u s domestic barter an empirical investigation this paper studies the barter industry developed in north america during the 1950s pointing out some of its main characteristics thus it examines its two main sectors i corporate barter and ii commercial barter contrary to expectations the analysis of official data shows that this phenomenon is essentially pro cyclical for the commercial barter component moreover commercial barter activity turns out to be complementary to the cash economy while the two sectors display some differences in their pattern they both help firms to increase their profits

fishery socioeconomics a survey fisheries management is constantly confronted and sometimes confounded by the complexities of real world fishery systems two major sources of such complexities are 1 the many conflicting goals and objectives faced by fishery managers and 2 the wide variety of socioeconomic factors which impact on the validity and effectiveness of regulatory instruments amongst the considerations lying within this fishery socioeconomics framework are distributional issues labor market structure social and opportunity costs fishing community dynamics and fishermen decisionmaking processes andersen 1978 fao 1985 fricke 1985 germa 1986 panayotou 1982 pollnac and sutinen 1979 while their importance is widely recognized little consensus exists regarding the manner in which such topics can best be incorporated into economic analyses and into fishery management decisions this paper reviews relevant literature on fishery socioeconomics addressing the questions what contribution can multi objective socioeconomic analysis play in fisheries economics and in practical fisheries management what insights can be obtained from existing socioeconomic research what specific questions need to be emphasized in future research an attempt is made to consolidate the research in this diverse area which has tended to develop somewhat independently from traditional resource economics theory and which has some clear connections to the ideas of institutional economics see e g wilson 1986 the paper is organized as follows section i explores the wide variety of objectives such as employment distributional concerns and rent generation which often play a practical role in real world fisheries whether or not they are expressed explicitly in fishery policy statements section ii reviews theoretical and empirical studies of income distribution wh le ection iii presents a broad examination of literature dealing with socioeconomic aspects of fishery management this involves both critiques of common management methods such as regulated property rights and limited entry schemes and examinations of alternative approaches such as cooperatives informal contracting and community property rights this leads into an exploration in sections iv and v of the social and opportunity costs for labor in fisheries and of related themes involving fishery labor markets the determinants of labor supply and the key issue of labor mobility section vi presents an overview of the literature concerned with fishermen and fishing community decision processes and behavioral dynamics the discussion is broadened in section vii to review data requirements in socioeconomic analysis and to provide perspectives on future priorities for research in fishery socioeconomics finally the paper ends in section viii with some general conclusions and some thoughts on the diffi ulties that have been faced in integrating socioeconomic research into economic analyses

when is fdi a capital flow in this paper we analyze the conditions under which a foreign direct investment fdi involves a net capital flow across countries for this purpose we investigate how multinational firms finance their foreign affiliates globally or locally we develop a contract theoretical model in which the financing structure is used to govern the incentives of managers we find that the investment tends to be financed locally if managerial incentive problems are large thus microeconomic governance problems may have macroeconomic implications for the net capital flow to host countries our results are consistent with survey data on german and austrian investment flows of firms to eastern europe

the new frontier of american fisheries governance abstract throughout its history america has viewed its oceans as vast fishery frontiers these frontiers are suffering depletion as large amounts of fishing power combined with significant oceanographic changes are straining the limits of sustainability the new ocean frontier is not the promise of undeveloped resources but rather the challenge of undeveloped sustainable governance systems this paper discusses the institutional transformation necessary to achieve sustainable governance the first part provides an historical overview of the american use of resources as frontiers the second part characterizes the frontier as an extreme form of resource use contrasting it to its opposite ideal the commons the third part outlines behavioral differences between the users of frontiers and commons the pioneers and shareholders building on the attributes of resource management under the two ideals the fourth part of the discussion focuses on the necessary conditions and major challenges to developing the institutional capital required for sustainable us fishery management the institutional capital needed for sustainable fisheries governance is comprised of several pieces 1 a perception of the fishery as an integrated ecosystem 2 an identification of shareholders 3 an allocation of decision making power and responsibility which vests all interests and internalizes the source of control 4 incentive structures to promote long term management 5 management skills among fishery interests 6 management processes that promote adaptability to change the final section provides conclusions and an assessment of the progress us fishery management has made in institutional capital development pressures of scarcity are forcing us fisheries management to evolve away from the frontier ideal but the development of the institutional capital necessary for sustainable fishery governance is incomplete

