human capital inequality and economic growth some new evidence this paper provides new measures of human capital inequality for a broad panel of countries taking attainment levels from barro and lee 2001 we compute gini coefficients and the distribution of education by quintiles for 108 countries over five year intervals from 1960 to 2000 using this new cross country data on human capital inequality two main conclusions are obtained first most countries in the world have tended to reduce the inequality in human capital distribution second human capital inequality measures provide more robust results than income inequality measures in the estimation of standard growth and investment equations

do the electronic books reinforce the dynamics of book supply chain market a theoretical analysis abstract in this paper we develop a set of mathematical models to examine and compare different pricing and launch strategies of electronic books e books under two types of copyright arrangements namely the royalty and buyout arrangements we conduct a sensitivity analysis to assess how various market structure parameters influence the publisher s pricing options in different copyright launch modes and channels of distribution aimed at gaining managerial insights into the complex issues in pricing and launch strategies involving e books we recommend optimal launch strategies and pricing decisions for the e book supply chain

wealth accumulation over the life cycle and precautionary savings this article constructs and simulates a life cycle model of wealth accumulation and estimates the parameters of the utility function the rate of time preference and the coefficient of risk aversion by matching the simulated median wealth profiles with those observed in the panel study of income dynamics and in the survey of consumer finances the estimates imply a low degree of patience and a high degree of risk aversion the results are used to study the importance of precautionary savings in explaining wealth accumulation they imply that wealth accumulation is driven mostly by precautionary motives at the beginning of the life cycle whereas savings for retirement purposes become significant only closer to retirement

risk preferences are not time preferences balancing on a budget line comment in a recent experimental study of intertemporal risky decision making andreoni and sprenger 2012 find that subjects exhibit a preference for intertemporal diversification which is inconsistent with discounted expected utility theory it was claimed that their results are also at odds with models involving probability weighting such as rank dependent utility and cumulative prospect theory here we demonstrate however that rank dependent probability weighting explains intertemporal diversification if decision makers care about portfolio risk moreover we provide a unified account of all of andreoni and sprenger s key findings

measuring discounting without measuring utility we introduce a new method to measure the temporal discounting of money unlike preceding methods our method requires neither knowledge nor measurement of utility it is easier to implement clearer to subjects and requires fewer measurements than existing methods

social motives vs social influence an experiment on interdependent time preferences we report experimental evidence on the effects of social preferences on intertemporal decisions to this aim we design an intertemporal dictator game to test whether dictators modify their discounting behavior when their own decision is imposed on their matched recipients we run four different treatments to identify the effect of payoffs externalities from those related to information and beliefs our descriptive statistics show that heterogeneous social time preferences and information about others time preferences are significant determinants of choices dictators display a marked propensity to account for the intertemporal preferences of recipients both in the presence of externalities social motives and or when they know about the decisions of their matched partners social influence we also perform a structural estimation exercise to control for heterogeneity in risk attitudes as for individual behavior our estimates confirm previous studies in that high risk aversion is associated with low discounting as for social behavior we find that social motives outweigh social influence especially when we restrict our sample to pairs of dictators and recipients who satisfy minimal consistency conditions

risk preferences are not time preferences on the elicitation of time preference under conditions of risk comment andreoni and sprenger 2012a b report evidence that distinct utility functions govern choices under certainty and risk i investigate the robustness of this result to the experimental design i find that the effect disappears completely when a multiple price list instrument is used instead of a convex time budget design alternatively the effect is reduced by half when sooner and later payment risks are realized using a single lottery instead of two independent lotteries the result is thus at least partially driven by intertemporal diversification supporting an explanation in terms of concavity of the intertemporal and not only atemporal utility function jel c91 d81 d91

memory and discounting theory and evidence abstract heterogeneous memory capacity is largely neglected in the economics literature although it may have profound economic implications adopting the concept of memory utility proposed by gilboa postlewaite and samuelson 2016 we explore the relationship between memory capacity and individual discounting behavior by building a simple two period model and comparing its predictions with experimental data both theoretical and experimental evidence confirm that memory capacity and discount rates are positively correlated

bricks vs clicks the impact of manufacturer encroachment with a dealer leasing and selling of durable goods in durable goods markets many brand name manufacturers including ibm hp epson and lenovo have adopted dual channel supply chains to market their products there is scant literature however addressing the product durability and its impact on players optimal strategies in a dual channel supply chain to fill this void we consider a two period dual channel model in which a manufacturer sells a durable product directly through both a manufacturer owned e channel and an independent dealer who adopts a mix of selling and leasing to consumers our results show that the manufacturer begins encroaching into the market in period 1 but the dealer starts withdrawing from the retail channel in period 2 moreover as the direct selling cost decreases the equilibrium quantities and wholesale prices become quite angular and often nonmonotonic among other results we find that both the dealer and the supply chain may benefit from the manufacturer s encroachment our results also indicate that both the market structure and the nature of competition have an important impact on the player s dealer s optimal choice of leasing and selling

