price wars caused by switching costs in many markets consumers have switching costs for example learning costs or transaction costs of changing between functionally equivalent brands of a product or of using any brand for the first time we analyse a four period complete information model of a market with switching costs in which new entry occurs after the second period the new entry results in equilibrium in a price war that is the new entrants prices are higher in the post entry period than in the entry period and the incumbent s price falls in either the pre entry period or the entry period and subsequently rises we can interpret the incumbent s lowering its price in the pre entry period as limit pricing behaviour we distinguish between two types of price war that can occur and show how the type or mixture of types that arises depends on the size of switching costs

urbanisation agriculture and industrialisation in china 1952 91 urbanisation rates in china have been low compared to other countries at similar stages of development we examine recent trends in china s urbanisation process in the context of a disequilibrium supply and demand model for urban residents with relative urban food consumption as a proxy for wages this model takes into consideration the roles of the agricultural and industrial sectors in the context of a non market economy where institutional arrangements and policy regimes play important roles in determining urbanisation levels we find persistent periods of disequilibrium prior to the introduction of reforms in 1978 throughout the post reform era there has been a markedly improved balance between urban population levels urban food consumption and industrial and agricultural production levels

socio geographic perception in the diffusion of innovation solar energy technology in sri lanka abstract understandings of the diffusion process have tended to emphasize either the adoption perspective which focuses on individual characteristics or the market perspective which focuses on institutional context in this paper we bring these two perspectives together by recognizing that people are embedded in socio geographic contexts that affect their perceptions of their situations which in turn shape the innovativeness of individuals and places focusing on the diffusion of solar home systems shs in sri lanka we explore the role of context at the village by comparing adoption rates among villages and individual by comparing time to adoption among household decision makers in a case study village scales at the village scale we find that expectations of government policy based on interactions related to ethnicity and politicians previous power grid connection promises are significant drivers of shs adoption along with perceived tolerance levels in the village for non conformist behavior among household decision makers within the case study village we analyze relative adoption time and the duration of the innovation decision process and find that perceiving strong village level social control inhibits shs adoption decision making the results add to innovation diffusion theory and provide policy recommendations for agencies promoting solar energy in developing countries

individual and collective socio psychological patterns of photovoltaic investment under diverging policy regimes of austria and italy abstract photovoltaic policies show the primary effect of encouraging photovoltaic investments but also secondary effects of crowding in out individuals with specific socio psychological patterns to enhance our understanding of such crowding effects we investigated two comparative study cases with contrasting state support for photovoltaic investments high financial support in the province of bolzano south tyrol italy versus lower financial support in the province of styria austria we surveyed individual and collective investors and as a control group households who had not invested in photovoltaics at the time of data collection we first compared crowding effects of diverging pv policies and afterwards individual and collective socio psychological patterns to grasp their role for photovoltaic adoption in general protecting the environment was found to be the strongest driver for photovoltaic investments generous state support in italy widened demographics crowded in economic considerations and persons with an anthropocentric relationship towards nature however italy s high incentivized photovoltaic policy crowded out the motivations for collective energy projects and could not sufficiently encourage a sustainable diffusion of photovoltaics as investments collapsed once state funding was stopped

entry costs reduction and competition in the portuguese mobile telephony industry we study the eect of entry on costs and competition in the portuguese mobile telephony industry we construct and estimate a model that includes demand network and cost equations the latter accounts for ine ciency and cost reducing eort we show that failure to account for cost reducing eort leads to biased estimates of competition in the industry we also nd that our estimated price cost margins are similar to hypothetical nash margins if rms are patient and have optimistic beliefs about the industry growth finally our results suggest that the entry of a third operator in 1998 lead to signi cant cost reductions and fostered competition

price wars and price collusion in china s airline markets in the absence of an effective antitrust law both fare wars and price collusion have been pervasive in china s airline markets causing concern for both airlines and consumers a study of monthly airfare data from 2002 to 2004 confirms that fare wars occur periodically as well as price collusion both tend to be short lived the fact that collusion is more likely to occur in january and april when demand is high as revealed by china eastern s and china southern s price war and collusion models has been confirmed by interview information obtained from the airlines sales managers however there is also evidence in these models suggesting that collusion can be more easily formed when demand is low high airport concentration measured by the hhi may facilitate collusion in certain circumstances but it may also lead to more price wars under other conditions concentration in both airports and routes does not appear to systematically affect the occurrence of fare wars and collusion in all the models estimated we also reject the possibility that mutual forbearance due to multimarket contact plays any important anti competitive role in china s airline markets

population concentration urbanization and demographic transition abstract this paper investigates how urbanization and demographic transition interrelate with each other via merits agglomeration economies and demerits congestion diseconomies of population concentration it reveals the mechanism by which agglomeration economies and congestion diseconomies affect the fertility rate furthermore analysis also shows that by assuming declines in infant and child mortality rate the model developed in this paper can replicate the following well known historical patterns i advances in urbanization ii rises in the wage rate iii declines in fertility and iv rises followed by declines in the population growth rate the inverted u shaped demographic transition

bureaucratic behavior modeled by reduced rank regression the case of expenditures from the soviet state budget abstract a bureaucratic hierarchy compresses information flowing upward and disaggregates directives passing downward thus making itself amenable to modeling by reduced rank regression applying this technique to the soviet government we find that about eight latent variables are required to characterize the mapping of predetermined variables into a vector of budgetary expenditures the latent variables can be interpreted as targets for expenditures in high priority sectors

urbanization and growth in a simple urban economics framework we aim at highlighting how the trade off between optimal and equilibrium city size behaves when introducing dynamic human capital externalities beside the classical congestion externalities our purpose is to show that there are dynamic gains from oversized cities to this end we assume that productivity depends on human capital which is solely accumulated in cities such that urbanization is the engine of growth in an empirical illustration we highlight the link between urbanization and human capital accumulation by focusing on cross country panel data

