role of distribution factors in congestion revenue rights applications in the locational marginal price lmp based congestion management scheme transmission customers face uncertainty in the congestion charges they incur in order to bring certainty to customers congestion revenue rights crr such as the fixed transmission rights ftr used in the pjm interconnection and flowgate rights fgr are introduced these crr are financial tools that provide the holder reimbursement of the congestion charges incurred in the day ahead market the implementation of crr requires appropriate modeling of the transmission network in which the distribution factors are extensively used these factors the injection shift factors isfs and the power transfer distribution factors ptdfs are linear approximations of the sensitivities of the active power line flows with respect to various variables the factors are computed for a specified network topology and parameter values in practice the ptdfs used for the crr issuance may be different from those used in the day ahead market due to changes in the forecasted network conditions the ptdf errors may impact the ftr issuance quantities the revenue adequacy of the ftr issuer and the hedging ability of the fgr in this paper we explore analytical characteristics of these distribution factors and investigate their role in crr applications we study the nature of the ptdf errors and examine their impacts in these applications both analytically and experimentally our results indicate that the impacts of the ptdf errors in crr applications stay in an acceptable range under a broad spectrum of conditions including contingencies used to establish n 1 security

shaping beliefs in experimental markets for expert services guilt aversion and the impact of promises and money burning options in a credence goods game with an expert and a consumer we study experimentally the impact of two devices that are predicted to induce consumer friendly behavior if the expert has a propensity to feel guilty when he believes that he violates the consumer s payoff expectations i an opportunity for the expert to make a non binding promise and ii an opportunity for the consumer to burn money in belief based guilt aversion theory the first opportunity shapes an expert s behavior if an appropriate promise is made and if it is expected to be believed by the consumer by contrast the second opportunity might change behavior even though this option is never used along the predicted path experimental results confirm the behavioral relevance of i but fail to confirm ii

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

the economics of credence goods an experiment on the role of liability verifiability reputation and competition credence goods markets are characterized by asymmetric information between sellers and consumers that may give rise to inefficiencies such as under and overtreatment or market breakdown we study in a large experiment with 936 participants the determinants for efficiency in credence goods markets while theory predicts that liability or verifiability yield efficiency we find that liability has a crucial but verifiability at best a minor allowing sellers to build up reputation has little influence as predicted seller competition drives down prices and yields maximal trade but does not lead to higher efficiency as long as liability is violated jel d12 d82

second opinions and price competition inefficiency in the market for expert advice we consider a market in which an expert must exert costly but unobservable effort to identify the service that meets the consumer s need in our model experts offer competing contracts and the consumer may gather multiple opinions we explore the incentives that a competitive sampling of prices and opinions provides for experts to exert effort and find that there is a tension between price competition and the equilibrium effort in particular the equilibrium fails to realize the second best welfare optimum an intervention that limits price competition via price control increases welfare

transmission congestion management in competitive electricity markets this paper studies the management of costs associated with transmission constraints i e transmission congestion costs in a competitive electricity market the paper examines two approaches for dealing with these costs the first approach is based on a nodal pricing framework and forms the basis of the so called pool model the paper also provides an analysis of financial instruments proposed to complement nodal pricing and includes illustrative test results on a large scale system the second approach is based on cost allocation procedures proposed for the so called bilateral model the paper explains the basis for this model including a game theoretic evaluation of some of its aspects both the pool and bilateral models have been at the center of the electric utility restructuring debate in california

on doctors mechanics and computer specialists the economics of credence goods most of us need the services of an expert when our apartment s heating or our washing machine breaks down or when our car starts to make strange noises and for most of us commissioning an expert to solve the problem causes concern this concern does not disappear even after repair and payment of the bill on the contrary one worries about paying for a service that was not provided or receiving some unnecessary treatment this article studies the economics underlying these worries under which conditions do experts have an incentive to exploit the informational problems associated with markets for diagnosis and treatment what types of fraud exist what are the methods and institutions for dealing with these informational problems under which conditions does the market provide incentives to deter fraudulent behavior and what happens if all or some of those conditions are violated

a decentralized approach for optimal wholesale cross border trade planning using multi agent technology over the past decade the power industry has been undergoing deregulations to introduce competitions among market participants once centralized decision making must now adapt to the new market structure the optimal cross border electricity trade planning is an important issue in interconnected power systems under transmission open access in this paper a decentralized approach is suggested to solve the problem using multiagent technology in the new approach rational market participants make decisions based on their own benefits in the meantime the minimum production and transmission cost of the whole system can be reached without a central coordination except necessary information exchange through media like the internet a relevant lemma has been proven the approach is implemented via a multiagent system using java programming language computer tests on a five area test system show that the suggested new approach is effective and promising

transparency in markets for experience goods experimental evidence we propose an experimental design to investigate the role of information disclosure in the market for an experience good the market is served by a duopoly of firms that choose both the quality and the price of their product consumers differ in their taste for quality and choose from which firm to buy we compare four different treatments in which we vary the degree to which consumers are informed about quality contrary to theoretical predictions firms do not differentiate quality under full information rather both tend to offer products of similar high quality entailing more intense price competition than predicted by theory under no information we observe a lemons outcome where quality is low at the same time firms manage to maintain prices substantially above marginal cost in two intermediate treatments quality is significantly higher than the no information level and there is evidence that prices become better predictors of quality taken together these findings suggest that information disclosure is a more effective tool to raise welfare and consumer surplus than theory would lead one to expect jel l15 c91 d82

competing globally allying locally alliances between global rivals and host country factors an emerging literature highlights the relationship between competitive intensity and the likelihood that two rival firms will form an alliance placing this argument in an international context we first suggest that the global competitive intensity between two rival multinationals positively affects the likelihood that they will ally in any host country additionally we highlight how a number of host country contextual factors moderate the relationship between global competitive intensity and alliance formation in a given host country we test our hypotheses with a sample of 13 global automobile companies operating in 27 countries and the results largely support our predictions

