how would the gas exporting countries forum influence gas trade the cleanest burning fossil fuel today is natural gas while many businesses have gone global it has remained an exception an impending challenge facing the industry however is the evolution of a cartel from the 5 year old gas exporting countries forum how would this new organization influence the trade of gas globally does its existence imply a threat to the development of gas trade the paper reviews this fairly new organization within the context of the above questions it is mainly a comparative study of the body in relation to opec s historical political and economic development subsequently the author proposes probable influence options available to the forum and the impending consequence of such actions on the market the outcome of this study calls for further analysis and research on new issues and questions of interest

the political economy of opec abstract we develop a conceptual model that captures opec pricing behavior and apply it to explain the large gap observed between domestic fuel prices in opec countries and prices in the rest of the world we model opec as a cartel of nations not firms and assume that politicians use two instruments production quotas and domestic fuel consumption subsidies the cartel of nations model suggests that introduction of alternatives to petroleum products may lead opec to reduce exports and increase domestic fuel consumption the empirical analysis suggests that when opec sets production quotas it places similar weights on consumer and producer surplus but when opec countries set domestic fuel subsidies on average 6 more weight is given to consumer surplus with some of the opec countries pursuing very aggressive domestic cheap fuel policies

a comment on rewarding impatience in lisa blaydes s article rewarding impatience a bargaining and enforcement model of opec international organization spring 2004 the oil production of members of the organization of petroleum exporting countries opec depends on the extent to which they discount future gains this comment discusses computer related errors in the original article and determines how the results change when the errors are rectified i then add country fixed effects and some additional control variables to the corrected models i would like to thank lisa blaydes for data and helpful discussions and to thank jim alt and mike kellerman for comments on previous drafts all remaining errors are my own

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

schumpeterian innovation and entrepreneurs in capitalism a case study of the u s biotechnology industry abstract this paper uses the theoretical framework developed by joseph schumpeter to examine the first ten years of the u s biotechnology industry the role of the entrepreneur scientist inventor manager and capitalist are distinguished there is a discussion of the obstacles the small firms have had to overcome to create a new economic space in the marketplace it is argued that the earlier schumpeter of the theory of economic development and business cycles emphasizing the role of small firms more accurately describes the u s biotechnology industry in 1985 than schumpeter s later work capitalism socialism and democracy which postulated that the large established firms have preempted the role of small firms in innovation a discussion of the role of large established firms and the small entrepreneurial firms presents the tensions inherent in the cooperative arrangements between these two types of business enterprises the role of small biotechnology firms in reducing these innovations to practice and in their ability to continue to grow demonstrates that the independent entrepreneur recognized by the early schumpeter has been very active in the biotechnology industry

the transmission of foreign disturbances under different exchange rate regimes abstract this paper is divided into two parts in the first part section 2 we present a model of a smaller economy which we use to evaluate in a simple comparative static framework the roles of exchange rate flexibility capital mobility and indexation in the transmission of foreign impulses from abroad in the second part section 3 we examine in some detail how expectations about foreign disturbances affect the way in which policies abroad are transmitted to the home economy we analyse three distinct cases the case of a fully anticipated permanent monetary and fiscal expansion abroad the case of an anticipated permanent change in policy abroad which is not realised and the case of an unanticipated policy change abroad

university spin out companies and venture capital abstract the creation of university spin out companies that create wealth is a major policy objective of governments and universities finance is a catalyst of this wealth creation yet access to venture capital is a major impediment faced by these companies in this article we adopt a finance pecking order perspective to examine the problems faced by those university spin out companies seeking to access venture capital we triangulate evidence from spin out companies university technology transfer offices and venture capital firms in the uk and continental europe to identify the problems and to suggest policy developments for these parties as well as government we compare perceptions of high tech venture capital firms that invest in spin outs with those that do not and also consider vcs views on spin outs versus other high tech firms our evidence identifies a mismatch between the demand and supply side of the market in line with the pecking order theory venture capitalists prefer to invest after the seed stage however in contrast to the pecking order theory ttos see venture capital as more important than internal funds early on we develop policy implications for universities technology transfer offices academic entrepreneurs venture capital firms and government and suggest areas for further research