who benefit from agency model a strategic analysis of pricing models in distribution channels of physical books and e books abstract we model a supply chain consisting of an author a publisher a physical bookstore p bookstore and an electronic bookstore e bookstore we employ game theory to examine and compare two types of pricing models of electronic books e books wholesale model and agency model furthermore we consider decentralized and horizontally centralized channels the p bookstore and e bookstore are independent in the former but centralized in the latter we adopt a simplified linear demand model to study when the publisher and the e bookstore both benefit from the agency model we find that a pareto zone where both the publisher and e bookstore benefit from the agency model always exists in the decentralized channels in the agency model the benefit from e book sales may be more than the loss in physical book p book sales by contrast a pareto zone exists in the horizontally centralized channels if the wholesale price of p books is not excessively low and the price elasticity is not extremely large to check the robustness of our results we relax model assumptions and conduct numerical studies in the pareto zone to investigate how various parameters such as authors royalty rate affect profit improvement and readers welfare we show that the publisher and bookstore have great potentials for profit improvement in the pareto zone significant improvement is also observed in readers welfare

does human capital matter for growth in oecd countries a pooled mean group approach abstract unlike previous panel data studies using an improved dataset and pmg estimators we find a significant impact of human capital on growth the estimated long run elasticity of output to human capital is consistent with the microeconomic evidence on returns to schooling

a supply chain model with direct and retail channels abstract we study a dual channel supply chain in which a manufacturer sells to a retailer as well as to consumers directly consumers choose the purchase channel based on price and service qualities the manufacturer decides the price of the direct channel and the retailer decides both price and order quantity we develop conditions under which the manufacturer and the retailer share the market in equilibrium we show that the difference in marginal costs of the two channels plays an important role in determining the existence of dual channels in equilibrium we also show that demand variability has a major influence on the equilibrium prices and on the manufacturer s motivation for opening a direct channel in the case that the manufacturer and the retailer coordinate and follow a centralized decision maker we show that adding a direct channel will increase the overall profit our numerical results show that an increase in retailer s service quality may increase the manufacturer s profit in dual channel and a larger range of consumer service sensitivity may benefit both parties in the dual channel our results suggest that the manufacturer is likely to be better off in the dual channel than in the single channel when the retailer s marginal cost is high and the wholesale price consumer valuation and the demand variability are low

convex time budgets and individual discount rates in the long run the purpose of this study is to use experimental data to estimate individual discount rates and test for hyperbolic discounting over a long time horizon to do this we employ the convex time budget experimental approach with cash payments over a 20 year time horizon to date there are few experimental studies that explore discount rates beyond a 1 year time horizon previous experimental studies that focus on short time horizons find high discount rates which may not be applicable to decisions that affect outcomes in the distant future our findings are quite similar to the average rate of 4 9 found by grijalva et al environ resour econ 59 39 63 2014 who similarly use a 20 year time horizon but use the multiple price list elicitation method along with payment via government savings bonds we find annual discounts rates in the range of 1 9 5 5 depending on the specific model used we also find evidence for declining discount rates and that this hyperbolic pattern of behavior is related to the confidence subjects have in receiving distant future payments

human capital and growth abstract this paper describes a growth model with the property that human capital accumulation can account for all observed growth the model is shown to be consistent with evidence on individual productivities as measured by census earnings data the central hypothesis is that we learn more when we interact with more productive people

interindustry variation in the costs of job displacement job displacement entails a substantial wage reduction for most displaced workers we show that the mean reduction the tenure profile of reductions and the experience profile of reductions all vary substantially across industries we then link this interindustry variation to analogous variation in firm size unionization wage levels and the incidence of employer provided training while these industry characteristics explain some of the interindustry variation in mean wage reductions they do not explain variation in the tenure or experience profiles of wage reductions

what do we know about economic growth or why don t we know very much summary the last 10 years has seen an explosion in cross country econometric studies of growth driven by two factors new mathematical models of the growth process that lend themselves to econometric testing and new data sets that make such testing possible this paper looks at a selective review of these studies it concludes that the results are disappointing in that no model has proven robust to trial by repeated regression the paper suggests some reasons for this including that the tested models tend to be ahistorical and over simple in terms of their causal accounts it concludes with possible lessons for econometric work in this area 2000 elsevier science ltd all rights reserved

present bias quasi hyperbolic discounting and fixed costs in this paper we elicit preferences for money time pairs via experimental techniques we estimate a general specification of discounting that nests exponential and hyperbolic discounting as well as various forms of present bias including quasi hyperbolic discounting our experimental data do not appear peculiar in any dimension in particular we find clear evidence for present bias as most of the previous literature however no evidence for quasi hyperbolic discounting is found and the data strongly favor instead a specification with a small present bias in the form of a fixed cost of the order of 4 on average across subjects with such a fixed cost the curvature of discounting is imprecisely estimated and exponential discounting is hardly rejected in this specification the present bias tends to vanish for economically relevant monetary rewards