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

peer effects in the diffusion of solar photovoltaic panels social interaction peer effects are recognized as a potentially important factor in the diffusion of new products in the case of environmentally friendly goods or technologies both marketers and policy makers are interested in the presence of causal peer effects as social spillovers can be used to expedite adoption we provide a methodology for the simple straightforward identification of peer effects with sufficiently rich data avoiding the biases that occur with traditional fixed effects estimation when using the past installed base of consumers in the reference group we study the diffusion of solar photovoltaic panels in california and find that at the average number of owner occupied homes in a zip code an additional installation increases the probability of an adoption in the zip code by 0 78 percentage points our results provide valuable guidance to marketers designing strategies to increase referrals and reduce customer acquisition costs they also provide insights into the diffusion process of environmentally friendly technologies

is economic growth improving urbanisation a cross regional study of china this study applies a bootstrap panel granger causality test to determine the relationship between urbanisation and economic growth for china we find that the patterns of interaction between urbanisation and economic growth vary across different regions the empirical results show that in urbanisation of the northern coastal region and most of the inland region granger causes economic growth whereas economic growth does not have a significant effect on urbanisation except in the southern coastal region and the inland region one fourth of china s provinces primarily in the southern coastal region do not show a granger causality relationship between urbanisation and economic growth this finding indicates that urbanisation has promoted economic growth by expanding demand and that economic growth s effect on urbanisation is restricted by administrative intervention rather than market mechanisms thus the findings for three fourths of the provinces in china conform to the urbanised economy theory these

motives to adopt renewable electricity technologies evidence from sweden the diffusion of renewable electricity technologies rets has to speed up for countries to reach their often ambitious targets for renewable energy generation this requires a large number of actors including individuals companies and other organizations to adopt rets policies will most likely be needed to induce adoption but there is limited knowledge about what motivates ret adoption the purpose of this paper is to complement and expand the available empirical evidence regarding motives to adopt rets through a survey to over 600 ret adopters in sweden the main finding of the study is that there are many different motives to adopt rets and that ret adopters are a heterogeneous group with regard to motives although environmental concerns interest in the technology access to an re resource and prospects to generate economic revenues are important motives in general adopters differ with regard to how large importance they attach to the same motive and each adopter can also have several different motives to adopt there are also differences in motives between adopter categories especially independent power producers vs individuals and diversified companies and between rets especially wind power vs solar power this implies that a variety of policy instruments might be needed to induce further adoption of a variety of rets by a variety of adopter categories

a new product growth for model consumer durables this article originally appeared in management science january 1969 volume 15 number 5 pp 215 227 published by the institute of management sciences a growth model for the timing of initial purchase of new products is developed and tested empirically against data for eleven consumer durables the basic assumption of the model is that the timing of a consumer s initial purchase is related to the number of previous buyers a behavioral rationale for the model is offered in terms of innovative and imitative behavior the model yields good predictions of the sales peak and the timing of the peak when applied to historical data a long range forecast is developed for the sales of color television sets

motivators for adoption of photovoltaic systems at grid parity a case study from southern germany in some countries photovoltaic pv technology is at a stage of development at which it can compete with conventional electricity sources in terms of electricity generation costs i e grid parity a case in point is germany where the pv market has reached a mature stage the policy support has scaled down and the diffusion rate of pv systems has declined this development raises a fundamental question what are the motives to adopt pv systems at grid parity the point of departure for the relevant literature has been on the impact of policy support adopters and recently local solar companies however less attention has been paid to the motivators for adoption at grid parity this paper presents an in depth analysis of the diffusion of pv systems explaining the impact of policy measures adopters and system suppliers anchored in an extensive and exploratory case study in germany we provide a context specific explanation to the motivations to adopt pv systems at grid parity

technology diffusion and public policy a useful typology of technological change is provided by the schumpeterian trilogy invention the generation of new ideas innovation the development of those ideas through to the first marketing or use of a technology and diffusion the spread of new technology across its potential market until recently policy schemes in most oecd countries have tended to focus predominantly on the invention and innovation or science and r d end of this technology spectrum see e g limpens et al i 992 although it is generally realised that it is the process of diffusion or use of technology that creates productive potential and competitiveness policy initiatives have largely bypassed opportunities to improve the diffusion process if this may seem misplaced emphasis it does in fact reflect the state of the academic literature which is wide ranging and extensive as it relates to policies on r d but small and fragmented as regards policies on diffusion currently a gradual reorientation of policy direction toward diffusion seems to be taking place the us and uk governments for example have recently proposed major technology policy initiatives that despite differences in emphasis both stress the importance of creating an infrastructure conducive to a rapid spread of awareness and knowledge of innovations we argue that although sensible in themselves such policies may be too limited in scope and that a broader policy stance may be needed this paper has two main objectives the first is to provide an overview of why policy intervention in the diffusion process may be desirable and what form it might take this discussion is rather long since to the best of our knowledge there is no published systematic synthesis of the diffusion policy literature though see stoneman i987 for an earlier attempt the second aim is to look at actual diffusion policies and their impacts to make the task manageable we are restricting this paper to a discussion of the diffusion of new process technologies although similar issues apply to new consumer technologies these are not explicitly addressed we also consider diffusion policy only within the context of a given institutional and macroeconomic environment although it may well be that the supply of skilled manpower the nature of the capital market animal spirits and entrepreneurship fiscal and monetary policies will all impact upon the diffusion path improvements in these areas will also impact upon a whole host of other aspects of the economy s performance to use a plea for diffusion policy as a rationale for changes in such areas would be equivalent to the tail wagging the dog and thus they fall outside the remit of this paper

