state liquor licensing implicit contracting and dry wet counties local option liquor laws are generally interpreted as granting voters the right to choose between allowing and prohibiting alcoholic beverage sales this paper argues that the real choice confronting voters is between legal sales according to state prescribed rules and illegal sales according to an informal set of locally determined rules given this choice rational voters will choose the option with the lower relative price state laws restricting the number of licenses that can be issued in legally wet jurisdictions prove to be more powerful than religious preferences in explaining the pattern of dry counties

nonlinear pricing in an oligopoly market the case of specialty coffee firms that use nonlinear pricing may distort product characteristics away from their efficient levels this paper offers the first empirical study of this issue using data from a specialty coffee market i estimate a structural utility model to compute consumers benefits from changing products sizes i then compare the estimated benefits to cost data design distortions are relatively large for products not targeted to the highest demand consumers distortions decrease toward zero with drink size for products with the largest profit margins these results support some of the central predictions from nonlinear pricing theory including no distortion at the top

estimating the foreclosure effect of exclusive dealing evidence from the entry of specialty beer producers this paper estimates an entry model to study the effect of exclusive dealing between anheuser busch and its distributors on rival brewers entry decisions and consumer surplus the entry model accounts for post entry demand conditions and strategic spillover effects i recover a brewer s fixed costs using a two step estimator and find spillover effects on brewers entry decisions i find that a brewer has higher fixed costs at locations where anheuser busch employ exclusive distributors but the effect is only statistically significant in certain local areas the estimates also show that a brewer is less likely to enter a location that is farther from its brewery has lower expected demand or is smaller in store size i implement counterfactual experiments to study the effect of banning exclusive contracts between anheuser busch and its distributors the results show that the welfare improvement associated with banning such contracts is very small

the spread of municipal reform temporal spatial and social dynamics the adoption of commission and managerial administrative structures and their subsequent abandonment by the 267 largest american cities during the period 1900 1942 is studied using event history methods full period equations show no significant direct effect of percentage catholic culture clash or population size hierarchical diffussion and only a modest impact of city age modernization a strong effect from average annual manufacturing wages is found but in a direction contrary to that posited by the class conflict hypothesis the variable affecting transition rates most strongly appears to be regional adoption percentages an indicator of neighborhood diffusion these findings suggest revisions of the conventional image of the municipal reform experience

do mergers increase product variety evidence from radio broadcasting mergers can reduce costs and alter incentives about how to position products so that theory alone cannot predict whether mergers will increase product variety we document the effect of mergers on variety by exploiting the natural experiment provided by the1996 telecommunications act we find that consolidation reduced station entry and increased the number of formats available relative to the number of stations we find some evidence that increased concentration increases variety absolutely based on the programming overlap of jointly owned stations we can infer that the effects operate through product crowding that is consistent with spatial preemption

alcohol prices consumption and traffic fatalities we examine the relationships among alcohol prices consumption and traffic fatalities using data across u s states from 1982 to 2000 some previous studies have found large negative associations between alcohol taxes and fatalities however commonly used price data suggest little or no connection between alcohol prices and fatalities these apparently conflicting findings may result from measurement error and or endogeneity in the price data which biases ordinary least squares estimators toward a finding of no price effects using alcohol taxes as instrumental variables fatali ties are found to be negatively related to prices in addition alcohol consumption is strongly posi tively related to fatalities however biases may still remain because taxes are not entirely suitable as instruments

the impact of maximum markup regulation on prices markup regulation is a common yet understudied type of regulation we analyze the repeal of maximum wholesale and retail markup regulation in an oligopolistic and vertically non integrated market by comparing the prices of products affected by regulation before and after the policy change and using unregulated products as a control group we find that abolishing regulation led to a significant decrease in both retail and wholesale prices the results provide indirect but consistent evidence that markup ceilings provided a focal point for collusion among wholesalers

diffusion of new products empirical generalizations and managerial uses the diffusion model developed by bass bass f m 1969 a new product growth model for consumer durables management sci 15january 215 227 constitutes an empirical generalization it represents a pattern or regularity that has been shown to repeat over many new products and services in many countries and over a variety circumstances numerous and various applications of the model have lead to further generalizations modifications and extensions of the model have lead to further generalizations in addition to the empirical generalizations that stem from the model we discuss here some of the managerial applications of the model

quantitative effects of the shale oil revolution abstract the aim of this paper is to analyze the impact of the so called shale oil revolution on oil prices and economic growth we employ a general equilibrium model of the world oil market in which saudi arabia is the dominant firm with the rest of the producers as a competitive fringe our results suggest that most of the expected increase in us oil supply due to the shale oil revolution has already been incorporated into prices and that it will produce an additional increase of 0 2 in the gdp of oil importers in the period 2010 2018 we also employ the model to analyze the collapse in oil prices in the second half of 2014 and conclude that it was mainly due to positive unanticipated supply shocks

a theory of the politically optimal commodity tax a theory of the politically optimal tax is developed where tax rates are endogenous and determined by forces in the political market the theory is used to explain the levels of alcoholic beverage taxes between states in the united states it is shown that these rates are influenced by the ownership structure existing in the liquor industry the consumption externalities associated with drinking the minimum drinking age laws the earmarking of tax revenues the enforcement of regulations and real income

