vertical linkages and the collapse of global trade a common view is that cross border vertical linkages played a key role in the 2008 2009 collapse of global trade this paper presents two accounting results from a global input output framework that shed light on this channel we feed in observed changes in final demand and find that trade in final goods fell by twice as much as trade in intermediate goods nevertheless intermediate goods account for more than two fifths of the trade collapse we also find that vertical specialization trade fell 13 percent while value added trade fell by 10 percent because declines in demand were largest in highly vertically specialized sectors

public research and industrial innovations in germany this paper deals with the effects of publicly funded research at universities polytechnics and federal research labs on industrial innovations in germany we discuss the characteristics of companies that benefit from the findings of public research institutions in questioning 2 300 companies we found that less than one tenth of product or process innovating firms introduced innovations between 1993 and 1995 that would not have been developed without public research these new products amount to approximately 5 percent of all new product sales regressions show that firms own r d support the ability to absorb the findings of public research and turn them into innovations contrary to the widely held opinion that proximity to public research institutions does promote collaboration between firms and public research and increase the amount of received knowledge spillovers we found no higher probability of publicly supported innovations for firms in germany that are located near universities or polytechnics

licensing of university inventions the role of a technology transfer office abstract we develop a theoretical model to explain the specific role of technology transfer offices ttos in licensing university inventions using a framework where firms have incomplete information on the quality of inventions we develop a reputation argument for the tto to reduce the asymmetric information problem our results indicate that a tto is often able to benefit from its capacity to pool innovations across research units and to build a reputation within universities we identify when the technology seller will have an incentive to shelve some of the projects thus raising the buyer s beliefs on expected quality this results in fewer but more valuable innovations being sold at higher prices we explain the importance of a critical size for the tto to be successful as well as the stylized fact that ttos may lead to fewer licensing agreements but higher income from innovation transfers

academic research underlying industrial innovations there has been no systematic study of the characteristics of the universities and academic researchers that seem to have contributed most to industrial innovation nor do we know how such academic research has been funded this paper based on data obtained from sixty six firms in seven major manufacturing industries and from over two hundred academic researchers sheds new light on the sources characteristics and financing of academic research underlying industrial innovation the findings should be of interest to economists concerned with technological change and to policymakers attempting to increase the economic payoff from the nation s academic research copyright 1995 by mit press

strong planning and forecast horizons for a model with simultaneous price and production decisions abstract in this paper we have solved a general inventory model with simultaneous price and production decisions both linear and non linear strictly convex production cost cases are treated upper and lower bounds are imposed on state as well as control variables the problem is solved by using the lagrangian form of the maximum principle strong planning and strong forecast horizons are obtained these arise when the state variable reaches its upper or lower bound the existence of these horizons permits the decomposition of the whole problem into a set of smaller problems which can be solved separately and their solutions put together to form a complete solution to the problem finally we derive a forward branch and bound algorithm to solve the problem the algorithm is illustrated with a simple example

transfer pricing in a dynamic marketing operations interface abstract a transfer price mechanism is proposed to coordinate the strategies of the marketing and operations functional areas operating in a dynamic interface environment in a decentralized firm marketing and operations are strategic decision makers in a differential game in which marketing has price and advertising and operations has production as control variables and advertising goodwill and production backlog are state variables a constant transfer price is entered into the objective functionals for marketing and operations and subgame perfect feedback strategies are derived for price advertising and production as functions of the state variables the feedback strategies allow a solution for the dynamic system involving goodwill and backlog and the total payoff to the firm the sum of the payoffs to marketing and operations is determined as a function of the transfer price finally for certain parameter conditions an interior maximum of the payoff function is achieved and the optimal transfer price is identified

debt deleveraging and the liquidity trap a fisher minsky koo approach in this paper we present a simple new keynesian style model of debt driven slumps that is situations in which an overhang of debt on the part of some agents who are forced into rapid deleveraging is depressing aggregate demand making some agents debt constrained is a surprisingly powerful assumption fisherian debt deflation the possibility of a liquidity trap the paradox of thrift a keynesiantype multiplier and a rationale for expansionary fiscal policy all emerge naturally from the model we argue that this approach sheds considerable light both on current economic difficulties and on historical episodes including japan s lost decade now in its 18th year and the great depression itself

