geographic mobility race and wage differentials abstract this paper analyzes the relationship between geographic mobility and earnings we present an equilibrium search model that yields differences between the reservation wages of mobile and immobile workers the expected wages of mobile workers exceed those of immobile workers due to partial sorting across high and low paying firms an extension to visibly distinct groups with different immobile proportions yields statistical discrimination against immobile group members using combined displaced workers files we find that mobility positively affects earnings and partially explains racial and ethnic earnings differentials to test for statistical discrimination we estimate separate earnings functions for union and nonunion workers

cooperation and entry induction as an extension of technological rivalry abstract this paper investigates how the structure of cooperation in an industry influences the dynamics of entry by start up firms competition over technological dominance induces the entry of start up firms into new subfields as incumbent firms seek to expand the consumer base using their technology by cooperating incumbent firms succeed to varying degrees in establishing their technologies as a dominant standard by building central positions in a cooperative network start ups tend to enter however if there is reasonable certainty that a dominant technology has been established we find strong support for the relationship between network centrality as a measure of technological dominance of a standard and the entry of start up firms into the semiconductor industry

choosy search and the mismatch of talents this article proposes a multi sector matching model where workers have symmetric sector specific skills and the search market is segmented by sector workers choose the range of markets they are willing to participate in i identify a composition externality workers do not take into account the impact of their choice on sector specific mean productivity among the pools of job seekers consequently workers prospect too many market segments and there is room for public policy even when the so called hosios condition holds

digital content provision and optimal copyright protection advances in digital technologies have led to an increasing concern about piracy for providers of digital content e g e books games music software videos yet controversies exist over the influence of copyright protection on firm profitability the objective of this paper is to provide an alternative rationale for the growing anti protection trend and to investigate optimal copyright enforcement and quality provision in a monopoly setting the proposed economic mechanism centers on the influence of copyright protection on consumer search when consumers can get to know the firm s actions e g price quality only after costly search we show that more stringent copyright protection can induce the consumers to rationally expect lower ex post surplus thus exerting a negative strategic effect on the consumers willingness to search this strategic effect may outweigh the positive main effect on the relative attractiveness of the authorized versus the pirated product which can hence explain the opti

alliance strategies of small firms the paper concludes that small firms follow one of two alliance strategies when the firms are small relative to their rivals and to their market they tend to use alliances to gain economies of scale and scope when they are large in relative terms they avoid alliances this behavior is consistent with alliance usage by large firms the paper also analyzes the sources of profit for a small firm that uses a constellation of allies to compete in a scale intensive industry its profits depend on a combination of the group based advantages generated by the constellation and the share of these profits that the firm can appropriate from the group small firms face particular hazards in this regard when their bargaining power within their constellation is weak the paper illustrates these arguments with data froma small survey with case studies from the computer industry and with a simple mathematical model

agricultural performance and development strategy retrospect and prospect abstract the slow pace and inequitable pattern of past agricultural growth have been major factors in the continuing problems of poverty hunger and unemployment especially in the poorer regions of the third world past experience shows that agriculture has an important potential in economic development given appropriate structures and policies these historical lessons are of strategic significance for poor countries as they confront severe problems of adjustment this paper examines the main payoffs and obstacles to the pursuit of an agriculture led industrialization strategy together with proposals for appropriate policies that can support such a strategy

software piracy an analysis of protection strategies software piracy by users is generally believed to harm both software firms through lower profits and buying customers through higher prices thus it is thought that perfect and costless technological protection would benefit both firms and consumers the model developed here suggests that in some circumstances even with significant piracy not protecting can be the best policy both raising firm profits and lowering selling prices key to the analysis is joining the presence of a positive network externality with the fact that piracy increases the total number of program users the network externality exists because consumers have an incentive to economize on post purchase learning and customization costs