mail versus mall a strategic analysis of competition between direct marketers and conventional retailers consumers now purchase several offerings from direct sellers including catalog and internet marketers these direct channels exist in parallel with the conventional retail stores the availability of multiple channels has significant implications for the performance of consumer markets the literature in marketing and economics has however been dominated by a focus on the conventional retail sector this paper is an effort toward modeling competition in the multiple channel environment from a strategic viewpoint at the outset a parsimonious model that accommodates the following consumer and market characteristics is introduced first the relative attractiveness of retail shopping varies across consumers second the fit with the direct channel varies across product categories third the strength of existing retail presence in local markets moderates competition fourth in contrast with the fixed location of the retail store that anchors its localized market power the location of the direct marketer is irrelevant to the competitive outcome the model is first applied in a setting where consumers have complete knowledge of product availability and prices in all channels in the resulting equilibrium the direct marketer acts as a competitive wedge between retail stores the direct presence is so strong that each retailer competes against the remotely located direct marketer rather than against neighboring retailers this outcome has implications for the marketing mix of retailers which has traditionally been tuned to attract consumers choosing between retail stores in the context of market entry conditions under which a direct channel can access a local market in retail entry equilibrium are derived our analysis suggests that the traditional focus on retail entry equilibria may not yield informative or relevant findings when direct channels are a strong presence next the role of information in multiple channel markets is modeled this issue is particularly relevant in the context of direct marketing where the seller can typically control the level of information in the marketplace sometimes on a customer by customer basis e g by deciding on the mailing list for a catalog campaign when a certain fraction of consumers does not receive information from the direct marketer the retailers compete with each other for that fraction of the market the retailer s marketing mix has to be tuned in this case to jointly address direct and neighboring retail competition the level of information disseminated by the direct marketer is shown to have strategic implications and the use of market coverage as a lever to control competition is described even with zero information costs providing information to all consumers may not be optimal under some circumstances in particular when the product is not well adapted to the direct channel the level of market information about the direct option should ideally be lowered the only way to compete with retailers on a larger scale with a poorly adapted product is by lowering direct prices which lowers profits lowering market information levels and allowing retailers to compete more with each other facilitates a higher equilibrium retail price in turn this allows a higher direct price to be charged and improves overall direct profit on the other hand when the product is well adapted increasing direct market presence and engaging in greater competition with the retail sector yields higher returns the finding that high market coverage may depress profits raises some issues for further exploration first implementing the optimal coverage is straightforward when the seller controls the information mechanism as in the case of catalog marketing the internet in contrast is an efficient mechanism to transmit information but does not provide the sellers with such control over the level of market information a key reason is that the initiative to gather information on the internet lies largely with consumers the design and implementation of mechanisms to control aggregate information levels in electronic markets can therefore be an important theme for research and managerial interest second direct marketers have traditionally relied on the statistical analysis of customer records to decide on contact policies the analysis in this paper reveals that these policies can have significant strategic implications as well research that integrates the statistical and strategic aspects could make a valuable contribution the paper concludes with a discussion of issues for future research in multiple channel markets including avenues to model competition in settings with multiple direct marketers

incomplete market demand tests for kreps porteus selden preferences abstract what does utility maximization subject to a budget constraint imply for intertemporal choice under uncertainty assuming consumers face a two period consumption portfolio problem where asset markets are incomplete we address this question following both the standard local infinitesimal and finite data approaches to focus on the separate roles of time and risk preferences individuals maximize kps kreps porteus selden preferences the consumption portfolio problem is decomposed into a one period portfolio problem and a two period certainty consumption saving problem we derive demand restrictions which are necessary and sufficient for portfolio choices and certainty intertemporal consumption to have been generated by maximization respectively of a one period expected utility representation and a certainty representation of time preferences conditions are provided for recovering the building block time and risk preference utilities for the finite data case we derive a set of linear inequalities that are necessary and sufficient for observations to be consistent with the maximization of kps utility

a strategic analysis of dual channel supply chain design with price and delivery lead time considerations abstract this paper extends the work of chiang et al 2003 by investigating how price and delivery lead time decisions affect channel configuration strategy under either the manufacturer owned or the decentralized mode we show the choice of channel structure depends on customer acceptance of the online channel and the cost parameters following a threshold policy in both forms of ownership we prove that the strategic use of direct marketing to mitigate the double marginalization the major finding in chiang et al 2003 still holds even in this general situation moreover pareto zone exists where both manufacturer and retailer outperform their counterparts in the traditional indirect channel only case thus indicating that mitigating double marginalization may bring mutual benefits we also compare pricing and delivery lead time decisions between different forms of ownership or between different channel structures under the same form of ownership the manufacturer adopts a slow down deliver later approach and speeds up delivery to serve customers with a higher sensitivity to delivery lead time when he owns the whole indirect channel but chooses to stay fast and brag about better services and surprisingly slows down the speed of service when customers are more sensitive to delivery lead time due to the internal competition between two channels in the decentralized mode

