multi product budget constrained acquisition and pricing with uncertain demand and supplier quantity discounts abstract we consider the joint acquisition and pricing problem where the retailer sells multiple products with uncertain demands and the suppliers provide all unit quantity discounts the problem is to determine the optimal acquisition quantities and selling prices so as to maximize the retailer s expected profit subject to a budget constraint this is the first extension to consider supplier discounts in the constrained multi product newsvendor pricing problem we establish a mixed integer nonlinear programming minlp model to formulate the problem and develop a lagrangian based solution approach computational results for the test problems involving up to thousand products are reported which show that the proposed approach can obtain high quality solutions in a very short time

aid and growth what meta analysis reveals abstract recent literature in the meta analysis category where results from a range of studies are brought together throws doubt on the ability of foreign aid to foster economic growth and development this article assesses what meta analysis has to contribute to the literature on the effectiveness of foreign aid in terms of growth impact we re examine key hypotheses and find that the effect of aid on growth is positive and statistically significant this significant effect is genuine and not an artefact of publication selection we also show why our results differ from those published elsewhere

modeling a multi attribute utility newsvendor with partial backlogging abstract traditional newsvendor models usually focus on single profit maximization or cost minimization approaches however making a monetary estimate of the consequences of lost sales as a result of shortages is often a difficult task for many practitioners besides there is still a lack of an explicit account of decision making judgments on the multiple consequences of making decisions with regard to order quantities in order to deal with this problem this paper presents a multi attribute utility model for the newsvendor problem with regard to profit the impacts of service level on corporate image and on customers goodwill and the impact on the environment arising from the disposal of unsold products demand is partially backlogged according to a decreasing exponential function of the waiting time the fundamental principles and limitations related to the application of the model built are also discussed

a two item newsboy problem with substitutability previous research on the newsboy problem is based on the assumption that in case of a shortage unsatisfied demand is lost such an assumption is inappropriate for items that have a close substitute in this paper we formulate a two item newsboy problem with substitutability tinps upper and lower bounds on the optimal order quantities of the two items are derived since analytical solutions to the problem are difficult to obtain a monte carlo simulation is used to identify the optimal solution to the tinps order quantities identified by the simulation provide higher expected profit than would have been obtainable without considering substitutability

aid policies and growth a nonlinear reassessment the association between foreign aid and growth has been controversial for decades and the evidence is quite mixed with results sensitive to data samples and modelling approaches we reassess the re

the function of authority in transaction cost economics abstract this paper questions the transaction cost characterization of observed authority relations as efficient governance structures various inadequacies in the transaction cost account of work organization and the limits of firm size are traced to its neglect of the possibility that authority may be abused opportunistically this exemplifies a more general propensity in the transaction cost literature that of explaining economic organization in functionalist terms with little attention to the causal mechanisms through which efficient governance structures might actually arise three such mechanisms are considered but none is found to provide an adequate rationale for the imputation of efficiency to observed structures

an extended newsboy problem with shortage level constraints abstract it is only an order quantity which is decided for a spot selling time in the classical newsboy problem both the purchase timing and the time variant variance of the demand are neglected when the vendor gives a price discount for early purchase the buyer purchases the quantities of price discount at the cost of forecast bias the buyer has to forecast the demand early before purchase ahead of schedule but it may increase the variance of the forecasted demand which is a forecast bias this time variant variance of the demand is embedded into the model when the average shortage level is specified to an upper limit both the purchase timing and the order quantity are simultaneously considered as the decision variables of the extended newsboy problem in this paper the resultant outcomes could apply to some cases in the futures contracts

disease and development the effect of life expectancy on economic growth we exploit the major international health improvements from the 1940s to estimate the effect of life expectancy on economic performance we construct predicted mortality using preintervention mortality rates from various diseases and dates of global interventions predicted mortality has a large impact on changes in life expectancy starting in 1940 but no effect before 1940 using predicted mortality as an instrument we find that a 1 percent increase in life expectancy leads to a 1 7 2 percent increase in population life expectancy has a much smaller effect on total gdp however consequently there is no evidence that the large increase in life expectancy raised income per capita

