competitive coupon targeting with the advent of panel data on household purchase behavior and the development of statistical procedures to utilize this data firms can now target coupons to selected households with considerable accuracy and cost effectiveness in this article we develop an analytical framework to examine the effect of such targeting on firm profits prices and coupon face values we also derive comparative statics on firms optimal mix of offensive and defensive couponing the number of coupons distributed redemption rates face values and incremental sales per redemption among our findings when rival firms can target their coupon promotions at brand switchers the outcome will be a prisoner s dilemma in which the net effect of targeting is simply the cost of distribution plus the discount given to redeemers

the ambiguous impact of inequality on local resource management abstract the impact of inequality on the ability of human groups to undertake successful collective action is investigated with special reference to overexploitation of common property resources in voluntary provision problems on the one hand inequality has an ambiguous impact on the feasibility of the efficient outcome even though better endowed agents contribute more to collective action in regulated settings on the other hand inequality tends to reduce the acceptability of available regulatory schemes and therefore to make collective action more difficult

an extension of the second welfare theorem to economies with nonconvexities and public goods in this paper we report a generalization of the results of foley and guesnerie on the second welfare theorem to economies with arbitrary nonconvex production sets the nature of marginal cost prices in such economies is clarified through the use of the clarke tangent cones

collective action for market chain innovation in the andes the papa andina network employs collective action in two novel approaches for fostering market chain innovation the participatory market chain approach pmca and stakeholder platforms engage small potato producers together with market agents and agricultural service providers in group activities to identify common interests share market knowledge and develop new business opportunities these forms of collective action have generated commercial technological and institutional innovations and created new market niches for andean native potatoes grown by poor farmers in remote highland areas these innovations have benefited small farmers as well as other market chain actors this paper describes papa andina s experiences with collective action for market chain innovation it then discusses the implications of these experiences for the understanding of collective action and the policy implications for research and development organizations

collective action for small scale producers of agricultural biodiversity products the role of well functioning markets for development is now widely recognized however the challenge remains to make these markets benefit the poor and the environment increasing attention is being given to the potential role markets can play for agrobiodiversity conservation through product diversification and increasing competitiveness in niche and novelty markets several case studies were undertaken that explore the use of market based approaches to on farm agrobiodiversity management and livelihood improvement this paper explores how the theory of collective action can provide a more synthetic understanding of how market chains operate and the changes that could permit a more equitable distribution of benefits the case studies illustrate the need for improved trust mutual understanding of each actor s involvement and an agreed process of collective action with a high level of community participation the cases differ in their degree of collective action the level of market organization and the ways in which handling processing and innovative marketing add value to the agrobiodiversity products comparative analysis identified a range of situations in which market development can support agrobiodiversity conservation and livelihoods

cooperative membership and dairy performance among smallholders in ethiopia this study assesses the impact of cooperative membership among dairy producers in selale ethiopia we selected ten impact indicators proportion of dairy income to total household income total dairy income proportion of crossbreed cows to the total number of cows in the herd indicator of technological innovation amount of feed bought another indicator of technological innovation milk production milk productivity commercialization price per liter of milk price per kg of butter and the share of milk production that is processed at the household level in order to minimize the biases that may arise by simply comparing members and non members we employed a propensity score matching technique the empirical analysis shows that cooperatives are strong in facilitating technological transformations and commercialization but weak in offering better prices these findings suggest structural trade offs between different domains of cooperatives action overall our study concludes that cooperatives can be efficient business institutions to foster rural development and food security

the impact of changes in common property resource management on intrahousehold allocation abstract in developing countries common property resources cprs can be an important source of income for certain individuals within households this paper demonstrates that if changes in the management of cprs impose fixed costs on them or cause a decline in the prices of goods produced from it the intrahousehold allocation of resources may alter in a manner detrimental to those individuals the paper also shows that the assumption of a unitary household model causes the detrimental effects of certain cpr policy interventions to be overlooked although the model is narrowly conceived the results can be generalised to examples where households have members who specialise in different economic activities outside the home