coordination and collaboration regimes in an anarchic world the study of regimes can contribute to our understanding of international politics only if regimes represent more than international organizations and less than all international relations the conceptualization of regimes developed here accepts the realist image of international politics in which autonomous self interested states interact in an anarchic environment yet there are situations in which rational actors have an incentive to eschew unconstrained independent decision making situations in which individualistic self interested calculation leads them to prefer joint decision making regimes because independent self interested behavior can result in undesirable or suboptimal outcomes these situations are labeled dilemmas of common interests and dilemmas of common aversions to deal with these states must collaborate with one another or coordinate their behavior respectively thus there are different bases for regimes which give rise to regimes with different characteristics coordination is self enforcing and can be reached through the use of conventions collaboration is more formalized and requires mechanisms both to monitor potential cheating and to insure compliance with the regime the article elucidates the assumptions of such an interest based approach to regimes assimilates alternative explanations into this framework and develops the implications for regime maintenance and change

bargaining enforcement and international cooperation neoliberals and their neorealist critics have debated the relative importance of two main obstacles to international cooperation problems of cheating and enforcement and problems of relative gains by contrast i argue that problems of international cooperation have a common strategic structure in which a third distinct obstacle plays a crucial role almost regardless of the issue area states must first resolve the bargaining problem of agreeing on terms before they can implement and begin to enforce an agreement furthermore the bargaining and enforcement problems interact using a game model i show that if states must bargain to determine the deal to be enforced the shadow of the future cuts two ways a high expectation of continued interactions may make enforcing the agreement easier but it can also give states an incentive to bargain harder delaying agreement in hopes of getting a better deal empirical evidence from trade and arms control negotiations suggests that this mechanism may help to explain the costly standoffs that are often observed in international politics and are problematic for received neoliberal theories

the price of oil lower and upper bounds abstract the magnitude of the recent dramatic fall in oil prices has once again like the rises of 1973 and 1979 taken most energy analysts and oil industry participants by suprise creating even greater uncertainty about future developments in the oil market in this paper we suggest that a return to first principles is appropriate at this time in order to help clarify the outlook two simple hotelling type models of the oil market are described one of the perfectly competitive market the other of a purely monopolistic market these two models are used to derive lower and upper bounds on oil prices a reinterpretation of the history of the oil market over the last 25 years is suggested with some implications for the future course of oil prices

a synthesis of the macroeconomic approaches to exchange rate determination abstract the paper develops a general model with the goods money domestic and foreign bond and labor markets the special assumptions needed to generate the predictions of the different approaches from the model are found it turns out that the assumption of perfect capital mobility essentially generates the monetarist predictions and perfect monetary sterilization by the central bank at a fixed interest rate the predictions of the elasticity absorption approach the approaches turn out to be independent rather than conflicting parts of the general model each approach abstracting from what the other is analyzing this is technically done by dichotomizing the general model the monetarists making the money market equation and the keynesians the goods market and balance payments equations the independent ones while the keynesian monetarist and short term portfolio balance approaches differ in their policy regime assumptions the long run portfolio balance approach differs in its equilibrium condition by constraining the trade balance to equilibrium

a note on opec market power and oil prices a static model of opec as a cartel with a fringe group of competitive producers is used to define short and long run monopoly price curves as a function of opec s market share a static model is used on the grounds that oil as adelman has argued is not a depletable resource in the sense of the hotelling theory but is more like a normal good that can be produced with application of labour capital resources and technology a rational cartel will choose prices that lie between the two curves the shapes of the curves depend on the world price elasticity of demand for oil and on the supply response rate of competitive oil producers as opec s market share increases the distances between the two curves increase rapidly this could lead to an unstable market since any price between the two curves would be obtainable in the short run in the long run prices above the long run price curve will result in a loss of market share for the cartel except in a growing market reducing the cartel s market power future work will extend the model to consider dynamic pricing strategies as a function of the cartel s discount rate and world market response rate

rewarding impatience revisited a response to goodrich in rewarding impatience a bargaining and enforcement model of opec international organization spring 2004 i presented a theoretical model that suggested that in strategic situations where a bargaining phase is followed by an enforcement phase that resembles a prisoners dilemma impatient actors earned better outcomes than their more patient rivals i also modeled the division of cartel profits in the organization of petroleum exporting countries opec particularly with regard to the relationship between bargaining strength and disparate time horizons and found that there is some threshold level for which states that discount the future more heavily tend to receive better production offers than those that do not the critique presented in goodrich deals with the final section of the article which presents the results of statistical analysis testing the implications of these theoretical models i am grateful to jeff lewis drew linzer and ken schultz for suggestions and advice many thanks to thomas pla mper for sharing the computer code for his procedure to analyze fixed effects with time invariant covariates in stata the usual disclaimers apply