the relationships between science technologies and their industrial exploitation an illustration through the myths and realities of the so called european paradox abstract this paper discusses first the properties of scientific and technological knowledge and the institutions supporting its generation and its economic applications the evidence supports the broad interpretation that we call the stanford yale sussex synthesis second such patterns yield important implications with respect to the so called european paradox i e the conjecture that eu countries play a leading global role in terms of top level scientific output but lag behind in the ability of converting this strength into wealth generating innovations some descriptive evidence shows that contrary to the paradox conjecture europe s weaknesses reside both in its system of scientific research and in a relatively weak industry the final part of the paper identifies a few normative implications much less emphasis should be put on various types of networking and much more on policy measures aimed at strengthening both frontier research and european corporate actors

the economic impact of industry funded university r d abstract in recent years industry has increased its direct funding of university r d this article examines whether such collaborative r d leads to increases in technological innovation in industry data are analyzed for the years 1953 through 1986 it is found that direct industry funding of university research is associated with subsequent increases in industry r d expenditures these expenditures include funding from both federal and industry sources this increase in r d expenditures occurs with a median lag of five years rival hypotheses are examined such as the effect of general university research expenditures however these hypotheses are rejected this article concludes by raising significant implications for policy

house prices home equity based borrowing and the u s household leverage crisis us household leverage sharply increased in the years preceding the 2007 eco nomic recession the top panel of figure 1 shows the steady rise in household debt since 1975 which accelerated beginning in 2002 in just five years the household sector doubled its debt balance in comparison the contemporaneous increase in corporate debt was modest the middle panel shows that the increase in household debt from 2002 to 2007 translated into a striking rise in household leverage as mea sured by the debt to income ratio during the same time period corporate leverage declined the dramatic absolute and relative rise in us household leverage from 2002 to 2007 is unprecedented compared to the last 25 years one reason for the rapid expansion in household leverage during this period is that mortgage credit became more easily available to new home buyers mian and sufi 2009 strong house price appreciation from 2002 to 2006 however which may have been fueled by the availability of mortgage credit to a riskier set of new home buyers could also have had an important feedback effect on household lever age through existing homeowners given that 65 percent of us households already owned their primary residence before the acceleration in house prices the feedback from house prices to borrowing may be an important source of the rapid rise in household leverage that preceded the economic downturn our central goals in this study are to estimate how homeowner borrowing responded to the increase in house prices and to identify which homeowners responded most aggressively we examine this home equity based borrowing channel using a dataset consisting of anonymous individual credit files of a national consumer credit bureau agency we follow a random sample of over 74 000 us homeowners who owned their homes as of 1997 at an annual frequency from the end of 1997 until the end of 2008 the bottom panel of figure 1 plots the growth in debt of 1997 homeowners over time and shows that existing homeowners borrow significantly more debt as their house prices appreciate from 2002 to 2006 while the aggregate trend is suggestive

labor market monopsony there has been a renewed interest in monopsony in labor markets in recent years that includes both the traditional static approach to monopsony ably reviewed by boal and ransom 1997 and the new approach to monopsony with more attention paid to dynamic issues developed in detail by manning 2003 the articles presented in this supplement highlight both approaches and illustrate the range of labor market settings in which the exercise of monopsony power may be important the first use of the term monopsony in economics is widely attributed to robinson 1969 robinson conceived of monopsony as analogous to monopoly whereas monopoly refers to the case of a single seller confronted in a market by many buyers monopsony refers to the case of a single buyer confronted in a market by many sellers just as the monopolist faces a downward sloping demand curve for his product and

borders and business cycles abstract we document that business cycles of u s census regions are substantially more synchronized than those of european countries data from regions within european countries confirm a european border effect within country correlations are substantially larger than cross country correlations these results continue to hold after controlling for exogenous factors such as distance and size we consider the role of four factors that have received attention in the debate about emu sectoral specialization the level of trade monetary policy and fiscal policy we find that the lower level of trade between european countries explains most of the observed border effect

the effects of federal research and development subsidies on firm commercialization behavior abstract this paper assesses the longer term up to 14 years causal impact of federal research and development r d subsidies on firms commercialization behavior the data are for small firms which applied to the 1998 2000 advanced technology program atp competitions a variant of the research design pioneered by heckman 1979 allows for selection bias to be controlled for commercialization behavior is operationalized as the number of new product announcements related to the technology a firm mentions in its atp proposal s the major finding is that receiving an atp award has a positive and significant causal impact on a firm s commercialization behavior