combined pool bilateral dispatch i performance of trading strategies this three paper series deals with the dispatch of power networks under mixed pool bilateral trading the major questions examined are i to what degree does the relative level of pool versus bilateral trading influence performance in terms of individual power levels costs prices revenues and expenditures ii what is the comparative performance of mixed trading with firm and nonfirm bilateral contracts under various curtailment strategies and iii is the revenue derived from the pool and bilateral trading consistent with the corresponding unbundled costs the above issues are sequentially addressed in each of the three parts the eventual goal of these results is to help generator and load serving entities choose appropriate relative levels of pool versus bilateral trades while considering risk economic performance as well as physical constraints this paper proposes a one step optimal power flow model that dispatches the pool in combination with the privately negotiated bilateral contracts while minimizing cost and accounting for both losses and congestion in part i notions of pool bilateral demand and generation as well as a number of technical and economic performance measures for each competing entity are defined this dissection of total and individual financial measures according to pool or bilateral trading allows the market participant to evaluate the profitability of each component of its chosen pool bilateral mix a number of simulation results illustrate the effect of varying the relative levels of pool bilateral trading on the values of individual performance measures

social welfare maximization in transmission enhancement considering network congestion transmission enhancement in a competitive electricity market is analyzed in terms of its impact on the social welfare a formulation of social welfare and the utility functions are derived in this research variations of supply and demand during a year are considered in transmission enhancement decisions the proposed social welfare optimization problem is solved to determine the transmission congestion status under the optimal condition of the existing system transmission enhancement options are compared quantitatively to demonstrate their ability to increase social welfare which provides valuable information for long term transmission the proposed method provides a systematic and quantitative tool for social welfare evaluation that is not available in industry today

credence goods efficient labelling policies and regulatory enforcement we analyse the optimality of information revelation of hidden attributes of credence goods via alternative labelling procedures when consumers are heterogeneous in their willingness to pay for the hidden attribute producers can either self label their products or have them certified by a third party the government can impose self or third party labelling requirements on either the green or the brown producers our benchmark model develops a condition that links the optimal imposition of third party labelling to the relative market share of each type of the good under complete information we extend our analysis to incorporate asymmetric information and cheating by the producers when corrupt producers can affix spurious labels the government needs to supplement the labelling policy with costly monitoring activities we find that mandatory self labelling schemes generally dominate mandatory third party labelling unless the market share effect greatly exceeds the incentive to cheat effect

studies of bilateral contracts with respect to steady state security in a deregulated environment under a deregulated environment electricity consumers and suppliers will be permitted to establish various bilateral service contracts the transmission company however will only have to honour and execute these bilateral contracts as far as the system design and operating conditions permit a fundamental question is to what extent the system security could affect these contracts and what kinds of system reinforcements will be required to meet the future contract needs this paper describes a series of studies modelling the bilateral contracts by using a transaction matrix t the concept of the transaction matrix is to expand the conventional load flow variables such as generations pg and loads pd into a 2 dimensional matrix t each element of t namely t sub ij corresponds to a bilateral contract between a supplier pg sub i and consumer pd sub j a generalized linear programming formulation is then proposed to solve various system operation and planning problems under a deregulated environment subjected to the steady state security constraints e g generation and line flow limits examples are presented to illustrate how to use this formulation to maximize any bilateral contract individual generation or groups of generations or to minimize the necessary correction needed for a proposed transaction matrix t sup 0 in order to comply with the security requirements other studies such as the use of monte carlo methods to study the behaviour of random bilateral contracts are also presented and discussed

learning from competing partners outcomes and durations of scale and link alliances in europe north america and asia this paper investigates the outcomes and durations of strategic alliances among competing firms using alliance outcomes as indicators of learning by partner firms we show that alliance outcomes vary systematically across link and scale alliances link alliances are interfirm partnerships to which partners contribute different capabilities while scale alliances are partnerships to which partners contribute similar capabilities we find that partners are more likely to reorganize or take over link alliances than scale alliances by contrast scale alliances are more likely to continue without material changes the two types of alliances are equally likely to shut down at similar ages these results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances copyright 2000 john wiley sons ltd

firm ownership preferences and host government restrictions an integrated approach two approaches may explain how multinational enterprises mnes select ownership structures for subsidiaries the first argues that mnes prefer structures that minimize that transaction costs of doing business abroad the second argues that ownership structures are determined by negotiations with host governments whose outcomes depend on the bargaining power of the firm this paper presents a framework integrating these two approaches and uses statistical methods to separate their effects empirically

congestion management schemes a comparative analysis under a unified framework the restructuring of the electricity industry has spawned the introduction of new independent grid operators igos typically called transmission system operators tsos independent system operator isos or regional transmission organizations rtos in various parts of the world an important task of an igo is congestion management cm and pricing this activity has significant economic implications on every market participant in the igo s region the paper briefly reviews the cm schemes and the associated pricing mechanism used by the igos in five representative schemes these were selected to illustrate the various cm approaches in use england and wales norway sweden pjm and california the authors develop a unified framework for the mathematical representation of the market dispatch and redispatch problems that the igo must solve in cm in these various jurisdictions they use this unified framework to develop meaningful metrics to compare the various cm approaches so as to assess their efficiency and the effectiveness of the market signals provided to the market participants they compare using a small test system side by side the performance of these schemes

economic inefficiencies and cross subsidies in an auction based electricity pool this paper compares two contrasting yet often used electricity market clearing procedures i an auction based algorithm including congestion management and transmission loss cost allocation and ii an optimal power flow the auction procedure produces a single period unit commitment and hence can be compared directly to an optimal power flow solution these algorithms are compared in terms of the economic efficiency of the solution attained and in terms of cross subsidies among generators and demands the purpose of this comparison is to quantify the actual cost to market participants of using a simple seemingly transparent procedure such as an auction based algorithm versus an integrated but computationally intensive one such as an optimal power flow

car mechanics in the lab investigating the behavior of real experts on experimental markets for credence goods credence goods such as car repairs or medical services are characterized by severe informational asymmetries between sellers and consumers leading to fraud in the form of provision of insufficient service undertreatment provision of unnecessary service overtreatment and charging too much for a given service overcharging recent experimental research involving a standard student subject pool has examined the influence of informational and market conditions on the type and level of fraud we investigate whether professional car mechanics as real sellers of credence goods react in the same way to changes in informational and institutional constraints while we find qualitatively similar effects in the fraud dimensions of undertreatment and overcharging for both subject pools car mechanics are significantly more prone to supplying unnecessary services in all conditions which could be a result of decision heuristics they learned in their professional training