the less you discount the more it shows you really care interpersonal discounting in households abstract household members make monetary tradeoffs across time classical economics treats these decisions as if one rational individual makes them this assumption masks important other regarding concerns between spouses we designed an artefactual field experiment and collected data from 94 pairs of cohabiting couples to capture the complex nature of intra household time preferences estimation results show that 1 the interpersonal discount rate the rate used to tradeoff intertemporal payoffs between one s own payoff and the spouse s payoff is significantly different from the individual discount rate and 2 the interpersonal discount rate may provide an alternative way for people to express their other regarding preferences towards their spouses

strotz meets allais diminishing impatience and the certainty effect abstract decision makers tend to exhibit a higher degree of impatience when considering a delay to an immediate reward than when contemplating an identical delay to an equal future reward this work argues that diminishing impatience originates from the distinction between the certain present and the risky future a simple functional representation of preferences exhibiting time inconsistency when the future is uncertain is derived experimental evidence which is inconsistent with other formulations that account for diminishing impatience supports the proposed approach the new theory uncovers a tight relation between diminishing impatience and well known behavioral regularities in choice under risk and uncertainty jel d12 d81

comment on risk preferences are not time preferences separating risk and time preference andreoni and sprenger 2012a b observe that utility functions are distinct for risk and time preferences and show that their findings are consistent with a preference for certainty we revisit this question in an enriched experimental setting in which subjects make intertemporal decisions under different risk conditions the observed choice behavior supports a separation between risk attitude and intertemporal substitution rather than a preference for certainty we further show that several models including epstein and zin 1989 chew and epstein 1990 and halevy 2008 exhibit such a separation and can account for the overall experimental findings jel c91 d81 d91 risk and time preferences are the cornerstones of economic analyses regarding risk preference expected utility eu has been the predominant theory in which the curvature of the utility index captures risk attitude regarding time preference discounted utility is the most widely used model in which the curvature of the utility index captures intertemporal substitution when risk and time are intertwined integrating the two theories yields discounted expected utility deu which evaluates a contingent consumption plan c c c 3 as follows

pricing and lead time decisions in decentralized supply chains this paper studies a decentralized supply chain consisting of a supplier and a retailer facing price and lead time sensitive demands a stackelberg game is constructed to analyze the price and lead time decisions by the supplier as the leader and the retailer as the follower the equilibrium strategies of the two players are obtained using the performance of the corresponding centralized system as a benchmark we show that decentralized decisions in general are inefficient and lead to inferior performance due to the double marginalization effect however further analysis shows that the decision inefficiency is strongly influenced by market and operational factors and if the operational factors are dominating it may not be significant this shows that before pursuing a coordination strategy with retailers a supplier should first improve his or her own internal operations

does human capital constrain the impact of foreign direct investment and remittances on economic growth in ghana this article empirically investigates whether human capital constrains the impact of foreign direct investment fdi and remittances on economic growth in ghana an economic growth model for ghana is specified and estimated using fully modified ordinary least squares fmols estimator and employing annual data spanning the period 1965 to 2008 empirical results indicate that fdi and remittances are key determinants of economic growth in ghana results indicate that human capital enhances the impact of fdi and remittances on economic growth although both government expenditure and trade openness are growth enhancing government expenditure appears to crowd out private investment empirical results also indicate that domestic inflationary pressures unstable political environment and volatile global economy exert a negative impact on economic growth in ghana

where has all the education gone cross national data show no association between increases in human capital attributable to the rising educational attainment of the labor force and the rate of growth of output per worker this implies that the association of educational capital growth with conventional measures of total factor production is large strongly statistically significant and negative these are on average results derived from imposing a constant coefficient however the development impact of education varied widely across countries and has fallen short of expectations for three possible reasons first the institutional governance environment could have been sufficiently perverse that the accumulation of educational capital lowered economic growth second marginal returns to education could have fallen rapidly as the supply of educated labor expanded while demand remained stagnant third educational quality could have been so low that years of schooling created no human capital the extent and mix of these three phenomena vary from country to country in explaining the actual economic impact of education or the lack thereof

time preference and real investment abstract this paper studies the investment timing problem of an entrepreneur with a non tradable real option with undiversifiable risk we find that the time preference can have a significant impact on the risk attitude toward the idiosyncratic risk which results from the wealth effect on the implied option value if the agent is impatient patient an increase in idiosyncratic volatility increases decreases the agent s value and delays hastens investment this finding suggests several important implications and empirical predictions for investment decisions in private firms and public firms with concentrated ownership

