are the self employed really jacks of all trades testing the assumptions and implications of lazear s theory of entrepreneurship with german data using a large representative german data set and various concepts of self employment this paper tests the jack of all trades view of entrepreneurship by lazear am econ rev 94 2 208 211 2004 consistent with its theoretical assumptions we find that self employed individuals perform more tasks and that their work requires more skills than that of paid employees in contrast to lazear s assumptions however self employed individuals do not just need more basic but also more expert skills than employees our results also provide rather limited support for the idea that human capital investment patterns differ between those who become self employed and those ending up in paid employment

the higher returns to formal education for entrepreneurs versus employees how valuable is formal education for entrepreneurs income relative to employees and if the income returns to formal education are different for entrepreneurs vis a vis employees what might be a plausible explanation to explore these questions we analyze a large representative us panel we show that entrepreneurs have higher returns to formal education than employees we refer to this as the entrepreneurship returns puzzle we run post hoc analyses to explore a number of potential explanations of this puzzle indirectly our analysis indicates that the higher returns to formal education for entrepreneurs might be due to the fewer organizational constraints they face leading to more personal control over how to use their human capital compared to employees

the chronology and intellectual trajectory of american entrepreneurship education 1876 1999 abstract since the first entrepreneurship class held in 1947 the academic discipline of entrepreneurship s growth is described using a chronology of three domains courses supplemental infrastructures and publications a 100 item chronology of entrepreneurship education in the usa from 1876 through 1999 is offered and analyzed the major findings are 1 in the usa the field has reached maturity and 2 growth is likely outside business schools and outside the usa the major problems include a glut of journals a narrowing focus on top tier publications potential american stagnation and a shortage of faculty overall exacerbated by a shortage of phd programs

entrepreneurship selection and performance a meta analysis of the impact of education in developing economies this meta analytical review of empirical studies of the impact of schooling on entrepreneurship in selection and performance in developing economies looks at variations impact across specific characteristics of the studies a marginal year of schooling in developing economies raises enterprise income by an average of 5 5 percent which is close to the average return in industrial countries the return varies however by gender rural or urban residence and the share of agriculture in the economy furthermore more educated workers typically end up in wage employment and prefer nonfarm entrepreneurship to farming the education effect that separates workers into self employment and wage employment is stronger for women possibly stronger in urban areas and also stronger in the least developed economies where agriculture is more dominant and literacy rates are lower

examining the formation of human capital in entrepreneurship a meta analysis of entrepreneurship education outcomes abstract effective human capital formation through the medium of entrepreneurship education and training eet is of increasing concern for governments as eet is growing rapidly across the world unfortunately there is a lack of consistent evidence showing that eet helps to create more or better entrepreneurs we undertake the first quantitative review of the literature and in the context of human capital theory find that there is indeed support for the value of eet based on 42 independent samples n 16 657 we find a significant relationship between eet and entrepreneurship related human capital assets r w 217 and entrepreneurship outcomes r w 159 the relationship between eet and entrepreneurship outcomes is stronger for academic focused eet interventions r w 238 than for training focused eet interventions r w 151 we find evidence of heterogeneity in many of our correlations and recommend that future studies examine potential moderators to more clearly delineate eet effect sizes we also find a number of methodological weaknesses among the studies analyzed and that those studies with lower methodological rigor are overstating the effect of eet recommendations to improve the quality of future work in the field are provided

re examining the consumption wealth relationship the role of model uncertainty this paper discusses the consumption wealth relationship we use data on consumption assets and labor income and a vector error correction framework this framework defines a set of models that differ in the number of co integrating vectors the form of deterministic components and lag length further models can be defined through parametric restrictions and in particular interest centers on a weak exogeneity restriction that says that the co integrating residuals do not affect consumption and income directly key results in previous work relate to the roles of permanent and transitory shocks in driving wealth and how consumption responds to these shocks we investigate the robustness of these results to model uncertainty and argue for the use of bayesian model averaging we find that there is a large degree of model uncertainty whether this uncertainty has important empirical implications depends on the researcher s attitude toward the theory used to motivate a co integrating relationship between consumption assets and income if we work with models consistent with this theory and impose the weak exogeneity restriction we find precisely estimated results that show that permanent shocks have only a small role in driving assets and that the predominant transitory shocks have little effect on consumption these findings are consistent with the previous literature however if we work with a broader set of models and let the data speak we find that the exact magnitude of the role of permanent shocks is hard to estimate precisely thus although some support exists for the view that their role is small we cannot rule out the possibility that they have a substantive role to play copyright c 2008 the ohio state university

