a history friendly model of the successive changes in industrial leadership and the catch up by latecomers abstract successive changes in industrial leadership between both firms and countries described here as catch up cycles have been common in several sectors this article develops a history friendly model to explore the role played by technological conditions in the emergence of such leadership changes the model is inspired by two cases where the emergence of disruptively novel technology played an important role mobile phones and semiconductors in the baseline setting the model is able to generate the benchmark case of three cycles with two leadership changes in particular the simulation analysis reveals that a the more disruptive the new technology and the lower the incumbents capabilities the greater the shake up of market shares between incumbents and latecomers b leadership change is more likely to occur when it coincides with certain responses by the actors to the technological disruption such as a high lock in behaviour on the part of incumbents and c a technology driven change of industrial leadership is more likely to occur in the presence of increasing returns to technological investments the counterfactual experiments show that different catch up dynamics can emerge depending on the magnitude of technological disruption the degree of lock ins the shape of technological landscape and incumbents initial capabilities in particular four other types of catch up cycle are generated the aborted cycle persistent leadership return of the old leadership and coexistence in leadership between latecomers and incumbents each of these cycles is identified with a specific historical case of catch up

competition and industrial policies in a history friendly model of the evolution of the computer industry abstract in this paper we explore some problems that industrial policy faces in industries characterized by dynamic increasing returns on the basis of a history friendly model of the evolution of the computer industry how does policy affect industry structure over the course of industry evolution is the timing of the intervention important do policy interventions have indirect and perhaps unintended consequences on different markets at different times we focus on two sets of policies antitrust and interventions aiming at supporting the entry of new forms in the industry the results of our simulations show that if strong dynamic increasing returns are operative both through technological capabilities and through customer tendency to stick with a brand there is little that antitrust and entry policy could have done to avert the rise of a dominant firm in mainframes on the other hand if the customer lock in effect had been smaller either by chance or through policies that discouraged efforts of firms to lock in their customers the situation might have been somewhat different in the first place even in the absence of antitrust or entry encouraging policies market concentration would have been lower albeit a dominant firm would emerge anyhow second antitrust and entry encouraging policies would have been more effective in assuring that concentration would decrease the leading firm would continue to dominate the market but its relative power would be reduced

a representative consumer theorem for discrete choice models in networked markets we provide an alternative way to model sequential decision processes which is consistent with the random utility maximization hypothesis and the existence of a representative agent our result is stated on terms of a direct utility representation and it does not depend on parametric assumptions

understanding systemic analysis in the governance of sustainability transition in renewable energies the case of fuel cell technology in iran abstract considering the complex and evolutionary process of renewable energy development it is imperative to have a framework for its governance the governance of transition toward renewable energies can be divided conceptually into two phases namely systemic analysis and policy making this paper focuses on identifying different methodological steps in the systemic analysis phase these steps provide requisite inputs for the second phase policy making by attaining a concrete understanding of the current status in the first step the boundaries of the transition process are defined by specifying the unit of analysis and identifying the system s components and relations in the second step and in order to have a big picture of the system s transformation the dynamism of technological development is mapped through time in the third step an approach for analyzing and policy making of sustainability transition is chosen by comparing various approaches and selecting the most fitted one all of these methodological steps are finally applied in the case of the iran fuel cell technology development program to show the practicality of the proposed conceptual framework in a real case problem and to provide some insights for practitioners

joint recreation choices and implied values of time a model of joint recreation quantity choices is developed individuals choose both total time spent at distant sites and the number of trips taken implicitly choosing average on site time the model permits nonzero marginal utility of travel makes on site time endogenous and is linear in the constraints the scarcity value of time is analyzed without assuming the marginal utility of work time is zero a partially testable assumption about relative marginal values of travel and on site time yields nonparametric calculations of the scarcity value of time and marginal values of trips and days on site from people s observed optimal quantity choices

dynamic procurement under uncertainty optimal design and implications for incomplete contracts we characterize the optimal dynamic contract for a long term basic service when an uncertain add on is required later on introducing firm risk aversion has two impacts profits for the basic service can be backloaded to induce cheaper information revelation for this service an income effect which reduces output distortions the firm must also bear some risk to induce information revelation for the add on this risk effect reduces the level of the add on but hardens information revelation for the basic service the interaction between these effects has important implications for the dynamics of distortions contract renegotiation and the value of incomplete contracts