top management s attention to discontinuous technological change corporate venture capital as an alert mechanism technological discontinuities pose serious challenges to top managers attention these discontinuities which often occur at the fringes of an industry are usually driven by innovative and often venture capital backed start ups creating new products and transforming existing industries in ways that are difficult for incumbent managers to understand against the backdrop of their existing cognitive schemata however failing to appreciate and embrace successful technological discontinuities might endanger incumbents very existence extending the attention based view we explore whether and how interorganizational relationships guide top managers attention either to or away from technological discontinuities we propose that homophilous relationships e g alliances with industry peers should exhibit a negative relationship with incumbents timely attention to technological discontinuities whereas heterophilous relationships e g with venture capitalists as a result of coinvestments should exhibit a positive relationship furthermore we hypothesize that the status of the partners strengthens the effect of homophilous and heterophilous relationships with the timely attention of top managers to technological discontinuities based on a longitudinal study of the incumbents in four information and communications technology industry sectors we find that heterophilous ties through corporate venture capital cvc coinvesting with high status venture capital firms exhibit a strong positive relationship with timely attention cvc when it connects senior management to high status venture capitalists through coinvestments has a special role in directing top managers attention to technological discontinuities and ensuing business opportunities implications for the understanding of the role of interorganizational ties as structural determinants of top managers attention are discussed

rewarding impatience a bargaining and enforcement model of opec in this article i make two primary contributions to the literature on international cooperation first i present a simple version of fearon s bargaining and enforcement model and show that impatience as captured in the discount factor can be a source of bargaining strength when the outcome of the bargaining phase is followed by an enforcement phase that resembles a prisoners dilemma second i illustrate how to apply this model to the question of the division of cartel profits within the organization of petroleum exporting countries opec particularly with regard to the relationship between bargaining strength and disparate time horizons i find that for some critical threshold level states that discount the future more heavily tend to receive better oil production offers than those that do not i examine empirical evidence that suggests that countries in opec fall into the range where this proposition holds in other words relatively poor populous countries and relatively unstable ones are allowed by opec to overproduce i am grateful to christino arroyo jim denardo joe gochal james honaker shuhei kurizaki drew linzer barry o neill art stein hiroki takeuchi george tsebelis jana von stein and two anonymous referees for helpful comments i am especially indebted to ken schultz for his advice and to randy calvert for a helpful discussion during the 2003 eitm summer institute at washington university in st louis

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

the emperor has no clothes the limits of opec in the global oil market most scholars and policymakers believe opec can and does influence the price of oil by acting as a cartel this paper argues that most of the conventional wisdom about opec is wrong opec rarely if ever influences the oil production rate in its member states further opec has almost no lasting impact on world prices except under rare conditions there was one occasion on which opec did have a significant impact on world oil prices namely the 1973 oil crisis but opec s role in the event has been greatly misunderstood the circumstances of the crisis were highly exceptional making it unlikely that the organization could ever have a similar impact on world oil prices again this paper seeks to correct the misunderstanding about opec s role and replace it with a better understanding of the organization i argue that opec is dysfunctional as a cartel as it has little or no causal impact on its members choices about production levels or investment in production capacity opec s role is obscured in part by the complexity of the world oil market and in part by misdirection by policymakers especially within opec many scholars especially economists have argued that opec should be understood as a cartel designed to solve a prisoner s dilemma pd coordination game yet opec s persistence is better understood as a widespread failure to update beliefs about the organization a failure that is driven by information asymmetry and politics the fact that such a widespread belief about the world s most important commodity market could be wrong can help us better understand international regimes

opec behavior a test of alternative hypotheses since interpretations of past and future oil price patterns depends on the model chosen the author tests and compares alternative theories of opec as a first step in validating the choice on any one model the results show that among opec countries the partial market sharing cartel model is the only model not rejected by at least some of the 11 members and gives the best explanation of production in comparison with 11 non opec countries the competitive model could not be rejected for 10 of the 11 non opec producers this raises the question of why if opec is a cartel friedman s predictions have not come true and introduces new questions for future research 19 references 3 tables