green revolution in sub saharan africa implications of imposed innovation for the wellbeing of rural smallholders green revolution policies are again being pursued to drive agricultural growth and reduce poverty in sub saharan africa however conditions have changed since the well documented successes of the 1960s and 1970s benefitted smallholders in southern asia and beyond we argue that under contemporary constraints the mechanisms for achieving improvements in the lives of smallholder farmers through such policies are unclear and that both policy rationale and means of governing agricultural innovation are crucial for pro poor impacts to critically analyze rwanda s green revolution policies and impacts from a local perspective a mixed methods multidimensional wellbeing approach is applied in rural areas in mountainous western rwanda here malthusian policy framing has been used to justify imposed rather than induced innovation the policies involve a substantial transformation for rural farmers from a traditional polyculture system supporting subsistence and local trade to the adoption of modern seed varieties inputs and credit in order to specialize in marketable crops and achieve increased production and income although policies have been deemed successful in raising yields and conventionally measured poverty rates have fallen over the same period such trends were found to be quite incongruous with local experiences disaggregated results reveal that only a relatively wealthy minority were able to adhere to the enforced modernization and policies appear to be exacerbating landlessness and inequality for poorer rural inhabitants negative impacts were evident for the majority of households as subsistence practices were disrupted poverty exacerbated local systems of knowledge trade and labor were impaired and land tenure security and autonomy were curtailed in order to mitigate the effects we recommend that inventive pro poor forms of tenure and cooperation none of which preclude improvements to input availability market linkages and infrastructure may provide positive outcomes for rural people and importantly in rwanda for those who have become landless in recent years we conclude that policies promoting a green revolution in sub saharan africa should not all be considered to be pro poor or even to be of a similar type but rather should be the subject of rigorous impact assessment such assessment should be based not only on consistent objective indicators but pay attention to localized impacts on land tenure agricultural practices and the wellbeing of socially differentiated people

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

domestic constraints on export led growth a case study of india abstract in light of the 1991 1993 indian policy reforms this paper assesses the feasibility of a strategy of manufacturing export led growth for india by means of simulation experiments using a nine sector seven income classes computable general equilibrium model developed for india s seventh plan period 1985 1990 the relative merits of this strategy are compared to those of an alternative open development strategy agricultural demand led industrialization under both a fixed and flexible exchange rate regime compared to earlier models the analysis adds disaggregated agricultural supply and income distribution and export demand response the results suggest that industrial growth can be self defeating by raising the relative price of domestic goods and thereby running into an export demand bottleneck hence if a step up in manufacturing exports is to contribute to a non inflationary acceleration of gdp growth it needs to be supplemented by adequate policies aimed at raising agricultural output and income

is structural adjustment with a human face possible the case of mexico the article attempts to model structural adjustment patterns in a single middle income oil exporter mexico it explores the economy wide costs in terms of economic growth income inequality and poverty of mexico s economic stabilisation policies of the 1980s on the basis of counterf actual simulation it also explores the likely impacts of alternative adjustment strategies this analysis utilises a modified social accounting matrix sam approach designed to overcome one of the major shortcomings of the conventional sam the assumption of unitary expenditure elasticities in household accounts the base model is calibrated to track the overall and sectoral growth performance of the mexican economy from 1980 to 1986 and becomes the foundation upon which our policy experiments are built the article is part of an on going study of economy wide impacts of alternative structural adjustment policies in mexico adelman and taylor 1990 and proceeds as follows the sam framework and estimated sam are descr

export led growth and import dependence the case of taiwan 1969 1981 abstract taiwan provides a notable example of successful export led growth in recent years this paper explores the prospects for her continued growth by examining past changes on the supply side the leontief input output framework is employed it is found that the level of import content in exports increased during the course of taiwan s export led growth on a sectoral level the level of import dependence also increased for all but some leading export sectors linkage effects of exports are not large enough to offset the price effect and the effect of the spreading of import dependent technology to other sectors the decline in export s domestic content has been more than offset by the increase in quantity of exports so that taiwan s income has been growing this decline in the domestic content slowed from 1976 to 1981 but so did the growth in export volume which reflects the effects of protectionism and the difficulty of finding enough new exportables

digital piracy a competitive analysis in recent years the issue of copyright protection for intellectual properties such as computer software music cds and videos has become increasingly important it is often claimed that illegal copying of intellectual property costs companies billions of dollars in lost revenues and reduces firms incentives to innovate some researchers have shown that copying can be beneficial to firms when there are strong network effects and copying expands the market in this paper we first examine the impact of illegal copying of software and other similar intellectual properties on firms prices profits and quality choices even when there are no network effects and the market is saturated we show that contrary to the claims of manufacturers there are conditions under which copying can increase firms profits lead to better quality products and increase social welfare this is because weaker copyright protection enables firms to reduce price competition by allowing price sensitive consumers to copy thus weaker copyright protection can serve as a coordination device to reduce price competition we also examine how equilibrium copyright enforcement is affected by network externalities in contrast to previous research we show that strong network effects can sometimes lead to a firm choosing higher levels of copyright protection our results show that in the presence of strong network effects stronger copyright enforcement by one firm can serve as a coordinating device to reduce price competition