universities and fundamental research reflections on the growth of university industry partnerships the recent rise in university industry partnerships has stimulated an important public policy debate regarding how these relationships affect fundamental research in this paper we examine the antecedents and consequences of policies to promote university industry alliances although the preliminary evidence appears to suggest that these partnerships have not had a deleterious effect on the quantity and quality of basic research some legitimate concerns have been raised about these activities that require additional analysis we conclude that additional research is needed to provide a more accurate assessment of the optimal level of commercialisation

investigating the sensitivity of equilibrium profits to advertising dynamics and competitive effects the author investigates the validity of the flat maximum principle the insensitivity of a firm s profits to changes in its optimal advertising level in a duopolistic market in which advertising by the two firms has carryover effects two alternative competitive scenarios are examined i in which total industry sales are allowed to vary over time and ii where firms are engaged in market share rivalry for i the open loop nash equilibrium advertising strategies for the firms are derived assuming a specific sales response function and an infinite time horizon a numerical analysis of the sensitivity of firms profit functions to advertising expenditures is performed at different levels of the a discount rate b advertising elasticity and c advertising decay rate an empirical illustration from the pharmaceutical industry is provided special cases of the model formulation are examined analytically in order to highlight the intuition behind the flatness of the maximum and to study the sensitivity of results obtained to choice of equilibrium strategy closed loop vs open loop for the market share game closed loop policies are considered and the flat maximum principle is illustrated in the context of coke pepsi rivalry in the soft drinks market

academic research and industrial innovation the purpose of this study is to estimate the extent to which technological innovations in various industries have been based on recent academic research and the time lags between the investment in recent academic research projects and the industrial utilization of their findings because no attempt to my knowledge has been made to estimate the social rate of return from academic research we also make some rough and tentative estimates of this sort while the results are subject to many limitations discussed below they should be of interest to public policy makers concerned with science and technology as well as to

assessing spillovers from universities to firms evidence from french firm level data we assess the importance of information flows from universities to innovative firms and determine the relative contribution of formal collaboration and pure knowledge spillovers in this process we find that spillovers provide the most benefit to firms that imitate existing technologies or those that are involved in incremental innovation on the other hand highly innovative firms appear to derive most benefit from collaborative research with foreign universities indeed highly innovative firms are at the frontier of the academic knowledge in their industry therefore they only marginally benefit from aggregate or industry wide spillovers they require new forms of academic knowledge that they acquire through formal cooperation with foreign universities

optimal production purchasing and pricing a differential game approach abstract this paper deals with a problem of determining optimal production and pricing policies of a manufacturing firm which is supplying a retailer the latter faces a price dependent demand function towards the final consumers and wishes to determine optimal purchasing and pricing policies both firms carry inventories and backlogging is permitted the problem is modelled as a two player nonzero sum differential game with the inventory levels as the state variables the controls are the rates of production and purchasing as well as the prices assuming linear production costs but convex ordering and holding costs open loop nash controls are characterized by using switching point analysis as well as phase diagrams

on modeling the advertising operations interface under asymmetric competition abstract using a market share attraction structure of advertising competition and following a supermodular game approach this article demonstrates for an asymmetric oligopoly the directional impact of changes in model parameters on the marketing controlled variables of all rivals advertising budgets and the operations controlled variables of all rivals ordered quantities importantly the various changes are examined analytically empirically and numerically in both non dominated and dominated asymmetric oligopolies in this regard the results indicate that firms in a dominated oligopoly one firm of market share larger than or equal to 50 behave differently compared to firms in a non dominated oligopoly each firm of market share less than 50 in response to changes in model parameters furthermore changes in model parameters are investigated in terms of their relative influential impact on a variety of equilibrium measures in this regard the findings indicate that for the analyzed model the marketing parameters exert much more influence on the equilibrium measures than the operations parameters additionally a change in the mode of competition from non cooperation oligopoly to cooperation joint ownership dictates that strong asymmetric firms of favorable marketing and operations parameters continue advertising but at lower levels and weak asymmetric firms of less favorable parameters cease advertising altogether