clustering in crude oil prices and the target pricing zone hypothesis abstract this paper studies the target pricing zone tpz hypothesis for crude oil by examining price clustering in the dollar digit it is hypothesized that price clustering occurs within an established tpz if opec is able to defend the upper and lower bounds through output changes the results show that prices strongly cluster around the dollar digit value of 9 within the tpz sub periods but not outside the sub periods furthermore the degree of clustering declines when production capacity utilization is high and when production significantly exceeds quotas consistent with opec s inability to defend the zone nine centered clustering also results in lower contemporaneous and next day volatility these results support the target pricing zone hypothesis of crude oil

on the economic determinants of oil production theoretical analysis and empirical evidence for small exporting countries abstract in this paper decisions regarding production in oil exporting countries are studied by means of theoretical analysis and empirical investigation in particular we aim at describing the relationship between oil production levels and changes in the world oil demand and prices intertemporal production decisions by a representative oil producer are modeled by means of a partial equilibrium model in this theoretical model oil producers are subject to exogenous shocks in world oil consumption and prices oil companies can change output levels only by incurring a fixed cost results from the simulation of this model show a strong relationship between oil production and changes in world oil consumption on the contrary the effects of changes in real oil prices on oil production decisions seem to be much lower results from the simulation of the theoretical model are then empirically investigated using time series econometric techniques the empirical evidence supports the hypothesis that oil producing countries are characterized by different responses to changes in world oil demand and in real oil prices for many countries production rapidly adjusts to changes in consumption whereas responses of oil production to innovations in real oil prices are found to be not statistically significant in addition when non linearities in the relationship between world oil demand prices and output levels are allowed for evidence of asymmetric effects of shocks to exogenous variables on output levels is found for some countries

reputation and decision making under ambiguity a study of u s venture capital firms investments in the emerging clean energy sector this study examines the role of reputation on decision making under ambiguity drawing on social cognition and behavioral theories we propose that a firm s reputation exerts dual pressures on its decision making under ambiguity on the one hand a firm s reputation increases its aspirations for future performance and promotes its engagement in risky strategies to achieve them on the other hand preserving the already established reputation requires a firm to deliver consistent performance over time which promotes greater use of risk reduction strategies our analyses of the u s venture capital firms investments in the clean energy sector from 1990 to 2008 demonstrate that while reputable firms are more likely to invest in the emerging sector they also employ risk reduction strategies more extensively the sector s legitimation further influences these firms investment decisions both directly and through its interaction with firm reputation

do uk venture capitalists still have a bias against investment in new technology firms abstract the growing economic and political importance of the new economy throughout 1990s has added greater saliency to both supply and demand sides policy oriented questions about the availability of venture capital as a catalyst for new or high technology based early stage investments this paper analyses the changing attitudes of uk venture capital firms to investment in technology enterprises a 1999 survey of 60 uk venture capital firms was structured to be directly comparable to a 1991 study the main findings demonstrate the increasing importance of technology investments to vc firms particularly generalists accordingly the adoption of collaborative strategies to access intellectual capital and complimentary resources via inter firm networks is particularly important the authors conclude that despite material improvements a bias is likely to remain against vc firms involvement in the earliest seed and start up stages of the technology investment cycle

venture capital and the birth of the local area networking industry abstract venture capital has played an important role in funding the development of a number of us high technology industries economists and business scholars utilizing models based in traditional economics have studied venture capital from the perspective of investment decision making these models provide significant insights and yet they do not explain the actual operation of venture capital this case study of the creation of lan industry utilizes a synthesis of the dominant design and social constructionist perspectives to create a more nuanced explanation of how the practice of venture capitalists operates to create firms and industries