the demand for information and the diffusion of a new product abstract the paper examines the implications of the ability of a consumer to learn about the characteristics of a new product on the diffusion of the product over time the demand for information by the consumer is shown to generate a sigmoid diffusion curve for total sales of the product further it is shown that over time the elasticity of demand along the diffusion curve increases

the determinants of technology adoption the case of the banking firm using data on the adoption of automatic teller machines by firms in the banking industry this study examines the relationship between the decision to adopt new technology and its determinants since banking firms differ considerably in terms of the competitive environments in which they operate focusing on this one innovation in this industry allows a stronger test of the relationship between market structure and the adoption of new technology than has been previously conducted using a failure time estimation procedure we find that larger banks and banks operating in more concentrated local banking markets register a higher conditional probability of adopting this new technology all else equal we also find that other results are consistent with the underlying model and that the bank s regulatory environment shapes its adoption decision in plausible ways

models and estimation of disequilibrium for centrally planned economies the planned level of output is an important variable in modelling centrally planned economies and the present paper discusses several disequilibrium models in which the plan level is an endogenous variable a key relationship in such a model is the plan adjustment equation which is the counterpart of the usual priceadjustment equation employed in models of free economies seemingly minor differences in assumptions lead to markedly different econometric models the coherency properties of these are studied and several likelihood functions are derived the most complex of the models includes both endogenous plan levels and endogenous prices

regulatory delay and the timing of product innovation abstract this paper examines how regulatory delay affects innovation by a regulated firm when product introduction costs fall over time an extra day of regulatory delay increases time to introduction by more than a day when the uncertainty of regulatory delay increases a risk neutral firm responds by moving up the product introduction the model places testable restrictions on the empirical relationship between introduction delay and regulatory delay and is consistent with data gathered from a large u s telecommunications provider

a theory of urban growth in an economy experiencing endogenous economic growth and exogenous population growth we explore two main themes how urbanization affects efficiency of the growth process and how growth affects patterns of urbanization localized information spillovers promote agglomeration and human capital accumulation fosters endogenous growth individual city sizes grow with local human capital accumulation and knowledge spillovers and city numbers generally increase which we demonstrate is consistent with empirical evidence we analyze whether local governments can successfully internalize local dynamic externalities in addition we explore how growth involves real income differences across city types and how urbanization can foster income inequality most nonagricultural production in developed countries occurs in metropolitan areas the underlying reasons why economic activity agglomerates into cities localized information and knowledge spillover also make cities the engines of economic growth in an we gratefully acknowledge support of the national science foundation grants sbr 9422440 and sbr9730142 for this research the work has benefited from conversations with harl ryder on the dynamics of the model and from comments by gilles duranton and participants in seminars at brown colorado and texas austin and a presentation at an isit seminar sponsored by the centre for economic policy research and the national bureau of economic research

russian voting and the initial economic shock of hyperinflation this paper addresses the issue of economicvoting in transitional democracies using data from the russianfederal elections it argues that the shock of inflation thatfollowed the fundamental economic reform has a lastinginfluence on voters specifically it shows that in russia where inflationary policy led to hyperinflation and thewidespread loss of personal savings the magnitude of savingslost at that time continues to explain a significant portionof the variation in the regional support for the communistparty in parliamentary and presidential elections

sales and consumer lock in this paper examines the dynamically consistent price path for a new product monopolist unable to commit to future prices when consumers must incur setup costs of adopting the product the authors find that setup costs give rise to a price path with introductory sales along the path periods of high prices during which only locked in or captive customers buy the product alternate with sales low price periods during which new customers adopt the product as the stock of captive customers increases over time sales become less frequent after the customer base reaches some critical level no further sales take place they show that the monopolist may hold a sleeping patient in which initial sales of the product are postponed to avoid locking into a high pricing strategy that ignores new customers copyright 1989 by the london school of economics and political science

enabling diffusion how complementary inputs moderate the response to environmental policy abstract while policies encouraging diffusion of new technologies provide incentives for adopting the focal good they typically ignore the ecosystem of complementary goods and services based on existing literature on indirect network effects we argue that when there is less availability of complementary goods policies have a smaller impact on diffusion using a natural experiment based on the establishment of state level solar carve out policies we demonstrate that solar power installations increased substantially more after the policy in cities where a critical complementary good qualified installers was more available

price wars triggered by entry abstract to attract customers who incur set up or switching costs new firms offer below market prices when entering a market the incumbent responds with discounts resulting in a price war once new entrants have locked in their customers the price warfare stops and all firms raise their prices during the price war the incumbent s price is not as low as the entrants after the price war the market price is lower and output is greater than the pre entry price and output entrants attract new buyers to the market and depending on the size distribution of set up costs we show that some of the incumbent s customers switch to entrants the model is shown to square with the price and output sequences observed in a price war that was the subject of a recent and prominent antitrust case in the cigarette market

human capital and growth abstract this paper describes a growth model with the property that human capital accumulation can account for all observed growth the model is shown to be consistent with evidence on individual productivities as measured by census earnings data the central hypothesis is that we learn more when we interact with more productive people

analyzing the functional dynamics of technological innovation systems a scheme of analysis various researchers and policy analysts have made empirical studies of innovation systems in order to understand their current structure and trace their dynamics however policy makers often experience difficulties in extracting practical guidelines from studies of this kind in this paper we operationalize our previous work on a functional approach to analyzing innovation system dynamics into a practical scheme of analysis for policy makers the scheme is based on previous literature and our own experience in developing and applying functional thinking it can be used by policy makers not only to identify the key policy issues but also to set policy goals