negotiation and renegotiation of optimal financial contracts under the threat of predation this paper examines the effect of renegotiation on the ability of financial contracts between a lender and entrant to deter an incumbent s predation in the presence of renegotiation it is more difficult for the entrant to obtain financing and more difficult for the contract to deter predation contracts successfully deter predation in some cases however even if renegotiation occurs at a stage with symmetric information between the entrant and lender giving the entrant constrained by limited liability stronger bargaining power vis a vis the lender improves the efficiency of the optimal contract but the results concerning renegotiation are unchanged copyright 1996 by blackwell publishing ltd

dynamic limit pricing i study a multiperiod model of limit pricing under one sided incomplete information i characterize pooling and separating equilibria and their existence and determine when these involve limit pricing for some parameter constellations the unique equilibrium surviving a d1 type refinement involves immediate separation on monopoly prices for others there are limit price equilibria surviving the refinement in which different types may initially pool and then possibly separate separation involves setting prices such that the inefficient incumbent s profits from mimicking are negative as the horizon increases or as firms become more patient limit pricing becomes increasingly difficult to sustain in equilibrium

strategic behavior and the problem of storming in a centrally planned economy abstract it is shown that if the common knowledge assumption is properly utilized then it is possible to dispose of some unnecessary restrictions on the game theoretic account of storming presented by alexeev

international business alliance under asymmetric information technology vis a vis information advantage author affiliation chifeng dai daic siu edusajal lahiri lahiri siu edu corresponding author acknowledgment we are grateful to two anonymous referees for extremely helpful comments and suggestions 1 introductioninternational inter firm business cooperation as a means to reach a foreign marketplace has been rapidly increasing in popularity and has been growing hand in hand with the overall process of globalization business collaborations in general take different forms licensing franchising and joint venture jv are two important forms of this collaboration the exact nature of the contract between firms can also take different forms involving one or more of the following up front licensing fees equity investments annual maintenance fees milestone payments and royalties 1 for example under the jv agreement between generex biotechnology canada and sejong capital korea sejong agrees to invest 25 million in the jv as a non refundable license fee paid to generex and to purchase 5 million of generex s equity under the jv agreement between cambridge biostability united kingdom and panacea biotec india panacea purchased 1 935 million of cambridge s equity up front and signed a long term licensing agreement that provides gross royalty income to cambridge over the agreement period 2apart from the contractual arrangements another important issue in international business cooperation is the question of transfer or adaptation of technology for the international alliance ia and this has received a lot of attention in the literature see for example katz rebentisch and allen 1996 it is generally agreed that the technology adaptation issue is a rather complicated engineering and economic issue and often requires significant efforts there are four broad research questions here first why do firms from developing and industrialized countries form an alliance miller et al 1997 studied 76 ias in six developing countries they found that more than 65 of the foreign companies chose domestic partners because of their knowledge of local politics government regulations local custom and local markets and more than 70 of the domestic firms in developing countries sought collaboration with multinationals based on their superior technology the second question involves why ias have diverse contractual arrangements the third question involves how each firm s advantage and disadvantage in technology and market information affect their profits in ias do firms in the alliance always prefer more market information and better technology the final question has to do with whether technology spillover hinders the formation of an ia 3in order to answer some of the research questions outlined above we consider a simple model consisting of two firms a multinational corporation mnc and a domestic firm the firms operate under uncertain market demand the mnc possesses a production technology that is superior to that of the domestic firm however the domestic firm has an information advantage in the sense that with costly and non contractable efforts it can predict demand conditions with some probability we start with the case in which the credit market is perfect and the technology adaptation in the ia is exogenous and costless we show that in the ia the mnc optimally charges the domestic firm a lump sum payment but offers it the entire profits of the ia under the contractual arrangement market uncertainty and the domestic firm s ability to gather information increase the domestic firm s profits but not the mnc s profits in ia however the mnc prefers duopoly competition to ia if the technology adaptation is imperfect and the domestic firm s production technology is exceedingly inferior we then deviate from the benchmark case in two different directions but one at a time