measuring the business cycle effects of permanent and transitory shocks in cointegrated time series abstract this paper proposes a statistical framework to evaluate the contribution of permanent and transitory shocks to the cyclical fluctuations of cointegrated variables an empirical application with us macroeconomic data reveals that transitory shocks are responsible for most of the variability at the business cycle frequencies

experimenting with purchase history based price discrimination many purchases of differentiated goods are repeated giving sellers the opportunity to engage in price discrimination based upon the shopper s previous behavior by either offering loyalty discounts to repeat buyers or introductory rates to new customers recent theoretical work suggests that loyalty discounts can be profitable to sellers when customer preferences are not stationary and sellers can pre commit to prices for repeat buyers but otherwise returning customers can be expected to pay the same or more than new buyers this paper reports behavior in controlled laboratory experiments designed to empirically test the impact of these factors on pricing strategies the results generally support the comparative static predictions of the theoretical model when customer preferences are fixed over time sellers attempt to lure customers from their rival price pre commitment for repeat shoppers when buyer preferences vary over time resulted in modest loyalty pricing but the discounts are not as prevalent as predicted as sellers rarely price below cost behaviorally price pre commitment to loyal customers is found to reduce prices overall

non stationary hours in a dsge model the time series fit of dynamic stochastic general equilibrium dsge models often suffers from restrictions on the long run dynamics that are at odds with the data using bayesian methods we estimate a stochastic growth model in which hours worked are stationary and a modified version with permanent labor supply shocks if firms can freely adjust labor inputs the data support the latter specification once we introduce frictions in terms of labor adjustment costs the overall time series fit improves and the model specification in which labor supply shocks and hours worked are stationary is preferred

embedded premium promotion why it works and how to make it more effective in this paper we define an embedded premium ep as an enhancement that involves a social cause added on to a product or service we characterize ep as a sales promotion strategy and juxtapose it with traditional approaches such as discounts and rebates across three experiments using a nationwide internet panel and employing stated measures and model based inference we find that at low denominations ep is more effective than an equivalent price discount we describe how an ep s social association may influence consumer choice quite differently than price promotions and contrary to the asymmetric price promotion effect documented in the promotions literature we find that ep benefits an unknown brand more than a known brand our hierarchical bayes approach uncovers heterogeneity in ep effectiveness that can be explained by affinity toward the focal charity personal motivations and demographic markers an identifiable segment of individuals prefer the other over self suggesting possible ep optimization and segmentation strategies two such strategies customization and coverage are empirically tested and the former is shown to be very effective our findings have broad implications for brand managers with regard to resource allocation and ep program return on investment roi as well as important social welfare implications

bertrand competition with an asymmetric no discrimination constraint regulators and competition authorities often prevent firms with significant market power or dominant firms from practicing price discrimination the goal of such an asymmetric no discrimination constraint is to encourage entry and serve consumers interests this constraint prohibits the firm with significant market power from practicing both behaviour based price discrimination within the competitive segment and third degree price discrimination across the monopolistic and competitive segments we find that this constraint hinders entry and reduces welfare when the monopolistic segment is small

success in entrepreneurship a complementarity between schooling and wage work experience what makes a successful entrepreneur using danish register data we find strong support for the hypothesis that theoretical skills from schooling and practical skills acquired through wage work are complementary inputs in the human capital earnings function of entrepreneurs in fact we find that schooling only pays off in combination with wage work experience as the returns to schooling are insignificant when the entrepreneur has no wage work experience the results are extremely robust toward more flexible specifications including fixed effect estimations dealing with unobserved heterogeneity furthermore the interaction term is negligible for non entrepreneurs suggesting that the complementarity between wage work experience and schooling is a distinctive characteristic of entrepreneurs