the impact of attribute preferences on adoption timing the case of photo voltaic pv solar cells for household electricity generation we are concerned with micro generation individual households generating electricity using a renewable technology we focus on modeling the adoption probability of photo voltaic solar panels by households using data from ontario canada where a generous feed in tariff is available to households generating electricity from solar panels we measure household level preferences for panels and use these preferences along with household characteristics to predict adoption time intentions we use discrete choice experiments to measure household level preferences and establish a causal link between the attributes of the technology and adoption time intentions using discrete time survival mixture analysis significant preferences included lower cost greater energy savings and lower fossil fuel inflation the conditional hazard probability of adoption at a particular time given no previous adoption showed that the attribute preferences had intuitively reasonable effects the hazard probabilities allow us to compute the cumulative probability of adoption over a 10 year period per household technology awareness has a significant effect on the adoption probability reinforcing the need for effective education our approach indicates the level of heterogeneity in preferences particularly high for investment criteria and co2 emissions these findings suggest that education campaigns should explain more about investment criteria feed in tariffs and environmental effects

what factors influence the diffusion of the mobile communications industry a case study from china mobile communications have experienced rapid growth in china and play an increasingly important role in the country s economic development however there is still vast regional imbalance in china s communications industry which we will be exploring here including examining what factors influence diffusion paths and cause these differences through a two step estimate method this paper successfully describes the differences in the diffusion paths of mobile communications in different regions of china it evaluates the impacts of industry variables intra regional income gaps macroeconomic factors such as degree of urbanisation and geographic effects of neighbouring provinces our work may be helpful to inform policymaking for effective and equitable development

competing networks and proprietary standards the case of quadraphonic sound quadraphonic audio systems failed to replace stereo in the 1970s despite backing from all the major manufacturers and recording houses network externalities played a significant role in this episode and the author uses the installed base model of j farrell and g saloner 1986 to explain quad s failure the author finds that the introduction of competing incompatible quadraphonic systems hindered the development of a viable user base and he argues that the systems sponsors introduced their products in a technologically premature state in order to prevent one another from preemptively establishing the quad standard as a result self fulfilling consumer and retailer expectations doomed quadraphonic sound copyright 1990 by blackwell publishing ltd

innovation diffusion public policy and local initiative the case of wood fuelled district heating systems in austria abstract this paper comprises a three level study on wood fuel utilisation for district heating in austria first we discuss the framework conditions for the diffusion in austria of rural biomass district heating bdh plants an energy conversion plant type which constituted a real innovation in the 1980s second we describe the diffusion of bdh systems in the austrian province of vorarlberg where a variety of biomass energy systems have been promoted by capital grants since 1993 as part of a dedicated bioenergy promotion programme third the paper contains a case study of a 2 mw bdh plant put into operation in 2000 in rankweil a small market town located in vorarlberg on the east side of the rhine valley analysis of the plant history reveals that an oversupply of forest residues caused by devastating storms and forest diseases together with the more general need to rejuvenate severely over aged forest stands created strong incentives to form local actor networks and initiatives to push for the adoption and diffusion of centralised biomass heating systems in rural areas in addition intensive lobbying and strong political and public support were necessary to successfully combat interventions by both the natural gas industry and influential gas supplied industrial enterprises finally a capital grant of 45 of eligible investment costs as well as careful capacity expansion and other planning significantly improved and safeguarded the economic viability of the plant these considerations combined with a dedicated forest restructuring programme render the plant one of the most successful integrated forestry and bdh projects in vorarlberg and an important model for later adopters overall the analysis sheds some light on the role of public policy local actors and economic and other framework conditions on the market diffusion dynamics of bdh in austria

human capital information and the early adoption of new technology when producers are uncertain or have imperfect information about the profitability of adopting new technology their adoption behavior depends on the endowment of human capital and the investment in adoption information this study analyzes the role of education experience and information acquisition in the decision to be an early adopter the findings support the hypothesis that adoption decision making is a human capital intensive activity the econometric evidence presented suggests that education and information reduce adoption costs and uncertainty and thereby raise the probability of early adoption adoption behavior is also shown to vary significantly across firm size

what triggers environmental management and innovation empirical evidence for germany abstract it is frequently hypothesized that environmental management systems emss may improve firms environmental innovation performance whether this hypothesis is true is as critical for environmental policy as questions pertaining to the relevant incentives for 1 a firm s voluntary adoption of an ems and 2 its environmental innovation behavior based on ample empirical evidence for german manufacturing this paper addresses the simultaneity of these issues on the basis of a recursive bivariate probit model that explores the hypothesis that a facility s decision on innovation activities is correlated with the decision on ems adoption our empirical results indicating that environmental innovation activities are not associated with ems implementation nor any other single policy instrument reflect the perceptions of the survey respondents and hence should be interpreted as correlations rather than causal relationships according to these perceptions innovation behavior seems to be mainly correlated with the stringency of environmental policy

the diffusion of mobile telecommunications services in the european union we study the technological and regulatory determinants of the diffusion of mobile telecommunications services in the european union using a logistic model of diffusion we find that the transition from the analogue to the digital technology during the early 1990s and the corresponding increase in spectrum capacity had a major impact on the diffusion of mobile telecommunications countries which granted first licenses at later points in time show a significant but slow catching up effect implying international convergence only by around 2006 the impact of introducing competition has also been significant during both the analogue and the digital period though the effect was smaller than the technology effect

economic growth size of the agricultural sector and urbanization in africa this paper uses variations in international commodity prices and rainfall to construct instrumental variables estimates of the within country effect that changes in the size of the agricultural sector and gdp per capita growth have on the urbanization rate for a panel of 41 african countries during the period 1960 2007 the paper s three main findings are that i decreases in the share of agricultural value added lead to a significant increase in the urbanization rate ii conditional on changes in the share of agricultural value added gdp per capita growth does not significantly affect the urbanization rate iii increases in the urbanization rate had a significant negative average effect on gdp per capita growth