aid and growth regressions this paper examines the relationship between foreign aid and growth in real gdp per capita as it emerges from simple augmentations of popular cross country growth specifications it is shown that aid in all likelihood increases the growth rate and this result is not conditional on good policy there are however decreasing returns to aid and the estimated effectiveness of aid is highly sensitive to the choice of estimator and the set of control variables when investment and human capital are controlled for no positive effect of aid is found yet aid continues to impact on growth via investment we conclude by stressing the need for more theoretical work before this kind of cross country regressions are used for policy purposes

note note on optimal ordering quantity to realize a pre determined level of profit in this note we consider the one period inventory model in which it is required to determine the order quantity which maximizes the probability of realizing a predetermined level of profit r we give a condition for determining the optimal order quantity and provide explicit expressions for the optimal order quantity in three special cases

what is the aggregate economic rate of return to foreign aid in recent years academic studies have been converging towards the view that foreign aid promotes aggregate economic growth we employ a simulation approach to i validate the coherence of empirical aid growth studies published since 2008 and ii calculate plausible ranges for the rate of return to aid our results highlight the long run nature of aid financed investments and the importance of channels other than accumulation of physical capital we find the return to aid lies in ranges commonly accepted for public investments and there is little to justify the view that aid has had a significant pernicious effect on productivity

power in a theory of the firm transactions take place in the firm rather than in the market because the firm offers power to agents who make specific investments past literature emphasizes the allocation of ownership as the primary mechanism by which the firm does this within the contractibility assumptions of this literature we identify a potentially superior mechanism the regulation of access to critical resources access can be better than ownership because i the power agents get from access is more contingent on their making the right investment and ii ownership has adverse effects on the incentive to specialize the theory explains the importance of internal organization and third party ownership

authority and democracy in corporate governance although mcmahon offers a potentially valuable extension of joseph raz s conceptualization of authority by distinguishing three different kinds of authority this paper argues first that his account of the conditions and considerations that would justify managerial authority is problematic because it relies on a conception of reasons for action that excludes precisely the kind of rationality that plays an important role in the explanation and justification of authority in economic organization this paper explains second why mcmahon s thesis of the justificatory similarity of authority in governments and nongovernmental organizations can also be seen to hold for corporate governance of publicly owned firms more specifically finally this paper raises some critical objections against mcmahon s presumption of democratic governance in governments and ngo s alike the thrust of these objections is that democratic corporate governance does not make sense in the publicly owned firms because 1 it will not produce results that are fair or welfare maximizing and 2 it will undermine the legitimacy of managerial authority in such firms

the new economics of organization over the last ten years or so an important new approach to the study of organizations has emerged within economics it is perhaps best characterized by three elements a contractual perspective on organizational relationships a theoretical focus on hierarchical control and formal analysis via principal agent models this paper provides political scientists with an overview of the new economics of organization and explores its implications for the study of public bureaucracy so far positive political theory has not contributed much to our understanding of public bureaucracy in part this is due to the unsympathetic treatment that rational modeling and most other modes of quantitative analysis have long received from students of public administration the other side of the coin however is that positive theorists have not made much of an effort to develop theories of bureaucracy their concerns have centered around two basic mechanisms of social choice voting and markets and they have devoted little systematic attention to a third mechanism that is clearly important for understanding how societies and other aggregates make collective decisions this third and relatively unexplored mechanism is hierarchy movement toward a positive theory of hierarchies would fill a serious gap in the social choice literature while at the same time making a theoretical contribution that strikes to the essence of public bureaucracy indeed of all organizations in fact significant steps toward a positive theory of hierarchies have very recently been taken but by economists not political scientists in small numbers of course economists made contributions to the study of public bureaucracy some time ago with the pioneering works of downs 1967 tullock 1965 and niskanen 1971 but this new wave of theoretical work is different it is already a large complex body of literature that is the focus of innovation and excitement among a growing number of economists and it reflects an unusual degree of theoretical coherence and cumulative effort work in this tradition tends to receive orientation from a distinctive economic approach to the analysis of organizations an approach perhaps best characterized by three elements a contractual perspective on organizational relationships a focus on hierarchical control and formal analysis via principal agent models this approach has emerged from recent attempts to move beyond the neoclassical theory of the firm which assumes away all organizational considerations to a theory of economic organizations that can explain why firms corporations and other enterprises behave as they do propo