the spread of the multidivisional form among large firms 1919 1979 the multidivisional form is the favored form of organization for the large firms that dominate the american economy this study takes up the causes of the dissemination of that form among large firms from 1919 to 1979 five theories are initially proposed as possible explanations for the changes observed and these theories are operationalized and tested the model that seems most consistent with the data emphasizes the ability of key actors to alter structure under three circumstances when the firm has a product related or unrelated strategy which is consistent with chandler s 1962 theorizing when the corporate presidents have a background in sales or finance and when other firms in the industry alter their structures the implications of these results for theories of organizational change are discussed with special reference to the importance of conceiving how actors operate with varying rationalities in this process

on information and innovation diffusion a bayesian approach learning and information accumulation are hypothesized to play a major role in innovation diffusion for instance hiebert argues that the probability distributions of new and unfamiliar technological parameters as perceived by farmers will shift over time due to learning and experience probabilities will be redistributed from lower to higher payoffs this induces farmers to increase their use of the innovation which was new seed varieties in the hiebert model the model presented by kislev and shchoribachrach introduces in the new technology production function an efficiency factor which is positively related to learning it is approximated by the cumulative over time output produced with the innovative technology as learning increases the innovation becomes advantageous for more and more producers who then adopt it in a similar vein feder and o mara construct a diffusion process where uncertainty about an innovation high yielding varieties hyv depends on cumulative area allocated to hyv this represents experience with the accumulation of experience uncertainty declines and the innovation is adopted by an increasing proportion of producers these models produce sensible and empirically valid hypotheses about the dynamics of innovation diffusion however the accumulation of information which is the basic driving element in these models is not treated explicitly thus the use of cumulative output or a cumulative input as an index of learning while plausible still requires formal justification one possibility is a bayesian learning process indeed the work by o mara 1971 1981 and more recently by lindner fischer and pardey have utilized bayes theorem to characterize an individual farmer s adoption behavior

the role of energy in real business cycle models abstract this paper modifies hansen s 1985 analysis of a real business cycle mode with indivisible labor by explicitly including energy as a productive input and modelling the relative price of energy as an exogenous random process one goal is to determine the extent to which the introduction of energy price shocks reduces the reliance of the real business cycle model on unobserved technology shocks the other goal following christiano and eichenbaum 1991 is to compare the correlation between real wages and hours predicted by the energy inclusive model to that predicted by hansen s model

a policy approach to the environmental impacts of technological lock in abstract the broadening spectrum of environmental problems the uncertainty regarding their scale and duration and their possible irreversibility in the context of the growing social preference for environmental quality make it necessary to undertake an ex ante approach to the link between productive activity and environmental quality this link lies in technology and the right approach is to understand how the process of technological change can lead towards sustainability the added value of evolutionary economics in the context of environmental policy resides mainly in the fact that it warns that certain inferior environmental technologies may be locked in to the economic system the results of our model show that it would be advisable to undertake policies expressly aimed at the process of sustainable technological change applying an ex ante precautionary approach in a way that is complementary to the conventional equilibrium oriented environmental policies the nature of these policies and how they might be implemented are questions we will address from this novel approach to the concept of sustainable development in short the main objectives of this paper are to understand more fully the dynamics of the process of technological change its role in sustainable development and to assess the implications of this dynamic approach to techno environmental policy to achieve these goals we have developed an agent based model abm using distributed artificial intelligence dai concepts drawn from the general methodology of social simulation

characterizing environmental variation a hypothesized relationship between environmental variation and organizational actions is central to organization theory this study shows that conventional summary measures of instability do not capture all dimensions of environmental variation this problem is addressed with frequency amplitude and predictability measures that characterize the pattern of environmental variation the hypothesis that there is a relationship between longitudinal environmental variation and organizational structures actions and outcomes is common to most of the major perspectives of organization theory child 1972 hannan freeman 1977 pfeffer salancik 1978 thompson 1967 although there has been little agreement across theories about the causal mechanisms linking environmental variation with organizational characteristics organizational theorists have generally agreed that there is some relationship between longitudinal environmental change and organizing problems as a result environmental variability is a central independent construct in models of processes as disparate as strategic choice firm failure and executive turnover organizations experience longitudinal environmental variation as variation in the availability of the resources required for organizational survival dess beard 1984 52 these resources include sales and knowledge about product design and manufacturing processes in private enterprises budget allocations in the public sector personnel and other production factors researchers have typically characterized variation in the availability of such resources over time with measures of volatility dynamism or instability that attempt to capture total environmental variation with a single dimension we propose a characterization of the pattern of longitudinal environ

identity claims and diffusion of sustainability report evidence from korean listed companies 2003 2010 this study integrates theories of diffusion and social identity to conceptualize the diffusion of sustainability report sr as a result of a firm s identification with its reference groups specifically we first hypothesize four different sources of external stakeholder pressures driving the diffusion next we argue that the source of external stakeholder pressures has a differential effect on the adoption of sr for firms that claim their identity on sustainability management for firms with organizational identity claims in group stakeholder pressure will amplify whereas out group stakeholder pressure will dampen the adoption we test our theory using an event history analysis of 675 publicly traded firms in korea during the period of 2003 2010 the results show that all four sources of external pressure serve as mechanisms through which sr spread in korea more importantly we find support for the moderating role of organizational identity claims in the effect of external pressures we discuss how organizational identity matters in the diffusion of corporate social initiatives along with implications for policy makers