tradeoffs from integrating diagnosis and treatment in markets for health care anyone who has consulted a doctor plumber or auto mechanic has experienced the tradeoffs in consulting a single expert to both diagnose and treat a problem in the presence of asymmetric information on one hand integrated diagnosticians those who also sell treatments may have the incentive to give advice that is not in the buyer s best interests as the theoretical models in curtis r taylor 1995 and asher wolinsky 1993 point out because the buyer has imperfect information on the scope of the problem if he did not he would not have needed to consult a diagnostician in the first place the diagnostician inevitably has the incentive to recommend treatments that are more profitable even if they are more costly of lower quality or less appropriate on the other hand joint production of diagnosis and treatment may be more efficient the diagnostician may have better information about how to treat the problem than he could or would provide to an independent third party or the diagnostician may be able to treat the problem himself less expensively or more effectively half the cost is opening the engine block we examine an important special case of this problem the costs and quality of care of a random sample of medicare beneficiaries with coronary artery disease we compare patients who were diagnosed by an integrated cardiologist one who also provides surgical treatment to patients who were diagnosed by a nonintegrated cardiologist we decompose the total effect of diagnosis by an integrated cardiologist into the parts due to the change in the type of treatment and the parts due to the relative efficiency of each type of treatment with this information we quantify the potential upsides and downsides to diagnosis by an integrated expert we identify these effects based on differences across geographic areas in the number of integrated cardiologists per capita our estimates are consistent under the assumption that unobserved patient characteristics and other determinants of spending are similar across areas with many versus few integrated cardiologists we explore the validity of this assumption below the paper proceeds in four sections section i reviews the previous empirical literature on the problems of obtaining diagnosis and treatment from a single expert when that expert has better information than the buyer on the source of the buyer s problem section ii discusses the details of the problem that we study and presents our models section iii describes our data section iv presents our results and section v concludes with the implications of our results for economic theory and health policy

quality and accountability in health care delivery audit study evidence from primary care in india we present unique audit study evidence on health care quality in rural india and find that most private providers lacked medical qualifications but completed more checklist items than public providers and recommended correct treatments equally often among doctors with public and private practices all quality metrics were higher in their private clinics market prices are positively correlated with checklist completion and correct treatment but also with unnecessary treatments however public sector salaries are uncorrelated with quality a simple model helps interpret our findings where public sector effort is low the benefits of higher diagnostic effort among private providers may outweigh costs of potential overtreatment

institutional solutions to the asymmetric information problem in health and development services for the poor summary the world s poorest pay for professional services and thus are in a market whether the services are provided in the public or private sectors the associated problems of unequal information are particularly acute in undergoverned countries where state regulation is weak we systematically review the evidence on solutions to these problems in a variety of professions payments by clients are more likely to have a positive effect on quality if they are made through locally managed organizations rather than directly to individual practitioners particularly if those organizations have an institutionalized history of other regarding values and incorporate client participation

transmission access and pricing with multiple separate energy forward markets california s congestion management protocols provide comparable access and prices to all users of the transmission system power exchange and bilateral contract parties the users implicitly bid for capacity on major transmission paths between zones the independent system operator iso allocates the available transmission capacity on these paths so that it maximizes the value of this capacity as measured by the users bids everyone scheduling flow on a congested path is charged the marginal cost based price for using the path the iso keeps each party s portfolio of generation and load individually in balance when adjusting schedules to relieve congestion on interzonal paths by keeping the portfolios of the different parties separate the iso clears its transmission market without arranging energy trades between parties parties are responsible for arranging their own trades the iso does not become involved in the energy forward markets

competitive consequences of interfirm collaboration how joint ventures shape industry profitability recent international business research on international joint ventures focuses on how firms can use such ventures for knowledge access and learning to enhance their competitiveness thereby increasing competition in the industry by contrast research in industrial organization economics has observed that firms can also use joint ventures in various ways to attenuate competition in this paper we join these two streams of research to investigate the conditions under which joint ventures reduce or enhance competition by empirically testing the effects of different types of joint ventures on industry profitability our results suggest that joint ventures can be pro competitive or anti competitive depending on whether or not they are formed between competing firms represent foreign market entry and operate in relatively concentrated industries our paper shows the importance of adopting a contingent approach to evaluating the competitive implications of joint ventures and it also points to the value of reinvigorating international business research on the competitive context and consequences of interfirm collaboration

assessment of transmission congestion cost and locational marginal pricing in a competitive electricity market in an open access environment transmission constraints can result in different energy prices throughout the network these prices are in fact dependent on a number of factors such as the generating unit bid system load level network topology and security limits imposed on the transmission network due to thermal and voltage and stability considerations computing these energy prices at all buses in large transmission networks under given system operating conditions can be time consuming this paper describes a simple methodology based on the analysis performed by the hydro one in house computer program procose to calculate for a given period of time transmission congestion cost tcc in dollars per unit time and locational marginal pricing lmp in dollars per megawatt hour mwh at any selected bus in the transmission system in addition the information provided by the program output on congested transmission elements is used to identify buses in the network whose lmps are representative of the entire network the computed lmps at these buses are used to define zones in the network where each zone has its lmp the proposed methodology can be used to carry out sensitivity studies to determine the impact of changes in system parameters and operating conditions on the lmps the proposed method is illustrated using the ieee reliability test system rts and the hydro one network system

corporate strategy and international environmental policy this paper analyzes the interactions between international environmental policy and multinational corporate strategy the main contribution is building a new conceptual framework to analyze the type of corporate strategy developed in the presence of both national an international environmental regulations this framework distinguishes between firm level compliance with environmental obligations and the development of resource based green capabilities it also classifies major environmental regulations and incorporates a discussion of public policy

seeking commonalities or avoiding differences re conceptualizing distance and its effects on internationalization decisions past research established distance s key influence on internationalization however theoretical issues methodological challenges and inconsistent results hinder scholarship on why distance plays such an influential role to address these problems we draw from cognitive research on similarity comparisons to re conceptualize distance and test a model of internationalization decisions analyzing the verbal protocols of executives considering a series of internationalization opportunities we demonstrate that over and above objective distance indicators considerations that reduce distance commonalities and considerations that augment distance differences have distinct effects on decisions of where when and how to internationalize as such our study contributes new insights for understanding the nature and effects of distance across different dimensions of distance and internationalization decisions moreover internationalization theories have come to emphasize different theoretical rationales for explaining the influential role of distance on different decisions by integrating these rationales together with the notion that distance reducing commonalities and distance augmenting differences have distinct implications for internationalization decisions we introduce the notion that it is not only the addition of distance considerations that matters but also the directionality of such changes doing so our study points to new theoretical and methodological insights to help address prior criticisms and advance future research