the evolution of markets under entry and standards regulation the case of global mobile telecommunications abstract we analyze the effects of government policies on the evolution of an industry the global mobile telecommunications market i we find a relatively slow diffusion convergence between countries this follows partly from regulatory delay in issuing first licenses yet persisting initial cross country differences also contribute to a lack of convergence ii introducing competition has a strong immediate impact on diffusion but a weak impact afterwards sequential entry is preceded by pre emptive behavior by incumbents this is consistent with the presence of consumer switching costs iii setting a single technological standard accelerates the diffusion of analogue technologies considerably for digital technologies it is too early to draw reliable conclusions yet the available evidence suggests that setting single standards has similar beneficial effects

announcement entry and preemption when consumers have switching costs i study the incentives of innovating firms to announce their entry in markets in which consumers incur a cost of switching from one product to another announcing entry can prevent the lock in of potential demand before the launch of the new product at the same time however the incumbent firm learns about the impending entry and has the opportunity to cut prices and preempt the market in equilibrium entrants do not always announce and i show that this behavior maximizes ex ante total welfare by contrast consumers might be better off with a ban on announcements when the entrant s claims are not verifiable vaporware announcements arise in equilibrium and i demonstrate that they can be beneficial for consumers

do financial development urbanization and trade affect environmental quality evidence from china abstract it is of great significance to study the impact of financial development on carbon emissions for the development of low carbon economy although many empirical studies reveal significant correlations between financial development and various environmental pollution variables few studies differentiate financial scale and efficiency from other factors and pay attention to the impact of securities capital market on carbon emissions in view of the complexity of financial development impact mechanism on carbon emissions in china this paper classifies financial development into two dimensions financial scale and securities size we establish a broader autoregressive distributed lag error correction model ardl ecm which is used to measure the dynamic relationship among financial scale securities size urbanization economic development trade openness and china s carbon emission intensity the study indicates that there is positive short run and long run relationship among financial scale economic growth and carbon emission intensity this reflects that the current development of financial scale has stimulated the development of china s economy but brought carbon emissions the size of securities has a relatively small impact on carbon emission intensity both in the short run and long run this shows that china s current securities market mechanism of regulating carbon emissions needs further improvement the above conclusions are convinced by the robustness tests this paper provides empirical evidence for policy makers to support the implementation of financial and low carbon economy growth

dynamic oligopoly behaviour in the airline industry abstract this paper examines the dynamic interaction between united airlines and american airlines on a set of duopoly routes we estimate quarterly conduct parameters or conjectural variations and test constant behaviour bertrand cournot and collusive models we also test two regimeswitching models derived from the green porter price war model one based on reversion to bertrand behaviour during price wars the other on reversion to cournot behaviour the three constant behaviour models are all rejected the regime switching models can both describe the data but the cournot based version is preferred

mobile telecommunications and the impact on economic development using annual data from 192 countries over the period 1990 2007 we assess the impact of mobile telecommunications on economic growth we find that this impact is smaller for countries with a low mobile penetration usually low income countries while in low income countries the mobile telecommunications contribution to annual gdp growth is 0 11 for high income countries this is 0 20 the increasing returns from mobile adoption are also emerging when assessing the impact on productivity growth to promote mobile telecommunications penetration liberalization policies along with appropriate regulatory frameworks are recommended such policies should be pursued more forcefully in cases where serious shortcomings exist harald gruber and pantelis koutroumpis

collusive conduct in duopolies multimarket contact and cross ownership in the mobile telephone industry the deregulation of the telecommunications industry has resulted in a variety of industry structures which have been created in hopes of increasing competition one example is the licensing of cellular telephone services in the united states where the fcc created duopolies in which two firms were granted licenses to compete in strictly defined product and geographic markets taking advantage of the unique regulatory environment we test to what degree duopolistic competition leads to competitive market outcomes we find that cross ownership and multimarket contact are important factors in explaining non competitive prices

technology adoption learning spillovers and the optimal duration of patent based monopolies abstract the paper analyses an often overlooked aspect of the patent system namely that a monopoly franchise for production of a new good could lead to a second best welfare optimum event when there was no future prospect of inventions being induced by the patent it is shown that a paten may improve economic welfare relative to a regime of competitive supply when there are learning externalities or spillovers from experience in the process of production comparative statics show that stronger learning effects at low levels of experience tend to strengthen the case for ex post grant of a monopoly franchise

revisiting the techno economic analysis process for building mounted grid connected solar photovoltaic systems part two application part one in this two part paper identified monte carlo analysis as an improved approach over traditional deterministic techno economic methods for solar pv prosumers in deregulated markets in this

urbanisation and regional productivity in korean manufacturing as the first study for korea we estimate the effects of urbanisation and localisation economies on the productivity of 19 korean manufacturing industries in 1983 1988 and 1993 based on the observation that material inputs contributed about 60 per cent of productivity growth in korea we consider gross output productivity which is an innovation that distinguishes our study from previous ones we find that localisation economies have been dominant features of korean manufacturing industries whereas korean manufacturing industries did not benefit much from locating in large cities more interestingly there are some indications of quadratic relations between city size and urbanisation economies