price discrimination in free entry markets using a spatial model of monopolistic competition we investigate price discrimination in free entry zero profit markets we show that when brands are heterogeneous competition does not prevent discrimination the power to earn economic profits is not necessary for a firm to maintain discriminatory prices our model treats formally the fact that consumers difer not only in the utility they derive from a good but also in how strongly they prefer one brand over all others in markets where firms are very competitive sorting consumers on the strength on brand preference produces larger price differentials between groups than sorting on the basis of consumers reservation prices for the good when firms sort customers on the basis of strength of brand preference however we find that the output and welfare effects are generally less favorable than when sorting is more closely related to consumers reservation prices

common property institutions and sustainable governance of resources abstract the literature on common property based resource management comprises many important studies that seek to specify the conditions under which groups of users will self organize and sustainably govern resources upon which they depend using three of the more comprehensive such studies and with an extensive review of writings on the commons this paper demonstrates that the enterprise of generating lists of conditions under which commons are governed sustainably is a flawed and impossibly costly research task for a way out the paper examines the relative merits of statistical comparative and case study approaches to studying the commons it ends with a plea for careful research design and sample selection construction of causal mechanisms and a shift toward comparative and statistical rather than single case analyses such steps are necessary for a coherent empirically relevant theory of the commons

biological and economic foundations of renewable resource exploitation abstract a physiologically based population dynamics model of a renewable resource is used as the basis to develop a model of human harvesting the model incorporates developing technology and the effects of market forces on the sustainability of common property resources the bases of the model are analogies between the economics of resource harvesting and allocation by firms and adapted organisms in nature specifically the paper makes the following points 1 it shows how economic and ecological theories may be unified 2 it punctuates the importance of time frame in the two systems evolutionary versus market 3 it shows contrary to prevailing economic wisdom how technological progress may be detrimental to resource preservation 4 it shows how the anticipated effects of high discount rates on resource use can be catastrophic when synergized by progress in harvesting technology 5 it suggests that increases in efficiency of utilization of the harvest encourages higher levels of resource exploitation and 6 it shows the effects of environmental degradation on consumer and resource dynamics the model leads to global implications on the relationship between economic growth and the ability of modern societies to maintain the environment at a sustainable level

the impact of high value markets on smallholder productivity in the ecuadorean sierra a stochastic production frontier approach correcting for selectivity bias abstract this paper uses data from small scale potato farmers in ecuador to examine the impact of the program plataformas de concertacion on productivity growth using propensity score matching combined with a stochastic production frontier model that corrects for sample selection bias we disaggregate the yield growth attributable to the program into technological change tc and technical efficiency te while the results do not exhibit a clear indication of selection bias the analysis does show that on average beneficiaries exhibit higher yields than control farmers given the same input levels but lower te with respect to their own frontiers these results suggest that while the program raised the technology gap in favor of beneficiaries it had a negative effect on te in the short run the latter finding is consistent with the notion that beneficiaries enjoyed a significant change in production techniques but it is very likely that they were still in the learning by doing stages at the time the data was collected in fact the results suggest a fast recovery in te levels on the part of beneficiaries as time with project increased

common property equality and development the appeal of common property ideas may be traced in large measure to the fact that they seem to embody widely held values of equality on the other hand empirical examination of common property institutions reveals that they can coexist with significant inequality in this paper the relationship between common property and equality is examined it is argued that the role of common property can only be understood in the context of the associated private property institutions common property in agriculture is interpreted as part of a system based on small scale peasant proprietorship of arable land common property institutions provide a method of capturing scale economies and thereby increasing the efficiency of small scale proprietorship in competition with large scale production based on wage labor

endogenous cartel formation experimental evidence in a bertrand oligopoly experiment firms choose whether or not to engage in cartel like communication and if so they may get fined by a cartel authority we find that the four firm industries form cartels more often than the duopolies because they gain less from a hysteresis effect after cartel disruption