research note consumer addressability and customized pricing the increasing availability of customer information is giving many firms the ability to reach and customize price and other marketing efforts to the tastes of the individual consumer this ability is labeled as consumer addressability consumer addressability through sophisticated databases is particularly important for direct marketing firms catalog retailers such as l l bean and land s end credit card issuing banks and firms in the long distance telephone market we examine the strategic implications of consumer addressability on competition between database direct marketing firms we address questions such as in a competitive environment how should firms invest in addressability will future improvements in the degree of addressability increase or mitigate the intensity of competition between the firms will greater addressability always be beneficial for firms we model competition between two firms in a market where consumers differ on a horizontal attribute of product differentiation the market comprises consumers located on a linear attribute space and firms located at the ends of the line we represent the degree of addressability or the reach of a firm s database as the proportion of consumers at each point in the market who are in the firm s database consequently the firm can offer these consumers customized prices consumer addressability creates two effects that govern the competition between firms a surplus extraction effect because a firm might address a consumer who is not reached by its competitor and a competitive effect that is created by the set of consumers who can be addressed by both firms the key results of the paper pertain to when the addressability decision is endogenous when the extent of market differentiation or consumer heterogeneity in preferences for a product brand attribute as well as the incremental cost of addressability are sufficiently large firms make symmetric investments in equilibrium given high costs firms choose sufficiently low levels of addressability low addressability and high levels of market differentiation both help reduce price competition which facilitates symmetric choice of addressability by the firms in equilibrium however when market differentiation and the cost of incremental addressability become small firms face the prospect of destructive competition as a result they strategically differentiate in their choice of addressability to mitigate this competition interestingly even in the extreme case when incremental addressability is costless not every firm chooses full addressability in equilibrium this has useful implications for direct marketing given that the advances in information technology should improve the ability of firms to address their consumers it might indeed not be desirable for all direct marketing firms to indefinitely pursue greater addressability as costs of doing so decline the analysis also shows an interesting effect of market differentiation in addressable markets equilibrium profits can decrease with an increase in market differentiation when the marginal cost of addressability is sufficiently high finally we discuss the competitive outcome that would result when firms compete with addressable as well as uniform posted prices

stochastic trends and economic fluctuations are business cycles mainly the result of permanent shocks to productivity this paper uses a long run restriction implied by a large class of real business cycle models identifying permanent productivity shocks as shocks to the common stochastic trend in output consumption and investment to provide new evidence on this question econometric tests indicate that this common stochastic trend cointegration implication is consistent with postwar u s data however in systems with nominal variables the estimates of this common stochastic trend indicate that permanent productivity shocks typically explain less than half of the business cycle variability in output consumption and investment copyright 1991 by american economic association

the impact of entrepreneurship education on entrepreneurship skills and motivation this paper analyzes the impact of a leading entrepreneurship education program on college students entrepreneurship skills and motivation using an instrumental variables approach in a difference in differences framework we exploit that the program was offered to students at one location of a school but not at another location of the same school location choice and thereby treatment is instrumented by the relative distance of locations to parents place of residence the results show that the program does not have the intended effects the effect on students self assessed entrepreneurial skills is insignificant and the effect on the intention to become an entrepreneur is even negative

strategic loyalty reward in dynamic price discrimination in a dynamic model with overlapping generations of consumers we study duopolistic competition when firms can price discriminate at each period between their previous customers and the consumers that they have never served long term contracts are not enforceable in markov perfect equilibrium one firm charges higher prices to its past customers than to its new customers as past customers have revealed their strong preferences for the firm the other firm however rewards its previous customers by charging lower prices to them than to its new customers this loyalty reward strategy comes from the interplay between the firms usual incentive to extract surplus from consumers with revealed strong preferences and their incentives to acquire information and to recognize their young loyal customers the result also relies on the firms inability a priori to tell different generations apart it is the outcome of the unique equilibrium of a simplified two period or t period version of the game and holds with forward looking consumers who are impatient enough

