers to keep part of their produce and another in 1987 providing improved land tenure we measure tfp growth using two modified forms of the standard malmquist data envelopment analysis dea method which we have named the three year window tyw and the full cumulative fc methods we have developed these methods to deal with degrees of freedom limitations our empirical results indicate strong average tfp growth of between 3 3 and 3 5 per cent per annum with the fastest growth observed in the period following the first reform our results support the assertion that incentive related issues have played a large role in the decline and subsequent resurgence of vietnamese agriculture

implementation via approval mechanisms abstract we focus on the single peaked domain and study the class of generalized approval mechanisms g a m s first players simultaneously select subsets of the outcome space and scores are assigned to each alternative and then a given quantile of the induced score distribution is implemented our main finding is that essentially for every nash implementable welfare optimum including the condorcet winner alternative there exists a gam that nash implements it importantly the gam that nash implements the condorcet winner alternative is the first simple simultaneous game with this feature in the literature

technical efficiency and productivity analysis in indonesian provincial economies this article estimates inefficiency and total factor productivity tfp across indonesian provinces from 1993 to 2000 indonesia is a large emerging market economy but provinces within the country due to the island structure of the country are more distinct from one another compared to other countries we use a stochastic frontier methodology to estimate inefficiency and tfp we find that tfp fell by an average rate of 7 5 across provinces due to the decrease in technical efficiency in fact the majority of output growth within indonesia is explained by the accumulation of inputs in this sense economic growth within indonesia does not appear to be sustainable without reversing these trends

is inflation in developing countries driven by low productivity or monetary growth abstract this paper investigates whether inflation in developing countries is driven by retrogression in productivity or by monetary expansion our empirical methodology relies on growth accounting non parametric and generalized method of moment techniques results indicate that inflation is primarily driven by monetary growth

why firms may prefer not to price discriminate via mixed bundling abstract we analyze a simple model of joint purchase discounts using a discrete choice framework to characterize consumer choices the model suggests that mixed bundling is more likely to be associated with monopoly this is due to the benefits reaped via price discrimination in a duopoly environment however only pure components pricing may be offered in equilibrium since firms fear the extra degree of competition inherent in mixed bundling

equilibrium product bundling this article offers an equilibrium theory of product bundling by rival firms in several models where a primary good is produced in a duopoly market and one or more other goods is produced under perfectly competitive conditions bundling is shown to emerge as an equilibrium strategy of one or both of the duopolists for its role as a product differentiation device when the rival firms can commit to bundling sales their profits are higher but social welfare is reduced copyright 1997 by university of chicago press

optimal bundle formation and pricing of two products with limited stock abstract in this study we consider the stochastic modeling of a retail firm that sells two types of perishable products in a single period not only as independent items but also as a bundle our emphasis is on understanding the bundling practices on the inventory and pricing decisions of the firm one of the issues we address is to decide on the number of bundles to be formed from the initial product inventory levels and the price of the bundle to maximize the expected profit product demands follow a poisson process with a price dependent rate customer reservation prices are assumed to have a joint distribution we study the impact of reservation price distributions initial inventory levels product prices demand arrival rates and cost of bundling we observe that the expected profit decreases as the correlation between the reservation prices of two products increases with negative correlation bundling cost has a significant impact on the number of bundles formed when the product prices are low the retailer sells individual products as well as the bundle mixed bundling when they are high the retailer sells only bundles pure bundling the expected profit and the number of bundles offered decrease as the variance of the reservation price distribution increases for high starting inventory levels the retailer reduces bundle price and offers more bundles the number of bundle sales decreases and the number of individual product sales increases when the arrival rate increases since the need for bundling decreases impacts of substitutability and complementarity of products are also investigated the retailer forms more bundles or charges higher prices for the bundle or both as the products become more complementary and less substitutable

experiments with the pivot process for providing public goods interest in demand revealing mechanisms for providing public goods has both waned and then renewed over the past two decades the possibility of using such mechanisms in different venues than originally anticipated sparked the research reported here the specific motivation for this paper is to conduct a series of simple direct tests of one version of the class of mechanisms failure of demand revelation was much more expensive than we had expected even when compared to previous research with related mechanisms the reason for this remains an open question