nuclear energy consumption and economic growth in oecd countries cross sectionally dependent heterogeneous panel causality analysis the purpose of this study is to determine the direction causality between nuclear energy consumption and economic growth in oecd countries the empirical model that includes capital and labor force as the control variables is estimated for the panel of fourteen oecd countries during the period 1980 2007 apart from the previous studies in the nuclear energy consumption and economic growth relationship this study utilizes the novel panel causality approach which allows both cross sectional dependency and heterogeneity across countries the findings show that there is no causality between nuclear energy consumption and economic growth in eleven out of fourteen cases supporting the neutrality hypothesis as a sensitivity analysis we also conduct toda yamamoto time series causality method and find out that the results from the panel causality analysis are slightly different than those from the time series causality analysis thereby we can conclude that the choice of statistical tools in analyzing the nature of causality between nuclear energy consumption and economic growth may play a key role for policy implications

the economics of networks a survey of the empirical literature network effects the increase in value of consuming a product if many other consumers use the same product are a feature of many markets and in particular of many high technology products this paper surveys the burgeoning empirical literature that has developed especially during the last years after theoretical work dominated the earlier years of research in this area newer research has combined theoretical models with empirical studies and applied work with direct implications for public policy marketing and company strategies furthermore insights from the study of social networks have been applied to analyse how consumers interact with each other the paper argues that a closer analysis of the network structure of consumer interaction promises fruitful future research avenues and advances in our understanding of how network effects operate copyright 2009 blackwell publishing ltd

consumer switching costs and private information abstract we consider a standard model of consumer switching costs with demand uncertainty where firms observe private information about demand given this private information each firm forms beliefs over different demand realizations as well as beliefs over the other firm s information the main result here is that in the first period if firms observe information suggesting that future demand is likely to be high they will price aggressively sacrificing current profits for higher market share and the expectation of higher future profits

urbanization and economic development a bias toward large cities abstract we find that a nation s urban population percentage increases with gdp per capita industrialization export orientation and possibly foreign assistance it decreases with the importance of agriculture industrialization and agricultural importance have the same implications for the concentration of urban population in cities with 100 000 population as for the urban percentage greater export orientation reduces such concentration finally gdp per capita population and export orientation reduce primacy political factors such as whether a country s largest city is also its capital affect primacy our results do not seem to imply that developing country urbanization today differs fundamentally from urbanization in the past

exploring the consumer decision process in the adoption of solar energy systems this study examines residential solar energy systems within an adoption and diffusion of innovations framework the findings indicate considerable differences between adopters and nonadopters on many measures multivariate nominal scale analysis is used to develop classification models based on both attribute perceptions of solar energy systems and demographic characteristics

redefining innovation eco innovation research and the contribution from ecological economics while innovation processes toward sustainable development eco innovations have received increasing attention during the past years theoretical and methodological approaches to analyze these processes are poorly developed against this background the term eco innovation is introduced in this paper addressing explicitly three kinds of changes towards sustainable development technological social and institutional innovation secondly the potential contribution of neoclassical and co evolutionary approaches from environmental and innovation economics to eco innovation research is discussed three peculiarities of eco innovation are identified the double externality problem the regulatory push pull effect and the increasing importance of social and institutional innovation while the first two are widely ignored in innovation economics the third is at the least not elaborated appropriately the consideration of these peculiarities may help to overcome market failure by establishing a specific eco innovation policy and to avoid a technology bias through a broader understanding of innovation finally perspectives for a specific contribution of ecological economics to eco innovation research are drawn it is argued that methodological pluralism as established in ecological economics would be very beneficial for eco innovation research a theoretical framework integrating elements from both neoclassical and evolutionary approaches should be pursued in order to consider the complexity of factors influencing innovation decisions as well as the specific role of regulatory instruments and the experience gathered in ecological economics integrating ecological social and economic aspects of sustainable development is highly useful for opening up innovation research to social and institutional changes 2000 elsevier science b v all rights reserved

winners and losers in a major price war abstract although retail price wars have received much business press and some research attention it is unclear how they affect consumer purchase behavior this article studies an unprecedented price war in dutch grocery retailing that started in fall 2003 initiated by the market leader to halt its sliding market share the authors investigate the short and long term effects of the price war on store visits on spending and on the sensitivity of these decisions to weekly prices and price image they use a unique data set with consumer hand scan and perceptual data for a national panel of 1821 households covering two years before and two years after the price war started although the price war initially entailed more shopping around and increased spending spending per visit ultimately dropped because consumers redistributed their purchases across stores the price war made consumers more sensitive to weekly prices and price image which helped both the chain that showed an improvement in price image

income inequality and technology diffusion evidence from developing countries we study the effect of within country income inequality on the diffusion of mobile phones using data on market penetration in a sample of developing countries from 1985 to 1998 mobile phones are an example of international technology originating in industrialized countries and diffusing worldwide we find that income inequality as measured by the income share of the highest earning deciles has a positive effect on the early diffusion of mobile phones and that the estimated effect becomes greater when a measure of agricultural endowments is used as an instrument the instrumental variable results are robust to weak instruments our findings suggest that the diffusion of new technologies originating from industrialized countries may generate yet another channel that links inequality and development

price wage dynamics and inflation in socialist economies empirical models for hungary and poland this article analyzes the determinants of open inflation in transitional socialist economies with reference to recent experience in hungary and poland a simple inflation model is centered on the transmission process and on the short run dynamics of inflation further incorporating a number of features specific to socialist economies and working with quarterly data dynamic price and wage equations are estimated the estimated equations allow satisfactory exploration of the role and weight of foreign prices and domestic factors in propagating inflation foreign prices matter but developments on the cost side are critical in relating exogenous policy driven adjustments to the price level to increases in the rate of inflation the absence of conventional market based equilibrating mechanisms requires that nominal anchors particularly wage restraints feature prominently in any stabilization program adopted by reforming socialist economies copyright 1992 by oxford university press