the principal agent relationship with an informed principal ii common values in many circumstances a principal may have relevant private information when she proposes a contract to an agent we analyze such a principal agent relationship as a noncooperative game the principal proposes a contract which is accepted or rejected by the agent who for most of our analysis has no private information the contract is executed if accepted otherwise the reservation allocation takes effect this allocation may be determined by a pre existing contract which the principal by her proposal is attempting to renegotiate or it may simply be the no trade point in this paper we assume that the principal s information directly affects the agent s payoff before solving the game we discuss pareto efficiency with asymmetric information we define an incentive compatible allocation to be weakly interim efficient wie if there exists no alternative incentive compatible allocation that both parties prefer for all possible beliefs that the agent might have about the principal s private information type we show that any wie allocation is interim efficient ie for some beliefs the rothschild stiglitz wilson rsw allocation relative to the reservation allocation l is the allocation that maximizes the payoff of each type of principal within the class of incentive compatible allocations that guarantee the agent at least the utility he gets from a irrespective of his beliefs about the principal s type the equilibrium set of the contract proposal game consists of the allocations that weakly pareto dominate the rsw allocation thus there is a unique equilibrium outcome if and only if the latter is ie and the equilibrium outcome is the rsw allocation itself after characterizing the equilibrium allocations we study those that are renegotiation proof when either the principal or the agent leads the renegotiation we then compare our contract proposal game which is a signaling model with its screening counterpart we conclude by extending our results to the case in which the agent as well as the principal has private information under the assumption of quasi linear preferences

cooperatives as entrants a potential shortcoming of game theoretic models in industrial organization is their failure to consider consumers as players we introduce a customer coalition a cooperative as a potential entrant and compare the cooperative entry threat with that posed by the usualforprofit entrant we identify four fundamental distinctions between cooperative andfor profit entrants and demonstrate that the strategic interplay between a cooperative and an incumbent firm may differ markedly from that between the incumbent and a for profit entrant the results impart a prospectively powerful role to potential cooperatives in beneficially regulating free market performance

barter for price discrimination abstract we study barter as a discriminatory instrument in oligopoly with asymmetric information buyers producers of final goods differ in the quality of their products sellers producers of inputs use barter as a screening device the higher quality buyers pay in cash while the lower quality ones pay in kind barter identified with non monetary contracts that give a seller control over a buyer s output emerges in equilibrium even in the absence of financial constraints there is a positive relationship between market concentration and the level of barter barter disappears as the market becomes more competitive barter and no barter equilibria coexist for a range of market structures

mandated countertrade as a strategic commitment abstract mandated countertrade is a policy to restrict unilateral imports a country s government thereby in effect commits domestic firms not to purchase from a foreign trading partner unless there are reciprocal sales we argue that the policy may be a rational response to fundamental contracting failures our key assumption being that sellers are incompletely informed about buyers valuations in line with observed practices the analysis suggests that an optimal mandated countertrade policy will target high mark up imports and low mark up exports implications for global welfare are ambiguous and depend upon the extent of a double coincidence of wants

a search theoretic approach to monetary economics the essential function of money is its role as a medium of exchange the authors formalize this idea using a search theoretic equilibrium model of the exchange process that captures the double coincidence of wants problem with pure barter one advantage of the framework described here is that it is very tractable the authors also show that the model can be used to addre ss some substantive issues in monetary economics including the potenti al welfare enhancing role of money the interaction between specializat ion and monetary exchange and the possibility of equilibria with multip le fiat currencies copyright 1993 by american economic association

reputation and imperfect information abstract a common observation in the informal literature of economics and elsewhere is that is multistage games players may seek early in the game to acquire a reputation for being tough or benevolent or something else but this phenomenon is not observed in some formal game theoretic analyses of finite games such as selten s finitely repeated chain store game or in the finitely repeated prisoners dilemma we reexamine selten s model adding to it a small amount of imperfect or incomplete information about players payoffs and we find that this addition is sufficient to give rise to the reputation effect that one intuitively expects

frictions in project based supply of permits emissions trading in climate change can entail large overall cost savings and transfers between developed and developing countries however the search for acceptable ji or cdm projects implies a deviation from the perfect market framework used in previous estimations our model combines the search market for projects with a frictionless permit market to quantify the supply side frictions in the co2 market we also decompose the effects of frictions into the effects of search friction bargaining and bilateralism a calibration using previous cost estimates of co2 reductions illustrate changes in cost savings and allocative implications