infrastructure and development a critical appraisal of the macro level literature this survey reviews the existing macro level empirical literature on the link between infrastructure and development outcomes in a critical light after providing a general framework that casts the relevant terms of the controversy on the real effect of infrastructure on growth in the context of an aggregate production function it signals what are the relevant empirical questions to be addressed this guides the systematic review of a number of empirical studies and the discussion of the main econometric challenges to the identification of the effect of infrastructure on output and productivity finally building on related research in particular in contract theory and political economy the paper spells out several promising research avenues

complementarity and external linkages the strategies of the large firms in biotechnology in biotechnology large firms enter into different kinds of linkages with universities and small medium sized research intensive firms we test the hypothesis that the strategies of external linkage of the large firms with other parties are complementary to one another we show that if any two strategies are complementary i e undertaking more of one strategy raises the marginal value of the other then they are positively correlated using data for a sample large us european and japanese chemical and pharmaceutical producers we find that the strategies above are positively correlated even after controlling for firm specific characteristics

the performance of nested logit models when welfare estimation is the goal in this paper we examine the performance of nested logit models in the face of two specification errors the first specification error arises when a nested logit model is appropriate but the wrong nesting structure is chosen the second specification error occurs when the underlying stochastic process is not consistent with nested logit particular attention is placed upon the impact that these errors can have on welfare predictions monte carlo experiments are used together with analytical results to examine the resulting bias to welfare estimates in addition we explore the value of alternative model selection criteria in choosing nesting structures

renegotiation of concession contracts in latin america evidence from the water and transport sectors abstract high rates of contract renegotiation have raised serious questions about the viability of the concession model to attract private participation in infrastructure in developing countries after extending in reduced form a standard regulation model in which renegotiation occurs due to the imperfect enforcement of concession contracts we use a unique data set of 307 concessions awarded in latin america from 1989 to 2000 covering the sectors of transport and water to analyze the determinants of this high incidence of renegotiations of infrastructure contracts we look in details at the impact on the probability of renegotiation of a concession of regulatory institutions institutional features economic shocks and of the characteristics of the concession contracts themselves we then derive some policy implications of our work

site aggregation in a random utility model of recreation random utility models are commonly used to model the choice among a set of alternatives often due to data or computational constraints the analyst must use aggregated alternatives to estimate the model these aggregates are defined by averaging characteristics of alternatives over prespecified groups in this analysis we demonstrate that unless some very restrictive conditions hold the use of aggregated alternatives will lead to biased results then using a data set of recreational fishing in wisconsin we show the effects that this bias can have on the results estimated from the model

the changing technology of technological change general and abstract knowledge and the division of innovative labour abstract in the past most innovations have resulted from empiricist procedures the outcome of each trial yielding knowledge that could not be readily extended to other contexts while trial and error may remain the primary engine of innovation developments in many scientific disciplines along with progress in computational capabilities and instrumentation are encouraging a new approach to industrial research instead of relying purely on trial and error the attempt is also to understand the principles governing the behaviour of objects and structures the result is that relevant information whatever its source can now be cast in frameworks and categories that are more universal the greater universality makes it possible for the innovation process to be organised in new ways firms can specialise and focus upon producing new knowledge and the locus of innovation may be spread across both users and producers more generally the use of general and abstract knowledge in innovation opens up the possibility for a division of labour in inventive activity the division of innovative labour the implications for public policy especially that on intellectual property rights are discussed

a repeated nested logit model of atlantic salmon fishing participation and site choice for atlantic salmon fishing are modeled in the context of a repeated three level nested logit model consumer s surplus measures are derived for different levels of species availability in the penobscot river the most important salmon river in new england for comparison six other travel cost models are estimated these include restrictive cases of the nested logit model a partial demand model and two single site demand models comparisons across these models indicate the importance of modeling the participation decision including income effects and of adopting a nested logit structure rather than a single level logit structure

industrial policy and politics abstract recognizing the uncontrollable nature of the political system in a fine tuning way we derive simple constitutional rules for industrial policies which take into account simultaneously the inefficiencies of the political system and informational asymmetries of regulators we apply this methodology to the regulation of natural monopolies we consider a two type political system with the majority rule we study how the chosen cost reimbursement rules and pricing rules which characterize regulation are affected by constitutional choices such as public ownership or privatization creation of incentives for regulators or not price discrimination or not