nuclear energy consumption oil consumption and economic growth in g 6 countries bootstrap panel causality test abstract this study applies bootstrap panel granger causality to test whether energy consumption promotes economic growth using data from g 6 countries over the period of 1971 2010 both nuclear and oil consumption data are used in this study regarding the nuclear consumption economic growth nexus nuclear consumption causes economic growth in japan the uk and the us economic growth causes nuclear consumption in the us nuclear consumption and economic growth show no causal relation in canada france and germany regarding oil consumption economic growth nexus we find that there is one way causality from economic growth to oil consumption only in the us and that oil consumption does not granger cause economic growth in g 6 countries except germany and japan our results have important policy implications for the g 6 countries within the context of economic development

predation and its rate of return the sugar industry 1887 1914 we show that the price wars following two major entry episodes were predatory our proof is twofold by direct comparison of price to marginal cost and by construction of a lower bound to predicted competitive price cost margins that we show to exceed observed margins predation occurred only when its relative cost to the dominant firm the american sugar refining company asrc was small its most clear effect was to lower the acquisition price of entrants and small incumbents it may also have deterred future capacity additions and raised asrc s share of industry profits predation operated by strengthening asrc s reputation as a willing predator

macroeconomic planning and disequilibrium estimates for poland 1955 1980 the authors specify and estimate a four equation disequilibrium model of the consumption goods market in a centrally planned econo my this work is based on previous papers of r portes and d winter 1977 and w charemza and r quandt 1982 the model contains a household demand equation a planners supply equation a min condition and plan adjustment equation through which plan formation becomes endogenous the paper uses a unique new data set of time series for plans for the major macroeconomic variables in poland the overall framework is applicable to any large organization which plans economic variables coauthors are richard e quandt david winter and stephen yeo copyright 1987 by the econometric society

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

when outcomes are the reflection of the analysis criteria a review of the tradable green certificate assessments abstract the tradable green certificates tgc framework is a prevalent policy support scheme enacted to stimulate investments in electricity from renewable energy sources res e in several countries including sweden and norway the tgc framework is currently under reevaluation in this process academic literature plays a crucial role in reflecting the outcomes of this policy framework the outcomes however are often limited by the analysis criteria which reflect what has been accounted for or disregarded when assessing the performance of the tgc framework the analysis criteria also stress what is considered as a successful outcome given the importance of such criteria this paper presents an extensive and systemic literature review of academic publications assessing the performance of the tgc framework the findings are to provide an overview of the publications analysis criteria and outline their outcomes we also provide descriptive statistics for the publications and examine the average citation record of the publications that use various analysis criteria in order to explore their relative impact on later studies these findings can help policymakers put the assessments into perspective when reevaluating a country s tgc system they also suggest several intriguing directions for future studies in this field

a signal jamming theory of predation we propose a new theory ofpredation based on signal jamming in our model the predator s characteristics are common knowledge while the entrant is uncertain of his own future profitability the entrant uses his current profit to decide whether to remain in the market and the predator preys to jam or interfere with this inference problem thus our model differs from those based on reputation effects in which the predator preys to signal information about himself

competition and pricing in the credit card market many credit card issuers charge fixed rates that remain the same for three to five years while the rest charge variable rates that are indexed to market rates the presence of these two distinct rate types forces prices at firms selling an otherwise identical product to move asynchronously variable rates move one for one with the index while fixed rates stay constant empirical and theoretical analysis shows that this pricing structure provides an explanation for the simultaneous yet seemingly contradictory existence of high rate cost margins and aggressive non price competition for new customers a phenomenon that existed in the credit card market in the early 1990s

government policy network externalities and mobile telecommunication services evidence from oecd countries this article analyses the effect of government policy on the diffusion of mobile telecommunication services in member countries of the organization for economic cooperation and development oecd specifically we examine how the competition in and standard policies of each country affect cellular diffusion through interactions with positive and negative network externalities the empirical analysis shows that significant network externality effects exist in a cellular market although the positive effects dominate the negative effects initially the negative network externality effects become larger and outweigh the positive externality effects after a certain level of diffusion rate has been achieved in particular a single standard policy and the speed of technological innovation combined with the previous penetration rate generate a positive network externality on the diffusion of mobile telecommunications however a competition policy that solely increases the rate of new subscriptions does not gen

understanding the uneven diffusion of building scale renewable energy systems a review of household local and country level factors in diverse european countries abstract this review focuses on renewable energy technology deployment in residential buildings which is part of current targets to develop net zero carbon buildings in europe and to promote the deployment of renewable energy we focus on the adoption of four technologies heat pumps solar photovoltaics solar thermal systems for domestic hot water and space heating and advanced biomass heating while there are several studies on households investment criteria a research gap exists because building owners across europe are quite diverse and the european markets exhibit different stages of maturity this article conducts a critical review of the literature on the diffusion of building scale renewable energy solutions in order to answer the following questions 1 to what extent can findings from studies on household adoption criteria be generalized from one country to another and 2 what insights does the literature offer on factors that might explain the differences in adoption patterns between european countries

