semicollusion in the norwegian cement market abstract a model of semicollusion where firms collude on prices and compete on capacities is tailor made to the characteristics of the norwegian cement market and tested on this particular market for the period 1927 1982 the results indicate that the rapid increase in capacity and thereby in exports in the period 1956 1967 the late phase of the price cartel best can be explained by the market sharing agreement each firm overinvested in capacity to receive a large quota in the domestic market

entry its deterrence and its accommodation a study of the u s photographic film industry this work set in the new empirical industrial organization framework bresnahan 1987 examines firm level demand based and cost based explanations for entry and accommodation strategies in the u s photographic film industry i first estimate preentry and postentry market structures then using the estimated demand cost and market conduct parameters i show how entry by fuji photo or lack thereof by others is a function of two market structures i also show how market structure and conduct and changes in them over the pre and postentry periods are in turn functions of entry its deterrence and it accommodation

averting crisis assessing measures to manage financial integration in emerging economies the asian crisis provides heterodox economists with the opportunity to investigate counterfactually whether the financial policies they have proposed would have averted the crisis the paper argues that neo liberal financial integration introduces distinct risks to emerging economies currency flight fragility contagion and sovereignty risks the paper presents the financial policies endorsed by the heterodoxy transactions taxes trip wires and or speed bumps convertibility restrictions the chilean model and a publicly managed mutual fund the paper considers whether these policies mitigate risks and whether they could have prevented the asian crisis and the transmission thereof the paper concludes with policies to avert future crises copyright 2003 oxford university press

extrinsic versus intrinsic problems of agricultural cooperation anti incentivism in tanzania and china peasant willingness to engage in collective farming and the efficiency of collective farms once established may be preconditioned on local self determination participatory control discriminating work incentives and external manoeuvrability in the absence of such preconditions whether or not there exist economies of scale sufficient to offset effectively minimised incentive problems cannot be determined anti incentivism bureaucratic controls and extractive external environments are identified as factors inhibiting successful collective farming in both tanzania and china explanations of these tendencies in the two countries are sought in their political economies and ideological structures

central bank independence a political economy approach1 the article uses a political economy approach to examine critically the conventional arguments for central bank independence and to make the terms of debate more precise it assesses the advisability and feasibility of greater autonomy in relation to the constellations of political forces in specific societies and concludes by suggesting how in the context of developing societies an accommodation of interests might be reached to support a more autonomous but not fully independent central bank

common marketing agency as a device for facilitating collusion in a variety of markets firms voluntarily and independently delegate control over certain aspects of marketing to common agents in this article we present an explicit model of agency delegation where firms noncooperatively select agents name output prices and choose compensation schemes we exhibit an equilibrium in which all strategic variables not merely the marketing choices delegated to agents but prices as well are selected perfectly cooperatively this cooperative equilibrium is very simple and attractive each firm sets the collusive output price and employs a commission scheme to compensate the agent although each

the political economy of policy credibility the new classical macroeconomics and the remaking of emerging economies the criterion of policy credibility is invoked with increasing frequency today by new classical development economists in debates over economic and institutional reform in developing and transitional countries the paper argues that the credibility criterion is used to privilege neoliberal economic policies and associated institutions the paper demonstrates that the credibility criterion is theoretically anti pluralist and politically anti democratic in this connection the paper argues that a policy s credibility is always secured endogenously through political and economic power rather than exogenously by virtue of the epistemiological status of the theory that promotes it the paper concludes by suggesting two alternative criteria by which policy regimes and the governance structure of monetary institutions could be adjudicated these alternative criteria are termed the principle of democratic credibility and the principle of fallibility copyright 2000 by oxford university press

research note additional learning and implications on the role of informative advertising observers argue that evidence for the persuasive role of advertising comes from competitive categories where increases in advertising lead to higher average prices conversely others claim that advertising serves a purely informational role here higher levels of advertising lead to better informed consumers and this should increase competition and stimulate lower prices the objective of this study is to neither confirm nor refute either of these perspectives it is rather to show that increases in informative advertisingalone can lead to both higher or lower prices i further show that the direction of this relationship depends on the level of differentiation between competing firms similar to grossman and shapiro 1984 i examine conditions where the differences between competing products are small but i also examine conditions where the differences are significant the role of advertising is to inform consumers about individual products and higher advertising for a product means that more of the potential market knows about it higher levels of advertising increase the relative importance of fully informed consumers compared to partially informed consumers this dynamic is the basis for explaining why informative advertising can push prices either up or down in a uniformly distributed spatial market