behavior based pricing production efficiency and quality differentiation in a two period vertical duopoly we examine how behavior based price discrimination bpd affects the firms endogenous quality differentiation and profits the firms relative production efficiency defined as the ratio between their unit cost difference and quality difference plays a crucial role with exogenous product qualities bpd always decreases the profits of the more efficient firm but increases those of the sufficiently less efficient firm anticipating its period 2 disadvantage in price discrimination the less efficient firm competes more vigorously and also gains more in period 1 than its competitor for the sufficiently less efficient firm its period 1 gain dominates its period 2 loss and its total profits increase with endogenous quality choices bpd does not alter the low end quality at the lower bound of the quality space but increases the high end quality enlarging quality differentiation this is because under bpd each firm s profit gain decreases or its profit loss increas

evidence on features of a dsge business cycle model from bayesian model averaging the empirical support for features of a dynamic stochastic general equilibrium model with two technology shocks is evaluated using bayesian model averaging over vector autoregressions the model features include equilibria restrictions on long run responses a structural break of unknown date and a range of lags and deterministic processes we find support for a number of features implied by the economic model and the evidence suggests a break in the entire model structure around 1984 after which technology shocks appear to account for all stochastic trends business cycle volatility seems more due to investment specific technology shocks than neutral technology shocks

thinking about the firm a review of daniel spulber s the theory of the firm in this review i describe how economists have moved beyond the firm as a black box to incorporate incentives internal organization and firm boundaries i then turn to the way that the theory of the firm is treated in daniel spulber s book the theory of the firm microeconomics with endogenous entrepreneurs firms markets and organizations spulber s goal is to explain why firms exist how they are established and what they contribute to the economy to accomplish this spulber defines a firm to be a transaction institution whose objectives differ from those of its owners for spulber this separation is the key difference between the firm and direct exchange between consumers i raise questions about whether this is a useful basis for a theory of the firm jel d21

growth econometrics for agnostics and true believers abstract the issue of model uncertainty is central to the empirical study of economic growth many recent papers use bayesian model averaging to address model uncertainty but ciccone and jarocinski 2010 have questioned the approach on theoretical and empirical grounds they argue that a standard agnostic approach is too sensitive to small changes in the dependent variable such as those associated with different vintages of the penn world table pwt this paper revisits their theoretical arguments and empirical illustration drawing on more recent vintages of the pwt and introducing an approach that limits the degree of agnosticism

returns to schooling in self employment abstract this paper challenges the idea that returns to schooling in self employment are similar to those in wage work by establishing a non linear relationship with very low returns for most educational levels in self employment we conclude that previous log linear specifications in the self employment literature have missed significant variation in the true relationship between education and earnings

are nascent entrepreneurs jacks of all trades a test of lazear s theory of entrepreneurship with german data in a recent paper edward lazear proposed the jack of all trades view of entrepreneurship based on a coherent model of the choice between self employment and paid employment he shows that having a background in a large number of different roles increases the probability of becoming an entrepreneur the intuition behind this proposition is that entrepreneurs must have sufficient knowledge in a variety of areas to put together the many ingredients needed for survival and success in a business while for paid employees it suffices and pays to be a specialist in the field demanded by the job taken this study contributes to the entrepreneurship literature by empirically testing lazear s hypothesis using a large recent representative sample of the german population the empirical estimation takes the rare events nature of becoming a nascent entrepreneur and the regional stratification of the sample into account the results illustrate the statistical significance and economic importance of the jack of all t