export taxes and sectoral economic growth evidence from cotton and yarn markets in pakistan abstract pakistan used an export tax on raw cotton from 1988 1995 in order to suppress the internal price of cotton to benefit the domestic yarn industry an analysis was conducted to estimate the impact of this policy on both the cotton and yarn sectors these effects were simulated using the results of a structural econometric model of these sectors of pakistan s economy results indicated that the export tax had a negative impact on the growth rate in the cotton sector while having little or no impact on the yarn sector thus the export tax did not achieve its objective of increasing the growth rate of value added yarn production above what would have occurred naturally

second sourcing as a commitment monopoly incentives to attract competition we show that a new product monopolist may benefit from delayed competition if consumers incur setup costs setup costs create a dynamic consistency problem the monopolist cannot guarantee low future prices once customers have incurred those costs we show that if customers anticipate this problem the monopolist s profits can be improved through ex ante commitment to competition in the post adoption market if setup costs are large if setup costs are small the monopolist can typically achieve the same level of profits without price commitment as with

letting rivals come close or warding them off the effects of substitution threat on imitation deterrence a resource based theory postulate is that firms must defend their resources against imitation to sustain competitive advantage however by deterring imitation firms may induce rivals to create su

life in a mexican village a sam perspective this article employs a social accounting matrix sam to analyse the economic structure of a migrant sending rural economy a village sam is constructed using 1982 household data from a major migrant sending village in central mexico the village matrix multiplier and its decompositions are derived from the sam and are utilised in policy experiments on the production value added income and investment flows of the village the results highlight the central role of both internal and international migration in the village economy as well as the importance of targeting directly anti poverty policies toward the landless

agriculture for development new paradigm and options for success the role of agriculture as an instrument for industrialization had been rigorously conceptualized in the 1960s and 1970s under theclassicalparadigmofdevelopmenteconomics aftermanyimplementationfailuresunderimportsubstitutionindustrialization policies and protracted neglect of agriculture under the policies of the washington consensus that followed the debt crisis agriculture has gradually returned in the development agenda especially with the food crisis we argue in this article that a new paradigm has started to emerge as to how to use agriculture for development pursuing a broadened development agenda we explore the specifications of this paradigm and discuss conditions for successful implementation jel classifications b20 o13 q18

agricultural price policy in general equilibrium models results and comparisons a number of alternative policies toward agricultural prices food subsidies and intersectoral allocation of investment are analyzed with computable general equilibrium models for six countries the models generally allow us to trace the intersectoral and intertemporal growth effects of these policies as well as their income distribution effects across social groups the results obtained are shown to be eventually quite different from those derived from partial equilibrium and multimarket approaches sensitivity analysis to alternative specifications of the mechanism of wage determination shows that the real income effects of price policies are critically dependent upon the particular theory of wage determination used

wage competition with heterogeneous workers and firms we study imperfect competition in the labor market when both workers and firms are heterogeneous when firms cannot observe workers skill firms pay workers equal wages but workers absorb training costs when firms can identify worker types firms pay different net wages to different workers voters select the level of general education that is financed by a lump sum tax workers are on average better off when firms can observe workers skill for a given level of general human capital but the median voter prefers a higher level of general human capital when firms cannot observe worker types

licensing in the theory of innovation this article analyzes licensing in a noncooperative r d game we ask two questions what are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure the gainsfrom trading information through licensing contracts are achieved through the replacement of inefficient production techniques the ex post incentive and the elimination of inefficient research expenditures the ex ante incentive in a duopoly the availability of licensing encourages research when the firms initial production technologies are close in costs and discourages research when initial costs are asymmetric

unemployment vs mismatch of talents reconsidering unemployment benefits we develop an equilibrium search matching model with risk neutral agents and two sided ex ante heterogeneity unemployment insurance has the standard effect of reducing employment but also helps workers to get a suitable job we show through calibrations how the mere difference on unemployment insurance when countries experience a common skilled biased technological shock may result in differences in unemployment productivity growth and wage inequality these results are consistent with the contrasting performance of the labour market in europe and the united states in the last twenty five years the model is used to address some political economy issues