east west joint ventures and buyback contracts abstract contractual joint ventures cjvs and the buyback form of countertrade are popular methods that socialist countries use to attract foreign investment in this paper we explore some reasons why this is so and also explain two predominant characteristics of these contracts the existence of sharing rules and minimum standard requirements on inputs the model stresses the incentive problems involved when a socialist host country which does not allow foreign direct investment uses a cjv to obtain the fruits of some knowledge based production process from a multinational enterprise

generating enhanced fishery rents by internalizing product quality characteristics this paper demonstrates howadditional rents are generated in a fisherycharacterized by intraseasonal variation infish characteristics including size condition and composition based on anexpanded conceptual model of the optimalharvest rule fish characteristics affect preand post harvest production yields and outputprices a dynamic empirical model which uses asystem of quality characteristics and anhedonic equation illustrates the complexrelationships and management choices associatedwith internalizing seafood qualitycharacteristics in a hake fishery the modelretains the regulated open access managementsystem but controls intertemporal andintersectoral quotas production portfolios and total allowable catch results demonstratethat including revenue side effects frominternalizing fish quality can generatesignificantly greater rents and reduce therelative benefits of increased productionyields if excluded bioeconomic models canunderestimate the level of regulatory rentdissipation and overemphasize managementobjectives such as full utilization whichcould misdirect processing decisions and resultin a suboptimal resource management plan implications for data collection multidisciplinary analysis and improvements inmarine resource management are discussed

economic incentives and international trade this paper studies the importance of incentives as a determinant of international trade flows we argue that barter countertrade and foreign direct investment can be seen as efficient institutions that mitigate contractual hazards which arise in technology trade marketing and imperfect capital markets paying an import with export goods rather than cash barter helps to overcome incentive problems that arise in debt repayment of highly indebted countries payment in export goods removes the anonymity of the medium of exchange and thus allows to create a collateral for the creditor furthermore tying an import with an export countertrade helps to solve the incentive problems related to the technology transfer to developing countries the export flow serves as a hostage that deters cheating on the quality of the imported technology good the predictions of the two models are consistent with the pattern of trade of actual barter and countertrade contracts

optimal selling strategies when to haggle when to hold firm a seller encountering risk neutral buyers one at a time should if commitments are feasible quote a single take it or leave it price to each this strategy is superior to any other for finite or infinite buyer populations whether there is learning or the distribution of buyer prices is known at the outset with one object for sale or many although haggling may offer advantages in terms of price discrimination these gains are more than offset by the losses it generates by encouraging buyers to refuse purchases at high prices

is the growth of small firms constrained by internal finance this paper examines the long standing theory that the growth of small firms is often constrained by the quantity of internal finance under plausible assumptions when financing constraints are binding an additional dollar of internal finance should generate slightly more than an additional dollar of growth in assets this quantitative prediction should not hold for the relatively small number of firms which access external equity we test these predictions with a panel of more than 1 600 small firms and find that the growth of most firms is constrained by internal finance our results have implications for several different research literatures including models of firm growth

sovereign debt a primer the troublesome debts of many developing countries have spawned much literature on why countries borrow on what debt contributes to growth on why countries repay and on how to deal with existing debt the author provides an analytical primer on the following aspects of sovereign debt 1 the basic accounting concepts associated with debt and some data associated with external borrowing 2 debt as a component of an optimizing model of borrowing in a competitive loan market when the borrower faces an intertemporal budget constraint 3 debt as a component of recent models of endogenous growth 4 problems arising from sovereign risk including problems of liquidity enforcement and revenue raising to finance repayment 5 incentives to repay 6 options available to a creditor whose debtor is unwilling to meet current debt service obligations and 7 debt buybacks the author concludes that in the absence of any efficiency cost imposed by outstanding debt how much a buyback benefits the borrower depends on how much buying back debt reduces what is available for repayment later the author also concludes that if there are efficiency losses associated with debt debt forgiveness can benefit both a debtor nation and its creditors contrary to claims in the literature this outcome does not require that a reduction in the face value of debt raise its market value and the debtor benefits even though the buyback raises the market price of the debt