have standard vars remained stable since the crisis small or medium scale vars are commonly used in applied macroeconomics for forecasting and evaluating the shock transmission mechanism this requires the var parameters to be stable over the evaluation and forecast sample or to explicitly consider parameter time variation the earlier literature focused on whether there were sizable parameter changes in the early 1980s in either the conditional mean or variance parameters and in the subsequent period till the beginning of the new century in this paper we conduct a similar analysis but focus on the effects of the recent crisis using a range of techniques we provide substantial evidence against parameter stability the evolution of the unemployment rate seems particularly different relative to its past behavior we then discuss and evaluate alternative methods to handle parameter instability in a forecasting context while none of the methods clearly emerges as best some techniques turn out to be useful to improve the forecasting performance

behavior based discrimination is it a winning play and if so when with advances in technology the collection of information from consumers at the time of purchase is common in many categories this information allows a firm to straightforwardly classify consumers as either new or past consumers this opens the door for firms to implement marketing that a discriminates between new and past consumers and b entails making offers to them that are significantly different our objective is to examine the competitive effects of marketing that tailors offers to consumers based on their past buying behavior in a two period model with two competing firms we assume that each firm is able to commit about whether or not to implement behavior based discrimination bbd i e to add benefits to its offer for past consumers in the second period when the firms are identical in their ability to add value to the second period offer bbd generally leads to lower profits for both firms past customers are so valuable in the second period that bbd leads to cutthroat competition in the first period as a result the payoffs associated with the implementation of bbd form a prisoner s dilemma interestingly when a firm has a significant advantage over its competitor one firm has the capability to add more benefits for its past customers than the other it can increase its profit versus the base case even when there is significant competition in the second period moreover the firm at a disadvantage sometimes finds that the best response to bbd by a strong competitor is to respond with a uniform price and avoid the practice completely

cross market network effect with asymmetric customer loyalty implications for competitive advantage a cross market network effect exists in many industries e g newspaper publishing media software in which a seller sells both a primary and a secondary product e g a newspaper publisher sells newspapers to readers and advertising space to advertisers and the value of the secondary product depends on the size of the user base of the primary product this paper examines the competitive implications of asymmetric customer loyalty in such markets in traditional markets an advantage in customer loyalty generates a profit advantage we show here however that in the presence of a cross market network effect a midlevel of loyalty advantage in the primary product market can lead to an overall profit disadvantage this surprising result is derived from the interdependence of the two markets whereby a profit in one market may be gained at the cost of the other and by the positive relationship between a larger loyalty segment and a higher opportunity cost of price competition in the product of the primary market extending our model to a two period entry game also shows that under certain conditions the entrant with disadvantage in customer loyalty can outperform the incumbent in profit and market share this result suggests that asymmetry in customer loyalty can be a source of first mover advantage or disadvantage

an examination of the substitutability of founders human and financial capital in emerging business ventures abstract undoubtedly access to financial capital and other resources is an important antecedent of new venture performance indeed inadequate financial resources often are cited as a primary reason why emerging businesses fail barren 1989 mcqueen 1989 otterbourg 1989 rujoub cook and hay 1995 yet there is some feeling among scholars that competent founders will find a way of coming up with necessary resources and capital chandler and hanks 1994 timmons 1990 thorne 1989 in this study we seek to better understand and provide insight into the factors that determine the amount of money needed to start a business and the factors that drive the decisions of whether such funding should come from founder savings or from outside sources we explore two questions 1 what factors are associated with the amount of initial capital raised and 2 what factors determine the mix of founder savings versus financial capital from outside sources that create the initial capital structure we seek to answer these questions using a sample of 102 manufacturing and service firms between 3 and 7 years of age these firms were categorized as manufacturing retail wholesale and business services in general the evidence supports our hypotheses the amount of financial capital at start up varies by industry of key importance in this study human and financial capital appear to be substitutable the analysis shows that on average firms with high levels of founder human capital and low levels of initial financial capital perform similarly to firms that have low levels of founder human capital and high levels of financial capital subgroup analysis provides insights into the degree of substitutability this finding suggests that founders with strong background experience may be able to start businesses that survive and thrive with less financial capital than their less experienced counterparts the proportion of initial capital provided by the founder differs significantly across industry types in more capital intensive industries founders provide a smaller proportion of the start up capital interestingly the amount of initial capital provided by the founder does not vary significantly across industry types this suggests that the amount of initial capital provided by the founder may result from contributing all they can give to the business which appears to be similar across business types finally founders perceptions of their ability to recognize and take advantage of opportunity are positively related to the proportion of initial capital provided by the founder this research provides insights into the factors that appear to drive the initial capital intensity and structure to provide better understanding of this phenomenon future research could investigate such practices as bootstrapping asset sharing or other techniques that allow founders to control resources without requiring ownership