a graphical analysis of bundling by comparing the demand for a bundle and the vertical sum of the demands for its components this article analyzes the profitability and welfare consequences of bundling if it does not lower costs bundling tends to be profitable when reservation values are negatively correlated and high relative to costs if bundling lowers costs and costs are high relative to average reservation values positively correlated reservation values increase the incentive to bundle bundling and charging a price equal to the sum of the components prices lowers consumer surplus bundling can however increase consumer surplus when it results in lower prices copyright 1995 by university of chicago press

malmquist productivity indexes and fisher ideal indexes comment fare and grosskopf i992 henceforth abbreviated as fg showed that under some conditions the productivity index defined as the geometric mean of two input based malmquist productivity indexes is equal to the quotient of the fisher input quantity index and the fisher output quantity index both fisher indices can be computed from observed prices and quantities these conditions appear to be so strong that they will almost certainly never be fulfilled in practice this is shown by a careful inspection of fg s proof however under slightly milder but more plausible conditions it can be shown that the quotient of the fisher input index and the fisher output index is a reasonable approximation of the productivity index consider a firm at two time periods t o i with different technologies which are modelled by the input correspondences lt y x x can produce y x c rn yce rm it is assumed that the sets lt y are closed and convex and that inputs are strongly disposable the vectors x yt wt pt t o i denote observed inputs observed outputs observed input prices and observed output prices respectively the productivity index is defined as

why is tfp growth sectorally concentrated research shows that total factor productivity tfp growth is weak in european countries this is inter alia attributed to the fact that substantial tfp growth is limited to a few industries because tfp growth is typically understood as technological progress it is concluded that technology diffusion between sectors in europe is hampered we use eu klems data sets to decompose sectoral tfp for nine european countries by means of a malmquist approach in order to identify potential sources besides technical progress applying harberger diagrams we describe the sectoral distribution of tfp growth efficiency gains and losses economies of scale and technological progress the analysis reveals that technological progress is quite evenly distributed across sectors in most european countries the wide scattering of tfp growth is explained by deviating efficiency developments and the unused economies of scale we conclude that the technology transfer between sectors in most european countries seems to work t

willingness to pay estimation with choice based conjoint analysis addressing extreme response behavior with individually adapted designs the increasing consideration of behavioral aspects in operations management models has prompted greater use of choice based conjoint cbc studies in operations research such studies can elicit consumers willingness to pay wtp a core input for many optimization models however optimization models can yield valid results only if consumers wtp is estimated accurately a simulation study and two field studies show that extreme response behavior in cbc studies such that consumers always or never choose the no purchase option harms the validity of wtp estimates reporting the share of consumers who always and never select the no purchase option allows for detecting extreme response behavior this study suggests an individually adapted design that avoids extreme response behavior and thus significantly improves wtp estimation accuracy

relative sources of european regional productivity convergence a bootstrap frontier approach enflo k and hjertstrand p relative sources of european regional productivity convergence a bootstrap frontier approach regional studies this paper addresses the issue of western european regional productivity growth and convergence by means of data envelopment analysis dea decomposing labour productivity into efficiency change technical change and capital accumulation the decomposition shows that most regions have fallen behind the production frontier in efficiency and that capital accumulation has had a diverging effect on the labour productivity distribution using bootstrapping methods the paper also accounts for the inherent bias and the stochastic elements in the efficiency estimation it is found that the relative ranking of the efficiency scores remains stable after the bias correction even after controlling for spatially correlated measurement errors and that the dea successfully identifies the regions on the production frontier as significantly more efficient than other regions enfl