economic growth as a function of human capital internet and work the world bank has suggested the need to enhance information and communication technology skills in all sectors because a 10 increase in internet connectivity was found to boost gdp growth by 1 38 simultaneously the oecd argued that high internet access rates generate a 2 increase in gdp because the internet positively affects economic growth we investigated the relationship between an economically active population human capital and technology to evaluate these effects in mexico a data series from 1991 to 2010 was analysed in three stages according to the least squares method a cobb douglas function under the solow model was considered technology and internet access were found to positively affect top level students and graduate students and thus contribute to the global innovation index

a theory of anticipated utility abstract a new theory of cardinal utility with an associated set of axioms is presented it is a generalization of the von neumann morgenstern expected utility theory which permits the analysis of phenomena associated with the distortion of subjective probability

direct marketing indirect profits a strategic analysis of dual channel supply chain design the advent of e commerce has prompted many manufacturers to redesign their traditional channel structures by engaging in direct sales the model conceptualizes the impact of customer acceptance of a direct channel the degree to which customers accept a direct channel as a substitute for shopping at a traditional store on supply chain design the customer acceptance of a direct channel can be strong enough that an indepent manufacturer would open a direct channel to compete with its own retailers here direct marketing is used for strategic channel control purposes even though it is inefficient on its own and surprisingly it can profit the manufacturer even when so direct sales occur specifically we construct a price setting game between a manufacturer and its independent retailer direct marketing which indirectly increases the flow of profits through the retail channel helps the manufacturer improve overall profitability by reducing the degree of inefficient price double marginalization while operated by the manufacturer to constrain the retailer s pricing behavior the direct channel may not always be detrimental to the retailer because it will be accompanied by a wholesale price reduction this combination of manufacturer pull and push can benefit the retailer in equilibrium finally we show that the mere threat of introducing the direct channel can increase the manufacturer s negotiated share of cooperative profits even if price efficiency is obtained by using other business practices

when should a manufacturer set its direct price and wholesale price in dual channel supply chains abstract applying an observable delay game framework developed in noncooperative game theory we investigate the timing problem concerning when a manufacturer managing dual channel supply chains consisting of a retail channel and a direct channel should post its wholesale price and direct price conventionally operational research models describing dual channel supply chains examine price competition where the retailer and the manufacturer simultaneously determine the retail and direct prices respectively in contrast to this conventional setting our model demonstrates that such simultaneous price competition never arises if the manufacturer and retailer can choose not only the level of the price but also the timing of pricing if the manufacturer sets the direct price after setting the wholesale price to the retailer the retailer accelerates the timing of retail pricing prior to the direct price setting by the manufacturer our findings suggest that the manufacturer should post the direct price before or upon but not after setting the wholesale price for the retailer this upfront posting of the direct price not only constitutes the subgame perfect nash equilibrium of the noncooperative game between channel members but also maximizes the profits for a manufacturer employing multichannel sales strategies

market information and firm performance the value of new information depends on how accurate the information is but it may also depend on the characteristics of the firm and the nature of the industry it operates in we develop a game theoretic model to understand how firm and industry characteristics moderate the effect of market information on firm profits our results suggest that information is more valuable when product substitutability is higher suggesting that information is of greater value in more competitive industries our results also suggest that although industry size does not affect the value of information information is more valuable for larger firms we find that except under some conditions more precise market information has a greater impact on profits in a stackelberg mode of conduct than in a bertrand nash mode

time discounting for primary and monetary rewards this paper reports a positive and statistically significant relation between short term discount rates elicited with a monetary and a primary reward chocolate the relation is most evident among people who like chocolate and are hungry this finding suggests that high short term discount rates are related to an underling individual trait consistent with models of presentbiased preferences

pricing production scheduling and delivery time competition this paper studies competition between firms that produce goods or services for customers sensitive to delay time firms compete by setting prices and production rates for each type of customer and by choosing scheduling policies the existence of a competitive equilibrium is proved the competitive equilibrium is well defined whether or not a firm can differentiate between customers based upon physical characteristics because each customer has incentive to truthfully reveal its delay cost further insights are derived in two special cases a unique equilibrium exists for each of the cases in the first case firms are differentiated by cost mean processing time and processing time variability but customers are homogeneous the conclusions include that a faster lower variability and lower cost firm always has a larger market share higher capacity utilization and higher profits however this firm may have higher prices and faster delivery time or lower prices and longer delivery time in the second

an industry equilibrium analysis of downstream vertical integration this paper investigates the effect of product substitutability on nash equilibrium distribution structures in a duopoly where each manufacturer distributes its goods through a single exclusive retailer which may be either a franchised outlet or a factory store static linear demand and cost functions are assumed and a number of rules about players expectations of competitors behavior are examined it is found that for most specifications product substitutability does influence the equilibrium distribution structure for low degrees of substitutability each manufacturer will distribute its product through a company store for more highly competitive goods manufacturers will be more likely to use a decentralized distribution system this article was originally published in marketing science volume 2 issue 2 pages 161 191 in 1983