the impact of entrepreneurship programs on minorities we document the impact of an entrepreneurship training program on startup activity of minorities females and non caucasians we compare entrepreneurial activity between applicants who are accepted into the program with applicants who are program finalists but not accepted we find that the effect of the program is small for minorities in the short run however the effect of the program is more pronounced for minorities likelihood of longer run startup activity whereas the effect on non minorities is small and statistically insignificant we suggest that such programs are most effective for individuals that may otherwise have limited access to entrepreneurial opportunities

pricing with cookies behavior based price discrimination and spatial competition we present a model of dynamic competition between two firms where firms gather customer information through first period purchase this creates asymmetric information in the second period whereby a

behavior based pricing in vertically differentiated industries we study behavior based pricing bbp in a vertically differentiated model vertical differentiation is innately asymmetric because all customers prefer the higher quality product when prices are equal this asymmetry causes bbp to have different properties than symmetric horizontally differentiated models we highlight two dimensions that affect the analysis the role of quality adjusted cost differences between the firms and the role of consumer discounting relative to firm discounting in the second period consistent with the prior literature we find that there are conditions based on market shares and quality adjusted costs under which either the low quality firm or the high quality firm but not both will reward its current customers with lower prices than it charges to new customers we then consider whether these conditions can arise in a two period equilibrium we find that if consumers sufficiently discount the future periods then firms at enough of a competitive disadvantage will reward their customers i e the low quality firm will reward its current customers if the quality adjusted cost differential between the two firms is small while the high quality firm will reward its current customers if this cost differential is large conversely we find that if consumers do not discount the future very much then the firm at a competitive disadvantage i e a low quality firm competing against a low cost high quality firm or a high quality firm that has very high costs can earn greater profits with bbp than without bbp although there are cases where both firms may benefit from bbp this paper was accepted by j miguel villas boas marketing

customer recognition in experience vs inspection good markets we study the effects of customer recognition and behavior based price discrimination bpd in a two period experience good duopoly with a discrete value distribution and we investigate the role of consumers ex ante valuation uncertainty in dynamic price competition through comparison with an inspection good duopoly several results are reached first the firms may reward repeat purchase when the probability of a high value is relatively low and when the high low value difference is large otherwise they may engage in poaching second bpd frequently increases each firm s total profits even in the poaching equilibrium these results contrast with the inspection good duopoly and the driver is that consumers period 2 product preference depends on their realized values in period 1 third consumers ex ante valuation uncertainty may increase or decrease firm profits without bpd and it weakly increases firm profits with bpd relative to the inspection good duopoly this paper was accepted by j miguel

behavioral price discrimination in the presence of switching costs we study the strategic impacts of behavioral price discrimination bpd on manufacturers and retailers in a distribution channel when there are switching costs in consumer demand unlike previous empirical studies of behavioral price discrimination which rely only on differences in price elasticity across customers our pricing model allows the firm strategies to additionally account for differences in price elasticity across time due to switching costs we estimate a dynamic pricing model using empirical data from the cola category and through a series of counterfactuals we find that the retailer should simply outsource the data analytics and customization of coupons to manufacturers and improve its profit beyond what it can achieve by proactively couponing on its own we further find that serving as an information broker to sell its customer database to manufacturers can be a vital source of profit to the retailer by contrast manufacturers end up worse off illustrating that customer information