the newsboy problem under progressive multiple discounts abstract previous research on the newsboy problem is based on the assumption that excess inventory is either discounted once and sold or disposed of real world settings especially in the apparel industry involve many cases where multiple discounts are used under multiple discounts a retailer has a series of discounts that are progressively used as the product remains on the shelf in this paper we formulate and solve a newsboy problem with multiple e discounts the new problem is solved with the objectives of 1 maximizing the expected profit and 2 maximizing the probability of achieving a target profit we show that multiple discounts when possible provide higher expected profit than using a single discount we verify the analytical results using numerical integration and illustrate the results with numerical examples

assessing the accountability of government sponsored enterprises and quangos government sponsored enterprises gses and quasi autonomous non governmental organizations quangos comprise a powerful organizational sector that has been criticized for its lack of accountability to governments and their citizens these organizations are established to serve the public as a whole by targeting the needs of particular groups or fulfilling specific functions often they use practices adopted from the business sector and sometimes they enter the marketplace as profit making enterprises in light of the contribution of gse fannie mae to the 2008 world economic crisis the impact of this sector on effective democratic government bears further examination in this article i present a systems model that suggests how researchers might comprehensively assess the accountability of organizations in this sector here termed the gray sector with respect to their government missions i focus on four systems dimensions mission organizational design organizational outcomes and the information feedback process organizational design and the nature of the sector population are cited as emerging issues of particular importance

newsvendor problem with clearance pricing abstract the newsvendor nv problem assumes that the salvage clearance price at which the leftover inventory is disposed of is a given parameter of the problem in this paper we relax this assumption and consider the nv problem with the salvage clearance price as a decision variable we have drawn from the literatures on the nv problem and clearance markdown dynamic pricing to develop three stochastic models in this paper in the first model we assume that while the seasonal demand is exogenous and stochastic the end of season demand is endogenous and deterministic the second model extends the first model by assuming that the end of season demand is endogenous and stochastic finally the third model considers that both the seasonal and end of season demands are endogenous and stochastic we have provided solution procedures for solving the stochastic optimization problems we have also performed sensitivity analyses to assess the sensitivity of the optimal expected profit and order quantity to different problem parameters specifically we have found that the optimal expected profit is most sensitive to the variable cost per unit mean seasonal demand and market potential of end of season demand our models will be useful for retailers of products with a short selling season and a short end of season period for clearance sale of leftover inventory such that there is a single replenishment opportunity at the beginning of the season and a single opportunity for setting the salvage price for clearance sale based on the leftover inventory and end of season demand pattern the paper is concluded with possible directions for future research

does foreign aid corrupt abstract we estimate the impact of foreign aid on corruption using geographical and cultural distance to the donor countries as instrumental variables to assess causality aid decreases corruption our results are statistically and economically significant and robust to different controls

product selection for newsboy type products with normal demands and unequal costs abstract in this paper we consider two newsboy type products with unequal prices and costs both demands are independent and follow normal distributions with unknown parameters and we study the product selection problem which deals with comparing two products and selecting the one that has a significantly higher profitability in which the profitability is defined to the probability of achieving a target profit under the optimal ordering policy the statistical hypothesis testing methodology is performed to tackle this selection problem critical value of the test is calculated to determine the selection decision sample size required for a designated power and confidence level is also investigated an application example on comparing english teaching magazines is presented to illustrate the practicality of our approach