price discrimination with partial information does it pay off abstract this paper investigates the profit effects of price discrimination when firms have partial information about consumer preferences it shows that price discrimination can boost industry profit if firms have access to the right kind of information about consumer preferences while remaining ignorant of other relevant information

on the existence of optimal stationary equilibria with a fixed supply of fiat money i the case of a single consumer this paper generalizes samuelson s well known analysis concerning the use of fiat or outside money to support pareto optimal allocations in an overlapping generations framework while maintaining an elementary demographic structure butexpanding the list of available commodities in each period we establish the following result if there is a fixed supply of fiat money and individuals are also permitted to issue bonds or inside money then there always exists at least one stationary equilibrium yielding a pareto optimal allocation

customer information sharing among rival firms abstract the recent rapid growth of the internet as a medium of communication and commerce combined with the development of sophisticated software tools are to a large extent responsible for producing a new kind of information databases with detailed records about consumers preferences these databases have become part of a firm s assets and as such they can be sold to third parties this possibility has raised numerous concerns from consumer privacy advocates and regulators who have entered into a heated debate with business groups and industry associations about whether the practice of customer information sharing should be banned regulated or left unchecked this paper investigates the incentives of rival firms to share their customer specific information and evaluates the welfare implications if such exchanges are banned in the context of a perfect price discrimination model

liquidity loanable funds and real activity abstract this paper develops a general equilibrium model of two traditional explanations of the monetary black box linking money and real activity the liquidity effect and the loanable funds effect these effects are modeled with a monetary production economy in which central bank injections of cash are funnelled into the economy through the credit market since only borrowers have direct access to the newly injected cash monetary injections cause nominal interest rates to fall if firms are borrowers then monetary injections also increase current and future real activity

commons regulation and rent seeking behavior the dilemma of pakistan s guzara forests curred over the past 120 years these forests known locally as guzara forests can be characterized as regulated commons the regulation by placing quantitative restrictions on felling aimed at an orderly exploitation of these forests on the surface the failure of regulation seems to be a simple case of enforcement failure however a closer look reveals a fairly complex picture in which factors such as the delineation of property rights and the rent seeking behavior of those subject to regulation as well as of the regulators themselves have contributed to the problems of these forests the evidence presented in this article shows that the way the regulation was devised gave rise to a discordant structure of property rights involving the government and the local inhabitants despite early signals that it could not be effectively enforced no rectifying change was introduced in the structure of rights which has persisted into the postcolonial era indeed there was a reversal of some potentially beneficial institutional changes that had been introduced toward the end of the colonial period while the process of degradation was set in motion by discordances that arose in the process of delineating property rights it is the theory of rentseeking behavior that provides an adequate explanation of its persistence as well as of the subsequent reversals an effective response to the problem of the guzara forests must take account of two additional features in the regulation of these forests first in addition to the common property externality that leads to the tragedy of the commons these forests also display interjurisdictional externality by virtue of their location second a common

the relation between price and marginal cost in u s industry an examination of data on output and labor input reveals that some u s industries have marginal cost well below price the conclusion rests on the finding that cyclical variations in labor input are small compared with variations in output in booms firms produce substantially more output and sell it for a price that exceeds the costs of the added inputs the paper documents the disparity between price and marginal cost where marginal cost is estimated from annual variations in cost it considers a variety of explanations of the findings that are consistent with competition but none is found to be completely plausible

third degree price discrimination in oligopoly all out competition and strategic commitment price discrimination by imperfectly competitive firms may intensify competition leading to lower prices for all consumers the tradeoff of consumer groups welfare that is characteristic of monopolistic discrimination need not arise this escalation of competition may make firms worse off and as a result firms may wish to avoid the discriminatory outcome under conditions similar to those in which unambiguous price and welfare effects may arise unilateral commitments not to price discriminate including the adoption of everyday low pricing or no haggle policies may raise firm profits by softening price competition

on income fluctuations and capital gains with a convex production function a note abstract this note considers the model of optimal consumption and accumulation with nonconvex technology contained in a 1987 paper by sotomayor published in this journal it is shown that the conditions on the utility and production functions imposed in that paper are insufficient to ensure the results claimed about concavity of the value function and other classical properties