counterfeit product trade the authors analyze trade in both legitimate and counterfeit products domestic firms ow n trademarks and establish reputations for delivering high quality pr oducts in a steady state equilibrium foreign suppliers export legiti mate low quality merchandise and counterfeits of domestic brand name merchandise heterogeneous home consumers either purchase low quality imports or brand name products rationally expecting some degree of counterfeiting of the latter the authors describe the positive and normative effects of counterfeiting in comparison with a no counterfe iting benchmark they also provide a welfare analysis of border inspe ction policy and of policy regarding the disposition of counterfeit g oods that are confiscated at the border copyright 1988 by american economic association

deterrence by market sharing a strategic incentive for licensing the potential of an incumbent firm to retain its dominant position in a market is a focal point of the modem theory of industrial organization a recent literature examines this issue for markets in which challengers threaten an incumbent s position by engaging in research for a new technology richard gilbert and david newbery 1982 show that an incumbent firm with a firstmover advantage will preempt potential entrants by inventing a new technology slightly earlier than would its rivals in a stochastic r d therefore its introduction does not alter the decision to research when the pre innovation market is characterized by an incumbent and potential entrants stephen salant 1984 shows that licensing ex post to innovation can alter the research decision as anticipation of the returns from future licensing encourages research by the entrant as a counterpoint to the salant result i find that licensing ex ante to research may discourage further research by the entrant indeed this strategic incentive for licensing may be so strong as to persuade the incumbent as well as the entrant to terminate research activity to isolate this incentive for licensing from the one discussed by salant a simple model is constructed in which licensing of future technologies is not desirable anecdotal evidence suggests that the strategic incentive does lead innovators in some markets to license their technologies examples of this information sharing are prevalent in markets where technological change is rapid in the 1940 s standard oil of new jersey discovered a process for synthetic rubber it traded patent rights on this process for a synthetic oil production process discovered by farben a german rubber company in both the synthetic oil and synthetic rubber markets rival companies were department of economics scarsborough college university of toronto toronto ontario canada m5s lal i thank jon cohen and ron saunders for discussions that inspired this paper i am also grateful to yehuda kotowitz andy mclennan jennifer reinganum ralph winter myma wooders two anonymous referees and seminar participants at the university of toronto for helpful comments on earlier drafts

growth incentives to invest in a network externality environment firms that operate in the telecommunications industry often have to make large and risky investments in digital infrastructure this paper examines how firm size affects the incentive to invest in infrastructure projects in industry environments that incur substantial network externalities we suggest that in the presence of network externalities a firm s rate of growth first declines and then increases with the size of its user base an implication of this result is that firms may benefit from making investments in emerging digital infrastructure early enough to achieve a substantial user base and to gain that user base before other firms investments pre empt them the results mean that firms that undertake earlier successful investment may achieve preemption very quickly the sources of network externalities contribute to the incidence of strategic alliances in network industries particularly when coupled with the pressures of technical uncertainty copyright 1998 by oxford university press

licensing to enhance demand for new technologies this article presents a model in which licensing competitors expands demand for a new proprietary product and therefore may be a profit maximizing strategy for the licensor even when licensing increases industry cost in the model buyers care about price and quality sellers can contract on price but not on quality and a single supplier has monopoly power licensing induces quality competition and allows the supplying firms to make a quality commitment that would not be credible for a single firm as a result licensing increases industry demand and may generate an increase in industry revenue sufficient to offset any increase in industry cost some of the characteristics of the model are informed by observations in the semiconductor industry

food security policy in a stochastic world abstract food security may be increased by variance reducing strategies by food aid or by development strategies this paper uses a korea cge model subjected to random fluctuation in world prices and domestic food productivity to evaluate these policies we find that poverty reducing development strategies are the most food security strategies

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

effects of increasing agricultural productivity in a multisectoral model for the philippines bautista r m 1986 effects of increasing agricultural productivity in a mul tisectoral model for the philippines agric econ 1 67 85 this paper investigates empirically the economy wide effects of agricultural productivity increases in the philippines reporting the results of a quantitative analysis based on a general equilibrium framework a multisectoral price endog enous model of the philippine economy is employed emphasizing not only agri culture but also other production sectors with which it closely interacts as well as the distinction between rural and urban households in their income genera tion and consumption patterns among other findings the differential effects on the real income of rural households vis a vis urban households arising from increased productivity in the various components of the agricultural production sector are striking the resulting improvements in the trade balance and national income among other macroeconomic variables are also relatively significant moreover there are significant differences in the economy wide effects among the four sectors of food and agriculture distinguished in the study particularly interesting is the highly favorable impact of rising productivity in the food pro cessing sector on agricultural crop production and rural income a linkage effect that has not received much attention in the development literature