how do competitive pressures affect incentives to innovate when there is a market for inventions competition and intellectual property ip protections are complements in stimulating innovation when ip is appropriable a market for inventions forms and competitive pressures increase incentives to innovate competition among producers the demand side of the market for inventions and competition among inventors the supply side of the market for inventions create incentives to innovate when ip is not fully appropriable markets for inventions are limited and competitive pressures can decrease incentives to innovate firms vertically integrate r d and production and share technology to appropriate the returns to ip this implies that antitrust policy and ip protections are complements

toward a theory of regulation for developing countries following jean jacques laffont s lead the efficient operation and expansion of infrastructures in developing countries is crucial for growth and poverty reduction however recent reforms aimed at improving the performance of these sectors have had limited success evidence suggests that in many instances this was because the traditional regulatory theory relied on by policymakers was not suitable for the institutional context in developing countries this article surveys more recent theoretical work focusing on problems with regulation in these countries at the heart of the survey is the work of jean jacques laffont who in the last decade of his life set about developing a theoretical framework for regulation in developing countries we consider the implications of his work which focused on the key institutional limitations faced in developing countries we then discuss where experience suggests that there are important omissions from this modeling bringing in extensions and alternative approaches pursued by other authors we conclude by summarizing the key ways in which regulatory policy will be different when institutions are weak overall we find that an understanding of the institutional context and its implications are crucial when designing a regulatory framework for developing countries

concessions of infrastructure in latin america government led renegotiation this paper analyzes government led renegotiations in infrastructure concession contracts in latin america based on the same sample used in guasch laffont and straub 2003 to examine firm led renegotiations after extending the theoretical framework to a multiple period context in which both pareto improving and rent shifting renegotiations at the initiative of the government can occur we develop an original instrumental variable strategy to address the issue of contract endogeneity and derive empirical results while some of the main insights concerning the importance of having a regulator in place when awarding concessions and the fragility of price cap regulatory schemes are unchanged significant differences arise with respect to the effect of investment and financing as well as the corruption variables we provide evidence that a good regulatory framework is especially important in contexts with weak governance and political opportunism copyright 2007 john wiley sons ltd

signaling and the design of delegated management contracts for public utilities this article analyzes the shape of contracts between local governments and the contractors they hire to run public facilities on their behalf governments are privately informed about the quality of the facility while risk neutral contractors undertake a non verifiable operating eort the design of the contract signals the quality of the facility in such a way that the better this quality the greater the share of operating risk kept by the government this feature reduces the agent s marginal incentives creating a trade o between signaling and moral hazard we provide extensions of our framework in several directions allowing for risk aversion on the agent s side double moral hazard and political delegation the model is supported by some stylized facts from the water industry

tests for the consistency of three level nested logit models with utility maximization abstract this paper provides necessary conditions for testing the local consistency of three level nested logit models with random utility maximization we find that for a model with two sub nests per nest the conditions can lead to a substantial increase in the range of acceptable dissimilarity parameters irrespective of the number of alternatives per sub nest

renegotiation and information revelation over time the case of optimal labor contracts the paper analyzes the issue of commitment in grossman and hart s model of optimal labor contracts under asymmetric information about firm profitability we extend their framework by allowing employment to vary over time at equidistant intervals when both parties can precommit ex ante not to renegotiate the contract this replicates the grossman hart outcome each subperiod when precommitment is not possible information revealed through the contract can create pareto improving renegotiation opportunities and the issue of optimal information revelation arises the paper analyzes the impact of ex post pareto improving renegotiations on the optimal contract

an empirical investigation of the consistency of nested logit models with utility maximization global conditions under which nested logit models are consistent with utility maximization are provided by daly and zachary and by mcfadden recently borsch supan and herriges and kling have provided conditions under which a nested logit model is locally consistent however previous work has not discussed implementation of these conditions here three alternative approaches to checking and formally testing for the consistency conditions using classical statistics are investigated in addition a bayesian approach to interpreting and imposing the local consistency conditions is provided the application is based on anglers choices regarding sportfishing alternatives in southern california

infrastructure privatization and changes in corruption patterns the roots of public discontent abstract this paper offers a theory of how the degree of corruption that prevails in a society responds to changes in the ownership structure of major public service providers we show that there are cases in which privatization even though it fosters investments in infrastructure also opens the door to more corruption the public dissatisfaction towards privatization is then crucially affected by the changes in the degree and pattern of corruption our model thus helps understand the seemingly paradoxical situation prevailing in latin america where most studies find that privatizations have been efficiency enhancing and have fostered investments and at the same time popular dissatisfaction with the process is extremely high especially among the middle class we show that this line of explanation is consistent with the evidence from surveys in the region