assessing the development of china s new energy industry abstract as the world s largest carbon dioxide co 2 emitter china is facing increasing international pressure to reduce emissions actively developing new energy has become a fundamental means to solve the dilemma between environmental pollution and energy consumption growth thus more scholars have conducted a wide range of studies on the new energy industry however most of the existing studies use traditional linear models to investigate the relationships between new energy industry and its driving forces ignoring the objective reality that there are many nonlinear relationships in economic variables in order to overcome the shortcomings of existing research this paper uses a data driven nonparametric additive regression model to study the new energy industry the results show that the nonlinear effect of agricultural development shows an inverted u shaped pattern due to the changes in crop acreage at different stages of development the nonlinear impact of foreign energy dependence also indicates an inverted u shaped pattern however technological progress produces a positive u shaped nonlinear impact on the new energy industry because of the difference in r d funding and r d personnel investments similarly the impact of energy consumption structure also shows a positive u shaped pattern owing to the gradual decline in coal consumption therefore the government should develop differentiated policies at different stages in order to effectively promote the development of new energy industries

spatial differentiation and vertical mergers in retail markets for gasoline this paper studies an empirical model of spatial competition applied to gasoline markets the main feature is to specify commuting paths as the locations of consumers in a hotelling style model as a result spatial differentiation depends in an intuitive way on the structure of the road network and the direction of traffic flows the model is estimated using panel data on the quebec city gasoline market and used to evaluate the consequences of a recent vertical merger difference in difference and counterfactual simulation methods are compared and the results to a large extent validate the assumptions of the demand model jel g34 l13 l42 l81 q41 r41

the effects of energy price technology and disaster shocks on china s energy environment economy system abstract this paper constructs a dynamic stochastic general equilibrium dsge model to analyze the effects of energy price technology and disaster shocks on china s energy environment economy 3e system it also studies stylized facts as well as co integration and error correction dynamic analyses of this system the disaster shock is modeled as a two state markov switching process the results show that both technology and energy price shocks increase the ratio of environmental investment to gdp the improvement in technology and rising energy prices helps to reduce co2 pollution and improve economic restructuring among the three kinds of shocks technology shock is the most important the robustness of the model is tested through statistical methods

optimal emissions tax rates under habit formation and social comparisons abstract the existing climate models ignore the behavioral anomalies of households and conclude that the optimal environmental tax rate should comove with business cycles however this assumption has received extensive criticism recently to this end this paper studies the optimal emissions tax rate when households are bounded rational in particular we calculate the optimal climate policy in a dynamic stochastic general equilibrium dsge model that features households with habit formation internal habits and social comparisons external habits compared to the benchmark model without consumption externality the social comparisons model amplifies consumption volatility but produces a similar response of pollutant emissions in the presence of the three types of economic shocks considered in contrast the habit formation model decreases the volatility of both consumption and pollutant emissions in contrast to the previous result that the optimal emissions tax rate should be procyclical we find that the social comparisons model largely mitigates the procyclicality of optimal emissions tax rates and the optimal emissions tax rates under the habit formation model remain constant in response to all the economic shocks considered

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

institutional theory and mnc subsidiary hrm practices evidence from a three country study this study sets out to explore human resource management hrm practices in multinational corporation mnc subsidiaries within an institutional theory framework based on a sample of 158 subsidiaries of mncs operating in the united states russia and finland the paper examines factors hypothesised to influence the hrm practices adapted in us japanese and european mnc subsidiaries located in russia finland and the us the results indicate significant differences in hrm practices used across host countries both the status of the subsidiary human resource department and the degree to which the subsidiary was involved in knowledge transfer with other parts of the mnc had a significant impact on the selection of hrm practices

imperfect competition and the effects of energy price increases on economic activity the authors show that modifying the standard neoclassical growth model by assuming that competition is imperfect makes it easier to explain the size of the declines in output and real wages that follow increases in the price of oil plausibly parameterized models of this type are able to mimic the response of output and real wages in the united states the responses are particularly consistent with a model of implicit collusion where markups depend positively on the ratio of the expected present value of future profits to the current level of output copyright 1996 by ohio state university press

applied welfare economics with discrete choice models economists have been paying increasing attention to the study of situations in which consumers face a discrete rather than a continuous set of choices such models are potentially very important in evaluating the impact of government programs upon consumer welfare but very little has been said in general regarding the tools of applied welfare economics indiscrete choice situations this paper shows how the conventional methods of applied welfare economics can be modified to handle such cases it focuses on the computation of the excess burden of taxation and the evaluation of quality change the results are applied to stochastic utility models including the popular cases of probit and logit analysis throughout the emphasis is on providing rigorous guidelines for carrying out applied work this abstract was borrowed from another version of this item

interfuel substitution a meta analysis interfuel substitutability has been of longstanding interest to the energy economics and policy community however no quantitative meta analysis has yet been carried out of this literature this paper fills this gap by analyzing a broad sample of studies of interfuel substitution in the industrial sector manufacturing industry or subindustries or macro economy of a variety of developed and developing economies publication bias is controlled for by including the primary study sample size in the meta regression results for the shadow elasticities of substitution between coal oil gas and electricity for forty six primary studies show that at the level of the industrial sector there are easy substitution possibilities between all the fuel pairs with the exception of gas electricity and coal electricity substitution possibilities seem more constrained at the macro level and less constrained in sub industries estimates also vary across countries publication bias does not seem to be present but model and data specification issues very significantly affect the estimates derived by each individual study estimates from cross section regressions are generally largest fixed effects panel estimates intermediate in magnitude and time series estimates are mostly much smaller econometric research suggests that the fixed effects estimates are likely the best among the existing studies though biased downwards