a game theoretic approach for green and non green product pricing in chain to chain competitive sustainable and regular dual channel supply chains abstract nowadays sustainable supply chain has become an exciting concept during the academic societies this paper considers environmental and economic aspect of sustainability due to environmental concerns the entry of green products into today s markets is on the rise how to compete for the production of green products with non green products is essential in these markets therefore this research focuses on the pricing and determination of the degree of greenness of a product in competition with a non green product this study for the first time investigates the pricing of two substitute products a green product produced by one manufacturer and a non green product produced by a second manufacturer under two dual channel supply chains including retail and internet channels the decision variables for one manufacturer are the price and degrees of eco friendliness of the green product for the other the decision variable is the price of the non green product this problem is solved under two different scenarios centralized and decentralized in the decentralized scenario a stackelberg competition is considered between the retailer level and the manufacturer level of the total supply chains in which the manufacturers are assumed to be the leader and the retailers are the followers in the centralized scenario players in each of their related supply chain are integrated the problem is solved and compared under two scenarios finally both parametric and numerical analyses are presented and some managerial insights are provided and some of which are as follows the centralized scenario cause to achieve high the green degree comparing with the decentralized scenario

hyperbolic discounting and the standard model eliciting discount functions abstract experiments on static intertemporal choice find evidence of particularly extreme impatience toward immediate rewards while this is often taken as support for hyperbolic discounting it could also arise because the most likely participants in experiments may be those with the most immediate need for money we conduct a calibration exercise and find that the extreme impatience observed in experiments can be accommodated by a standard exponential discounting model with no discounting and expectation of a small increase in the base consumption level the calibration uses existing estimates of curvature of utility

price and lead time decisions in dual channel supply chains abstract manufacturers today are increasingly adopting a dual channel to sell their products i e the traditional retail channel and an online direct channel empirical studies have shown that service quality we focus on the delivery lead time of the direct channel even goes beyond product price as one of the major factors influencing consumer acceptance of the direct channel delivery lead time has significant effects on demand profit and pricing strategy however there is scant literature addressing the decision on the promised delivery lead time of a direct channel and its impact on the manufacturer s and retailer s pricing decisions to fill this gap we examine the optimal decisions of delivery lead time and prices in a centralized and a decentralized dual channel supply chain using the two stage optimization technique and stackelberg game and analyze the impacts of delivery lead time and customer acceptance of a direct channel on the manufacturer s and retailer s pricing behaviours we analytically show that delivery lead time strongly influences the manufacturer s and the retailer s pricing strategies and profits our numerical studies reveal that the difference between the demand transfer ratios in the two channels with respect to delivery lead time and direct sale price customer acceptance of the direct channel and product type have great effects on the lead time and pricing decisions

price and lead time quotation for contract and spot customers we study price and lead time quotation decisions in a make to order system with two customer classes 1 contract customers whose orders are practically always accepted and fulfilled based on a contract price and lead time agreed on at the beginning of the time horizon and 2 spot purchasers who arrive over time and are quoted a price and lead time pair dynamically the objective is to maximize the long run expected average profit per unit time where profit from a customer is defined as revenues minus lateness penalties incurred because of lead time violations we model the dynamic quotation problem of the spot purchasers as an infinite horizon markov decision process given a fixed price and lead time for contract customers we analyze the impact of customer preferences e g price and lead time sensitivity on the optimal price and lead time decisions for spot purchasers and characterize the optimal policy we explore the benefits of dynamic quotation compared to the use of fixed price and lead tim

risk preferences are not time preferences reply can the well known experimental phenomenon of present bias in intertemporal choice be confounded with the risks associated with receiving payment can measurements of risk preferences be used to represent desires for smoothness in intertemporal payments in our two 2012 papers in this journal we explored these two questions and found the answer to the first to be yes and the second to be no we feel the three papers inspired by our work and published here underscore these arguments and point to interesting new possibilities for modeling and measuring risk over time jel c91 d81 d91

demand forecast sharing in a dual channel supply chain abstract we assess the benefits of sharing demand forecast information in a manufacturer retailer supply chain consisting of a traditional retail channel and a direct channel the demand is a linear function of price with a gaussian primary demand i e zero price market potential both the manufacturer and the retailer set their price based on their forecast of the primary demand in this setting we investigate the value of sharing demand forecasts we analyze the make to order scenario in which prices are set before and production takes place after the primary demand is known and the make to stock scenario in which production takes place and prices are set before the primary demand is known we also compare the supply chain performance with and without the direct channel under some assumptions production cost is zero and each demand function has the same slope of price we find that the direct channel has a negative impact on the retailer s performance and under some conditions the manufacturer and the whole supply chain are better off our research extends and complements prior research that has investigated only the inventory and replenishment related benefits of information sharing