education language and youth entrepreneurship in chad this study aims to assess the effect of education language arabic or french on the probability of being self employed in chad mainly we make use of a recursive bivariate probit model and matching techniques to assess the effect as well as to remedy to the endogeneity problem overall the analysis suggests that youths with arabic language education are more likely to be self employed however most of them specialise in modest informal micro enterprises these results can help to shed light on the education language implications and then can help policymakers to design appropriate policies to foster youth entrepreneurship in chad

on the strategic choice of spatial price policy the strategic incentives with respect to the choice of price policy in spatial competition are analyzed in a duopoly model price discrimination emerges as the unique equilibriu m outcome in games with either simultaneous choice of policy and pric e or sequential choice where firms may commit first to uniform mill p ricing before the actual market stage nevertheless profits may be h igher with uniform pricing the authors models are applied to analyz e some common business practices that arise in geographical pricing like the basing point system and in the pricing of varieties or opti ons from a base product in a product differentiation context copyright 1988 by american economic association

the boundaries of the firm revisited why do firms exist what is their function and what determines their scope these remain the central questions in the economics of organization they are also central questions for business executives and corporate strategists the worldwide volume of corporate mergers and acquisitions exceeded 1 6 trillion in 1997 it is hard to imagine that so much time effort and investment bankers fees would be spent on adjusting firm boundaries unless there was some underlying economic gain indeed the exceptional levels of merger and acquisition activity over the past two decades are a strong indication that economically significant forces do determine organizational boundaries the study of firm boundaries originated with the famous essay by coase 1937 who raised the question of why we observe so much economic activity inside formal organizations if as economists commonly argue markets are such powerful and effective mechanisms for allocating scarce resources coase s answer was in terms of the costs of transacting in a world of imperfect information when the transaction costs of market exchange are high it may be less costly to coordinate production through a formal organization than through a market in large part thanks to the work of williamson 1975 1985 recent decades have seen a resurgence of interest in coase s fundamental insight that firm boundaries can be explained by efficiency considerations our understanding of firm boundaries has been sharpened by identifying more precisely the nature and sources of transaction costs in different circumstances in the process the focus of

the effects of human capital interventions on entrepreneurial performance in industrialized countries this paper provides a systematic review of studies on the effects of human capital interventions on entrepreneurial performance in industrialized countries we identify 21 experimental and quasi experimental studies published before september 2018 these studies examine the effects of business training formal education and entrepreneurship education their performance outcomes include firm profits firm size and entrepreneurial earnings the main finding across these studies is that these interventions do not have statistically significant effects formal education is the only exception showing positive effects on firm profits and entrepreneurial earnings yet these effects are small in magnitude evidence is inconclusive regarding effect duration these findings stand in stark contrast to correlational studies which tend to find large positive correlations between human capital interventions and entrepreneurial performance we therefore conclude that correlational studies tend to overestimate the benefits of human capital interventions moreover our estimates show that the interventions are associated with moderately low additionality

behavior based pricing an analysis of the impact of peer induced fairness firms tracking consumer purchase information often use behavior based pricing bbp i e price discriminate between consumers based on preferences revealed from purchase histories however behavioral research has shown that such pricing practices can lead to perceptions of unfairness when consumers are charged a higher price than other consumers for the same product this paper studies the impact of consumers fairness concerns on firms behavior based pricing strategy profits consumer surplus and social welfare prior research shows that bbp often yields lower profits than profits without customer recognition or behavior based price discrimination by contrast we find that firms profits from conducting bbp increase with consumers fairness concerns when fairness concerns are sufficiently strong practicing bbp is more profitable than without customer recognition however consumers fairness concerns decrease consumer surplus in addition when consumers fairness concerns are sufficiently stron

the perils of behavior based personalization behavior based personalization has gained popularity in recent years whereby businesses offer personalized products based on consumers purchase histories this paper highlights two perils of behavior based personalization in competitive markets first although purchase histories reveal consumer preferences competitive exploitation of such information damages differentiation similar to the classic finding that behavior based price discrimination intensifies price competition with endogenous product design there is yet a second peril it emerges when forward looking firms try to avoid the first peril by suppressing the information value of purchase histories ideally if a market leader serves all consumers on day 1 purchase histories contain no information about consumer preferences however knowing that their rivals are willing to accommodate a market leader firms are more likely to offer a mainstream design at day 1 which jeopardizes differentiation based on this understanding i investigate how the perils of behavior based personalization change under alternative market conditions such as firms better knowledge about their own customers consumer loyalty and inertia consumer self selection and the need for classic designs