university industry collaboration and firms r d effort abstract this paper investigates the impact of publicly funded university industry collaboration on uk firms r d effort we test the hypotheses that project participation has a positive effect on firms r d expenditure per employee and on their share of r d employment the paper exploits a novel source of data made up of a set of u i projects funded by the uk engineering and physical sciences research council between 1997 and 2007 and firm level data available through the uk office for national statistics we employ propensity score matching to select an appropriate control group of untreated firms on the basis of the probability that they participate to u i partnerships we then estimate the impact of participation on firms r d effort in two points in time via ordinary least squares regression the results show a positive and significant impact on the share of r d employment two years after the end of projects this is also confirmed by a robustness check a positive effect on r d expenditure per employee is found both at the end of the project and two years later these findings are highly relevant for policy given that u i collaboration is among the most frequent policy instruments put in place by local and national policy makers to foster pre competitive research and firms r d activities

on the global supply of basic research abstract in a two country schumpeterian growth model we study the incentives for basic research investments by governments in a globalized world a country s basic research investments increase with the country s level of human capital and decline with its own market size this may explain why some smaller countries invest so much in basic research compared with the optimal investments achievable when countries coordinate their basic research policies a single country may over invest in basic research however the total amount of decentralized basic research investments is always below the socially optimal investment level which justifies policy coordination in this area

the finnish great depression from russia with love during the period 1991 93 finland experienced the deepest economic downturn in an industrialized country since the 1930s we argue that the collapse of the finnish trade with the soviet union in and of itself resulted in a large contraction of the economy and a costly restructuring of the manufacturing sector similar to the transition suffered by countries in eastern europe finland and these transition countries show almost identical u shaped dynamics of output in the early 1990s yet as a western democracy with fully developed capital markets and well functioning legal and political institutions finland faced none of the large institutional adjustments experienced in the formerly centrally planned economies thus by studying the finnish experience we can isolate the adjustment costs due solely to the collapse of trade from the other burdens of adjustment borne by transition economies we develop and calibrate a multisector dynamic general equilibrium model of the finnish economy and show that the collapse of soviet finnish trade can indeed go a long way in explaining finland s great depression

stochastic dynamic pricing and advertising in isoelastic oligopoly models abstract in this paper we analyze stochastic dynamic pricing and advertising differential games in special oligopoly markets with constant price and advertising elasticity we consider the sale of perishable as well as durable goods and include adoption effects in the demand based on a unique stochastic feedback nash equilibrium we derive closed form solution formulas of the value functions and the optimal feedback policies of all competing firms efficient simulation techniques are used to evaluate optimally controlled sales processes over time this way the evolution of optimal controls as well as the firms profit distributions are analyzed moreover we are able to compare feedback solutions of the stochastic model with its deterministic counterpart we show that the market power of the competing firms is exactly the same as in the deterministic version of the model further we discover two fundamental effects that determine the relation between both models first the volatility in demand results in a decline of expected profits compared to the deterministic model second we find that saturation effects in demand have an opposite character we show that the second effect can be strong enough to either exactly balance or even overcompensate the first one as a result we are able to identify cases in which feedback solutions of the deterministic model provide useful approximations of solutions of the stochastic model

on crises contagion and confusion abstract since the tequila crisis of 1994 1995 the asian flu of 1997 and the russian virus of 1998 economists have been busy producing research on the subject of contagion yet few studies have examined empirically through which channels the disturbances are transmitted if there are indeed fundamental reasons for the spillovers we observe we attempt to fill this gap by analyzing how both trade links and the largely ignored financial sector links influence the pattern of fundamentals based contagion we examine the role of international bank lending the potential for cross market hedging and bilateral and third party trade in the propagation of crises

coordination mechanisms of supply chain systems supply chain management scm has become an important management paradigm as supply chain members are often separate and independent economic entities a key issue in scm is to develop mechanisms that can align their objectives and coordinate their activities so as to optimize system performance in this paper we provide a review of coordination mechanisms of supply chain systems in a framework that is based on supply chain decision structure and nature of demand this framework highlights the behavioral aspects and information need in the coordination of a supply chain the identification of these issues points out several directions of future research in this area