introduction of a second channel implications for pricing and profits in this paper we study the optimal pricing strategies when a product is sold on two channels such as the internet and a traditional channel we assume a stylized deterministic demand model where the demand on a channel depends on prices degree of substitution across channels and the overall market potential we first study four prevalent pricing strategies which differ in the degree of autonomy for the internet channel for a monopoly we provide theoretical bounds for these pricing strategies we also analyze the duopoly case where an incumbent mixed retailer faces competition with a pure retailer and characterize price equilibria finally through a computational study we explore the behavior price and profits under different parameters and consumer preferences for the alternative channels

tying odysseus to the mast evidence from a commitment savings product in the philippines we designed a commitment savings product for a philippine bank and implemented it using a randomized control methodology the savings product was intended for individuals who want to commit now to restrict access to their savings and who were sophisticated enough to engage in such a mechanism we conducted a baseline survey on 1777 existing or former clients of a bank one month later we offered the commitment product to a randomly chosen subset of 710 clients 202 28 4 percent accepted the offer and opened the account in the baseline survey we asked hypothetical time discounting questions women who exhibited a lower discount rate for future relative to current trade offs and hence potentially have a preference for commitment were indeed significantly more likely to open the commitment savings account after twelve months average savings balances increased by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group we conclude that the savings response represents a lasting change in savings and not merely a short term response to a new product

estimating individual discount rates in denmark a field experiment we estimate individual discount rates with respect to time streams of money using controlled laboratory experiments these discount rates are elicited by means of field experiments involving real monetary rewards the experiments were carried out across denmark using a representative sample of 268 people between 19 and 75 years of age individual discount rates are estimated for various households differentiated by socio demographic characteristics such as income and age our conclusions are that discount rates are constant over the 12 month to 3 year horizons used in these experiments and that discount rates vary substantially with respect to several socio demographic variables hence we conclude that it would be reasonable to assume constant discount rates for specific household types but not the same rates across all households

estimating time preferences from convex budgets experimentally elicited discount rates are frequently higher than what seems reasonable for economic decision making such high rates are often attributed to present biased discounting a well known bias of standard measurements is the assumption of linear consumption utility attempting to correct this bias using measures of risk aversion to identify concavity researchers find reasonable discounting but at the cost of exceptionally high utility function curvature we present a new methodology for identifying time preferences both discounting and curvature from simple allocation decisions we find reasonable levels of both discounting and curvature and surprisingly dynamically consistent time preferences jel c91 d12 d81 understanding and estimating time preferences is obviously of great importance to economists marketers and policy makers consumers decide how much to invest in savings education real estate and life insurance how much to diet exercise and smoke whether to marry when to have children and what to leave in their wills while there has been substantial research estimating time preferences using aggregate consumption data 1 the bulk of the effort has occurred in laboratory environments 2 among the many laboratory techniques employed recent studies have favored multiple price lists mpl with monetary payments 3 with mpls individuals are asked multiple times to choose between smaller payment amounts closer to the present and larger amounts further into the future the interest rate increases monotonically in a price list such that the point where an individual switches from preferring sooner payments to later payments carries interval

consume now or later time inconsistency collective choice and revealed preference this paper develops a revealed preference methodology for exploring whether time inconsistencies in household choice are the product of nonstationarities at the individual level or the result of individual heterogeneity and renegotiation within the collective unit an empirical application to household level microdata highlights that an explicit recognition of the collective nature of choice allows the vast majority of household behaviour to be rationalised by theory that assumes preference stationarity at the individual level for our particular short panel data set simply permitting limited intrahousehold heterogeneity in time preferences allows the choices of 98 4 of the sample to be rationalised by a model that assumes exponential discounting at the individual level we also find that couples characterized by lower divergence in spousal discount rates are older more likely to have children and wealthier which we take as indications of experiencing higher match quality

the human capital and economic growth nexus in east and south asia abstractthis study adopts a disaggregated regional focus to test for the human capital hc growth nexus in selected nine asian countries it utilizes the empirical bayesian methodology which addresses not only the heterogeneity issue but it also utilizes the common structural priors of regional countries to yield informationally efficient estimates of the impact of hc on the stock and levels of gdp various measures of hc are utilized to determine which of these produces a better explanation of economic growth in the two asian regions the study finds that primary and secondary education was more prominent in explaining the fluctuations of economic growth in east asia whereas tertiary and vocational education showed positive effects on economic growth in south asia government expenditures on education were also found to positively affect economic growth in both regions the results shed new evidence to establish that the differences in growth rates within east and south asia are associated with diffe