intertemporal price discrimination uncertainty and introductory offers recent analyses of market equilibria have shown that it is possible for price dispersion to exist even in competitive markets for homogeneous goods the usual departure from the perfectly competitive extreme that leads to the possibility of price dispersed equilibria is the introduction of some form of imperfect information salop and stiglitz 1977 1982 braverman 1980 and sadanand and wilde 1982 have all shown that a competitive market may display more than one price in equilibrium in general these models feature equilibria exhibiting price dispersion because of the assumption that consumers find it costly to obtain full information on prices and or quality although the above models provide better characterisations of actual market structures they still exhibit a weakness and this has been highlighted by varian 1980 he argues that because they model spatial price dispersion it allows some stores to sell their product persistently at a lower price than available elsewhere this he argues ignores the possibility of consumers learning from experience as an alternative he proposed a model of temporal price dispersion in his model stores randomly select their price over time so that they can discriminate between the informed and uninformed sectors of the market at any one moment in time there can exist a price distribution he argues that the model could be viewed as an explanation of sales however it is typically the case that sales are predictable regular and well advertised rather than random and most stores seem to hold sales simultaneously in a recent paper sobel 1984 presents a model where stores periodically hold sales his model displays an equilibrium where stores adopt a cyclical pricing policy occurring because of known consumer heterogeneity this heterogeneity enables stores to price discriminate over time by occasionally holding sales in an attempt to capture all of the consumers with a low reservation price hence he argues that consumer heterogeneity may result in price dispersed equilibria over time in the model considered here there are similarities to those discussed above we present an intertemporal model where stores hold sales and these sales take the form of introductory offers the theme is about consumers who enter a market and choose to purchase a perishable commodity however each individual consumer is uncertain about the quality of a match at any store not previously sampled that is consumers cannot determine the quality of

models of technology diffusion abstract the literature on new technology diffusion is vast and it spills over many conventional disciplinary boundaries this paper surveys the literature by focusing on alternative explanations of the dominant stylized fact that the usage of new technologies over time typically follows an s curve the most commonly found model which is used to account for this model is the so called epidemic model which builds on the premise that what limits the speed of usage is the lack of information available about the new technology how to use it and what it does the leading alternate model is often called the probit model which follows from the premise that different firms with different goals and abilities are likely to want to adopt the new technology at different times in this model diffusion occurs as firms of different types gradually adopt it there are actually many ways to generate an s curve and the third class of models which we examine are models of density dependence popularized by population ecologists in these models the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take up finally we look at models in which the initial choice between different variants of the new technology affect the subsequent diffusion speed of the chosen technology such models often rely on information cascades which drive herd like adoption behaviour when a particular variant is finally selected

mixed pricing in oligopoly with consumer switching costs abstract in this paper we develop an alternative and more natural two period model of duopolistic competition with switching costs we find that overall competition is always less severe when consumers find switching suppliers expensive however the relationship between the strength of competition and the importance of switching costs is not monotonic interestingly competition between ex ante identical firms naturally results in firms having asymmetric market shares in equilibrium

entry exit and diffusion with learning by doing early entry has the advantage of higher revenues per unit of output early on late entry has the benefit of learning from the experience of earlier entrants and hence lower production costs the advantages are balanced off in a continuous time perfect foresight equilibrium competition generates s shaped diffusion and staggered entry and exit a monopolist will innovate less than a competitive industry but the innovation that he does do he will do sooner copyright 1989 by american economic association

the two faces of market support how deployment policies affect technological exploration and exploitation in the solar photovoltaic industry the recent years have seen a strong rise in policies aiming to increase the diffusion of clean energy technologies while there is general agreement that such deployment policies have been very effective in bringing technologies to the market it is less understood how these policies affect technological innovation to shed more light on this important question we conducted comparative case studies with a global sample of 9 firms producing solar photovoltaic pv modules complemented by in depth interviews with 16 leading pv industry experts we propose that on the one hand policy induced market growth serves as an important catalyst for innovative activity as it raises the absolute level of firm investments in technological exploration on the other hand however deployment policies create an incentive for firms pursuing more mature technologies to shift their balance between exploitation and exploration toward exploitation firms focusing on less mature technologies cannot tap the potentials of exploitative learning to the same extent as those with more mature technologies therefore stimulating strong market growth may raise the barrier to market entry for less mature technologies we conclude that when designing deployment policies great care should be taken to avoid adverse effects on technological diversity and a premature lock in into more established technologies

computational controversies in disequilibrium and shortage modelling of centrally planned economies abstract most disequilibrium and shortage models of centrally planned economies fall into three categories testable excess demand the portes school disequilibrium indicators and kornai s economics of shortage these models have generated numerous controversies and conflicting empirical results however this paper argues that some disputes are not caused by the theoretical features of the models but rather by the utilisation of different estimation methods that are not directly comparable this suggests that several controversies are more apparent than real and can be resolved through the improvement of computational techniques and statistical hypothesis testing theory

switching costs in the wholesale distribution of cigarettes recent theories of price wars triggered by entry assign a critical role to switching costs in explaining price and output changes earlier elzinga and mills 1998 showed that actual switching patterns following an episode of new entry in an industry are driven by the fact that buyers have different switching costs the current paper draws on transaction specific price and shipments data surrounding the 1984 1985 price war in generic cigarettes to explore the size and determinants of switching costs among wholesale cigarette distributors results show that switching costs vary across firms and are nontrivial in magnitude several implications of the findings are discussed

systems competition and network effects this paper discusses firm behavior market performance and the public and private institutions that arise in systems markets i e markets where consumers use compatible components together to generate benefits in such markets which include communications networks and hardware software networks popular products are inherently more valuable these network effects can drive corporate strategies and are critical in understanding innovation in many high technology markets the discussion here emphasizes the dynamics of consumer adoption decisions in the presence of network effects competition between incompatible systems and how suppliers choose which components are compatible and which are not

what explains china s rising urbanisation in the reform era china has been transforming from a rural to an urban economy over the past century especially since 1978 when economic reforms were initiated and rapid economic growth began this paper attempts t

export subsidies and oligopoly with switching costs abstract i examine export policy using a two period model of oligopolistic competition with switching costs a switching costs model captures the idea that market share in one period affects profits and welfare in future periods if consumers are impatient firms and governments are patient and switching costs are significant then governments subsidize first period exports and tax second period exports otherwise governments tax exports in both periods although governments may subsidize first period exports each country is made worse off when both countries subsidize in addition firms dump p mc under conditions similar to those required for export subsidies