obtaining strategic advantage from being imitated when can encouraging clones pay an important business strategy research theme concerns finding ways to minimize competition faced by the firm this paper however focuses on a different set of situations the model developed suggests that an innovator s best strategy may be to encourage clones of its product when a network externality is present key factors to consider in assessing whether encouraging cloning is the innovator s best strategy are 1 the benefit to be derived in terms of added user base contributed by the clone sales traded off against 2 the unit sales that will be lost to the clones these factors in turn depend upon the strength of the network effect and the degree to which the innovator s product quality is perceived by consumers to be superior to the clone s the model further suggests that both the innovator and clone earn their highest payoffs when the clone takes the lead in price setting i e when the clone establishes its own price by considering for each price it might set how the innovator will react to that price and the innovator as price follower responds to the price the clone chooses the paper demonstrates that the clone leader innovator follower situation represents the unique nash equilibrium in price setting strategies a central implication is that when operating in a network externality environment instead of a problem to be avoided clones may be valuable assets to an innovating firm building up the user base for the innovator s technology by bringing lower valuing consumers into the market which in turn makes the innovator s product more attractive to high and medium valuing purchasers thus when the above described conditions hold being cloned can be more profitable for an innovating firm than dominating the market alone

beyond export led growth abstract in light of the adverse conditions in the current international economic environment this paper reassesses the feasibility of continuing to rely on manufacturing export led growth as the major development dynamic for most ldcs during the next decade this paper argues that after the initial stages of industrial development the emphasis in policy toward agriculture should shift from surplus extraction to surplus creation and to the generation of demand linkages with the rest of the economy the author compares the relative merits of two alternative open development strategies export led industrialization and agricultural demand led industrialization adli by means of several simulation experiments the experiments are performed with a computable general equilibrium model of a small low income semi industrial open economy which is a stylization of south korea of 1963 they are carried out in an international environment assumed to represent the next decade based on a rate of growth of international demand for imports of about half the 1960 1973 rate the results support the adli approach on all counts

durable products time inconsistency and lock in many durable products cannot be used without a contingent consumable product e g printers require ink ipods require songs razors require blades etc for such products manufacturers may be able to lock in consumers by making their products incompatible with consumables that are produced by other firms we examine the effectiveness of such a strategy in the presence of strategic consumers who anticipate the future prices of both the durable product and the contingent consumable under a lock in strategy the manufacturer has pricing power over the contingent consumable which she can use to extract additional rents from higher valuation consumers but such pricing power may also reduce consumers willingness to pay for the durable because it subjects them to being held up with higher consumables prices in the future restricting our attention to linear pricing policies we find that if the manufacturer can commit to shutting down production of her durable after an initial one time sale then competition from another consumable of an appropriately degraded level of quality can benefit the manufacturer by mitigating consumers fears of being held up on the other hand when the manufacturer cannot commit to shutting down production of her durable then her own output of additional durables gives her an incentive to keep consumables prices low and competition in the consumables market is less beneficial this paper was accepted by pradeep chintagunta and preyas desai special issue editors this paper was accepted by pradeep chintagunta and preyas desai special issue editors

the contribution of agriculture to economic growth some empirical evidence the paper analyzes the contribution of agriculture to economic growth by employing cross section data for the developing and developed countries during 1960 1970 and 1970 1979 it is found that in the context of mr chenery syrquin s model intercountry variation in agricultural growth explains a significant portion of intercountry variation in the industrial non agricultural growth further in the context of an aggregate production function agricultural growth is found to contribute significantly to productivity increases and thus to overall economic growth for the developing countries sample of the 1970 79 period the results show that a one percent increase in agricultural growth leads to approximately four tenths of a percentage point increase in productivity it is also found that export growth contributes positively to productivity growth while the inflation rate contributes negatively

efficiency in a search and matching model with endogenous participation abstract we show that in a search matching model with endogenous participation in which workers are heterogeneous with respect to market productivity satisfying the hosios rule leads to excessive vacancy creation

car ownership and the labor market of ethnic minorities we show how initial wealth differences between low skilled minorities and white workers can generate differences in their labor market outcomes this even occurs in the absence of a taste for discrimination against ethnic minorities or exogenous differences in distance to jobs because of the initial wealth difference minorities cannot afford to buy a car while whites can car ownership allows whites to reach more jobs per unit of time which gives them a better bargaining position in the labor market as a result in equilibrium ethnic minorities end up with both higher unemployment rates and lower wages than whites furthermore we also show that it takes more time for minorities to reach their jobs even though they travel less miles when employed those predictions are consistent with the data better access to capital markets or better public transportation will reduce the differences in labor market outcomes