bundling with customer self selection a simple approach to bundling low marginal cost goods with declining costs of distributing digital products comes renewed interest in strategies for pricing goods with low marginal costs in this paper we evaluate customized bundling a pricing strategy that gives consumers the right to choose up to a quantity m of goods drawn from a larger pool of n different goods for a fixed price we show that the complex mixed bundle problem can be reduced to the customized bundle problem under some commonly used assumptions we also show that for a monopoly seller of low marginal cost goods this strategy outperforms individual selling m 1 and pure bundling m n when goods have a positive marginal cost or when customers have heterogeneous preferences over goods comparative statics results also show that the optimal bundle size for customized bundling decreases in both heterogeneity of consumer preferences over different goods and marginal costs of production we further explore how the customized bundle solution is affected by factors such as the nature of distribution functions in which valuations are drawn the correlations of values across goods and the complementarity or substitutability among products altogether our results suggest that customized bundling has a number of advantages both in theory and practice over other bundling strategies in many relevant settings

multiproduct monopoly commodity bundling and correlation of values through what selling strategy can a multiproduct monopolist maximize his profits when his knowledge about individual consumers preferences is limited one possibility extensively studied in the context of a single good monopoly is to use quantity dependent pricing as a means of discriminating among customers with differing tastes see for example oi 1971 and maskin and riley 1984 an alternative technique for price discrimination first suggested by stigler 1968 and analyzed further by adams and yellen 1976 is for the monopolist to package two or more products in bundles rather than selling them separately through a series of examples adams and yellen illustrate that bundling can serve as a useful price discrimination device even when all consumers willingnesses to pay for each of the goods individually are unaffected by whether they are also consuming the other product a typical example is illustrated in figure i adapted from figure iv in adams and yellen where there are two goods three consumers ab c who consume at most one unit of each good with reservation values for each good that are independent of whether the other good is consumed and zero costs of production there a bundle offered at a price of 100 fully extracts all potential surplus which would be impossible pricing the goods independently unfortunately though these authors do not provide any general characterization of the circumstances in which bundling is actually a multiproduct monopolist s optimal strategy their examples however such as figure i create the impression that the profitable use of bundling

bridging the gap between partial and total factor productivity measures using directional distance functions technical dependencies as well as data constraints limit our ability to allocate inputs across sectors and hence our ability to measure sectoral productivity we adapt a directional measure of efficiency to the measurement of sector specific productivity that does not require allocating all inputs across sectors applied to the agricultural sector of a group of countries the results show important differences in livestock and crops productivity growth commonly used partial factor productivity measures for livestock and crops tend to overestimate productivity growth in most developing countries while underestimating it in european countries

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

quadratic voting and the public good introduction this introduction to the public choice special issue on quadratic voting qv and the public good provides an opinionated narrative summary of the contents and surveys the broader literature related to qv qv is a voting rule proposed by one of us weyl quadratic vote buying http goo gl 8yeo73 2012 lalley and weyl quadratic voting https papers ssrn com sol3 papers cfm abstract id 2003531 2016 building off earlier work by groves and ledyard econometrica 45 4 783 810 1977a hylland and zeckhauser a mechanism for selecting public goods when preferences must be elicited kennedy school of government discussion paper d 70 1980 where individuals buy as many votes as they wish by paying the square of the votes they buy using some currency an appreciation of the history of research in the field suggests that qv is uniquely practically relevant compared to the other approximately pareto efficient mechanisms economists have proposed for collective decisions on public goods however it faces a number of sociological and ethical concerns regarding how a political system organized around qv would achieve the efficiency aims stated in abstract theory and whether the pure aggregate income maximizing definition of efficiency qv optimizes in its simplest form is desirable the papers in this volume flesh out and formalize these concerns but also provide important responses in two ways by suggesting domains where they are unlikely to be applicable primarily related to survey research of various kinds and versions of qv using an artificial currency that maintain many of qv s benefits while diffusing the most important critiques together this work suggests both a practical path for applying qv in the near term and a series of research questions that would have to be addressed to broaden its application

a non parametric analysis of productivity the case of u s and japanese manufacturing a nonparametric analysis of technology technical change and productivity is presented in the context of cost minimizing behavior a number of nonparametric tests concerning the existence and nature of technical change are applied to u s and japanese manufacturing data nonparametric measures of technical change are presented copyright 1990 by american economic association