on trust in honesty and volunteering among europeans cross country evidence on perceptions and behavior abstract we conduct an experimental study among european citizens regarding cross cultural perceptions related to trust in two dimensions volunteerism and honesty we use representative samples from five major economies of the euro area france germany italy the netherlands and spain we find that european citizens rely on nationality to infer behavior assessments of behavior show a north south pattern participants from northern countries are perceived to be more honest and to provide more effort in a volunteering game than participants from southern countries actual behavior is however not always in line with these assessments assessments of honesty show strong evidence of social projection participants expect other european citizens to be less honest if they are culturally closer to themselves assessments of volunteerism instead show that both northern and southern europeans expect higher performance in northern than in southern european countries

what drives taxi drivers a field experiment on fraud in a market for credence goods credence goods are characterized by informational a symmetries between sellers and consumers that invite fraudulent behavior by seller s this paper presents the results of a natural field experiment on taxi rides in athens g reece set up to measure different types of fraud and to examine the influence of passengers p resumed information and income on the extent of fraud results reveal that taxi drivers c heat passengers in systematic ways passengers with inferior information about optimal routes are taken on longer detours while asymmetric information on the local tariff system l eads to manipulated bills higher income seems to lead to more fraud

a zonal congestion management approach using real and reactive power rescheduling in a deregulated electricity market it may always not be possible to dispatch all of the contracted power transactions due to congestion of the transmission corridors system operators try to manage congestion which otherwise increases the cost of the electricity and also threatens the system security and stability in this paper a new zonal cluster based congestion management approach has been proposed the zones have been determined based on lines real and reactive power flow sensitivity indexes also called as real and reactive transmission congestion distribution factors the generators in the most sensitive zones with strongest and nonuniform distribution of sensitivity indexes are identified for rescheduling their real power output for congestion management in addition the impact of optimal rescheduling of reactive power output by generators and capacitors in the most sensitive zones has also been studied the proposed new zonal concept has been tested on 39 bus new england system and a 75 bus indian system

developing difference social organization and the rise of the auto industries of south korea taiwan spain and argentina theories of economic development as diverse as modernization dependency world system and market reform take a critical factor view proponents of each theory argue that countries fail to develop because of an obstacle to economic growth we argue instead that neither a critical factor nor a single path leads to economic development viable paths vary economic growth depends on linking a country s historically developed patterns of social organization to the opportunities of global markets we formulate a sociological theory of cross national comparative advantage including not only economic factor endowments but also institutionalized patterns of authority and organization such patterns legitimize certain actors and certain relationships among those actors which facilitate development success in some activities but not in others we illustrate this approach to understanding development outcomes with a comparative analysis of the difficult rise of the automobile assembly and components industries in south korea taiwan spain and argentina

management of multiple congested conditions in unbundled operation of a power system this paper studies congestion management based on congestion pricing as may be done by an independent power system operator four main concepts are discussed congestion pricing can lead to the same solution as an optimal power flow pricing need not have cost information available good estimates of nonlinear cost coefficients are necessary and pricing for congestion management is separable from pricing for the purpose of transmission network revenue reconciliation emphasis is on the determination of sufficient information by observation of the behavior of the market to permit optimum pricing without explicit communication among parties and without generators ever being explicitly concerned about the relief of flow congestion results from simulated experiments are presented

green public procurement of certified wood spatial leverage effect and welfare implications certified and conventional products are not traditional substitute goods green public procurement stimulates certification globally but not in each region public procurement of the cheaper unsustainable product does not maximise welfare increasing the price premium for certified wood creates a trade barrier the high costs of forest certification exclude vulnerable producers

wheeling of power under deregulated environment of power system a bibilographical survey the power industry is moving rapidly from regulated conventional setup to a deregulated environment there is an urgent need to keep a track of international experiences and activities taking place in this emerging field this paper gives a bibliographical survey and general backgrounds of research and development in the field of power system wheeling under deregulated environment based on over 170 published articles wheeling in general and the establishment of wheeling rate in particular are subjects of extensive debate today this will be very much useful for all countries especially those developing countries which are moving toward the unbundling of electricity supply industry esi the collected literature have been divided into many section so that new researchers do not face any difficulty for obtaining literature particularly in the area of wheeling of power under deregulated environment

credence goods experts and risk aversion abstract the existing literature on credence goods and expert services has overlooked the importance of risk aversion in this paper we extend a standard expert model of credence goods with verifiable service quality by considering risk averse consumers our results show that the presence of risk aversion reduces the expert s incentive to invest in diagnosis and may thus lead to consumers mistreatment

a general formulation for lmp evaluation the evaluation of locational marginal prices or lmps which constitute the basis of the new generation of market design in the u s is a critical need in the side by side operation of electricity markets and power systems their use in various applications such as congestion management and hedging requires specific lmp components in the computations we provide a general formulation for the evaluation of the lmp components by making explicit use of the important role played by the nodes with generators with free capacity on the other hand the lmps of the nodes without generation or with the generators at their limits are a function of the lmps at the marginal nodes and the impacts of the network constraints including the losses in the network in the formulation we pay special attention to the importance of the assumptions and specifications the so called policy specification in the determination of the components we obtain a very general formulation that brings under a single framework the different decomposition approaches that exist the formulation s comprehensiveness brings numerous insights into the various decompositions provides a platform for their comparative analysis and allows us to understand the direct implications and the role of the policy specified moreover the formulation reveals the limitations of any decomposition into the components due to the underlying structural interdependencies among them which is clearly shown in this paper we provide an example to illustrate the capabilities and the insights obtainable with the use of this formulation

combined pool bilateral dispatch part ii curtailment of firm and nonfirm contracts this paper deals with the dispatch of power networks under mixed pool bilateral trading the major questions that are examined are the following 1 to what degree does the relative level of pool versus bilateral trading influence performance in terms of individual power levels costs prices and revenues 2 what is the comparative performance of mixed trading with firm and nonfirm bilateral contracts under various curtailment strategies 3 is the revenue derived from the pool and bilateral trading consistent with the corresponding unbundled costs the above questions are sequentially addressed in separate parts of this three part paper the eventual goal of these results is to help generator and load serving entities choose appropriate relative levels of pool versus bilateral trades while considering risk economic performance and physical constraints in part ii two types of bilateral contracts firm and nonfirm are introduced together with their respective curtailment and noncurtailment bids the optimal power flow problem from part i is now modified to accommodate this new type of operation technical and economical performance measures defined in part i namely generation revenues from bilateral and pool sales pool demand payments plus generation and load expenditures to cover transmission loss and congestion management attributed to bilateral exchanges are also used here together with revenues from contract curtailment and expenditures due to noncurtailment bidding simulation results illustrate the effects of firm and nonfirm contracts and their bidding strategies on the relative levels of pool bilateral trading as well as on economic performance of market participants