monopolistic competition and the effects of aggregate demand how important is monopolistic competition to an understanding of the effects of aggregate demand on output we ask the question at three levels can monopolistic competition by itself explain why aggregate demand movements affect output can it together with other imperfections generate effects of aggregate demand in a way that perfect competition cannot if so can it give an accurate account of the response of the economy to aggregate demand movements the answers are no yes and yes

sticky price and limited participation models of money a comparison abstract we provide new evidence that models of the monetary transmission mechanism should be consistent with at least the following facts after a contractionary monetary policy shock the aggregate price level responds very little aggregate output falls interest rates initially rise real wages decline by a modest amount and profits fall we compare the ability of sticky price and limited participation models with frictionless labor markets to account for these facts the key failing of the sticky price model lies in its counterfactual implications for profits the limited participation model can account for all the above facts but only if one is willing to assume a high labor supply elasticity 2 percent and a high markup 40 percent the shortcomings of both models reflect the absence of labor market frictions such as wage contracts or factor hoarding which dampen movements in the marginal cost of production after a monetary policy shock 1997 elsevier science b v

marginal cost pricing under bounded marginal returns most of the available results on the existence of marginal cost pricing equilibrium are unsatisfactory in that they make a survival assumption that is stated as a condition on the production equilibria of the economy the primary objective of this paper is to provide a relatively elementary existence result that replaces such an assumption with one on the primitive data of the economy the author s main assumption is that no firm faces unbounded increasing returns in the sense that if it uses some input then the rate at which this input can be substituted into an output is finite copyright 1992 by the econometric society

the structure of a contract and the theory of a non exclusive resource the process of arriving at a useful concept of analysis is not only slow and painful but also may go astray and attain nothing useful someone begins with one example or observation followed by a theory which is intuitively plausible a theoretical term associated with a vague concept is coined examples of a seemingly different type emerge which call for another theory the process goes on as examples and theories continue to accumulate the different categories under the same heading of analysis serve only to confuse and each associated theory becomes ad hoc such has been the fate of the concept of externality a more useful approach i think is via contractual conditions the example chosen for illustration is marine fisheries where the fishing right is taken

individual marketing with imperfect targetability our research investigates the competitive ramifications of individual marketing and information management in today s information intensive marketing environments the specific managerial issues we address are as follows first what kinds of incentive environments do competing firms face when they can only target individual customers imperfectly second does the improvement in an industry s targetability intensify price competition in the industry such that all competing firms become worse off third should a firm share its customer knowledge so as to improve its rival s targetability fourth how should an information vendor sell its information that can improve a firm s targetability finally do competing firms have the same incentives to invest in their own targetability to answer those questions we develop a simple model a la narasimhan 1988 in which each of the two competing firms have their own loyal customers and compete for common switchers we assume that each firm can classify its own loyal customers and switchers correctly only with a less than perfect probability this means that each firm s perceived customer segmentation differs from the actual customer segmentation based on their perceived reality these two competing firms engage in price competition as an extension we also allow the competing firms to make their investment decisions to acquire targetability we show that when individual marketing is feasible but imperfect improvements in targetability by either or both competing firms can lead to win win competition for both even if both players behave noncooperatively and the market does not expand win win competition results from the fact that as a firm becomes better at distinguishing its price insensitive loyal customers from the switchers it is motivated to charge a higher price to the former however due to imperfect targetability each firm mistakenly perceives some price sensitive switchers as price insensitive loyal customers and charges them all a higher price these misperceptions thus allow its competitors to acquire those mistargeted customers without lowering their prices and hence reduce the rival firm s incentive to cut prices this effect softens price competition in the market and qualitatively changes the incentive environment for competing firms engaged in individual marketing a prisoner s dilemma occurs only when targetability in a market reaches a sufficiently high level this win win perspective on individual marketing has many managerial implications first we show that superior knowledge of individual customers can be a competitive advantage however this does not mean that a firm should always protect its customer information from its competitors to the contrary we find that competing firms can all benefit from exchanging individual customer information with each other at the nascent stage of individual marketing when firms targetability is low indeed under certain circumstances a firm may even find it profitable to give away this information unilaterally however as individual marketing matures as firms targetability becomes sufficiently high further improvements in targetability will intensify price competition and lead to prisoner s dilemma therefore it is not only prudent politics but also a business imperative for an industry to seize the initiative on the issue of protecting customer privacy so as to ensure win win competition in the industry second we show that the firm with a larger number of loyal customers tends to invest more in targetability when the cost of acquiring targetability is high however the firm with a smaller loyal base can through information investment acquire a higher level of targetability than the firm with a larger loyal base as long as the cost of acquiring targetability is not too high as the cost further decreases competing firms will all have more incentives to increase their investments in targetability until they achieve the highest feasible level third an information vendor should make its information available nonexclusively exclusively when its information is associated with a low high level of targetability when the vendor does sell its information exclusively it should target a firm with a small loyal following if it can impart a high level of targetability to that firm finally our analysis shows that an information intensive environment does not doom small firms in fact individual marketing may provide a good opportunity for a small firm to leapfrog a large firm the key to leapfrogging is a high level of targetability or customer knowledge