the effect of health on economic growth a production function approach abstract we estimate a production function model of aggregate economic growth including two variables that microeconomists have identified as fundamental components of human capital work experience and health our main result is that good health has a positive sizable and statistically significant effect on aggregate output even when we control for experience of the workforce we argue that the life expectancy effect in growth regressions appears to be a real labor productivity effect and is not the result of life expectancy acting as a proxy for worker experience

linking advertising and quantity decisions in the single period inventory model abstract the single period problem spp also known as the newsboy or news vendor problem is to find the order quantity which maximizes the expected profit in a single period probabilistic demand framework interest in the spp remains unabated and many extensions to it have been proposed in the last decade an important aspect of the spp is the effect of advertising on sales in this paper we extend the spp to a case in which advertising leads to increases in sales we assume that the mean demand is increasing and concave in advertising expenditure and address three cases of demand variance as a function of advertising expenditure 1 demand has constant variance 2 demand has constant coefficient of variation and 3 demand has an increasing coefficient of variation we deal with two objectives a maximizing the expected profit and b maximizing the probability of achieving a target profit we provide closed or near closed form solutions to the problem under uniform exponential and normal demand distributions we illustrate the results using numerical examples and provide some insights into the effect of advertising

aid infrastructure and fdi assessing the transmission channel with a new index of infrastructure official development assistance oda and foreign direct investment fdi are widely perceived to be alternative means of supplementing domestic savings and promoting economic development in low and middle income countries however possible complementarities of aid and fdi have received limited attention so far it remains open to debate whether aid could render recipient countries more attractive to fdi by removing specific bottlenecks that prevent higher fdi inflows in particular we raise the hypothesis that aid specifically targeted at economic infrastructure helps developing countries attract higher fdi inflows through improving their endowment with infrastructure in transportation communication energy and finance by performing 3sls estimations we explicitly account for dependencies between three structural equations on the allocation of sector specific aid the determinants of infrastructure and the determinants of fdi we find strong and robust evidence that aid in infrastructure is effective in improving the recipient countries endowment with infrastructure in sharp contrast other aid is not effective in improving infrastructure infrastructure consistently proves to be an important determinant of developing countries attractiveness to fdi consequently only targeted aid promotes fdi indirectly through the infrastructure channel in addition aid in infrastructure has direct effects on fdi it appears that foreign investors anticipate longer term effects of aid on the country s endowment with infrastructure and expect aid financed infrastructure to serve them particularly well

aid effectiveness opening the black box this paper examines the causality chain linking aid flows to development outcomes it argues that many of the questions policymakers and economists would like data to answer simply cannot be answered due to the complexity and noise along links in the chain and the problem of attribution it then examines what is known about aid effectiveness along different links in the causality chain finally it turns to recent trends in the way aid is delivered and the new model that appears to be emerging

assessing foreign aid s long run contribution to growth in development this paper confirms recent evidence of a positive impact of aid on growth and widens the scope of evaluation to a range of outcomes including proximate sources of growth e g physical and human capital indicators of social welfare e g poverty and infant mortality and measures of economic transformation e g share of agriculture and industry in value added focusing on long run cumulative effects of aid in developing countries and taking due account of potential endogeneity a coherent and favorable pattern of results emerges aid has over the past forty years stimulated growth promoted structural change improved social indicators and reduced poverty

aid econometrics lessons from a stochastic growth model abstract this paper evaluates the standard empirical methods employed in the study of foreign aid when the data generating process is a calibrated stochastic growth model in which aid recipients make optimal investment and consumption decisions when recipients receive a stochastic flow of aid and wish to smooth consumption standard methods fail to distinguish between the response to transient and permanent aid shocks and hence yield misleading results concerning the object of interest to policy makers the long run impact of aid

reordering strategies for a newsboy type product abstract this paper considers the very common situation in which a single period newsboy type product may be ordered or produced twice during a season period we show that the explicit consideration of this reorder opportunity makes the newsboy problem very much richer the specific version considered in this paper allows a reorder during mid season after the early season demand has been observed and this reorder arrives after a given lead time the demand distributions during the various portions of the season may have very general distribution forms also the late season and early season demands may be dependent solution procedures are developed to find the best way to exploit this reorder opportunity and our numerical solutions indicate that this reorder opportunity can improve profits considerably as long as the product s profit margin is not very high other real world variations of this two order newsboy problem are briefly discussed