do voluntary payments to advisors improve the quality of financial advice an experimental deception game abstract the market for retail financial products e g investment funds or insurances is marred by information asymmetries clients are not well informed about the quality of these products they have to rely on the recommendations of advisors incentives of advisors and clients may not be aligned when fees are used by financial institutions to steer advice we experimentally investigate whether voluntary contract components can reduce the conflict of interest and increase truth telling of advisors we compare a voluntary payment upfront an obligatory payment upfront a voluntary bonus afterwards and a three stage design with a voluntary payment upfront and a bonus after advisors are most truthful when mutual opportunities to reciprocate exist and when the voluntary payment is largest our analysis identifies the third stage bonus payment as the key feature for success as it allows for an interplay of reciprocal behavior between clients and advisors

framework for the design and analysis of congestion revenue rights the capability to deal effectively with the uncertainty associated with locational marginal prices lmps in congestion management schemes requires the development of appropriate financial tools congestion revenue rights crr are hedging tools that provide the holder reimbursement of the congestion charges in the day ahead market and thereby provide transmission service customers with price certainty in this paper we construct a framework for the design and analysis of the crr by marrying finance theory notions with salient characteristics of electric power systems and electricity markets the framework consists of three interconnected layers with one layer each to represent the models of the transmission network the commodity markets and the crr financial markets the interaction between the layers is represented as information flows the framework has sufficient scope to allow the analysis of a broad range of problems associated with ensuring price certainty for transmission services the structural modularity of the framework provides the flexibility to analyze issues and design structures for the provision of transmission services in the competitive environment we introduce a new notion of crr payoff parity and a practical pricing scheme which are used as the basis for the design of more liquid crr markets the application of the framework is further illustrated by the analysis of the conditions that guarantee the revenue adequacy for the crr issuer

a physical flow based approach to allocating transmission losses in a transaction framework a physical flow based approach to allocating transmission losses in a multiple transaction system is presented the allocation scheme is developed using a framework in which the transactions are explicitly represented the proposed scheme is based on expressing losses explicitly in terms of all the transactions in the system an important property of the allocation scheme is its effective capability to deal with counter flows that result in the presence of specific transactions extensive numerical testing indicates that the allocation scheme produces loss allocations that are appropriate and that behave in a physically reasonable manner test results on several systems are presented

decentralized approach to intermarket congestion management when transmission bottlenecks affect dispatches and prices of neighboring regional transmission organization rto markets intermarket congestion management and coordination are needed to mitigate congestion and to compute economically efficient prices in the day ahead markets this paper discusses and proposes two decentralized processes with which each rto administers its energy market and also acts as a transmission coordinator to achieve feasible and efficient use of congested transmission by all markets in the region interconnection with this arrangement a new decomposition technique is introduced without breaking a network model at the rto s geographical boundaries the paper then presents two decentralized congestion management formulations to model markets interactions in the interconnection the coordination between market operators and transmission operators is based on the use of congestion price signals or allocated megawatt capacities as well as their sensitivity information the proposed solution ensures not only feasible schedules but also efficient and consistent congestion path prices for the final schedules in the entire interconnection numerical examples are given to illustrate the application of the proposed models

reputation formation in economic transactions abstract we investigate patterns of information transmission and the evolution of behaviour in standard trust games where reputational information can be exchanged between individual agents within a population but does not become public we vary the nature of information that could be transmitted either a subjective rating or the objective details of a transaction as well as the cost of information transmission either zero or positive we find that information transmission is heavily used if it is costless but only moderately if it has positive cost objective information effectively increases the average amount sent in the trust game and thus efficiency and average profits as well as the return rate only if transmission is costless and therefore is heavily used subjective information a rating only increases transfer and return rates in a control treatment where it becomes publicly available but not for private communication a detailed analysis of the determinants of information transmission shows a positive influence of a the transfer made to a receiver b experience of exploitation and c points to reciprocity in information transmission

individual heterogeneity and cultural attitudes in credence goods provision abstract i study the heterogeneity of credence goods provision in taxi drivers taking detours in new york city first i document that there is significant detouring on average by drivers second there is significant heterogeneity in detouring across individuals yet each individual s propensity to take detours is stable drivers who detour almost always detour while those who do not detour almost never do drivers who take longer detours on each trip also take such trips more often third cultural attitudes plausibly explain some of this heterogeneity in behavior across individuals

seller reputation from word of mouth to centralized feedback abstract reputation is one of the most important incentives for trade and cooperation using the complete selling history of 125 135 sellers on eachnet com an ebay equivalent in china we show that sellers with a longer successful selling record enjoyed more repeat business reached more buyer regions sold in more product categories and had a higher completion rate even before eachnet introduced a centralized feedback system since the centralized feedback system the difference between reputable and non reputable sellers has decreased in terms of repeat business but enlarged in terms of market expansion these findings suggest that while reputation can facilitate trade through buyer experience and word of mouth it is not as effective as centralized feedback our study also shows that although completion rate and transaction price are the two outcomes most often examined in the literature seller reputation is important for buyer clientele market reach business scope and market survival

improving regulation service based on adaptive load frequency control in lmp energy market in a new environment of energy deregulation the locational marginal price lmp basis is overwhelming congestion management issues but it still requires proper ancillary services to serve the system load frequency control lfc is needed to maintain the system frequency in the dynamic environment in this letter an efficient lfc approach with the critical load level cll based adaptive participation factor is proposed for an lmp based market the cll is considered when the load varies from the generation set point the proposed approach could enhance the lfc performance in securely following up the aggressive change of energy demand the pjm 5 bus system is used to illustrate the proposed lfc

congestion management with ex ante pricing for decentralized electricity markets in this paper the authors present a method and a model for managing transmission congestion based on ex ante congestion prices their method is influenced by the yield management approach widely used for airline reservation systems and their model is built based on the relations between transmission congestion prices and electricity commodity prices that exist for an optimal solution they formulate the congestion pricing problem as a master problem and the electricity commodity energy and reserve pricing as subproblems examples are presented to illustrate how a system operator can use this approach to compute ex ante congestion prices and how market operators can determine clearing prices and schedules of forward electric energy and reserve markets