r d rivalry with licensing or imitation the authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post development dissemination of the innovation such as licensing or imitation this dissemination may cause the noninnovating firm to benefit from the discovery when this occurs conventional results in the economics of r d no longer need apply they find that industry leaders will tend to develop minor innovations but will develop major innovations only if imitation is difficult copyright 1987 by american economic association

the unemployment volatility puzzle is wage stickiness the answer i discuss the failure of the canonical search and matching model to match the cyclical volatility in the job finding rate i show that job creation in the model is influenced by wages in new matches i summarize microeconometric evidence and find that wages in new matches are volatile and consistent with the model s key predictions therefore explanations of the unemployment volatility puzzle have to preserve the cyclical volatility of wages i discuss a modification of the model based on fixed matching costs that can increase cyclical unemployment volatility and is consistent with wage flexibility in new matches

wages and commuting quasi natural experiments evidence from firms that relocate we examine individual level compensating differentials for commuting distance in a quasi natural experiment setting by examining how wages respond to changes in commuting distance induced by firm relocations this set up enables us to test for the relevance of job search frictions within labour market models due to the quasi experimental set up we are able to avoid a range of endogeneity issues we demonstrate that a 1 km increase in commuting distance induces an almost negligible wage increase in the year after the relocation but a more substantial wage increase of about 0 15 three years later 2013 royal economic society

investment strategies to combat rural poverty a proposal for latin america abstract the economic crisis that started in 1980 has forced the latin american countries to implement drastic stabilization policies and structural adjustment programs the consequent appreciation of the real exchange rate has transformed agriculture into the most dynamic sector of the economy this creates the possibility of defining a forward looking rural development strategy that is consistent with this new role for agriculture and that has the potential of significantly lessening rural poverty starting from a social poverty map for the rural areas we identify a five pronged approach that includes 1 farm oriented rural development projects for the upper subfamily and family farms 2 household oriented rural development projects for the lower subfamily farms 3 access to addtional assets for the landless and subfamily farmers through land reform and colonization 4 employment creation and labor market rationalization and 5 the promotion of backward forward and final demand linkages with agriculture located in the rural areas

spatial mismatch in search equilibrium we construct a search equilibrium model for a city with central and suburban labor markets that is consistent with the set of empirical regularities commonly associated with the spatial mismatch hypothesis a higher rate of unemployment for central city residents than suburban residents a higher job vacancy rate for suburban firms and reverse commuting and higher suburban wages the effectiveness and welfare implications of public policy programs that might be used to remedy the underlying mismatch are examined

strategic disclosure of meaningful information to rival i study a model of strategic disclosure of a private signal to a rival in the presence of a payoff externality in the model two agents forecast the unknown true state of a future period specifically the quality of the signal is also private information hence which quality of signal is revealed for which incentive is the main question of interest i show that even when disclosure is costly the revealing equilibrium where an agent voluntarily reveals his signal can exist and it should be a monotone equilibrium asymmetry between the penalty for an incorrect forecast and the reward for a correct forecast is a necessary condition for the existence of this revealing equilibrium if the penalty is larger than the reward the unique revealing equilibrium is a separating equilibrium where only the low quality signal is disclosed in order to induce the rival s imitation on the other hand if the reward is much larger than the penalty the unique revealing equilibrium is a pooling equilibrium where the signal is always revealed in order to induce the rival s deviation if the reward is not much larger than the penalty no revealing equilibrium is robust to a costly disclosure jel d81 d82

how to license intangible property we examine the optimal licensing strategy of a research lab selling to firms who are product market competitors we consider an independent lab as well as a research joint venture we show that 1 demands are interdependent and hence the standard price mechanism is not the profit maximizing licensing strategy 2 the seller s incentives to develop the innovation may be excessive 3 the seller s incentives to disseminate the innovation typically are too low 4 larger ventures are less likely to develop the innovation and more likely to restrict its dissemination in those cases where development occurs and 5 a downstream firm that is not a member of the research venture is worse off as a result of the innovation