the assessment economic policy for transport this paper considers the economic principles underlying contemporary british transport policy issues and the contributions that recent theoretical and empirical work can make to assessing policy solutions it discusses two alternative highly stylised approaches to transport policy 1 transport services supplied by privately owned companies and financed by charges to users 2 statutory publicly owned transport monopolies it considers the corresponding problems of market failure and regulatory failure types of market failures include circumstances where competitive solutions are either 1 feasible but not achieved because of actions by companies or 2 achieved but undesirable for various reasons or 3 not feasible because the relevant sectors have natural monopolies and high entry costs the authors conclude that both the stylised approaches that they analysed have serious drawbacks the most important consequence of the nationalisation of uk transport in the late 1940s was significant inefficiency in production and pricing the public transport deregulation of the 1980s resulted in significant product innovation and changes in the level and structure of prices however artificial restriction of competitive outcomes seems to be the most important source of regulatory failure

restricting the means of exchange within organizations abstract this paper considers why firms often ban monetary exchange between their employees while encouraging these trades through other means such as through the reciprocation of favours or barter despite classical inefficiencies associated with non monetary exchange we illustrate two themes as to why non monetary trade may be preferred to allowing money first the use of non monetary trade may affect the allocation of rents in surplus enhancing ways as agents respond strategically to the existence of these rents second non monetary trade improves the ability of agents to impose sanctions on those who act dishonestly

on the strategic role of high leverage in entry deterrence abstract this paper examines the strategic role of high levels of debt and bankruptcy threats in deterring entry into monopolistic markets in the context of an infinite horizon entry game we show that if a potential entrant has access to debt financing with limited liability the unique sub game perfect equilibrium involves the entrant successfully issuing a high level of debt entering the market and being met with cooperation if in addition to the entrant the incumbent also has access to debt with limited liability it will be highly levered and will completely pre empt any entry in equilibrium finally if the incumbent faces a variety of potential entrants with differing abilities to capture market shares its optimal capital structure will help pre empt the entry of the tougher entrants while allowing the weaker ones to share the market the results of extreme leverage are also shown to hold in an alternative formulation analyzed by kreps and wilson 1982 and milgrom and roberts 1982 and thus are robust to model specifications the empirical implications and possible application to high leverage industries are briefly discussed

complementary credit networks and macroeconomic stability switzerland s wirtschaftsring abstract the swiss wirtschaftsring economic circle credit network founded in 1934 provides residual spending power that is highly counter cyclical individuals are cash short in a recession and economize by greater use of wir credits a money in the production function mipf specification implies that transactions in wir form a stabilizing balance that makes up for the lack of ordinary currency thus unlike the ordinary money wir money is negatively correlated with gdp in the short run this implication is confirmed by empirical estimates such credit networks play a stabilizing role that should be considered in monetary policy

the economic institution of international barter starting with the international debt crisis in the 1980s international barter increased substantially more recently barter has emerged in russia and south east asia this paper examines how barter can help highly indebted countries to finance imports if they cannot use standard credit arrangements we argue that payment in goods is easier to enforce than payment in money however debtors may pay with inferior quality products we rank goods with respect to these incentive properties and derive the economic institution of commodity money which explains the trade pattern in barter our theoretical predictions are consistent with data on barter contracts

on designing contracts to guarantee enforceability theory and evidence from east west trade this article suggests how the literature on east west trade and the choice of contracts can be integrated into recent work on the theory of the multinational corporation and contract enforceability by using the properties of foreign direct investment as a benchmark it explains why one type of contract tends to prevail over another the explanation rests on the premise that because of the prohibition on fdi contracts are used which most closely replicate the benefits of intra firm trade while providing managerial and risk shifting services to the eastern partner

when does predation dominate collusion i study repeated competition among oligopolists the only novelty is that firms may go bankrupt and permanently exit the probability that a firm survives a price war depends on its financial strength which varies stochastically over time under some conditions including no entry an anti folk theorem holds when firms are patient so that strength levels change relatively quickly every nash equilibrium involves an immediate price war that lasts until at most one firm remains surprisingly the possibility of entry may facilitate collusion as may impatience the model can explain some observed patterns of collusion and predation