innovation and market structure in the dynamics of the pharmaceutical industry and biotechnology towards a history friendly model this paper is a first attempt at modelling the long term dynamics of market structure and innovation in the pharmaceutical industry in a history friendly way the model examines the relationships between the nature of the search space demand the patterns of competition and industry evolution in the age of random screening and in the age of molecular biology and shows that concentration in the pharmaceutical industry is shaped by lack of cumulativeness in innovative activities and market fragmentation the model conforms to our appreciative understanding and responds to changes in parameters concerning demand costs economies of scale opportunity conditions and the relative advantages of new biotechnology firms nbfs vis a vis incumbents with the exception of cost increases the model is quite robust to these changes in its essential features it is quite difficult to raise substantially concentration and to have nbfs displacing incumbents

market structure r d and advertising in the pharmaceutical industry jungere entwicklungen der literatur zum thema marktstruktur ermoglichen es robuste testbare hypothesen aus der theorie des strategischen verhaltens abzuleiten das grundlegende industrieokonomische modell geht von einer einfachen aber allgemein gultigen beziehung zwischen konzentration und marktgrose aus dabei wird insbesondere der einflus endogener versunkener kosten fur werbung und oder forschung und entwicklung fue auf den wettbewerb untersucht die empirischen ergebnisse dieser fallstudie zeigen das endogene versunkene kosten tatsachlich eine entscheidende rolle fur die herausbildung der marktstruktur in der pharmazeutischen industrie spielen die ergebnisse zeigen jedoch auch das unternehmensspezifische fahigkeiten geeignet sind die reaktionsweisen der unternehmen im wettbewerb zu erklaren

the effect of intellectual property rights on domestic innovation in the pharmaceutical sector summary there is little empirical evidence concerning the effect of intellectual property rights ipr protecting pharmaceutical products and processes on pharmaceutical domestic innovation indeed existing literature does not provide a punctual estimate of this effect for developing countries this paper fills this gap by exploiting a self constructed dataset which provides for a 22 year period information concerning ipr reforms involving pharmaceuticals for 74 developed and developing countries the identification strategy exploits the different timing across these countries of two sets of ipr reforms domestic innovation is measured as citation weighted domestic patent applications filed at the european patent office epo the highly skewed distribution of the dependent variable and the high number of zero observations are taken into account using count data models in particular a zero inflated negative binomial model is adopted to overcome previous literature assumption that all innovations are patented in the main markets of reference and to take into consideration the choice not to patent at the epo results show that innovation is sensitive to ipr protection but not to its degree moreover the effect is not long lasting my study also finds that developing countries profit significantly less than developed ones from the protection benefiting from an effect that is roughly half of that for developed countries consequent policy implications are examined and include the conclusions that a one size fits all approach can be inappropriate and that gradual reforms should be preferred to rare reforms that greatly alter the level of ipr protection

the implications of model specification for welfare estimation in nested logit models nested logit models are increasingly being used to value environmental amenities the implications of nesting structure choice of estimator fiml or sequential and restrictions on parameters across nested groups on welfare estimates are examined these issues have received little previous attention model selection criteria that can be used to distinguish among the models are extended and applied additionally a simulation procedure is implemented to construct standard errors for the welfare measures

adverse selection and renegotiation in procurement as was shown by dewatripont optimal long term contracts are generally not sequentially optimal the parties ex post renegotiate them to their mutual advantage this paper fully characterizes the equilibrium of a simple two period procurement situation and studies the extent to which renegotiation reduces ex ante welfare i a central result is that like in the non commitment case the second period allocation is optimal for the principal conditionally on his posterior beliefs about the agent ii the first period allocation exhibits an increasing amount of pooling when the discount factor grows iii with a continuum of types it is never optimal to induce full separation the paper also analyzes whether renegotiated long term contracts yield outcomes resembling those under either unnegotiated long term contracts or a sequence of short term contracts and it links the analysis with the multiple unit durable good monopoly problem