marketing the third world the contradictions of portfolio investment in the global economy abstract while international portfolio investment pi in emerging markets has flourished during the 1990s the macroeconomic and political dilemmas introduced into these site economies by this development have not been adequately explored this paper presents a keynesian analysis of the effects of these inflows the paper argues that a dependence on pi can constrain the autonomy of macroeconomic policy and introduce increased risk in site economies the paper then applies this framework to recent mexican experience the paper concludes with a call for aggressive management of portfolio investment and outlines some measures toward this end

informative advertising competition or cooperation there are two main views of advertising the informative view and the persuasive view this thesis studies aspects of the informative view one aspect of interest is whether firms can benefit from collusion on advertising even though advertising is only informative if so will this enhance or lower welfare there are several reasons why firms may want to collude on adver tising first the legal field is tilted in favour of nonprice collusion second it is not at all obvious that collusion on price is more profitable than collusion on advertising and third the analyses of grossman and shapiro 1984 and others show that profits can be increased by restricting advertising in paper 1 we examine firms incentives to collude on advertising and the implications for welfare we find that collusion on advertising and competition on price is more profitable than competition on both price and advertising we also find that semicollusion on advertising is detrimental to welfare this suggests a need for monitoring especially since it is in the interest of firms to restrict price advertising we also compare semicollusion on price to semicollusion on advertising we find that in general semicollusion on price does not lead to higher profits compared to semicollusion on advertising hence we lend theoretical support to the empirical literature that consistently find evidence of semicollusion on advertising rather than on price another important issue concerns the effect on prices and profits of ad vertising only a subset of the product range many firms in particular those in the retail sector sell a wide variety of products but only advertise a few recent empirical evidence suggests that prices of unadvertised products are higher milyo and waldfogel 1999 theoretically little is known in paper 2 we study the effects of advertising only a subset of products we allow for both low and high differentiation and at the same time we explicitly model the advertising decision we find that the extend of differentiation between competing firms plays an important role in the analysis of loss leader pricing when firms sell products with the same reservation price loss leader pric ing obtains only when differentiation is low when products are less similar however price competition is less intense and as a result firms advertise prices above marginal cost our loss leader pricing results enable us to shed some light on the seemingly paradoxical empirical findings in the marketing literature that loss leader pricing fails to increase store traffic loss leader sales and hence to increase profits we also consider a different subject price discrimination although it is well understood that movements in the exchange rate have a bearing on firm profitability and hence affect firm behaviour the role of exchange rate variability in the firm s choice of the number of varieties to produce has to my knowledge not been explored this despite the fact that the product mix is an important aspect of firm strategy by tinkering with the number of varieties a firm can bolster its ability to extract consumer surplus in paper 3 we explore this issue we show that variability in the exchange rate induces the firm to vertically segment markets i e offer two varieties in each market this happens because exchange rate variability affects income dispersion and hence the firm s incentives to extract consumer surplus to better extract surplus the firm offers two price quality menus high quality variant priced high for top end surplus extraction and a low quality variety priced low to address market coverage concerns

informative advertising with differentiated products in this paper we study the role of promotional expenditures by sellers in a model of product differentiation advertising conveys full and accurate information about the characteristics of products heterogeneous consumers who have no source of information other than advertisements seek to purchase the products that best fit their needs despite the roles played by advertising in improving the matching of products and consumers and in increasing the elasticity of demand faced by each firm we find that the market determined levels of advertising are excessive given the extent of diversity in the market we derive a promotional equilibrium based on a specific information transmission technology paying explicit attention to the structure of consumer information and its impact on firms demand curves this allows us to study the effects of changes in the advertising technology including an increased ability to target messages to specific groups of consumers on the equilibrium in the product market we find that decreased advertising costs may reduce profits by increasing the severity of price competition