spatial versus social mismatch the aim of this paper is to provide a new mechanism based on social interactions explaining why distance to jobs can have a negative impact on workers labor market outcomes especially ethnic minorities building on granovetter s idea that weak ties are superior to strong ties for providing support in getting a job we develop a model in which workers who live far away from jobs choose to have less connections to weak ties because of the lack of good public transportation in the us it is costly both in terms of time and money to commute to business centers to meet other types of people who can provide other source of information about jobs if distant minority workers mainly rely on their strong ties who are more likely to be unemployed there is then little chance for them of escaping unemployment it is therefore the separation in both the social and physical space that prevents ethnic minorities from finding a job

space and unemployment the labor market effects of spatial mismatch the aim of this article is to analyze the effects of housing discrimination on the wages and unemployment rates of black workers the unemployment effect is first analyzed using a simple minimum wage model an efficiency wage model is then adopted in order to endogenize both unemployment and wages under both models suburban housing discrimination leads to a higher unemployment rate for blacks in the central city than in the suburbs under the efficiency wage model black wages are also lower in the center the analysis thus generates a link between unemployment and a seemingly unrelated phenomenon racial discrimination in the housing market

the mechanisms of spatial mismatch the spatial mismatch hypothesis smh argues that low skilled minorities residing in us inner cities experience poor labour market outcomes because they are disconnected from suburban job opportunities this assumption gave rise to an abundant empirical literature which is rather supportive of the smh surprisingly it is only recently that theoretical models have emerged which probably explains why the mechanisms of spatial mismatch have long remained unclear and not properly tested this article presents relevant facts reviews the theoretical models of spatial mismatch confronts their predictions with available empirical results and indicates which mechanisms deserve further empirical tests

farm nonfarm synergies in africa discussion sequence of low market integration and low substitutability between domestic and imported foods in addition if the geographical area over which these multipliers are calculated increases the share of nontradables in the economy rises and multipliers are correspondingly larger this leads the authors to praise the potential for a demand led approach to both agricultural and industrial development anchored in productivity gains in traditional exports while the general proposition is reminiscent of the development strategies advanced by mellor 1986 adelman 1984 and hazell 1984 and by now well accepted the quantification of multiplier effects is inadequate the model used makes unrealistic assumptions that systematically bias upward the size of the growth linkages induced by technological change in farm or nonfarm tradables denoting by t tradables t farm tradables nt nontradables e elasticity of supply response qm elasticity of substitution in consumption between output q and imports m and m income multiplier of an extra 1 of income from farm tradables the key assumptions made by the authors are t e 0 qm o and nt e o yqm a value which does not matter as long as e oo this yields local m between 1 3 and 1 8 reported in table 2 of the delgado et al paper consider now the more realistic characteriza

farm nonfarm linkages in rural sub saharan africa this paper is an accumulation over the past 25 years of a body of detailed work examining the structure of africa s rural nonfarm economy first it systematically reviews empirical evidence on the nature and magnitude of the african rural nonfarm economy it then explores differences across locality and size across countries and over time in an effort to assess likely patterns of growth a subsequent review of key production and consumption parameters allows an estimate of the magnitude of the agricultural growth multipliers in africa the paper concludes with a brief discussion of policies and programs that will be necessary if farm nonfarm growth linkages are to achieve their full potential

search in cities the aim of this paper is to expose the recent developments of urban search models which incorporate a land market into a search matching framework using these models we will be able to explain why unemployment rates vary within a city how city structure affects workers labor market outcomes how unemployment benefits and the job destruction rate affect the growth of cities and why workers living far away from job centers search less intensively and experience higher unemployment rates than those residing closer to jobs we are also able to explain why as compared to whites black workers spend more time commuting to work but travel less miles and search for jobs over a smaller area

market research and innovation strategy in a duopoly we model a duopoly in which ex ante identical firms must decide where to direct their innovation efforts the firms face market uncertainty about consumers preferences for innovation on two product attributes and technology uncertainty about the success of their research and development r d investments firms can conduct costly market research before setting r d strategy we find that the value of market information to a firm depends on whether its rival is expected to obtain this information in equilibrium consequently one firm may forgo market research even though its rival conducts such research and learns the true state of demand we examine both vertical and horizontal demand structures with vertical preferences firms are a priori uncertain about which attribute all consumers will value more in this case a firm that conducts market research always attempts innovation on the attribute it discovers that consumers prefer and expends more on r d than a rival that has not conducted market research with horizontal preferences distinct segments exist each caring about innovation on only one attribute and firms are a priori uncertain how many consumers each segment contains in this case a firm that conducts market research may follow a niche strategy and attempt innovation to serve the smaller segment to avoid intense price competition for the larger segment a firm that conducts market research may therefore invest less in r d and earn lower postlaunch profits than a rival that has forgone such research