trade law and product complexity abstract how does the quality of national institutions that enforce the rule of law influence international trade anderson and marcouiller argue that bad institutions located in the importer s country deter international trade because they enable economic predators to steal and extort rents at the importer s border we complement this research and show how good institutions located in the exporter s country enhance international trade in particular trade in complex products whose characteristics are difficult to fully specify in a contract we argue that both exporter and importer institutions affect international as well as domestic transaction costs in complex and simple product markets international transaction costs are a part of the costs of trade domestic transaction costs affect complex and simple products differently thereby changing a country s comparative advantage in producing such goods we find ample empirical evidence for these predictions countries that have good institutions tend to

risk sharing in international trade an analysis of countertrade countertrade agreements in international trade refer to a trade practice in which an exporter agrees to purchase back commodities proportional to his original export sale in the future this paper provides a rationale for why such an agreement might be efficient more specifically the paper argues that countertrade represents a rational response to market incompleteness by allowing the forward selling of commodities where no organized future market exists this way countertrade helps to reduce risk by providing information on future market conditions and by offering insurance against random fluctuations in market conditions copyright 1994 by blackwell publishing ltd

predation reputation and entry deterrence abstract economists often argue that predatory practices are irrational since there exist cheaper or more certain means to gain or maintain a monopoly our gametheoretic equilibrium analysis suggests that if a firm is threatened by several potential entrants then predation may be rational against early entrants even if it is costly when viewed in isolation because it yields a reputation which deters other entrants asymmetric information plays a crucial role in our analysis since it provides the rationale for entrants to base their expectations of the firm s future behavior on its past actions the analysis also suggests methods to treat general reputational phenomena

predation mergers and incomplete information this article examines the strategic pricing of duopolists in anticipation of a takeover of one by the other in equilibrium the acquiring firm may expand its output to signal that it is a low cost rival and thereby improve the takeover terms if the merged firm willface potential entry a premerger expansion of output may be necessary to deter entry and to make the merger profitable in that case the acquiringjirm s output expansion increases industry concentration by facilitating the takeover and by deterring entry this establishes the rationality of predatory output expansions even when a merger or a takeover is possible and indeed anticipated a voluminous literature is devoted to exploring the role of pricing in altering industry structure to achieve monopoly power that literature discusses both price cutting to drive existing rivals from the industry predatory pricing and setting low prices to deter potential entrants limit pricing the former has received the lion s share of the attention of antitrust commentators and enforcers but the rationality of predatory pricing has been seriously questioned the major criticism has two parts i takeovers are a superior means of achieving monopoly power and where legal should therefore be used instead of price cutting and ii if a takeover is anticipated premerger price cutting merely dissipates some of the value of the merging parties and would thus be irrational the first argument was originally advanced by mcgee 1958 and later by telser 1965 and bork 1978 the essential idea is that since predation is costly firms should realize that a more profitable arrangement in the form of a merger exists and ought to be negotiated the second argument is a natural extension of the first in response to this criticism yamey 1972 provides two arguments first the aggressor knows that he may face other rivals in the future entrants into this or other markets those potential rivals may draw inferences from his current behavior about the response they will face if they enter in that case the aggressor may wish to develop a reputation for aggressive behavior second even if a takeover is anticipated the terms of the takeover may be affected by the pretakeover pricing

a note on countertrade contractual uncertainty and transaction governance in emerging economies this paper develops a conceptual framework for analyzing organizational responses to contractual uncertainty in the context of emerging economies elaborating on hennart s 1989 transaction cost rationale for countertrade we develop a typology of exchange and transaction governance pertinent to the study of emerging economies contract trust and hostage notwithstanding the traditional explanation based on foreign exchange shortage we argue that the persistence of international countertrade illustrates organizational remedies to institutional deficiency in transaction governance

coordination commitment and enforcement the case of the merchant guild we interpret historical evidence in light of a repeated game model to conclude that merchant guilds emerged during the late medieval period to allow rulers of trade centers to commit to the security of alien merchants the merchant guild developed the theoretically required attributes secured merchants property rights and evolved in response to crises to extend the range of its effectiveness contributing to the expansion of trade during the late medieval period we elaborate on the relations between our theory and the monopoly theory of merchant guilds and contrast it with repeated game theories that provide no role for formal organization