marginal versus average cost pricing in the presence of a public monopoly the arrow debreu analysis of decentralized resource allocation in a walrasian economy assumes constant or decreasing returns to scale in production recently several authors have extended this analysis to economies with a public monopoly that is a firm with increasing returns to scale in this literature the salient feature is the characterization of increasing returns to scale technologies as nonconvex production sets so that under this definition both single and multiproduct firms may exhibit increasing returns here our intended model is an economy with a competitive sector consisting of households and firms with convex technologies and a public sector consisting of firms with nonconvex technologies a special case is a single multiproduct firm which produces products for regulated markets with a nonconvex technology and produces products for unregulated markets with a convex technology for example att firms with constant or decreasing returns are maximizing profits the public monopoly is pricing at marginal cost where potential losses are covered by the lump sum taxes and all markets clear an average cost pricing equilibrium is a family of consumption plans production plans and prices such that households are maximizing utility subject to their budget constraint firms with constant or decreasing returns are maximizing profits the public monopoly is pricing at average cost that is breaking even or making zero profits and all markets clear unfortunately all of the extant proofs of existence of a mcp or an acp equilibrium are somewhat technical in nature and lack the transparency of counting equations and unknowns which many economists accept as an intuitive if not formally correct proof of existence in view of this one of the purposes of this paper is to demonstrate the existence of a mcp and an a cp equilibrium in a simple economy with increasing returns where the equilibrium notions are characterized by systems of behavioral equations and market clearing conditions we give both an intuitive proof of existence by counting equations and unknowns and a formal argument that these systems of equations have a solution by use of a simple fixed point argument in addition we review several of the standard partial equilibrium prescriptions for the regulation of a public monopoly and show that in a general equilibrium model they can be interpreted as mcp or a cp equilibria

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

common property and collective action in economic development abstract a fundamental issue in many ldcs is the degree to which natural resource mismanagement is caused by common property arrangements this view has led to widespread attempts to privatize forests rangelands and water resources many of these efforts have failed to stop overuse and have contributed to inequality in resource distribution this paper seriously questions this approach and describes a number of reasons why common property may continue to be both efficient and equitable complementing and combining with private rights in a way consistent with the resource endowments of village economies a theoretical approach is outlined showing that the tragedy of the commons is an unsatisfactory model of common property an alternative model is presented together with a call for research into institutional alternatives in resource management