privatizing highways in latin america fixing what went wrong revolution in the way highways are provided took place in latin america in the 1990s when more than fifty projects mainly in argentina brazil chile colombia and mexico were privatized using build operate and transfer bot contracts the so called lost decade of the 1980s resulted in low investment in infrastructure and inad equate maintenance and it created a major highway deficit across latin america this deficit together with chronic budgetary problems led gov ernments to embrace a scheme in which the private sector financed urgently needed infrastructure investments thereby freeing up public resources for projects in other priority areas 1 this paper draws some lessons based on the evidence accumulated to date in particular we show that policymakers face unpleasant choices when considering how to provide highways in the future the evidence suggests that private financing of new highways freed up fewer resources than expected in several cases public funds were diverted to bail out fran chise holders in financial trouble 2 government guarantees for private highway franchises also added to the fiscal burden and such guarantees

infrastructure public private partnerships in the developing world lessons from recent experience abstractseeking to address inefficient and costly infrastructure delivery governments over the past two decades have turned to public private partnerships ppps to build and operate infrastructure the key characteristic of ppps is the outsourcing and bundling of project delivery components for example design build finance operate structured to incentivise the builder operator to incorporate long term operating cost considerations in the design and construction phases of a project and reduce coordination costs this article reviews the benefits and drawbacks of ppps and the experience to date focusing in particular on developing economies relative to traditional procurement ppps are complex and require governments to anticipate and plan for contingencies and conduct monitoring and enforcement of long term contracts we argue that institutional capacity is a key determinant of ppp success and in mitigating potentially welfare reducing contract renegotiations evident in the latin american exp

on site time in the demand for recreation the standard travel cost model has treated on site time ambiguously over the years this paper shows how to handle on site time by exploring the implications of two assumptions in the travel cost model first people choose the amount of time that they spend on a site and second the time spent on site is exogenous this paper uses a duality result to show that when on site time is chosen the standard travel cost demand function takes a particularly simple form with slight modification standard estimation and welfare calculations continue to hold

an econometric analysis of telecom competition privatization and regulation in africa and latin america this paper explores the effects of privatization competition and regulation on telecommunications performance in 30 african and latin american countries from 1984 through 1997 fixed effects regressions reveal that competition measured by mobile operators not owned by the incumbent is correlated with increases in the per capita number of mainlines payphones and connection capacity and with decreases in the price of local calls privatization combined with an independent regulator is positively correlated with telecom performance measures privatization alone however is associated with few benefits and is negatively correlated with connection capacity

contract renegotiation and coasian dynamics consider a long term relationship between a seller and a buyer whose valuation for a per period service or a durable good is private as trade progresses the valuation will be partially revealed and it may be impossible for the parties to commit ex ante not to take advantage of this we analyse this situation first by supposing that the parties can sign a sequence of short term contracts and secondly by supposing that they can sign a long term contract but cannot commit not to renegotiate it later we find a close relationship in the second case between the optimal long term contract and the non commitment outcome in the standard coasian durable good model our results also have implications for hidden information principal agent models

public sector capital and the productivity puzzle a number of studies have suggested a quantitatively important relationship between public sector capital accumulation and private sector productivity with the most compelling evidence derived from analyses of state level data estimates herein of production functions that use standard techniques to control for unobserved state specific characteristics however reveal essentially no role for public sector capital in affecting private sector productivity only estimates of state production functions that do not include such controls find substantial productivity impacts this result reconciles existing econometric estimates with the findings of hulten and schwab based on growth accounting techniques as such techniques effectively control for state specific effects region level estimates are essentially identical to those from state data suggesting no quantitatively important spillover effects across states copyright 1994 by mit press

estimation of limited dependent variable models with dummy endogenous regressors applied economists have long struggled with the question of how to accommodate binary endogenous regressors in models with binary and nonnegative outcomes i argue here that much of the difculty with limited dependent variables comes from a focus on structural parameters such as index coefcients instead of causal effects once the object of estimation is taken to be the causal effect of treatment several simple strategies are available these include conventional two stage least squares multiplicative models for conditional means linear approximation of nonlinear causal models models for distribution effects and quantile regression with an endogenous binary regressor the estimation strategies discussed in the article are illustrated by using multiple births to estimate the effect of childbearing on employment status and hours of work