time consistency stationarity and time invariance a sequence of experiments documents static and dynamic preference reversals between sooner smaller and later larger rewards when the sooner reward could be immediate the theoretically motivated design permits separate identification of time consistent stationary a ndtime invariant choices at least half of the subjects are time consistent but only three quarters of them exhibit stationary choices about half of subjects with time inconsistent choices have stationary preferences these results chal lenge the view that present bias preferences are the main source of time inconsistent choices the past twenty years have seen a surge of interest in time inconsistent preferences mostly this has been motivated by psychological experiments and introspection that have suggested the existence of present bias a decision maker prefers smaller immediate reward to a larger delayed reward but when she is asked about her preferences between these two alternatives when both are equally shifted into the future her preferences are reversed although there is no inconsistency per se in her answers this behavior has been taken to suggest that when the decision maker will be asked to update her choices in the future she will generally deviate from her ex ante plans our goal in the present study is to perform a dynamic preference reversal experiment as such one is required to extend the standard framework of pref erences over temporal payments to a dated collection of such preferences this extension allows us to formally define three distinct properties stationarity im plies that ranking of temporal payments depends only on the time distance and payment distance between the alternatives time invariance assumes that the decision maker evaluates each temporal payment relative to the evaluation pe

risk preferences are not time preferences risk and time are intertwined the present is known while the future is inherently risky this is problematic when studying time prefer ences since uncontrolled risk can generate apparently present biased behavior we systematically manipulate risk in an intertemporal choice experiment discounted expected utility performs well with risk but when certainty is added common ratio predictions fail sharply the data cannot be explained by prospect theory hyperbolic discounting or preferences for resolution of uncertainty but seem consistent with a direct preference for certainty the data suggest strongly a difference between risk and time preferences jel c91 d81 d91 understanding individual decision making under risk and over time are two foundations of economic analysis 1 in both areas there has been research to suggest that standard models of expected utility eu and exponential discounting are flawed or incomplete regarding time experimental research has uncovered evidence of a present bias or hyperbolic discounting frederick loewenstein and o donoghue 2002 regarding risk there are number of well documented departures from eu such as the allais 1953 common consequence and common ratio paradoxes an organizing principle behind expected utility violations is that they seem to arise as so called boundary effects where certainty and uncertainty are combined camerer 1992 harless and camerer 1994 and starmer 2000 indicate that violations of expected utility are notably less prevalent when all choices are uncertain this observation is especially interesting when considering decisions about risk taking over time in particular certainty and uncertainty are combined in intertemporal decisions the present is known and certain while the future is inherently risky this observation is problematic if one intends to study time preference in isolation from

price delivery time guarantees and capacity selection this paper studies the impact of using delivery time guarantees as a competitive strategy in service industries where demands are sensitive to both price and delivery time we assume that delivery reliability is crucial and investment in capacity expansion is plausible in order to maintain a high probability of delivering the time guarantee a mathematical framework is proposed to understand the interrelations among pricing delivery time guarantee and capacity expansion decisions specifically an optimization model is developed to determine the joint optimal selection of these three important decision variables with an objective of maximizing the average net profit we characterize the optimal decisions and study their qualitative behaviors as various parameters change we further present a numerical example to illustrate how the results of our model can be used to provide useful managerial insights for selecting the best competing strategies for firms with different operating characteristics our model and results are also applicable to a make to order manufacturing environment

pricing policies under direct vs indirect channel competition and national vs store brand competition abstract this paper analyzes channel pricing in multiple distribution channels under competition between a national brand nb and a store brand sb where an nb can be distributed both through a direct channel e channel and an indirect channel local stores but an sb can be distributed only through an indirect channel we first explore cross brand and cross channel pricing policies formulating the problem as a nash pricing game we reach two findings 1 brand loyalty building is profitable for both an nb and an sb and 2 marketing decisions are more restrictive for an nb channel than they are for the sb channel we next assess supply chain coordination and reach two findings 1 wholesale price change does not coordinate the supply chain and 2 an appropriate combination of markup and markdown prices can achieve both supply chain coordination and a win win outcome for each channel

optimal quality and quantity provisions for centralized vs decentralized distribution market size uncertainty effects abstract we provide insights on how market size uncertainty affects the optimal quality quantity provision in distribution channels when consumers are heterogeneous in their willingness to pay for product quality in this context we denote the difference between the manufacturer s optimal quality quantity provision for a centralized channel and its optimal analog for a decentralized channel as the quality quantity differential we find that market size uncertainty creates or increases the quantity differential but it does not affect the differential s polarity in contrast market size uncertainty decreases the quality differential and it does so to the extent that depending on the level of consumer heterogeneity it reverses the differential s polarity moreover we find that the higher the inherent uncertainty level the more pronounced are the effects we likewise find that the effects of market size uncertainty are amplified if the notion of consumer heterogeneity is replaced with retail level competition