trade and the geographic spread of the great recession abstract i study the role of trade between u s states in the regional propagation of local consumer demand shocks during the great recession to identify the trade channel empirically i make use of heterogeneity in the direction of trade flows across industries in the same state industries that depended relatively more on final demand from states with housing boom bust cycles grew by more before the crisis and declined faster from 2007 to 09 a one standard deviation difference in the exposure to demand shocks during the recession explains a 2 9 percentage point difference in employment growth

globalisation of knowledge production and regional innovation policy supporting specialized hubs in the bangalore software industry abstract this paper is concerned with the changing role of regional innovation systems and regional policies in supporting the transition of indigenous firms in developing countries from competing on low costs towards becoming knowledge providers in global value chains special attention is paid to policies supporting the emergence and development of the regional innovation system in this transition process regional innovation systems in developing countries have very recently started to be conceptualised as specialized hubs in global innovation and production networks asheim b coenen l vang lauridsen j 2007 face to face buzz and knowledge bases socio spatial implications for learning innovation and innovation policy environment and planning c government and policy 25 5 655 670 chaminade c vang j 2006a innovation policy for small and medium size smes in asia an innovation systems perspective in yeung h ed handbook of research on asian business edward elgar cheltenham maggi c 2007 the salmon farming and processing cluster in southern chile in pietrobello c rabellotti r eds upgrading and governance in clusters and value chains in latin america harvard university press a specialized hub refers to a node in a global value chain that mainly undertakes one or a few of the activities required for the production and development of a given good or service or serves a particular segment of the global market in global value chains firms in developing countries have traditionally been responsible for the lowest added value activities however a few emerging regional innovation systems in developing countries are beginning to challenge this scenario by rapidly upgrading in the value chain there is however still only a poorly developed understanding of how the system of innovation emerges and evolves to support this transition process and what the role of regional innovation policy is in building the regional conditions that support indigenous small and medium size enterprises smes in this transition process this paper aims at reducing this omission by analyzing the co evolution of the strategies of indigenous smes and the regional innovation system of bangalore india

the changing rewards to science the case of biotechnology little is known about the form and or magnitude of compensation provided university based scientists working on firm r d this is unfortunate given the important role that university based scientists play in r d and the growing literature concerning compensation and innovation this paper sheds some light on these issues by examining the compensation of university based scientists involved with 52 biotech firms that made an initial public offering between march of 1990 and november of 1992 although the stock holdings of the university scientists are of particular interest additional forms of compensation received by the scientists are also examined

effectiveness and efficiency of sme innovation policy this paper assesses uk innovation policy impact on a large population weighted sample of both service and manufacturing smes by focussing on self reported innovation the study achieves a wider coverage of the effects of sme innovation policy than possible with more traditional indicators propensity score matching indicates that smes receiving uk state support for innovation were more likely to innovate than unsupported comparable enterprises innovating enterprises are shown to have grown significantly faster over the years 2002 2004 when other growth influences are appropriately controlled combining these two results and comparing the outlays on sme innovation policy with the estimated effects suggests that policy was efficient as well as effective there is evidence that sme tax credits were expensive compared with earlier support instruments but the overall high returns estimated suggest that even in times of public spending cuts persisting with sme innovation policy would be prudent

optimal pricing and production in an inventory model abstract this paper deals with the problem of simultaneously determining the optimal price policy and production rate over a given planning horizon for nonlinear demand functions and convex inventory and shortage cost functions the optimal solution paths are derived by using optimal control theory the treatment of linear nonsmooth cost functions requires the use of a generalized maximum principle the solution method is a phase portrait analysis providing insight into the optimal pricing and production policies as well as the resulting inventory paths moreover it is shown that in the case of nonsmooth piecewise linear cost functions the equilibrium is approached within finite time although the model is nonlinear in the control variables finally it is illustrated that exogenous fluctuations in the demand rate seasonal demand pattern amount to cyclical optimal solutions

trust and the market for technology abstract conditional on the decision to enter the market for immature technology we test for the effects that trust proxied by the context in which the negotiating parties first met has on the likelihood that these negotiations are successful using survey responses from 860 university firm and firm firm technology transactions we find that trust matters parties with high levels of trust i e know each other from a previous business are between 6 and 23 per cent more likely to conclude a transaction compared with those with low levels of trust i e cold callers we also find that patents can effectively substitute for a lack of trust and that trust is more important in upstream stages basic or applied science