contractual flexibility rent seeking and renegotiation design an empirical analysis of information technology outsourcing contracts this paper examines renegotiation design in contracts for outsourced information technology it services whereas prior literature in information systems has highlighted the likelihood of ex post rent seeking engendered by renegotiation we build upon literature on incomplete contracts to posit that renegotiation can be pareto improving by incorporating contingencies revealed ex post research on contract renegotiation has been hampered by two sets of challenges the lack of appropriate data and empirical challenges in identification we circumvent this problem both by appropriate data collection and by employing an identification strategy to address alternate causal explanations we propose a measure pareto improving amendments to assess renegotiation outcomes that enhance the value from outsourcing by hazard equilibration and by incorporating learning using a unique sample of 141 it outsourcing contracts we examine the role of decision rights delineated ex ante in enabling pareto improving amendments and in resolving the trade off between adaptation and rent seeking we find that flexibility provisions termination for convenience rights and contractual rights whereby vendors are granted rights to reuse know how are associated with pareto improving amendments the results are robust to potential endogeneity of contractual provisions when parties have feasible foresight and to the possibility of adverse selection in the sample we also examine alternate explanations from the literature on contractual breach implications for practitioners and researchers are discussed this paper was accepted by sandra slaughter information systems

on limiting or encouraging rivalry in technical progress the effect of patent scope decisions abstract this essay is on the effects of the scope of a patent e g how broad its allowed claims on subsequent inventing in a field it is argued that this depends on the topography of technical advance in a field in particular on how inventions are linked to each other and in the extent to which rapid technical advance requires a diversity of actors and minds as contrasted with being facilitated by express coordination of inventive activity technical advance is examined in several different fields with a focus on how patents influenced the pace and quality of development the authors conclude that allowing and enforcing broad patent claims tends to hinder technical progress

structure learning and the speed of innovating a two phase model of collective innovation using agent based modeling continual increase in the complexity of technologies and innovations has resulted in actors i e individuals or organizations becoming more dependent on other actor s knowledge and skills to complement their own skills in the innovation process as a result networks have become more and more prominent in affecting the innovation process conceptualizing innovation as a search and learning process that results in a successful product we introduce a two phase model of collective innovation that accounts for the deliberateness of the innovation process using agent based modeling we explore how interaction structure among a group of actors affects the speed at which the group can collectively innovate in addition we present results from counterfactual simulations to highlight the importance of deliberate search and changing realized connections in modeling collective innovation process moreover we discuss the effects of the structure under different mechanisms of learning and different levels of actor s learning capabilities copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

commitment in utility regulation a model of reputation and policy applications abstract this paper builds a dynamic model of utility regulation where a government cannot commit to a time inconsistent policy of not expropriating investment by allowing the government s type to change over time i explore how reputation concerns may generate partial commitment restricting attention to equilibria that are strongly renegotiation proof i show that there is a unique perfect bayesian equilibrium this contains episodes of investment and good behaviour followed by periods of expropriation and non investment i then apply the model to consider how the power of the incentive scheme and decentralization may influence the properties of this equilibrium in the case of the power of incentives the model suggests that price caps may worsen commitment in developing countries but not in developed ones similarly the model suggests that decentralisation is likely to have a significant effect on commitment but that this effect will depend on the general ability of the government to commit overall we conclude that the effect of such policies on commitment will be different across countries depending on the institutional environment

innovation and corporate growth in the evolution of the drug industry abstract this work studies the processes of growth of the worlds top 150 pharmaceutical firms on the grounds of an original database which also allows disaggregate analysis at the level of single therapeutical classes and chemical entities our findings show that the industry whose long term evolution is driven by innovation imitation and permanent creation of new markets displays i fat tails in the distribution of growth shocks present at all levels of aggregation with relatively rare big spurs of growth ii a significant autocorrelation of growth rates iii a fall of variance of growth rates with size entirely dependent on corporate diversification patterns in turn plausibly shaped by the competence scope of each firm and iv different lifecycles of diverse types of products and persistent forms of heterogeneity across firms in terms of innovative output which however do not not seem to affect comparative growth performances

exploring the determinants of best practice benchmarking in electricity network regulation abstract in this paper we use a best practice index constructed from the survey responses of regulators in 40 countries to explore the determinants of the methods used in electricity network regulation drawing from the incentive regulation and institutional economics literature we construct an empirical model to investigate the impact of industry size political and economic institutions on the degree of best practice regulation our results suggest that the existence and experience of an independent regulator is the most important institutional determinant of best practice regulation in addition small numbers of network companies act as a constraint on the use of advanced benchmarking methods finally regional effects are also important these findings lead us to question whether one best practice model is in fact applicable to countries with very different political and economic contexts