changing macroeconomic dynamics at the zero lower bound this article develops a change point var model that isolates four major macroeconomic regimes in the us since the 1960s the model identifies shocks to demand supply monetary policy and spread yield using restrictions from a general equilibrium model the analysis discloses important changes to the statistical properties of key macroeconomic variables and their responses to the identified shocks during the crisis period spread shocks became more important for movements in unemployment and inflation a counterfactual exercise evaluates the importance of lower bond yield spread during the crises and suggests that the fed s large scale asset purchases helped lower the unemployment rate by about 0 6 percentage points while boosting inflation by about 1 percentage point

long run implications of investment specific technological change an attempt is made to disentangle its effects from the more traditional hicksneutral form of technological progress the balanced growth path for the model is characterized and calibrated to u s national income and product account nipa data the quantitative analysis suggests that investment specific technological change accounts for the major part of growth jel e13 030 041 047

hierarchical markov normal mixture models with applications to financial asset returns motivated by the common problem of constructing predictive distributions for daily asset returns over horizons of one to several trading days this article introduces a new model for time series this model is a generalization of the markov normal mixture model in which the mixture components are themselves normal mixtures and it is a specific case of an artificial neural network model with two hidden layers the article uses the model to construct predictive distributions of daily s p 500 returns 1971 2005 and one year maturity bond returns 1987 2007 for these time series the model compares favorably with arch and stochastic volatility models the article concludes by using the model to form predictive distributions of one to ten day returns during volatile episodes for the s p 500 and bond return series copyright 2010 john wiley sons ltd

the dynamic effects of neutral and investment specific technology shocks the neoclassical growth model is used to identify the short run effects of neutral technology shocks which affect the production of all goods homogeneously and investment specific shocks which affect only investment goods the real equipment price crucial for identifying the investment shocks experiences an abrupt increase in its average rate of decline in 1982 so the analysis is based on a split sample on the basis of the preferred specification the two technology shocks account for 73 percent of hours and 44 percent of output s business cycle variation before 1982 and 38 percent and 80 percent afterward the shocks also account for more than 40 percent of hours and 58 percent of output s forecast errors over a three to eight year horizon in both samples the majority of these effects are driven by the investment shocks

tests for multiple forecast encompassing in the evaluation of economic forecasts it is frequently the case that comparisons are made between a number of competing predictors a natural question to ask in such contexts is whether one forecast encompasses its competitors in the sense that they contain no useful information not present in the superior forecast we develop tests for this notion of multiple forecast encompassing which are robust to properties expected in the forecast errors and apply the tests to forecasts of uk growth and inflation copyright 2000 john wiley sons ltd

the strategic value of high cost customers many firms today manage their existing customers differentially based on profit potential providing fewer incentives to less profitable customers and firing unprofitable customers although researchers and industry experts advocate this practice results have been mixed we examine this practice explicitly accounting for competition and find that some conventional prescriptions may not always hold we analyze a setting where customers differ in their cost to serve we find that when a firm can discriminate among its customers but the rival cannot customer base composition influences the rival s poaching behavior consequently even though a low cost customer is more profitable when viewed in isolation a high cost customer may be strategically more valuable by discouraging poaching therefore contrary to conventional advice it can be profitable for a firm to retain unprofitable customers moreover some customers may become more valuable to retain and receive better incentives when they are less profitable we further show that in competitive settings traditional customer lifetime value metrics may lead to poor retention decisions because they do not account for the competitive externality that actions toward some customers impose on the cash flows from other customers our results suggest that firms may need to evolve from a segmentation mindset which views each customer in isolation to a customer portfolio mindset which recognizes that the value of different customers is interlinked this paper was accepted by j miguel villas boas marketing