transition and enterprise restructuring the development of individual farming in romania economic reforms have induced enterprise restructuring in transition countries in agriculture the most dramatic form of restructuring is the break up of state and collective farms into individual farms the development of individual farming varies strongly between countries regions and households this paper uses household level data from a 1996 survey in romania to analyze which household and regional characteristics determine the shift to individual farming individual farming is influenced by several household characteristics such as the human capital education age farming experience physical capital endowments ownership of land buildings machinery livestock and access to other finance sources off farm wages pensions furthermore environmental factors such as infrastructure local access to inputs and the pre reform importance of individual farming in the region all affect the development of individual farming

farm strategy self selection and productivity can small farming groups offer production benefits to farmers in post socialist romania abstract this paper addresses two questions why are romanian farmers continuing to place land in cooperative forms of farming when theory suggests that private farming is more productive and are there efficiency gains to be had from cooperative farming endeavors results from an econometric selection model suggest that smaller endogenously developed farming cooperatives such as family societies provide benefits over private farming strategies under certain conditions this paper questions the wholesale rejection of cooperation around production and challenges policy to move away from the typically dichotomized presentation of agrarian structure as being a trade off between private small scale farming and large scale collective farming

not your grandfather s imf global crisis productive incoherence and developmental policy space the response by the international monetary fund imf and developing country national governments to the current global financial crisis represents a moment of what i term productive incoherence which has displaced the constraining neoliberal coherence of the past several decades productive incoherence refers to the proliferation of inconsistent and even contradictory strategies and statements by the imf that to date have not congealed into any sort of new organised regime those who see continuity at the imf emphasise the reassertion of the imf s authority the reiteration of pro cyclical policy adjustment and the maintenance of existing governance patterns within the institution in contrast evidence of discontinuity includes a world now populated by increasingly autonomous states in the south the normalisation of capital controls and fund conditionality programmes that are inconsistent in key respects in the face of this evidence it is best to understand the current conjuncture as an interregnum that is pregnant with new development possibilities

the transition to a market economy pitfalls of partial reform we present a theory of a partial economic reform of a planned economy similar to the one that took place in russia since 1988 and in china earlier in such a reform some markets are liberalized in the sense that producers can sell output to whomever they want including private firms at free prices but at the same time must sell to state firms at state prices we show that such a reform can result in a substantial diversion of subsidized inputs away from state firms and toward private firms even when state firms value these inputs more the result may be a reduction of total output the simple analysis sheds light on many consequences of the soviet reform such as breakdown of coordination of production increased state policing of delivery quotas prohibitions of trading cooperatives and opposition to privatization the model also explains why partial reform failed in russia but worked in china

optimal sequencing of credible reforms with uncertain outcomes abstract we study a two period representative agent economy in which economic liberalization is modeled as adding a positive random variable to the marginal product of capital we show liberalization always raises the expected utility of agents agents may respond to this by increasing consumption in the first period consequently consumption in the second period is sometimes smaller than the in the first depending on the realization of the random variable this tail may cause the government to reject liberalization of declining gdp enters negatively in the government s objectives we apply these results to the chilean experience of the 1980s

expectations the business cycle and the mexican peso crisis the 1994 95 peso crisis did not display characteristics which allow it to be easily captured by traditional crisis models models based on minsky s financial fragility hypothesis offer more persuasive accounts but have been supported by relatively little direct empirical evidence this paper provides such evidence with particular attention being paid to the role of domestic financial liberalisation in the process minsky s hypotheses about the evolution of expectations over the business cycle are tracked using business survey data in addition crisis indicators are constructed reflecting the changing vulnerability of the economy to shocks the findings support a minskyian interpretation of the crisis copyright 2006 oxford university press

coordination economies advertising and search behavior in retail markets we introduce a model of the retail firm in which consumers and active firms benefit collectively from coordination of sales at fewer firms using this model we show that ostensibly uninformative advertising plays a key role in bringing about coordination economies by directing consumer search toward firms that offer the best deals optimal consumer search takes the form of a simple rule of thumb that uses observed advertising information to guide search both industry concentration and social surplus are higher in the presence of advertising relative to a no advertising benchmark jel d83 l15 many observed advertisements seem to be at odds with rational behavior in a variety of ads mostly on tv and radio multiproduct sellers provide little hard information choosing instead to impart only vague slogans that are suggestive of good deals examples are plentiful a hardware store