the employment effects of credit market disruptions firm level evidence from the 2008 9 financial crisis this article investigates the effect of bank lending frictions on employment outcomes i construct a new data set that combines information on banking relationships and employment at 2 000 nonfinancial firms during the 2008 9 crisis the article first verifies empirically the importance of banking relationships which imply a cost to borrowers who switch lenders i then use the dispersion in lender health following the lehman crisis as a source of exogenous variation in the availability of credit to borrowers i find that credit matters firms that had precrisis relationships with less healthy lenders had a lower likelihood of obtaining a loan following the lehman bankruptcy paid a higher interest rate if they did borrow and reduced employment by more compared to precrisis clients of healthier lenders consistent with frictions deriving from asymmetric information the effects vary by firm type lender health has an economically and statistically significant effect on employment at small and medium firms but the data cannot reject the hypothesis of no effect at the largest or most transparent firms abstracting from general equilibrium effects i find that the withdrawal of credit accounts for between one third and one half of the employment decline at small and medium firms in the sample in the year

does government funding complement or substitute private research funding to universities abstract there is growing political pressure on universities to intensify their interaction with industry and to enlarge their own research funding options in a context characterised by increasing constraints on public spending however whether the successful achievement of such a political desired outcome is consistent with a restriction of government funding is not clear and requires further investigation as a matter of fact there is scant empirical evidence on whether and to what extent government funding affects the external funding options available to universities in particular those related to research and consulting activities by using a set of probit and tobit panel data models estimated on financial data for the whole population of italian university departments engaged in research in the engineering and physical sciences this paper provides evidence that government funding to universities complements funding from research contracts and consulting contributing to increasing universities collaboration with industry and activating knowledge transfer processes

trade openness and volatility abstract this paper examines the mechanisms through which output volatility is related to trade openness using an industry level panel data set of manufacturing production and trade the main results are threefold first sectors more open to international trade are more volatile second trade is accompanied by increased specialization these two forces imply increased aggregate volatility third sectors that are more open to trade are less correlated with the rest of the economy an effect that acts to reduce overall volatility the point estimates indicate that each of the three effects has an appreciable impact on aggregate volatility added together they imply that the relationship between trade openness and overall volatility is positive and economically significant

contagion and trade why are currency crises regional abstract currency crises tend to be regional they affect countries in geographic proximity this suggests that patterns of international trade are important in understanding how currency crises spread above and beyond any macroeconomic phenomena we provide empirical support for this hypothesis using data for five different currency crises in 1971 1973 1992 1994 and 1997 we show that currency crises affect clusters of countries tied together by international trade by way of contrast macroeconomic and financial influences are not closely associated with the cross country incidence of speculative attacks

a differential game model of the marketing operations interface in the development of their dynamic strategies the marketing and operations functions within a firm have differing objectives and conflict between the two functions is common the strategic interdependence involving marketing and operations decisions is modeled as a noncooperative differential game demand is assumed to be a function of price and advertising goodwill and marketing controls price and advertising to maximize its discounted stream of revenue net of advertising costs backlogging is allowed and operations controls production to minimize its discounted stream of production and backlog costs a feedback nash equilibrium is derived for the game which allows a solution of the system of differential equations for goodwill and backlog and is analyzed to study the nature of the dynamic strategies for price advertising and production

production inventory and pricing under cost and demand learning effects abstract the paper considers a monopolist firm that plans its production inventory and pricing policy over a fixed and finite horizon the problem is represented by an optimal control model which combines elements from three streams of literature the first of these is a classical or area and deals with optimal production and inventory under exogenously given demand conditions the second is an area of marketing science which studies dynamic pricing under demand learning effects demand learning refers to the situation where current demand for a product is influenced by past demand the third area belongs to microeconomics and industrial organization and is concerned with the effects of learning by doing in a firm s production process learning is reflected in a unit production cost that decreases with cumulative production using a path synthezising procedure we obtain closed form characterizations of optimal production pricing and inventory policies