allocation of transmission losses to bilateral contracts in a competitive environment under open access market driven transactions have become the new independent decision variables defining the behavior of the power system understanding the impact of bilateral transactions on system losses is important to be able to allocate a loss component to each individual transaction and improve economic efficiency the theory presented here is based on the argument that it is always possible to compute the exact loss allocation corresponding to an infinitesimal bilateral transaction this leads to a set of governing differential equations whose solution yields the loss allocation for contracts of any size several examples illustrate the properties of both the proposed allocation equations and other methods the dependence of the proposed solution on the path of integration and a number of implementation issues

local knowledge transfer and performance implications for alliance formation in asia foreign firms in host country environments frequently face location based disadvantages this study proposes three means channels of overcoming local knowledge disadvantages based on a sample of 558 japanese joint ventures jvs located in southeast and east asia we find that partnering with local firms the first channel can be a primary strategy for accessing local knowledge and improving jv performance jv experience in the host country the second channel also mitigates local knowledge disadvantages and leads to increased jv performance the third channel the foreign parent s host country experience leads to increased performance in the absence of a local partner however when a jv is formed with a local partner increased parent experience in the host country leads to decreased performance suggesting that the need for a local partner declines as parent experience in a host country increases

the stability of joint ventures reciprocity and competitive rivalry the focus of the following empirical analysis is the influence of reciprocity and long term relationships on the stability of joint ventures these cooperative incentives are offset by industry structural conditions which may promote competitive rivalry among the partners to separate these effects on joint venture survival the hypothesized relationships are proxied by variables drawn from industry and questionnaire data and estimated under a hazard model specification a theoretical implication of the findings is to suggest a shift of attention from the transaction to the economic relationship as the unit of analysis copyright 1989 by blackwell publishing ltd

pre emptive patenting joint ventures and the persistence of oligopoly abstract gilbert and newbery 1982 have examined pre emptive patenting and the persistence of monopoly the present paper considers pre emptive patenting when there are several incumbent firms rather than just one it is shown why the incumbent oligopolists behaving non cooperatively might fail to deter entry this suggests that a joint venture in r and d might be a useful entry deterring device insofar as it pools the incumbents incentives to prevent entry this is indeed the case for small innovations but for large innovations the formation of a joint venture weakens the incumbents incentive to innovate by removing the competitive stimulus between them

pricing energy and ancillary services in integrated market systems by an optimal power flow a detailed ac opf based formulation for procuring pricing and settling energy and ancillary service in simultaneous auctions by integrated market systems is presented the paper provides clear definitions of locational marginal prices for energy and ancillary service marginal prices in terms of lagrange multipliers the characteristics of the prices are analyzed especially when economic substitution among ancillary services is required the paper also evaluates the conditions under which opportunity costs are incurred to units that provide ancillary services it is particularly shown that the intuitive belief that the provision of regulation down service does not incur opportunity cost to the provider in general is not true

the dynamics of learning alliances competition cooperation and relative scope we show how the tension between cooperation and competition affects the dynamics of learning alliances private benefits and common benefits differ in the incentives that they create for investment in learning the competitive aspects of alliances are most severe when a firm s ratio of private to common benefits is high we introduce a measure relative scope of a firm in an alliance to show that the opportunity set of each firm outside an alliance crucially impacts its behavior within the alliance finally we suggest why firms might deviate from the theoretically optimal behavior patterns 1998 john wiley sons ltd

when do experts cheat and whom do they target a credence good is a product or service whose usefulness or necessity is better known to the seller than to the buyer this information asymmetry often persists even after the credence good is consumed i propose two new theories of expert cheating suggesting that identifiable heterogeneities among customers can cause expert sellers to defraud their customers according to these theories cheating arises as a substitute for price discrimination and experts cheat selectively for instance experts target high valuation and high cost customers finally selective cheating may damage the communication of useful information from customers to experts and result in inferior services

complex losses allocation to generators and loads based on circuit theory and aumann shapley method this paper presents a new method to allocate active and reactive losses simultaneously to generators and loads the allocation is calculated for each transmission branch identifying and quantifying the buses responsibilities in losses this is a two step process in the first step generators are modeled as current injections and loads as constant admittances in order to determine generator participations in losses in the second step loads are modeled as current sources and generators as constant admittances in order to determine load participations in losses the aumann shapley and circuit theories are used to calculate the participation of each real and imaginary current component considering them as independent players in the complex losses allocation game the properties of the aumann shapley method ensure equitable allocation and recovery of the total active and reactive losses counter flow cross subsidy and negative allocation issues are discussed numerical results are presented and discussed to demonstrate the applicability of the proposed method

when competition eclipses cooperation an event history analysis of joint venture failure why do so many joint ventures fail despite the fact that their success is the exception rather than the rule the literature on why joint venture performance has been so poor remains fragmentary we address this issue adopting a transaction cost economics perspective and modeling joint ventures as governance structures that blend the advantages and drawbacks of both markets and hierarchies using a data base on electronics industry ventures and event history analysis we identify several predictors of joint venture failure and test for their influences a key finding is that the presence of competition between joint venture partners outside of the agreement significantly impairs chances for the operation s chance of survival we also find clear evidence that the failure rate of joint ventures is nonmonotonic rising to a peak in the middle term and then declining finally we compare and contrast predictors of terminations due to failure to those due to acquisition of the joint venture by one of its partners our overall conclusions highlight implications for strategic choice theory building and the management of joint ventures

control cooperation interfaces in global strategic alliances a situational typology and strategic responses this article applies the dialectical logic of loose coupling to interpartner exchanges in order to analyze the dynamics of global strategic alliances we develop a typology of control and cooperation that defines alliance states or situations according to their level of cooperation under private and collective control in the private control cooperation interplay contending honeymoon and coopetition situations arise depending on the levels of private control and cooperation in the collective control cooperation interplay the loosely connected the equity hostage the tightly integrated and the trusting states emerge according to the levels of collective control and cooperation we illustrate how an individual partner strategically responds to the control cooperation interplay under each situation or state and develop hypotheses explicating how these strategic responses are influenced by relational characteristics such as goal congruity resource complementarity and bargaining asymmetry between foreign and local partners