exploring the locus of invention the dynamics of network communities and firms invention productivity departing from prior research analyzing the implications of social structure for actors outcomes by applying either an ego network or a global network perspective this study examines the implications of network communities for the invention productivity of firms network communities represent dense and nonoverlapping structural groups of actors in a social system a network community lens helps identify new ways to study firms access to diverse knowledge inputs in a dynamic system of interorganizational relationships specifically we examine how the membership dynamics of a network community affect the invention productivity of member firms by either enabling or constraining access to broad diverse knowledge inputs our findings suggest first that a firm reaps the greatest invention benefits in a network community with moderate levels of membership turnover second a firm attains the greatest invention productivity when its own rate of movement across different network communities is moderate third we find that community members located in the core of their network community can benefit more from membership dynamics and prior community affiliations than those on its periphery in empirical analyses we use the evolving community structure of the network of interorganizational partnerships in the global computer industry over 1981 2001 to predict firms patenting rates

refraining from imitation professional resistance and limited diffusion in a financial market why do some practices not spread although this is an important question for both diffusion theorists and those interested in institutional change we know surprisingly little about the limitations on diffusion because most diffusion studies sample on successful diffusion i address the question of why some practices fail to spread by introducing the concept of a deviance discount a deviance discount is a systematic downgrading of the observed adoption performance of controversial practices which limits the contagion of such practices i test and find qualitative and quantitative support for my thesis in the product introduction behavior of swedish mutual fund firms my findings hold implications for diffusion theory and theories of endogenous institutional change

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

globalizing carbon lock in this paper extends the arguments surrounding carbon lock in elaborated in unruh energy policy 28 2000 817 30 2002 317 to countries currently undergoing industrialization it argues that for numerous reasons industrializing countries are unlikely to leapfrog carbon intensive energy development on the contrary carbon lock in may be globalizing and could further constrain climate change mitigation options it is then argued that many policy recommendations ignore carbon lock in possibly limiting their potential for successful implementation the paper then discusses four policy approaches that appear to have advantages given lock in conditions it is recognized however that relative ease of implementation does not necessarily equate with superiority instead it is merely a path dependent outcome of past development decisions pursuing policies on the basis of relative implementation ease may help address the issue of climate change but could also result in sub optimal outcomes along other dimensions of sustainable development

the effect of ownership structure on prices in geographically differentiated industries i analyze how ownership structure and market geography jointly influence fast food prices i estimate a model of demand and supply that accounts for the market geography and run counterfactual experiments that demonstrate how mergers affect prices i find that the impact of mergers can be large that this impact decreases as the merging outlets are farther apart that mergers among market leaders generally increase prices more than mergers among weaker firms and that mergers can increase prices even if the outlets are so far apart that neither outleti s presence affects prices at the other before the merger

learning about new technologies through social networks experimental evidence on nontraditional stoves in bangladesh there are few marketing studies of social learning about new technologies in low income countries this paper examines how learning through opinion leaders and social networks influences demand for nontraditional cookstoves a technology with important health and environmental consequences for developing country populations we conduct marketing interventions in rural bangladesh to assess how stove adoption decisions respond to a learning the adoption choices of locally identified opinion leaders and b learning about stove attributes and performance through social networks we find that households generally draw negative inferences about stoves through social learning and that social learning is more important for stoves with less evident benefits in an institutional environment where consumers are distrustful of new products and brands consumers appear to rely on their networks more to learn about negative product attributes overall our findings imply that external information and marketing campaigns can induce initial adoption and experiential learning about unfamiliar technologies but sustained use ultimately requires that new technologies match local preferences

regulating innovation with uncertain quality information risk and access in medical devices we study the impact of regulating product entry and quality information requirements on an oligopoly equilibrium and consumer welfare product testing can reduce consumer uncertainty but also increase entry costs and delay entry using variation between eu and us medical device regulations we document patterns consistent with valuable learning from more stringent us requirements to derive welfare implications we pair the data with a model of supply demand and testing regulation us policy is indistinguishable from the policy that maximizes total surplus in our estimated model while the european union could benefit from more testing post market surveillance could further increase surplus

asymmetries in the response of economic activity to oil price increases and decreases abstract it has been common to assume that the relationship between economic activity and oil prices is asymmetric theoretical underpinnings for this asymmetry include costly sectoral reallocation partial equilibrium models of irreversible investment and some version of precautionary savings yet recent studies that use new methodologies to test for asymmetries in u s data have cast some doubts on that premise in this paper we use state of the art techniques to evaluate the presence of asymmetries for a set of oecd countries containing both oil exporters and oil importers we find very little support for the hypothesis that the response of industrial production to oil price increases and decreases is asymmetric our results have important implications for theoretical models of the transmission of oil price shocks they point towards the importance of direct supply and direct demand transmission channels as well as indirect transmission channels that imply a symmetric response

cross country heterogeneity in intertemporal substitution abstract we collect 2735 estimates of the elasticity of intertemporal substitution in consumption from 169 published studies that cover 104 countries during different time periods the estimates vary substantially from country to country even after controlling for 30 aspects of study design our results suggest that income and asset market participation are the most effective factors in explaining the heterogeneity households in rich countries and countries with high stock market participation substitute a larger fraction of consumption intertemporally in response to changes in expected asset returns micro level studies that focus on sub samples of rich households or asset holders also find systematically larger values of the elasticity