safety in small numbers local strategies for survival and growth in romania and the kyrgyz republic abstract using a comparative study of farm households from poor rural communities in kyrgyzstan and north east romania this paper explores the intricacies of a variety of forms of cooperation in agriculture the findings highlight the safety net labour specialisation asset pooling and service delivery functions of different groups that enable rural livelihoods to at times cope and at times improve in situations of imperfect information sluggish labour and land markets and constrained capital markets the research presented here indicates that small to medium forms of cooperation provide the rural poor with predictable livelihood strategies under conditions of uncertainty specifically cooperative action in the form of groups substitutes for imperfect markets despite the push for decollectivisation and privatisation across transition countries there remains a place for encouraging group initiatives at least for the medium term on the grounds of both poverty alleviation and agricultural growth

central bank independence and macroeconomic performance some comparative evidence this note uses information on a sample of sixteen oecd countries to assess the relationship between central bank independence and macroeconomic performance as previous work suggests politically controlled central banks are more likely to pursue policies that lead to high and variable inflation however the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth unemployment or the ex ante real interest rate copyright 1993 by ohio state university press

the design of reform packages under uncertainty the authors present a model of large scale economic reforms modeled on the transition process in eastern europe with aggregate and individual uncertainty concerning the outcome of reforms the government is assumed to choose the speed and sequencing of reforms the authors compare big bang strategies with gradualist reform packages they show that gradualist reform packages may be easier to get started optimal sequencing of reforms should aim at creating constituencies for further reforms and gradualism may generate a higher investment response because of a lower option value of waiting than would a big bang approach copyright 1995 by american economic association

the asian debt and development crisis of 1997 causes and consequences abstract interpretations of the asian crisis have coalesced around two rival stories the death throes of asian state capitalism story about internal real economy causes and the panic triggering debt deflation in a basically sound but under regulated system story that gives more role to external and financial system causes the paper presents the stories and assesses the evidence the evidence in particular the chronology of the crisis supports the second rather better than the first the paper discusses the interests driving capital account liberalization without a framework of regulation the single most irresponsible act of public authorities in the whole crisis us and uk financial firms allied with their treasuries and with the imf the wto and the oecd saw themselves at a chronic disadvantage in the asian system of long term relationships and patient capital this alliance supported by segments of asian political and financial elites achieved dramatic domestic financial sector liberalization and capital account opening in asia over the 1990s setting up the conditions for crisis paradoxically the crisis may be looked back upon not as the triumph of benign globalization and neoliberal economic doctrine but as the beginning of its end

advantageous semi collusion the textbook view that cartels increase industry profits and lower consumer welfare ignores the effects of competition in other activities a revisionist view shows that when cartel members compete in other activities i e when they semi collude the cartel members may be worse off and consumers better off using a two stage model in which the non production activity is r d and is subject to technological spillovers we show that both the traditional and revisionist views can be wrong that consumers and producers can both be made worse off or both better off by a semi collusive production cartel

monetary policy and policy credibility theories and evidence within the past decade there has been a significant shift in attitude by many western industrialized countries toward the objectives and conduct of national economic policy the events of the 1970s accelerating inflation and stagnant economic growth motivated the view that inflation had created its own stubborn self sustaining momentum that either was not amendable to the influences of conventional macroeconomic policy or else would yield to such influences only at unacceptable costs this led to the development of a program aimed at reestablishing control over prices while minimizing any adverse consequences of anti inflationary policies on output and employment seen as a new monetary experiment the essential ingredients included prudent financial management abstinence from discretionary intervention commitment to intermediate targets and above all prior announcement of these policies evidence of this program and its effects can be found oni the continents of europe north america and latin america and provide further important lessons in anti inflationary management this paper is a survey of recent theoretical developments in monetary policy which among other issues attempt to explain one rationale for this program and the likely consequences thereof to the extent that the new program of monetary and fiscal reform was deliberately made public and impressed upon citizens as an overriding commitment of governments in advance of its execution reflects a prevailing opinion that economic policies are more effective if they are credible to private economic agents this view emphasized forcefully by william fellner 1976 1979 may be seen as being mainly due to the assimilation of the rational expectations hypothesis