observed and unobserved preference heterogeneity in brand choice models this paper extends the scanner based choice literature by explicitly incorporating individual level brand preference data we illustrate our model using a unique data set that combines survey and scanner data collected from the same individuals the addition of individual specific brand preference information significantly improves fit and prediction furthermore this observed heterogeneity better explains choice than does unobserved heterogeneity in the standard scanner model s parameters more importantly we find that the standard model underestimates the importance of consumers brand preferences and overestimates both brand loyalties and price sensitivities brand loyalty is overestimated because models without preference information confound state dependence heterogeneity and preference effects price sensitivities are inflated because the average preference based consumer is implicitly assumed to be more willing to switch from his preferred brand than is the real preference based consumer further standard models overestimate the heterogeneity in price and loyalty sensitivities and misidentify both price and loyalty sensitive consumers the managerial implications of our findings and the applicability of our methodology when survey data are collected infrequently and for only a subsample of consumers are pursued we demonstrate that even under these circumstances better populationwide pricing and promotion decisions are identified and more accurate targeting results

raising rivals cost through buyer power we re examine the view that a ban on price discrimination in input markets is particularly desirable in the presence of buyer power this argument crucially depends on an inverse relationship between downstream firms profits and the uniform input price assuming different input efficiencies among downstream firms we derive a necessary and sufficient condition such that a higher input price benefits a subset of relatively efficient downstream firms in such instances consumers may be better off if discriminatory pricing is feasible

linking smallholders to the new agricultural economy the case of the plataformas de concertacion in ecuador abstract this article examines the challenges of linking smallholders to high value food markets by looking at the experience of the plataformas programme in the ecuadorian sierra multiple evaluation methods are employed to ensure identification of program impact the findings suggest that the programme successfully improved the welfare of beneficiary farmers as measured by yields and gross margins these benefits are achieved through improving the efficiency of agricultural production and through selling at higher prices no significant secondary health or environmental effects were found overall the programme provides clear evidence that combining production support with facilitating market access can be successful

targeted pricing and customer data sharing among rivals it is increasingly observable that competitors in different industries share customer data which can be used for targeted pricing we propose a modified hotelling model with two dimensional consumer heterogeneity to analyze the incentives for such sharing and its ensuing welfare effects we show that these incentives depend on the type of customer data and on consumer heterogeneity in the strength of brand preferences only data on consumer transportation cost parameters is shared the incentives to do so are stronger if consumers are relatively homogeneous customer data sharing is most likely to be detrimental to consumer surplus while the effect on social welfare can be positive

small menu costs and large business cycles a macroeconomic model of monopoly i introduction the conflict between modern neoclassical and traditional keynesian theories of the business cycle centers upon the pricing mechanism in neoclassical models prices are fully flexible they represent the continuous optimization of economic agents and the continuous intersection of supply and demand in keynesian models prices are often assumed to be sticky they do not necessarily equilibrate all markets at all times one of the reasons for the resurgence of the equilibrium approach to macroeconomics has been the absence of a theoretical underpinning for this keynesian price stickiness this note shows that sticky prices can be both privately efficient and socially inefficient the business cycle results from the suboptimal adjustment of prices in response to a demand shock to the extent that policy can stabilize aggregate demand it can mitigate the social loss due to this suboptimal adjustment in some keynesian models prices are simply exogenously fixed 2 in others agents must set their prices in advance of the transaction date the act of altering a posted price is certainly costly these costs include such items as printing new catalogs and informing salesmen of the new price yet these menu costs are small and therefore generally perceived as providing only a weak foundation for these fixed price models however this inference is flawed small menu costs can cause large welfare losses the claim that price adjustment costs are small does not rebut the claim that they are central to understanding economic fluctuations

why research partnerships really matter innovation theory institutional arrangements and implications for developing new technology for the poor abstract this paper explores the conceptual basis for existing and emergent institutional patterns in the context of partnership approaches to technology development drawing examples from recent studies of private enterprise activity in india smallholder horticulture it suggests that agricultural innovation as a process involves a wider range of organizational types than the conventional policy focus on public sector research organizations would tend to suggest it uses the concept of a national innovation system to argue that a partnership approach is adopted as a core methodology for engaging science and technology development with the livelihood demands of the poor