an effective transmission network expansion cost allocation based on game theory the expansion of transmission systems impacts many entities in the market environment each entity may fare better or worse as a result of congestion relief in the presence of new investments negatively affected firms exert their influence to prevent the expansion from taking place the opposition of these firms and the lack of appropriate incentives results in insufficient investments in transmission assets the network is being frequently used at its maximum limits leading to economic inefficiencies and reduced reliability hence there is a need for effective incentive schemes for network expansion in this paper we propose a game theory based scheme for the allocation of transmission expansion costs among market entities the allocation takes into account both the physical and economic impacts of the new transmission assets and the influence of each firm on the expansion decision this is the first scheme designed to give all market participants explicit incentives to support the expansion the application of the allocation solution to the garver six bus system is presented to illustrate the capabilities of the proposed method

reliability and reserve in competitive electricity market scheduling power systems are typically scheduled at least cost subject to operational and security constraints generally no account is taken of generator reliability when scheduling units also the security criteria which include reserve are usually deterministic in nature this paper proposes a method to consider generator reliability explicitly in the scheduling problem a competitive structure is proposed which includes a market for reserve this is formulated as an augmented lagrangian dual function and is solved using a new recurrent neural network the price for reserve is used along with the unit reliability to find a balance between the cost of reserve and the risk of not providing it

transmission loss allocation i single energy market this paper presents a new methodology for allocating transmission losses to the participants of a single energy market the proposed approach is based on the incremental transmission loss concept and is implemented through two models basic and extended in the basic model the total system losses are estimated through the linear dc load flow equations while the extended model uses the exact ac formulation the concept of center of losses is used a fictitious bus in the system network where all transactions are compensated for transmission losses both models provide a sharing of transmission losses among generators and loads based on a predefined proportion for instance 50 50 for each participant class some important aspects related with the allocation fairness and transparency are illustrated by numerical applications with the ieee reliability test system the extension of this methodology to interconnected energy markets is treated in a companion paper

an institution based view of international business strategy a focus on emerging economies leveraging the recent research interest in emerging economies this perspective paper argues that an institution based view of international business ib strategy has emerged it is positioned as one leg that helps sustain the strategy tripod the other two legs consisting of the industry and resource based views we then review four diverse areas of substantive research 1 antidumping as entry barriers 2 competing in and out of india 3 growing the firm in china and 4 governing the corporation in emerging economies overall we argue that an institution based view of ib strategy in combination with industry and resource based views will not only help sustain a strategy tripod but also shed significant light on the most fundamental questions confronting ib such as what drives firm strategy and performance in ib

mixed pool bilateral operation part iii unbundling costs of trading services for pt ii see ibid vol 17 no 4 p 1184 90 2002 some of the various services provided under mixed pool bilateral electricity trading are i power to satisfy bilateral contract demand ii power for transmission losses and congestion management due to bilateral contracts iii power for transmission losses and congestion management due to wheeling contracts and iv power for transmission losses and congestion management due to pool demand a procedure is developed and tested to unbundle these mw services as well as their corresponding costs thus allowing the calculation of the average cost of each service comparison of the average and marginal costs serves to evaluate the relative profitability of each service the goal of these results is to help generator and load serving entities choose appropriate relative levels of pool versus bilateral trades while considering risk economic performance and physical constraints

why don t people trust experts abstractcredence goods such as health care legal and financial services and auto repair create a conflict of interest by requiring experts to diagnose and provide services to uninformed consumers mistreatment of consumers appears widespread empirically but a simple explanation for mistreatment under realistic assumptions has proved elusive i generalize uwe dulleck and rudolf kerschbamer s credence good model to incorporate the highly realistic assumption that consumers do not observe experts cost functions the model guarantees equilibrium mistreatment in a wide range of price setting and market environments the model also yields testable implications regarding the nature of mistreating firms and the direction of mistreatment

politicians as experts electoral control and fiscal restraints we propose an argument for fiscal restraints that is based on the premise that the services of politicians are credence goods politicians are experts who specialize in observing the true state of the economy budget maximizing politicians are better informed than the electorate about the level of public spending necessary to manage public affairs voters who are able to observe the size of the budget but not the necessary level of spending affect the government s spending behavior via electoral control a fiscal restraint limits the maximum spending a government can choose we identify conditions under which such a fiscal restraint improves voter welfare and discuss the role of the political opposition as a second expert in situations in which the state of the economy requires a level of spending which exceeds the fiscal restraint

equitable allocation of congestion relief cost to transactions this paper investigates a bid based congestion management scheme for a system that accommodates many bilateral transactions the paper proposes a new allocation method for allocating the cost of congestion relief to transactions that cause the congestion the allocation reflects the actual usage of the congested facilities by the transactions and recovers the cost also proposed in the paper is a consistency test to quantify and test the equity fairness of the method test results illustrate that the method provides better price signals for relieving congestion on lines than the shadow prices the test results also indicate that the method recovers the cost the results on consistency indicate that the proposed method is consistent provided that the transactions causing counterflows on congested lines be compensated

energy and reserve market designs with explicit consideration to lost opportunity costs the primary goal of this work is to investigate the basic energy and reserve dispatch optimization cooptimization in the setting of a pool based market of particular interest is the modeling of lost opportunity cost introduced by reserve allocation the authors derive the marginal costs of energy and reserves under a variety of market designs they also analyze existence algorithm and multiplicity of optimal solutions the results of this study are used to support the reserve market design and implementation in iso new england control area

a congestion management aflocation mechanism for multiple transaction networks in this paper we present a physical flow based congestion management allocation mechanism for multiple transaction networks we use the multiple transaction network framework constructed to characterize transmission congestion and then determine the contribution to congestion attributable to each transaction on a physical flow basis this allocation scheme explicitly addresses the issue of counter flows the allocation results are used in the congestion relief of the independent grid operator igo so as to allow it to acquire relief services to remove the overload congestion attributed to each transaction from the network in the most economic manner the congestion charges attributable to each transaction for its usage of the network are also determined we tested the proposed scheme on several systems and we illustrate its capabilities on a network based on the ieee 57 bus system we discuss the policy implications of the congestion relief allocation solution the proposed scheme provides physically reasonable results and is applicable to large scale networks