contagious cooperation temptation and ecosystem collapse real world observations suggest that social norms o f cooperation can be effective in overcoming social dilemmas such as the joint management of a c ommon pool resource but also that they can be subject to slow erosion and sudden collapse we show that these patterns of erosion and 15 collapse emerge endogenously in a model of a closed community harvesting a renewable natural resource in which individual agents face the tempta tion to overexploit the resource while a cooperative harvesting norm spreads through the community via interpersonal relations we analyze under what circumstances small changes in key parameters including the size of the community and the rate of technological progress trigger catastrophic transitions from 20 relatively high levels of cooperation to widespread norm violation causing the social ecological system to collapse

collusion under financial constraints collusion or predation when the discount factor is near one abstract this paper considers the possibility of collusion between financially constrained firms it is found that they cannot collude when the discount factor is sufficiently close to one while collusion emerges at lower discount factors

property rights regimes and natural resources a conceptual analysis the term common property resource is an example of a term repeatedly used to refer to property owned by a government or by no one it is also used for property owned by a community of resource users such usage leads to confusion in scientific study and policy analysis in this paper we develop a conceptual schema for arraying property rights regimes that distinguishes among diverse bundles of rights ranging from authorized user to claimant to proprietor and to owner we apply this conceptual schema to analyze findings from a variety of empirical settings including the maine lobster industry

oil shocks competition and corporate investment evidence from china abstract this paper aims to investigate the impact of three classical oil shocks on the chinese corporate investment by using firm level data moreover we assess the role of product market competition in the relationship between oil shocks and corporate investment our empirical results show that oil aggregate demand and specific demand shocks negatively affect corporate investment while oil supply shocks show a positive effect notably compared to the non energy related industry the corporate investment of energy related industry is more sensitive to these oil shocks furthermore we find high competitive pressure can mitigate the impact of oil specific demand shocks on the corporate investment of energy related industry but competition presents a limited effect on the relationship between other oil shocks and corporate investment

the strategic impact of resource flexibility in business groups we show that in business groups with efficient internal capital markets resources may be channelled to either more or less profitable units depending on the amount of internal resources a group may exit a market in response to increased competition or channel funds to the subsidiary operating in that market this has important implications for the strategic impact of group membership affiliation to a monopolistic subsidiary can make a cash rich poor firm more less vulnerable to entry deterrence also resource flexibility within a group makes subsidiaries reaction functions flatter thus discouraging rivals strategic commitments when entry is accommodated

credible commitments further remarks i distinguish between unilateral and bilateral trading relations in an earlier article in this review 1983 in which i examined the use of hostages or their commercial equivalents to support exchange the purposes of this note are 1 to confirm the optimality of reciprocal trading by explicitly displaying the combined net benefit relations and 2 to acknowledge a previously unremarked complication that arises when nonsalvageable assets are used as hostages in a unilateral trade

financially constrained entry in a game with incomplete information in an earlier paper we presented an entry game with a monopolist and a potential entrant facing financial constraints in which the unique perfect equilibrium involved no entry here we consider a one sided incomplete information variant of the game in which the monopolist allows for the possibility that the entrant is committed to endure a price war to the limit of his capability we find a unique sequentially perfect equilibrium in which entry sometimes occurs when it does predatory price wars may result with the incumbent sometimes driving out the entrant but other times eventually abandoning the fight

sushi or fish fingers seafood diversity collapsing fish stocks and multispecies fishery management we present a model of a multispecies fishery and we show the following i consumer preferences for seafood diversity can trigger a sequential collapse of fish stocks under open access fishery ii the stronger the preferences are for diversity the higher is the need for coordinated multispecies regulation iii second best optimal management of only one or a few species is less strict than socially optimal management of the same species iv myopic regulation of one species ignoring spillovers to other species can cause depletion of other stocks that would not be depleted under open access

working capital and fixed investment new evidence on financing constraints this article presents new tests for finance constraints on investment by emphasizing the often neglected role of working capital as both a use and a source of funds the coefficient of endogenous working capital investment is negative in a fixed investment regression as expected if working capital competes with fixed investment for a limited pool of finance this finding addresses a criticism of previous research on finance constraints that cash flows may simply proxy shifts in investment demand in addition previous studies may have underestimated the impact of finance constraints on growth and investment because firms smooth fixed investment in the short run with working capital