agricultural technology and farm nonfarm growth linkages abstract agricultural growth stimulates rural nonfarm activity by boosting demand for production inputs and consumer goods but different kinds of agricultural technology promote different patterns of nonfarm linkages to explore how key features of agricultural technology affect growth in the rural nonfarm economy this paper reviews an array of cross section and time series evidence bearing on the dynamics of the rural nonfarm economy then using consumption and production parameters associated with different agricultural technologies it introduces a simple model which isolates the effects of different technologies on nonfarm growth linkages

workforce location and equilibrium unemployment in a duocentric economy with matching frictions this article examines unemployment disparities and efficiency in a duocentric city where workers are non uniformly distributed between the two job centers we introduce commuting costs and search matching frictions to deal with the spatial mismatch between workers and firms in a decentralized economy job seekers do not internalize a composition externality they impose on all the unemployed with symmetric job centers a change in the distribution of the workforce can lead to asymmetric equilibrium outcomes we calibrate the model for los angeles and chicago metropolitan statistical areas simulations suggest that changes in the workforce distribution have non negligible effects on unemployment rates wages and net output but cannot be the unique explanation of a substantial mismatch problem

household strategies and rural livelihood diversification this article reviews the recent literature on diversification as a livelihood strategy of rural households in developing countries with particular reference to sub saharan africa livelihood diversification is defined as the process by which rural families construct a diverse portfolio of activities and social support capabilities in order to survive and to improve their standards of living the determinants and effects of diversification in the areas of poverty income distribution farm output and gender are examined some policy inferences are summarised the conclusion is reached that removal of constraints to and expansion of opportunities for diversification are desirable policy objectives because they give individuals and households more capabilities to improve livelihood security and to raise living standards

selling and leasing strategies for durable goods with complementary products it has been recognized that when a durable goods manufacturer sells its output it has an incentive to produce at a rate that will drive down the market price of the product over time because anticipation of declining prices makes consumers less willing to invest in owning the durable good selling can be self defeating for the manufacturer if the manufacturer instead leases the product it can eliminate its own incentive to decrease the price over time which allows it to extract larger rents from consumers in this paper we investigate how a durable goods manufacturer s choice between leasing and selling is affected by a complementary product that is produced by an independent firm we show that a durable goods manufacturer that leases its product has an incentive to increase prices by limiting the availability of the product in response to the availability of a complement because this potential for opportunistic behavior discourages output of the complement leasing can also be problematic as a result the durable goods manufacturer faces a trade off between leasing which commits the manufacturer to not overproduce and selling which commits it to not underproduce our contribution is to identify this trade off and show how a durable goods manufacturer can use a combination of leasing and selling to balance its strategic commitment across both its own market as well as the complementary market

licensing radical product innovations to speed up the diffusion abstract we present a differential game to study how companies can simultaneously license their innovations to other firms when launching a new product the licensee may cannibalize licensor s sales albeit this can be compensated by gains from royalties nonetheless patent royalties are generally so low that licensing is not an attractive strategy in this paper we consider the role of licensing to speed up the product diffusion word of mouth by licensee s customers and licensee s advertising indirectly push forward sales of the licensing company accelerating new product diffusion we find evidence that licensing can be a potentially profitable strategy however we also find that a weak intellectual property right ipr protection can easily diminish the financial attractiveness of licensing

foreign counterfeiting of status goods we study the positive and normative effects of counterfeiting i e trademark infringement in markets where consumers are not deceived by forgeries consumers are willing to pay more for counterfeits than for generic merchandise of similar quality because they value the prestige associated with brand name trademarks counterfeiters of status goods impose a negative externality on consumers of genuine items as fakes degrade the status associated with a given label but counterfeits allow consumers to unbundle the status and quality attributes of the brand name products and alter the competition among oligopolistic trademark owners we analyze two policies designed to combat counterfeiting enforcement policy which increases the likelihood of confiscation of illegal items and the imposition of a tariff on low quality imports

outstanding female economists in the analysis and practice of development economics abstract this article examines the contributions of five eminent economists all women to the analysis and practice of development economics irma adelman frances stewart and nancy birdsall are leading advocates of alternative development strategies that focus on poverty alleviation and investment in human capital anne krueger and alice amsden stand at the forefront of two opposing camps in a lively and long lasting debate on the appropriate role of government in trade and industrialization we use the storied careers of these economists as a vehicle to convey the big picture of how development economics has evolved and which topics have proved durable