signaling corporate social responsibility third party certification versus brands corporate social responsibility csr is a credence attribute of products which can be signaled either through a label certified by a third party or via unsubstantiated claims used as part of a brand building strategy we use an experimental posted offer market with sellers and buyers to compare the impact of these signaling strategies on market efficiency only third party certification gives rise to a separating equilibrium and an increase in csr investments unsubstantiated claims can generate a halo effect on consumers whereby the latter are nudged into paying more for the same level of csr investments by firms

transmission rights and transmission expansions in this paper we propose a new method of defining rights that may be assigned to the developer of a transmission expansion project they include a right to collect the value of the capacity provided by the expansion project as well as the value arising from the admittance of the expansion project this approach not only ties the rights allocation to actual physical characteristics of the transmission project but also allows such allocation to remain independent both of the order in which the projects are treated and of any previously allocated transmission rights

gender effects in the credence goods market an experimental study abstract in this paper we offer further explanation for differences in earnings across genders we investigate difference in preferences in payment systems for credence goods we find that women were no less likely to select variable rate payment schemes as compensation for providing credence goods than men however overall earnings remained higher for men than for women disaggregating behavior by type of payment and gender reveals that women who chose fee for service provided significantly fewer units of services paid for than men who chose fee for service this difference accounts for the lower overall earnings for women in our experiments

transmission loss allocation through complex power flow tracing this paper presents a new method for transmission loss allocation the method is based on tracing the complex power flow through the network and determining the share of each load on the flow and losses through each line transmission losses are taken into consideration during power flow tracing unbundling line losses is carried out using an equation which has a physical basis and considers the coupling between active and reactive power flows as well as the cross effects of active and reactive power on active and reactive losses a tracing algorithm which can be considered direct to a good extent as there is no need for exhaustive search to determine the flow paths as these are determined in a systematic way during the course of tracing results of application of the proposed method are also presented

multimarket contact and collusive behavior traditional analyses of industrial behavior typically link the exercise of market power in an industry to internalfeatures such as demand conditions concentration and barriers to entry nevertheless some economists have remained concerned that external factors such as contact across markets may also play a significant role in determining the level of competitiveness in any particular industry in this article we examine the effect of multimarket contact on the degree of cooperation that firms can sustain in settings of repeated competition we isolate conditions under which multimarket contact facilitates collusion and show that these collusive gains are achieved through modes of behavior that have been identified in previous empirical studies of multimarketfirms

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

second degree moral hazard in a real world credence goods market in a field experiment in the market for taxi rides we investigate a phenomenon called second degree moral hazard the tendency of the supply side in a market to react to anticipated moral hazard on the demand side by increasing the extent or price of the service our moral hazard manipulation consists of some passengers explicitly stating that their expenses will be reimbursed this has a strong positive effect on the likelihood and the amount of overcharging and consequently increases consumer expenditure our results suggest that second degree moral hazard may have a severe impact on the provision of credence goods

transmission management for congested power system a review of concepts technical challenges and development of a new methodology transmission networks have some constraints that should be addressed in order to ensure sufficient control to maintain the security level of a power system while maximising market efficiency the most obvious drawback of transmission constraints is a congestion problem that becomes an obstacle to perfect competition among the market participants since it can influence spot market pricing as the power flow violates transmission constraints redispatching generating units is required and this will cause the price at every node to vary this manuscript presents concepts technical challenges and methodology for investigating an alternative solution to the redispatch mechanism and then formulates lmp scheme using an optimisation technique that may well control congestion as the main issue the lmp scheme are varied and improved to take into account the energy price congestion revenue cost of losses as well as the transmission usage tariff by utilising shift factor based optimal power flow sf opf which is derived from the well known dc optimal power flow dc opf model

a joint energy and transmission rights auction proposal and properties an auction based process is proposed that allows power market participants to acquire and reconfigure financial transmission rights the process simultaneously accommodates flowgate and point to point options and obligations along with energy production and consumption futures a sequence of auctions is held during which participants can buy and sell rights which are then settled in a day ahead or real time auction at which time all rights are cashed out by allowing flowgate and point to point obligations and options to be reconfigured and exchanged the market can decide what combination of financial rights are most useful to power generators consumers and traders rights can be specified not only for capacity of individual flowgates but also for more complex transmission constraints such as nomograms under certain conditions we prove that the auction is revenue adequate for the market operator in that payments to rights holders cannot exceed congestion revenues we present a linearized dc auction along with a numerical illustration

market plurality and manipulation performance comparison of independent system operators in this paper the authors present three different models that represent the coordinating functions of existing independent system operators isos and discuss their advantages and disadvantages max iso is a centralized operator based on the pool model and min iso is a decentralized operator based on the bilateral model mix iso is positioned in between having multiple power exchanges or bilateral contracts the performance of the different isos is compared by the total social welfare and the vulnerability to market manipulation a numerical example is presented to compare the performance of different isos the max iso is considered to be the most efficient model theoretically but it does not necessarily provide the best market in terms of vulnerability to market manipulation

policy and non policy determinants of u s equity foreign direct investment this study examined the effects of policy and non policy variables on the location of new u s direct investment abroad as distinct from reinvested earnings of existing affiliates using 1977 and 1982 benchmark data the data revealed statistically significant effects for investment incentives positive performance requirements negative and host country effective tax rates negative with interesting differences between the two time periods and between developed versus developing countries significance was also found for non policy variables such as political stability cultural distance gdp per capita and infrastructure

how social preferences shape incentives in experimental markets for credence goods credence goods markets suffer from inefficiencies caused by superior information of sellers about the surplus maximising quality while standard theory predicts that equal mark up prices solve the credence goods problem if customers can verify the quality received experimental evidence indicates the opposite we identify a lack of robustness with respect to heterogeneity in social preferences as a possible cause of this and conduct new experiments that allow for parsimonious identification of sellers social preference types our results confirm the assumed heterogeneity in social preferences and provide strong support for our explanation of the failure of verifiability to increase efficiency

rivalry deterrence in international markets contingencies governing the mutual forbearance hypothesis the mutual forbearance hypothesis states that when the same competitors meet in multiple markets rivalry is deterred our study highlights how pressures for local responsiveness impact the veracity of this hypothesis for multinational corporations mncs in host countries we develop theory to explain how subsidiary ownership home host cultural distance host country regulatory restrictions on mnc activities and the presence of local competitors affect the rivalry dampening impact of multi market contact we tested our hypotheses with a sample of 13 global automobile companies operating in 27 countries and report strong support for our hypotheses