does international law promote the peaceful settlement of international disputes evidence from the study of territorial conflicts since 1945 in this article we explain the role of international law in the resolution of territorial disputes from 1945 to 2000 in doing so we focus on three outcomes of interest first when do states choose to revise the territorial status quo through negotiations instead of force second when are states able to reach a final settlement third when do states prefer a process of legal dispute resolution i e adjudication or arbitration to bilateral negotiations to answer these questions we argue that when the legal principles relevant to the dispute are unambiguous and clearly favor one side a law based focal point will emerge this focal point in turn facilitates the settlement process by helping leaders overcome distribution problems a central obstacle in reaching a final agreement we find strong and consistent empirical support for our hypotheses regarding international law and peaceful dispute resolution i s a legal advantage an important source of bargaining leverage for state leaders as they negotiate over security issues in international disputes does international law provide the foundation for the peaceful settlement of security related disputes in a system defined by anarchy there are reasons to question whether international law can play a central role in the orderly and peaceful resolution of disputes when security issues are at stake for leaders indeed many would argue that the shadow of military power is an ever present influence over such bargaining processes and that international law is therefore not a viable substitute for military strength and credible threats of force to secure the peace as a result although law may have an important role to play in governing international economic relations e g goldstein rivers and tomz 2007 simmons and hopkins 2005 von stein 2005 zangl 2008 where the parties will often have strong incentives to coordinate their behavior the role of law in settling disagreements over security related issues is a far more contentious question among scholars and policy makers in such situations leaders will often have divergent preferences over how the issue should be resolved making the identification of a mutually acceptable solution difficult the security aspect of the dispute compounds this problem because leaders will be reluctant to sign any agreement that they believe might decrease

the secrets of industry are in the air industrial cooperation and the organizational dynamics of the innovative firm abstract the purpose of this exploratory work is to contribute to the elaboration of an analytical framework appropriate to the study of the organizational forms involved in technological cooperation the approach used herein is one of formulating those properties of the process of integration and association of resources that are not based on the economics of transaction costs these properties suggest that the integration and the association of resources are necessary for the creation of technology but are also a source of irreversibility after having defined the concept of organizational balance of innovative firms which corresponds to the possibility of reconciling specific resources with the reversibility of technological capacity i will attempt to show that the forms of cooperation as much intra as inter firm constitute the basic principle of organization and functioning of innovative firms i shall be able thus to give a positive reading of technological cooperation on the basis of an economic analysis of organization

learning patterns in venture capital investing in new industries using an organizational learning perspective we link the decision by venture capital vc firms to invest early in a new high technology industry to three experiential learning mechanisms the familiarity associated with accumulation of early funding decisions the shaping or imprinting effect of the firm s very first such decision and the decay or forgetting associated with the dormancy of prior such decisions we find support for these learning patterns using data on the investments made by us vc firms between 1962 and 2004

the effects of foreign disturbances under flexible exchange rates abstract foreign fiscal expansion has a contractionary and monetary expansion an expansionary effect on the small economy in the real wage model the reverse conclusions hold in the money wage model only if the income elasticity of the demand for money is one or greater the same results hold also for the stationay state effects this theory provides an explanation in the policy mix of the united states for the recent lacklustre performance of europe under rational expectations foreign monetary expansion leads to an overshooting appreciation fiscal expansion leading to several possible exchange rate responses the new results are produced by consistently specified money demand and import functions the supply side and the wealth effect

reputation and hegemonic stability a game theoretic analysis we develop and explicate a game theoretic model in which repeated play incomplete information and reputation are major elements a significant advance of this model is the way it represents cooperation under incomplete information among rational actors of different sizes the model is used to formalize certain aspects of the theory of hegemonic stability it shows that the dilemma or limits of hegemonic stability look like natural attributes of games where reputation is involved unifying both benevolent and coercive strands of hegemony theory an example drawn from recent developments in the organization of petroleum exporting countries shows how our model of reputation guides the study of hegemonic regime construction we conclude by comparing the nature of cooperative behavior under conditions of complete and incomplete information

systems competition and network effects this paper discusses firm behavior market performance and the public and private institutions that arise in systems markets i e markets where consumers use compatible components together to generate benefits in such markets which include communications networks and hardware software networks popular products are inherently more valuable these network effects can drive corporate strategies and are critical in understanding innovation in many high technology markets the discussion here emphasizes the dynamics of consumer adoption decisions in the presence of network effects competition between incompatible systems and how suppliers choose which components are compatible and which are not

the equilibrium price range of oil economics politics and uncertainty in the formation of oil prices abstract this paper attempts to clarify the articulation between economic and political factors in the formation of petroleum prices it begins with defining the political factors then it gives a definition of the dynamic equilibrium price of a mineral commodity market the essential point is that when actors control significant low cost reserves and will not or cannot adopt behaviour of a substantial economic rationality then the economic analysis does not allow a unique dynamic equilibrium price to be determined however it does permit definition of an equilibrium price range within which political preferences may be expressed finally the paper draws some conclusions on what could be discussed within the scope of a new oil producer consumer dialogue