price markdown scheme in a multi echelon supply chain in a high tech industry this paper studies the price markdown scheme in a supply chain that consists of a supplier a contract manufacturer cm and a buyer retailer the buyer subcontracts the production of the final product to the cm the cm buys the components from the supplier and charges the buyer a service fee for the final product produced the price markdown is made possible by the supplier with the development of new manufacturing technologies that reduce the production cost for the sourced component consequently the buyer adjusts the retail price in order to possibly stimulate stronger demand that may benefit both the supplier and the buyer under this scenario we identify the optimal discount pricing strategies capacity reservation and the stocking policies for the supplier and the buyer we also investigate the optimal inventory decision for the cm to cope with the price discount by considering both demand and delivery uncertainties our results suggest that higher production cost accelerates the effects of higher price sensitivity on lowering the optimal capacity and stocking policies in the supply chain the effect of mean demand error on the optimal prices is relatively marginal compared with that from price sensitivity we also found that increasing the standard deviation of the random demand does not necessarily increase the stocking level as one would predict the results show that delivery uncertainty plays an important role in the inventory carried beyond the price break we discuss potential extensions for future research

the contractual nature of the firm for their helpful comments i am grateful to armen a alchian yoram barzel keith leffler john s mcgee and dean worcester 1 ronald h coase the nature of the firm 4 economica 386 1937 the paper however was written several years earlier see note 3 infra 2 the social sciences citation index provides the following information breaking down the period of 1966 80 into three five year periods the total citations of coase s firm paper for each subperiod are 1966 70 17 citations 1971 75 47 citations and 1976 80 105 citations

revisiting cross country poverty convergence in the developing world with a special focus on sub saharan africa abstract the literature on poverty convergence is sparse and much of the empirical evidence relies on ravallion 2012 who found a lack of poverty convergence across some ninety less developed countries ldcs during 1980 2007 this paper revisits cross country poverty convergence using data from the same sources but an extended period of 1980 2014 we find that while poverty convergence remains absent across ldcs it is present in sub saharan africa ssa during the extended period initial poverty canceling the effectiveness of growth in reducing poverty explains the lack of poverty convergence across ldcs while a strong growth effect dominating the adverse effect of initial poverty on growth effectiveness explains the strong poverty convergence found in ssa a direct adverse link between initial poverty and subsequent growth which ravallion 2012 recognized as the main impediment to poverty convergence during 1980 2007 is not found in this study

aid dutch disease and manufacturing growth abstract we examine the effects of aid on the growth of manufacturing using a methodology that exploits the variation within countries and across manufacturing sectors and corrects for possible reverse causality we find that aid inflows have systematic adverse effects on a country s competitiveness as reflected in the lower relative growth rate of exportable industries we provide some evidence suggesting that the channel for these effects is the real exchange rate appreciation caused by aid inflows we conjecture that this may explain in part why it is hard to find robust evidence that foreign aid helps countries grow

the long run effect of aid on health evidence from panel cointegration analysis abstractalthough a major objective of aid donors is to improve health outcomes in recipient countries there is relatively little research on whether aid to the health sector leads to improved heal

aid and growth what does the cross country evidence really show abstract we examine the effects of aid on growth in cross sectional and panel data after correcting for the possible bias that poorer or stronger growth may draw aid contributions to recipient co

foreign aid and the question of fungibility this paper analyzes whether the foreign assistance provided for specific categories of expenditure is shifted among them contrary to the wishes of donors it also considers whether aid reduces the tax effort of recipient governments econometric results are presented for the dominican republic that show that the fungibility of aid has resulted in a thwarting of the intentions of donors an attempt is made to account for the observed differences in behavior of individual countries in altering expenditures copyright 1993 by mit press