framing controversial actions regulatory focus source credibility and stock market reaction to poison pill adoption we contribute to the research on organizational accounts by examining the role of different framing languages and the credibility of the frame articulator on justifying controversial organizational actions drawing on regulatory focus theory and the literature on source credibility we develop novel arguments as to how a gains versus nonlosses framing and the perceived credibility of the speaker influence stakeholder responses as well as how the effectiveness of these aspects is influenced by context we test our arguments using data on the framing of the adoption of poison pills by u s firms between 1983 and 2008 using content analysis and an event study we find that a gains framing aligned with the dominant institutional logic leads to a positive stock market reaction while statements emanating from speakers with potentially self serving interests negatively affect the stock market reaction our findings further show that the effectiveness of framing and source credibility are dependent on contextual attributes such as speaker visibility prior performance and practice prevalence

fixed costs and the product market treatment of preference minorities we clarify the sense in which the market outcome may be biased against preference minorities and estimate the degree of bias using an empirical model of entry into american radio broadcasting markets listening model estimates are used to infer fixed costs and these estimates are then used to compute optimal station configurations as well as the welfare weights on different groups that rationalize the observed configuration welfare weights are 2 to 3 times higher for whites than for blacks and 1 5 to 2 times higher for non hispanic than for hispanic listeners we explore the role of importing and exporting patterns in generating these findings

threshold models of interpersonal effects in consumer demand abstract whether one buys may be determined in part by how many others have when the correlation is positive we refer to bandwagon effects and when negative reverse bandwagons we construct demand schedules in the presence of such effects and with simple assumptions about supply investigate the existence of and approach to equilibrium stable price quantity equilibria exist but for many plausible parameter values equilibria are asymptotically unstable and system trajectories consist of cycles that can move with slight parameter changes via successive bifurcations into what has been called chaotic dynamics essentially indistinguishable from random noise these conditions occur despite assumptions of erfect information profit maximizing firms and utility maximizing individuals

from security to mobility generalized investments in human capital and agent commitment this paper considers the impacts of different investments in human capital firm specific versus generalized investments on employee commitment to the firm the resource based literature has stressed that only firm specific human capital is likely to generate organizational rents since those assets are more likely to be inimitable rare and therefore a better basis for sustained competitive advantage generalized investments in human capital i e investments in capabilities that people can transfer and deploy to other firms or settings are to be avoided however observing lessons from the literature on psychological contracts and organizational commitment we argue that generalized investments may have value for the firm through their effects on worker commitment to the firm the gain in worker commitment is valuable to firms given the fragile state of the contemporary employment relation in which the lack of job security is likely to breed diminished employee commitment this is particularly a concern for employment relations consisting of externalized labor i e contract work or selfemployed professionals operating as agents of the firm in which agent commitment is vital but likely to be more scarce in this paper we focus on the externalized workers independent agents of two insurance firms in addressing these issues a sample of 237 agents shows support for the benefits of generalized investments on agent commitment questioning conventional wisdom that such investments should be avoided we also examine the impact of relation specific investments and other key antecedents on agent commitment concluding that a mixture of strategic investments in human capital should be considered taking into account their impacts on the firm worker psychological contract we also examine the impact of agent commitment on agent performance in this context finding committed agents do provide greater value to the insurer

estimation of a model of entry in the airline industry this paper considers the effect of an airline s scale of operation at an airport on the profitability of routes flown out of that airport the empirical methodology uses the entry decisions of airlines as indicators of underlying profitability the results extend the empirical literature on airport presence by providing a new set of estimates of the determinants of city pair profitability these estimates imply that city pair profits increase in airport presence and decrease rapidly in the number of entering firms the literature on empirical models of oligopoly entry is also extended via a focus on the role of differences between firms

the impacts of nonferrous metal price shocks on the macroeconomy in china from the perspective of resource security abstract in recent years the price of international nonferrous metals has undergone drastic fluctuations which could exert significant shock effects on macroeconomic variables based on the perspective of resource security this paper reveals the relationship between the nonferrous metal price shocks and china s macroeconomic variables by establishing a dynamic stochastic general equilibrium dsge model embedded with nonferrous metal consumption and means of production blocks the model is based on the optimal decision making behaviours of three departments that satisfy multiple constraints to realize optimal policy making furthermore the structural vector autoregression svar method is applied to verify the shock effects of nonferrous metal price and obtain more robust results the bayesian results show that there is consistency among nonferrous metal price shocks consumer reference shocks wage bonus shocks technical shocks and price adjusted shocks the impulse response function results indicate that the stimulation of an international nonferrous metal price increase would have significant positive impacts on the macroeconomic variables of investment money supply consumption and total output but negative effects on labour demand in addition the impulse responses of wage levels and the rate of inflation to nonferrous metal price shocks present obvious lagging effects

product differentiation and efficiencies in the retail banking industry abstract we empirically quantify the welfare implications of bank entry in the united states between 2000 and 2008 we use a fully structural framework that combines a differentiated demand model with an endogenous product model to investigate the market outcomes we find no evidence for under or over entry compared with the socially efficient outcome there is a mild welfare loss resulting from banks entering wrong locations in product space compared with the observed outcome consumer surplus drops by 20 38 and bank profits decline by 48 59 when banks are homogeneous therefore product differentiation significantly improves welfare under free entry

interfuel substitution in the united states in this paper we use the locally flexible translog functional form to investigate the demand for energy and interfuel substitution in the united states and to provide a comparison of our results with most of the existing empirical energy demand literature motivated by the widespread practice of ignoring theoretical regularity we follow barnett s 2002 suggestions and estimate the model subject to theoretical regularity using methods developed by diewert and wales 1987 and ryan and wales 2000 in an attempt to produce inference consistent with neoclassical microeconomic theory moreover we use the most recent data published by the u s energy information administration eia and in addition to investigating interfuel substitution possibilities in total u s energy demand we follow serletis et al 2009 and also examine interfuel substitution possibilities in energy demand by sector moreover we test for weak separability with the objective of discovering the structure of the functional form in total energy demand as well as energy demand by sector