an empirical analysis of dynamic nonprice competition in an oligopolistic industry this article develops a dynamic model of nonprice competition in an oligopolistic industry and uses it to analyze advertising competition in the u s cigarette industry the model generalizes existing studies by allowing advertising to affect both firm market shares and the total size of the market the model also allows dynamic conjectural variations to arise from the intertemporal links created by the durability of advertising we use these dynamic conjectural variations to distinguish alternative models of competitive interaction we estimate the complete model of firm production demand and advertising choice by using data for u s cigarette producers the results indicate that firm advertising primarily affects the level of market demand with a firm s effect on rival firms market shares arising through variations in the number of brands sold empirical results on firm behavior suggest that firms act as if their advertising choices will alter the future advertising choices of rival firms in both the high tar and low tar cigarette markets

is the accumulation of international reserves good for development international reserves accumulation has been the preferred policy recently adopted by developing economies to achieve financial stability the aim of this policy is to increase liquidity and thus reduce the risk of suffering a speculative attack the main concern expressed in the literature has been related to its cost most of the studies conclude that the opportunity cost of international reserves accumulation is around 1 of gdp however these studies have not analysed whether this strategy is or could be more broadly supportive of development an issue that must be of central interest for developing economies the aim of this paper is to show that the stockpiling of international reserves is not optimal for developmental purposes and that there exist alternative policies that can be applied to achieve financial stability policy autonomy and a better performance in terms of development

cooperative advertising models in supply chain management a review this paper reviews articles on cooperative advertising a topic which has gained substantial interest in recent years thereby we first briefly distinguish five different definitions of cooperative advertising which can be found in operations research literature after that we concentrate on vertical cooperative advertising which is the most common object of investigation it is understood as a financial agreement where a manufacturer offers to pay a certain share of his retailer s advertising expenditures in total we identified 58 scientific papers considering mathematical modeling of vertical cooperative advertising these articles are then analyzed with regard to their general model setting e g the underlying supply chain structure and design of the cooperative advertising program after that we explain the different demand and cost functions that are employed whereupon we distinguish between static and dynamic models the last dimension of our review is dedicated to the game theoretic concepts which are mostly used to reflect different forms of distribution of power within the channel

financialization of the global economy the instability of the world financial system starkly revealed in the recent debacle is not the only problem it poses its secularly increasing dominance over the real economy is in itself a phenomenon that needs examining the article traces the source of this increasing dominance not just to the increasingly leveraged and increasingly incomprehensible forms of intermediation between savers and those in the real economy who need credit and insurance but also to the increasingly universal doctrine that maximizing shareholder value is the sole raison d etre of the firm and the promotion by governments of an equity culture some of the social consequences of financialization are exacerbating inequalities greater insecurity misdirection of talent and the erosion of trust copyright 2008 oxford university press

exchange market mayhem the antecedents and aftermath of speculative attacks exchange market mayhem the antecedents and aftermath of speculative attacks this paper evaluates the causes and consequences of episodes of turbulence in foreign exchange markets using data from 1959 through 1993 for twenty oecd countries we consider the antecedents and aftermath of devaluations and revaluations flotations fixings and speculative attacks which may not be successful we find that realignments of fixed exchange rates are alike devaluations are preceded by political instability budget and current account deficits and fast growth of money and prices revaluations are mirror images of devaluations speculative attacks resemble devaluations but money growth and inflation are more endemic and there is no last minute attempt to tighten monetary policy in contrast few consistent correlations link regime transitions like flotations or fixings to macroeconomic or political variables transitions between exchange rate regimes are largely idiosyncratic and are neither consistently provoked ex ante by systematic imbalances nor typically justified ex post by subsequent changes in policy we conclude that there are no clear early warning signals of many speculative attacks and no easy solutions for policy makers barry eichengreen andrew k rose and charles wyplosz

collective agricultural production a solution for transition economies abstract the paper examines theoretical reasons and provides examples for productivity differences between agricultural service cooperatives and collectives service cooperatives can utilize economies of scale enhance competitiveness and provide technical information advantages that often outweighed problems of free riding low investment and excessive political intervention agricultural collectives while not adding substantial advantages are in addition associated with problems of supervision and effort supply tendencies to substitute casual workers or mechanization for regular members and low investment incentives while collective forms of organization in transition economies respond to high risk and market imperfections they do so inefficiently policies that create conditions for service cooperatives to compete may lead to large productivity gains