testing the consistency of nested logit models with utility maximization abstract this paper provides simple necessary conditions for testing the local consistency of nested logit models with stochastic utility maximization a graphical analysis illustrates the extent to which these conditions extend the range of admissible dissimilarity coefficients beyond the unit interval

the mirrlees approach to mechanism design with renegotiation with applications to hold up and risk sharing the paper studies the implementation problem first analyzed by maskin and moore 1999 in which two agents observe an unverifiable state of nature and may renegotiate inefficient outcomes following play of the mechanism we develop a first order approach to characterizing the set of implementable utility mappings in this problem paralleling mirrlees s 1971 first order analysis of standard mechanism design problems we use this characterization to study optimal contracting in hold up and risk sharing models in particular we examine when the contracting parties can optimally restrict attention to simple contracts such as noncontingent contracts and option contracts where only one agent sends a message

modeling overnight recreation trip choice application of a repeated nested multinomial logit model in this paper we apply the repeated nested multinomial logit model a version of a random utility model rum to estimate the choice of an overnight versus single day recreation trip along with the other usual choice of which of the sites to visit and less typically the choice of whether to participate in our application to fish at all we also find statistically significant income effects in the empirical results the application is to atlantic salmon fishing and the data set is for maine resident angler s fishing trips to rivers in maine and canada

the demand for local telephone service a fully discrete model of residential calling patterns and service choices we present an empirical model of households choices among local telephone service options for example between flat rate and measured service and the interrelation of these choices with the number and average duration of local calls households make at each time of day to each geographical zone using a nested logit model with estimation performed on a randomly selected subset of the households calling patterns we calculate elasticities of demand for each local service option number of calls average duration and revenues with respect to the fixed monthly charges and the usage charges for calling under each option we find moderate price elasticities of number of calls with respect to usage charges for households subscribing to measured service nevertheless raising usage charges has a negligible effect on revenues since a sufficient number of households either originally subscribe to flat rate service or convert to flat rate service in response to higher usage charges we find a high elasticity of demandfor each service option with respect to itsfixed monthlyfee this indicates high substitutability among service options the shift among service options induces new calling patterns which wefind to be a small but not negligible indirect effect e most telephone operating companies offer residential customers several options for local service there are two general categories of service flat rate service under which a household can for a fixed monthly charge make an unlimited number of calls within a specified geographical area and measured service for which the household pays a lower fixed monthly fee but can make only a specified number or dollar value of calls at no extra charge after which charges are incurred for additional calls various flat rate services differ in the size of the geographical area in which calling is at no extra charge with higher monthly fees for larger areas measured services differ with respect to the threshold number or dollar value of calls beyond which the customer is charged

binary choice with binary endogenous regressors in panel data this article considers the estimation of the causal effect of fertility on female labor force participation equations my main concern is to examine two considerations the endogeneity of fertility and the impact of controlling for unobserved heterogeneity and for predetermined existing children using psid data a switching binary panel data model that accounts for selectivity bias as well as for other forms of time invariant unobserved heterogeneity is estimated individual effects are allowed to be correlated with the explanatory variables which can be predetermined as opposed to strictly exogenous family sex composition is used as an instrument for exogenous fertility movements the results indicate that exogeneity assumptions of children variables induce a downward bias in absolute value in the estimated negative effect of fertility on participation although the failure to account for unobserved heterogeneity overstates this effect moreover stronger effects of fertility are found when existing c

optimal electoral timing exercise wisely and you may live longer using insights from option pricing in finance we explore the electoral timing problem in a flexible term democracy we assume that politic ally heterogeneous voters continuously learn over time about the evolving party merits this yields a mean reverting stochastic process for the support of the parties the incumbent sees its poll support and must call an election within five years o f the last election we assume that it wishes to maximize its expected total time in office so that this resembles the optimal exercise rule for an american financial o ption we characterize how the renewable election option behaves as waiting and stopping values interact we then calibrate our model to the labour tory rivalry in the u k with polling data from 1943 2005 and the 16 elections after 1945 excluding three elections essentially forced by weak governments our maximizing story explains when the elections were called quite well we also measure the value of election options finding that over the long run they should more than double the expected time in power of a fixed term electoral cycle