an empirical model of firm entry with endogenous product type choices i describe a model of entry with endogenous product type choices these choices are formalized as the outcomes of a game of incomplete information in which rivals differentiated products have nonuniform competitive effects on profits i estimate the model for location choices in the video retail industry using a nested fixed point algorithm solution the results imply significant returns to product differentiation simulations illustrate the tradeoff between demand and intensified competition and the extent to which markets with more scope for differentiation support greater entry

optimal taxes on fossil fuel in general equilibrium we analyze a dynamic stochastic general equilibrium dsge model with an externality through climate change from using fossil energy our central result is a simple formula for the marginal externality damage of emissions or equivalently for the optimal carbon tax this formula which holds under quite plausible assumptions reveals that the damage is proportional to current gdp with the proportion depending only on three factors i discounting ii the expected damage elasticity how many percent of the output flow is lost from an extra unit of carbon in the atmosphere and iii the structure of carbon depreciation in the atmosphere thus the stochastic values of future output consumption and the atmospheric co2 concentration as well as the paths of technology whether endogenous or exogenous and population and so on all disappear from the formula we find that the optimal tax should be a bit higher than the median or most well known estimates in the literature we also formulate a parsimonious yet comprehensive and easily solved model allowing us to compute the optimal and market paths for the use of different sources of energy and the corresponding climate change we find coal rather than oil to be the main threat to economic welfare largely due to its abundance we also find that the costs of inaction are particularly sensitive to the assumptions regarding the substitutability of different energy sources and technological progress

tax design in the alcohol market abstract alcohol consumption generates negative externalities that are non linear in the total amount of alcohol consumed if tastes for products are heterogeneous and correlated with marginal externalities then varying tax rates on different products can lead to welfare gains we study this problem in an optimal tax framework and empirically for the uk market we find that heavy drinkers have systematically different patterns of alcohol demands and welfare gains from optimally varying rates are higher the more concentrated externalities are among heavy drinkers

public monopoly and economic efficiency evidence from the pennsylvania liquor control board s entry decisions we estimate a spatial model of liquor demand to analyze the impact of government controlled retailing on entry patterns in the absence of the pennsylvania liquor control board the state would have roughly 2 5 times the current number of stores higher consumer surplus and lower payments to liquor store employees with just over half the number of stores that would maximize welfare the government system is instead best rationalized as profit maximization with profit sharing government operation mitigates but does not eliminate free entry s bias against rural consumers we find only limited evidence of political influence on entry jel d42 d72 l11 l12 l43 l81

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

coming forward the effects of social and regulatory forces on the voluntary restatement of earnings subsequent to wrongdoing we investigate the effects of social and regulatory forces on a firm s decision to disclose past wrongdoing by voluntarily restating its earnings with an eight year sample of more than 2 500 public firms including 170 voluntary restaters we find that firms are more likely to voluntarily restate their earnings in response to informal social pressures from other firms in their industry and less likely to do so in response to formal regulatory sanctions we also show that the impact of these forces varies with firm status we contribute to corporate governance and public policy research that examines the effectiveness of hard versus soft deterrence measures on firm compliance

sme internationalization modes in the german biotechnology industry the influence of imitation network position and international experience in this article we reveal how network enabled imitation processes impact young small and medium sized enterprises smes internationalization and how a firm s network position as well as its experiential knowledge moderate imitative behavior in internationalization modes building on institutional network and organizational learning theory we suggest that firms imitate the internationalization modes of their peers in their network moreover we argue that a firm s imitation propensity depends on two important boundary conditions network position and past experience applying a longitudinal event history analysis to analyze the complete population of 977 german biotechnology firms between 1996 and 2012 largely supports our hypotheses our findings reveal that firms imitate the internationalization modes of their peers in a precise manner this implies that the imitation of others can initially serve as a presumably convenient low risk shortcut to a planned or experience driven internationalization process furthermore our results confirm that this imitation process is channeled through formal network relations and that central network positions that are associated with superior information access enhanced legitimacy and status may promote deviating behavior acknowledging the interplay of different learning sources our findings additionally show that initial internationalization mode choices of smes can have a lasting effect on subsequent internationalization behavior overall our study contributes to a more nuanced view of imitative behavior of internationalizing smes and its boundary conditions and highlights future research opportunities that exist for considering imitation and its implications in international business research

the economic effects of energy price shocks large fluctuations in energy prices have been a distinguishing characteristic of the u s economy since the 1970s turmoil in the middle east rising energy prices in the u s and evidence of global warming recently have reignited interest in the link between energy prices and economic performance this paper addresses a number of the key issues in this debate what are energy price shocks and where do they come from how responsive is energy demand to changes in energy prices how do consumers expenditure patterns evolve in response to energy price shocks how do energy price shocks affect u s real output inflation and stock prices why do energy price increases seem to cause recessions but energy price decreases do not seem to cause expansions why has there been a surge in the price of oil in recent years why has this new energy price shock not caused a recession so far have the effects of energy price shocks waned since the 1980s and if so why as the paper demonstrates it is critical to account for the endogeneity of energy prices and to differentiate between the effects of demand and supply shocks in energy markets when answering these questions