prisoner s dilemma on behavioral choices in the presence of sticky prices farsightedness vs myopia abstract when making decisions in a dynamic environment myopic supply chain members tend to ignore the future effects of their decisions on the evolution of state dynamics by contrast far sighted decision makers consider about the impacts of current decisions on both current profits and future profits in order to study how behavioral choices affect the operation decisions and profits of supply chain members we develop a differential game with sticky prices where one manufacturer purchases components from one supplier and makes final products for end customers the supplier decides on its wholesale price while the manufacturer sets its production quantity either of supply chain members has two behavioral choices myopia and farsightedness we derive and compare equilibrium solutions under four different behavioral combinations our analysis shows that there always exists a prisoner s dilemma caused by behavioral choices farsightedness is a dominant strategy for either the supplier or the manufacturer but both to act myopically makes both of them better off furthermore comparing with other scenarios the whole supply chain obtains the highest profit when both players are myopic in addition we introduce a revenue sharing contract with static wholesale price to mitigate the adverse impacts of the prisoner s dilemma

the roles of science in technological innovation abstract one of the central issues in science policy during the past decade has been the extent to which the national levels of expenditure on scientific education and research influence the standard of living this paper provides empirical evidence to show that the pay off from this investment in science is more complex and indirect than previously supposed

quality improvement vs advertising support which strategy works better for a manufacturer abstract we consider a marketing channel with a single manufacturer and a single retailer where both advertising and quality improvement contribute to the build up of goodwill in a non coop scenario the retailer controls the advertising efforts while the manufacturer controls the quality improvements and wholesale price although improving quality positively contributes to goodwill it also increases the production cost thereby reducing the manufacturer s profit in a coop scenario the manufacturer supports the retailer s advertising while decreasing his investments in quality we investigate the conditions under which a coop program is beneficial when such a trade off occurs our results demonstrate that only when advertising significantly contributes to goodwill the manufacturer has an incentive to cooperate and a coop program turns out to be pareto improving conversely the retailer is always better off with a coop program moreover the channel is operational and marketing driven when quality effectiveness is high independent of advertising effectiveness or when both quality and advertising effectiveness are large in all other cases the channel is marketing driven

market share pioneering advantage a theoretical approach in this paper we present an industry in which a pioneer has entered accumulated capital in the form of goodwill and in his monopoly period has also reduced his cost of production as a result of some form of learning by doing at some later date a newcomer enters his production cost is higher than that of the monopolist at that date however due to diffusion of information the costs of the two firms equate at some future date once the new firm enters the market a duopolistic game begins in which the firms choose prices and investment rates analyzing this game we discover the conditions under which the final market shares no longer depend on the order of entry the initial cost advantage the length of the monopoly period or the length of time it took the newcomer to overcome the pioneer s cost advantage we analyze the speed and pattern of convergence to the final market shares and the capital path of the pioneer in his monopoly period depending on his beliefs concerning the possibility of entry

recent developments in dynamic advertising research a variety of continuous time differential functions have been developed to investigate dynamic advertising problems in business and economics fields since major dynamic models appearing before 1995 have been reviewed by a few survey papers we provide a comprehensive review of the dynamic advertising models published after 1995 which are classified into six categories i nerlove arrow model and its extensions ii vidale wolfe model and its extensions iii lanchester model and its extensions iv the diffusion models v dynamic advertising competition models with other attributes and vi empirical studies for dynamic advertising problems for each category we first briefly summarize major relevant before 1995 models and then discuss major after 1995 models in details we find that the dynamic models reviewed in this paper have been extensively used to analyze various advertising problems in the monopoly duopoly oligopoly and supply chain systems our review reveals that the diffusion models have not been used to analyze advertising problems in supply chain operations which may be a research direction in the future moreover we learn from our review that very few publications regarding dynamic advertising problems have considered the supply chain competition we also find that very few researchers have used the diffusion model to investigate the dynamic advertising problems with product quality as a decision variable and the pricing decision has not been incorporated into any extant lanchester model the paper ends with a summary of our review and suggestions on possible research directions in the future

from financial crisis to great recession the role of globalized banks this paper provides evidence of the role of globalized banks in transmitting financial stresses to the real economy during the global financial crisis a novel dataset is constructed from quarterly balance sheet reports provided by all uk resident banks to the bank of england i find that the shock to bank funding from non resident creditors was transmitted domestically through a significant reduction in bank credit supply resident subsidiaries and branches of foreign owned banks reduced lending by a larger amount than domestically owned banks while the latter calibrated the reduction in domestic lending more closely to the size of the funding shock