efficiency and technical progress sources of convergence in the spanish regions the paper analyses the contribution of efficiency as a mechanism of labour productivity convergence taking as the unit of analysis the spanish regions in the period 1964 1993 using the stochastic frontier approach a translogarithmic production function is estimated for the different sectors of the spanish regional economy demonstrating on this basis the existence of substantial differences in efficiency between sectors as well as between regions with regard to convergence the results obtained indicate that at aggregate level the convergence observed in labour productivity is explained by the faster growth of the capital labour ratio of the initially poorer regions and the contribution of technical change and the efficiency hence by the convergence of tfp however the information by sectors shows different results thus on the one hand the importance of the convergence in production per employee is seen in all sectors except agriculture and on the other it is observed that technical change is a

sources of productivity growth using the fare primont decomposition an empirical application to the irish beef sector several competing methodologies for tfp estimation have been developed in the past decades a popular approach in the literature is index number computation the most widely implemented tfp indices

total factor carbon emission performance of fossil fuel power plants in china a metafrontier non radial malmquist index analysis article i nfo this paper proposes the metafrontier non radial malmquist co2 emission performance index mnmcpi for measuring dynamic changes in total factor co2 emission performance over time the mnmcpi method allows for the incorporation of group heterogeneity and non radial slack into the previously introduced malmquist co2 emission performance index mcpi we derive the mnmcpi by solving several non radial data envelop ment analysis dea models we decompose the mnmcpi into an efficiency change ec index a best practice gap change bpc index and a technology gap change tgc index and based on the proposed indices we examine the dynamic changes in co2 emission performance and its decomposition of fossil fuel power plants in china for the 2005 2010 period the empirical results show a 0 38 increase in total factor co2 emission performance as a whole and a u shaped mnmcpi curve for the sample period because companies owned by the central government lack innovation and technological leadership the results suggest a missing link in the role of the central government in promoting co2 emission performance

performance and efficiency in colombia s power distribution system effects of the 1994 reform we assess evolution in performance efficiency and productivity of colombia s power distribution utilities before and after the 1994 regulatory reform that introduced electricity market activities for the power sector in 12 distribution companies from 1985 to 2001 performance is evaluated contrasting changes in mean and median by wilcoxon rank sum and pearson tests on financial and other performance indicators technical efficiency is measured by means of data envelopment analysis dea the nature of the dataset allows the estimation of malmquist productivity index and its evolution in time results show a recovery after the reform in the main performance indicators of profitability partial input productivity and output plant efficiency and productivity increased after the reform mainly in the largest utilities used as benchmarks in the dea efficiency scores measures meanwhile the less efficient power distribution companies did not improved after the reform and were not able to undertake plant restructuring to catch up in plant efficiency with respect to the pareto efficient input allocations econometric results on dea efficiency scores suggest a positive effect of policy reform

the evolution and main determinants of productivity in brazilian electricity distribution 1998 2005 an empirical analysis abstract this paper estimates changes in the productivity of the brazilian electricity distribution sector using data envelopment analysis dea on a panel of 18 firms from 1998 to 2005 the study decomposes the productivity change of these distribution firms in terms of technical efficiency scale efficiency and technical progress this exercise aims to help the understanding of the main determinants of the evolution of productivity focusing its relationship with the restructuring process implemented in the 1990s tfp index records a yearly positive growth rate of 1 3 in the whole period under analysis for all firms technical change was the main component behind this evolution with an average growth of 2 1 per year while technical efficiency presented a yearly negative performance of 0 8 the results prove that in general terms the incentives generated in the reform process do not seem to have led the firms to behave in a more efficient manner

the transatlantic productivity gap a survey of the main causes abstract during the last 2 decades europe s economy experienced a productivity slowdown whereas the united states us economy exhibited a marked acceleration the result is that since the early 1990s the relative productivity levels between the two regions have continuously diverged leading to a transatlantic productivity gap much of the explanation for this is the strong performance of the us in the so called new economy or knowledge economy and in particular the underinvestment in r d and as a result productivity and innovation has been at the forefront in the european policy agenda however various explanations for the us european union transatlantic productivity gap suggest that the picture is rather more complex than simply the effects on or the result of particular technology driven sectors