energy price shocks and the macroeconomy the role of consumer durables so far the literature on dynamic stochastic general equilibrium models with energy price shocks uses energy on the production side only in these models energy shocks are responsible for only a negligible share of output fluctuations we study the robustness of this finding by explicitly modeling private consumption of energy at the household level in addition to energy use at the firm level to account for total energy use in the economy additionally we distinguish between investment in consumer durables and investment in capital goods the model economy is calibrated to match total energy use and durable goods consumption as observed in the u s data simulation results indicate that despite higher total energy use this economy has an even smaller proportion of output fluctuations attributable to energy price shocks productivity shocks continue to be the primary force behind business cycle fluctuations the driving force behind our results is that the household now has the flexibility to rebalance its investment portfolio specifically the energy price hike is absorbed by reducing durable goods investment more than investment in capital goods thereby cushioning the hit to future production at the expense of current consumption hence our model better matches the consumption volatility observed in the data jel classification e32 q43

social network effects on the extent of innovation diffusion a computer simulation of innovation diffusion no longer focus exclusively on explaining the rate at which innovations diffuse or the sequence in which they are adopted they also focus on explaining why certain innovations diffuse extensively be coming de facto standards whereas others do so partially or not at all many of these theories specify a bandwagon process a positive feedback loop in which increases in the number of adopters create stronger bandwagon pressures and stronger bandwagon pressures in turn cause increases in the number of adopters factors affecting if and how many times this feedback loop cycles explain if and how many potential adopters jump on a bandwagon we argue that one important factor has not yet been incorporated into theories explaining bandwagons extent the structure of social net works through which potential adopters of innovations find out information about these innovations which can cause them to adopt these innovations we advance a theory of how the structure of social networks affects bandwagons extent we propose that both the number of network links as well as small seemingly insignificant idiosyncracies of their structures can have very large effects on the extent of an innovation s diffusion among members of a social network

the diffusion of new technology and the market for an innovation this article shows that the diffusion of a capital embodied process innovation results from a pattern of decreasing incremental benefits and adoption costs for later adoptions strategic behavior is inessential to this finding we develop a method for comparing diffusion rates for different market structures in the capital equipment market we consider cases with market power on the seller s side of the market and on the buyers side of the market a case with no market power and the welfare optimal case we find that a joint venture adopts an innovation more slowly than other market regimes to protect existing capital investments and that the adoption rate is slower than is socially optimal a monopoly supplier on the other hand adopts at a rate faster than is socially optimal this result is usually also the case when there is no market power finally we show that the monopoly supplier accelerates adoptions faster than in the case where there is no market power but retards later adoptions market power thus makes a difference in diffusion rates and on which side of the market that power lies makes a considerable difference

how should monetary policy respond to changes in the relative price of oil considering supply and demand shocks abstract this paper examines optimal monetary policy in a new keynesian model where supply and demand shocks affect the price of oil optimal policy fully stabilizes core inflation when wages are flexible the nominal rate rises falls in response to the demand supply shock with sticky wages core inflation falls rises in response to the demand supply shock impulse response functions from a var estimated with post 1986 u s data show minimal movement in core inflation in response to both shocks the federal funds rate rises falls in response to the demand supply shock consistent with the predictions from the theoretical model for policy that stabilizes core inflation

on the diffusion of new technology a game theoretic approach this paper is an attempt at a rigorous albeit not exceedingly general analysis of the diffusion of new technology in particular consider an industry composed of two firms each using the current best practice technology the firms are assumed to be operating at nash equilibrium output levels generating a market price given demand and profit allocations when a cost reducing innovation is announced each firm must determine when if ever to adopt it based in part upon the discounted cost of implementing the new technology and in part upon the behavior of the rival firm if either firm adopts before the other it can expect to make substantial profits at the expense of the other firm on the other hand the discounted sum of purchase price and adjustment costs may decline with the lengthening of the adjustment period as various quasi fixed factors become more easily variable therefore although waiting costs the firm more in terms of foregone profits it may save money on the cost of purchasing the new technology thus the firm must weigh the costs and benefits of delaying adoption as well as take account of its rival s strategic behavior

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

prices versus policy an analysis of the drivers of the primary fossil fuel mix abstract energy policymakers often attempt to shape their countries energy mix rather than leave it purely to market forces by calibrating and simulating a dynamic stochastic general equilibrium dsge model this paper analyzes the primary fossil fuel mix in the usa and compares it to germany and the uk given the different evolution of the mixes and the different roles played by relative prices and policy in north america and europe it is found that the model explains well the evolution of the primary fossil fuel mix in the usa for the period 1980 2014 suggesting that relative fossil fuel prices generally dominated in determining the mix during this time however this is not the case for germany and the uk for both countries the model performs well only for the period after the market oriented reforms in the 1990s additionally the volatility of private consumption and output for the pre and post reform periods is evaluated for germany and the uk and it is found that the liberalized energy markets brought about a transition from coal to natural gas but with increased macroeconomic volatility

the third oil price surge what s different this time the period from 2003 to 2008 was marked by an oil price increase comparable to the two oil price crises in the 1970s this paper looks in detail at the situation of the oil price crises 30 years ago and compares them along various aspects on the demand and supply side with the recent price increase to identify similarities and differences while both oil price crises in 1973 and 1979 1980 were ultimately caused by supply actions of members of the organisation of petroleum exporting countries opec all three oil price crises were preceded by high demand growth other aspects that favoured a high oil price in all three cases were low investments in new oil fields as a consequence low spare capacity and a weak us dollar in addition the recent oil price surge has been characterised by a high global refinery utilisation and refineries that did not adapt fast enough to the rising demand for lighter oil products moreover broader geopolitical uncertainties combined with risks associated with the oil trade helped push the oil price into a triple digit zone speculation played only a limited and temporary role in accelerating price movements during the recent price increase