games of survival in the us newspaper industry 1989 games of survival in the us newspaper industry applied economics vol 21 no 5 pp 631 649

conglomerate entrenchment under optimal financial contracting we provide a formal analysis of the notion that conglomerates are more entrenched as they have deeper pockets using the financial contracting model of bolton and scharfstein 1990 we can isolate two effects that confirm this conjecture the pooling of cash flows which allows to smooth out repayments and the ability to obtain better credit terms for less profitable business segments the internal capital market operated in a conglomerate may however work in the opposite direction increasing the sensitivity of operations to own cash flows and increasing the likelihood of exit

the economical management of multispecies fisheries resource based theory implicitly assumes that property rights to resources are secure extant property rights theory enables us to relax this assumption to take into account processes where there are struggles in establishing property rights that enhance

countertrade transactions theory and evidence countertrade consists of bilateral agreements usually between western industrial enterprises and government agencies or state owned enterprises in developing countries ldcs and centrally planned economies cpes whereby sales of goods by the western exporter are linked contractually to the exporter s purchases of other goods or services from the countertrade partner this paper reports findings from a sample of 230 countertrade agreements we develop an analytical framework that both explains the mutual attraction of countertrade deals to the parties and predicts the terms of trade in individual transactions various statistical tests serve to assess assumptions underlying the model evaluate various predictions and corollaries and distinguish between certain competing hypotheses about the motives or effects of countertrade transactions from authors

tying trade flows a theory of countertrade with evidence a countertrade contract ties an export to an import usually countertrade is criticized as a form of bilateralism and reciprocity and thus as an inefficient form of international exchange in this paper the authors argue that there are circumstances in which the tying of two technologically unrelated trade flows may be efficiency enhancing they show that countertrade can be an efficient institution in international trade that solves moral hazard problems and restores creditworthiness of highly indebted countries the authors test the implications of their model using a sample of 230 countertrade contracts copyright 1995 by american economic association

on the robustness of contestability theory abstract the robustness of contestability theory is discussed with special attention to the role of price response lags the possibility of collusion in the post entry game is examined by modeling an infinitely repeated game moreover the hit and run strategy is obtained as the unique subgame perfect equilibrium of a repeated game with infinite horizon under certain conditions

the signalling role of municipal currencies in local development the last decade has seen the burgeoning of several hundred local community currency institutions in cities across the world although residents of these communities claim that local currency promotes local development how it does so has hitherto been unexplored we argue that the introduction of a municipal currency may serve as a signal of demand for local goods where demand uncertainty deters firms from investing in more productive technologies such a signal improves the chances that technology choice will be optimal the introduction of a local currency therefore always improves ex ante efficiency and may lead to ex post efficiency with strictly higher levels of productivity and welfare

disorganization and financial collapse since the fall of communism the former soviet union experienced a strong output decline and a dramatic increase in arrears and barter we develop a model which explains how these three phenomena are connected we introduce liquidity and credit constraints into a model of disorganization and show how these problems can alleviate the hold up problem we argue further that barter creates a hostage that allows to deal with disorganization when credit enforcement becomes prohibitively costly based on a firm survey in ukraine in 1997 we test how input shortages financial shortages and barter affect output growth of firms

bankruptcy costs and the theory of oligopoly this paper examines the relationship between financial decisions and output decisions in oligopolistic markets assuming a duopoly market structure in which financial decisions and output decisions follow in sequence the authors analyze how bankrupt cy costs which are incurred when the firm is unable to meet current debt obligations affect the firm s behavior in output markets with fixed bankruptcy costs firms have an incentive to increase output le vels if they take on more debt proportional bankruptcy costs lead to a u shaped relationship between output and debt foresighted owners of firms are led to take into account the strategic output effects of financial structure when considering an optimal financial structure for the firm

a simple model of buybacks abstract buybacks are a type of contractual joint venture used in countertrade where the good produced is allocated in fixed proportions to the parties involved we show that buybacks can act as commitment devices when the quality of inputs cannot be contracted over