an econometric model of location and pricing in the gasoline market abstract the authors propose an econometric model of both the geographic locations of gasoline retailers in singapore and price competition among retailers conditional on their geographic locations although market demand for gasoline is not observed the authors are able to infer the effects of such demand from stations locations and pricing decisions using available data on local market level demographics using the proposed location model which is based on the assumption of social welfare maximization by a policy planner the authors find that local potential gasoline demand depends positively on the local demographic characteristics of the neighborhood using the proposed pricing model which is based on the assumption of bertrand competition between retail chains the authors find that retail margins for gasoline are approximately 21 the authors also find that consumers are willing to travel up to a mile for a savings of 03 per liter using the estimates of the proposed econometric model the a

on existence of location equilibria in the 3 firm hotelling problem it is well known that the hotelling model of spatial competition with three firms admits no equilibrium solution see chamberlin 1933 and lerner and singer 1937 apparently this non existence result is associated with the assumption that customers patronize the nearest firm now empirical evidence supports the idea that consumers do not necessarily choose to buy from the closest firm since they also take variables other than distance into account as these variables are often unobservable firms cease to be fully informed about consumers motivations consequently they can at best determine the shopping behavior of a particular customer up to a probability distribution the purpose of this note is to reconsider the 3 firm hotelling problem within a probabilistic framework it is shown that two different types of equilibria emerge centrally agglomerated equilibria in which the three firms are clustered and symmetric dispersed equilibria in which the three firms have distinct locations these equilibria are compared to the socially optimal locations

the demand for alcohol the differential response to price although several studies indicate that drinking is responsive to price little work has focused on whether prices have a differential effect on light moderate or heavy drinking this study examines the price responsiveness of the demand for alcohol whether heavy drinkers are less sensitive to price than light or moderate drinkers the study uses data on alcohol consumption on the 1983 national health interview survey the results indicate that both light and heavy drinkers are much less price elastic than moderate drinkers further we cannot reject the hypothesis that the very heaviest drinkers have perfectly price inelastic demands

on some economic principles of the energy transition abstract energy transitions are complex processes difficult to characterize using a small number of features we provide a simple framework for the energy transition pointing out that some scenarios have a higher probability the document is organized around four key propositions i the current energy transition is driven by policies rather than by technology improvements ii the energy transition disrupts liberalized electricity markets and undermines their economic foundation iii given the current technologies and technological perspectives the energy transition to renewable sources is going to be incomplete iv there is a change in consumer preferences for cleaner energy demanding new business models these propositions lead to the following consequences a the outcome in terms of electricity prices and energy production will depend on the policies applied as there are multiple possible policies and paths of energy transition b a complete transition based on renewable energy may be technically possible but difficult to manage in liberalized markets requiring a new design c there is a change in consumers preferences towards decarbonized energy creating new business opportunities and jeopardizing traditional business models it is difficult to make accurate predictions on the energy transition but we provide general guidelines for policymakers companies and investors

do we really understand the development of china s new energy industry abstract countries all over the world have realized that the key to resolving the dilemma between accelerated energy consumption and reduction in carbon dioxide emission is to actively develop new energy industry many scholars have conducted in depth investigation into the main driving forces of the new energy industry however they often adhere to an assumption that the effect of the driving forces on new energy industry is constant across areas ignoring the spatial heterogeneity in economic phenomena geographically weighted regression gwr model and the use of local sample data to implement parameter estimation can make up for the inadequacies of existing research therefore this paper uses the gwr model to carefully investigate the new energy industry the results show that the impact of economic growth on the new energy industry in the eastern region is higher than in the central and western regions owing to the differences in economic structure and fixed asset investment the impact of foreign energy dependence continuously declines from the eastern region to the central and western regions this is attributable to the differences in natural gas and oil imports technological progress has a similar effect on account of the differences in r d funding and r d personnel investments however the impact of the agriculture industry in the central region is higher than in the eastern and western regions due to the differences in crop acreage and agricultural output this study improves our understanding of the new energy industry and would help local authorities to formulate targeted policies for promoting the growth of new energy industry

the performance consequences of ambidexterity in strategic alliance formations empirical investigation and computational theorizing although alliance studies have generally favored an ambidextrous approach between exploration and exploitation they tend to overlook a firm s characteristics its industry constraints or the dynamic network in which the firm is embedded this study examines the ambidexterity hypothesis and its boundary conditions with a unique research method we not only analyze empirical data from five u s industries spanning eight years but also expand theoretical insights to the network level by building a computer simulation model both our empirical and simulation results reveal the contingencies of the ambidexterity hypothesis in alliance formation our findings show that although an ambidextrous formation of alliances benefits large firms a focused formation of either exploratory or exploitative alliances benefits small firms in an uncertain environment an ambidextrous formation enhances firm performance but so does a focused formation in a stable environment finally the simulation model demonstrates that a firm s centrality and structural hole positions in network relations can moderate the relationships between alliance formation choices and firm performance and that the ambidexterity hypothesis may be limited to the earlier stage of the network our study provides critical evidence into the viability of adopting a dynamic network perspective in understanding the ambidexterity hypothesis and advancing strategic alliance research beyond static and dyadic levels