tenure issues in higher education the system of tenure that dominates american higher education has long been a source of controversy the institution of tenure has been attacked for entrenching a lazy professoriate more interested in attending faraway conferences and producing unreadable research than in teaching or developing practical insights while on the other hand it has long been defended as an absolute necessity for the defense of open intellectual inquiry the tenure controversy has been sharpened in recent years by several events the end of mandatory retirement which was abolished by federal law effective january 1 1994 has heightened concerns about the productivity and commitment of professors who received tenure long ago and who no longer have the same incentives to invest in long term reputation there is also ongoing concern over the steadily rising cost of higher education which raises the question of what students as well as the taxpayers who support public institutions of higher education are getting for their money 1 the idea that tenure is a wasteful institution for universities runs up against the puzzling fact that the commitment to tenure is one that academic institutions impose on themselves although the american association of university professors aaup provides a powerful lobby in favor of tenure generally colleges and universities most notably private ones are under no legal requirement to observe tenure constraints although as administrators we certainly feel the weight of those constraints our view is that a tenure system in fact provides important benefits to society and to colleges and universities we argue here that the role of tenure is

should mobile marketers collect data other than geo location we take today s mobile marketing data landscape as a starting point and consider a duopoly model of third degree price discrimination in which firms can complement geo location information with data on consumer flexibility of varying quality we show that depending on consumer heterogeneity higher quality flexibility data affect profits according to three different patterns in equilibrium both firms tend to acquire data if the data are of high quality while only one acquires data if the data quality is low firms are likely to gain from additional data if consumers have similar preferences and or when data are precise although social welfare weakly improves consumers can be harmed

on income fluctuations and capital gains with a convex production function abstract this work considers a one good economy the production function is random and not necessarily concave the interest factor is variable and the consumer must maximize asymptotically the expected accumulated and discounted utility one proves that the value function is concave and the limit policy is optimal and is the unique one furthermore if the production function is convex there exist two levels of capital with the property that for initial capitals below the first level the optimal sequence of capitals stays bounded with probability one for initial capitals above the second level the optimal sequence of capitals tends monotonically to infinity for initial capitals between the two levels the optimal sequence of capitals leaves the interval with probability one

price vs quantity competition in a vertically related market this paper demonstrates that the standard conclusions regarding the comparison of cournot and bertrand competition are reversed in a vertically related market with upstream monopoly and trading via two part tariffs in such a market downstream cournot competition yields higher output lower wholesale prices lower final prices higher consumers surplus and higher total welfare than bertrand competition

ejido reforms in mexico conceptual issues and potential outcomes the evolving privatization of the ejido system in mexico represents a challenge to standard economic models of common property regimes these models tend to emphasize human interrelations while discounting the ecological conditions which form the environment for human interactions a risk spreading safety first model capturing interrelationships between nature and humans is developed to analyze the potential implications of mexico s privatization efforts recognizing that the majority of ejido lands are communal not parcelized located primarily in arid areas the model supports the prediction that privatization will occur and be most successful on irrigated ejido lands with modern social and economic infrastructure

on the strategic choice of spatial price policy the strategic incentives with respect to the choice of price policy in spatial competition are analyzed in a duopoly model price discrimination emerges as the unique equilibriu m outcome in games with either simultaneous choice of policy and pric e or sequential choice where firms may commit first to uniform mill p ricing before the actual market stage nevertheless profits may be h igher with uniform pricing the authors models are applied to analyz e some common business practices that arise in geographical pricing like the basing point system and in the pricing of varieties or opti ons from a base product in a product differentiation context copyright 1988 by american economic association

existence of competitive equilibrium under financial constraints and increasing returns abstract this paper studies a factor cost in advance model with increasing returns in production in the model both partial equilibrium and general equilibrium may exist since working capital of firms limit their input demand we provide a sufficient condition for the existence of partial equilibrium of a firm operating on a non convex choice set furthermore we establish the existence and uniqueness of competitive equilibrium in the special case of logarithmic utility

asymmetric spiders supplier heterogeneity and the organization of firms we consider a property rights model of a firm with two heterogeneous suppliers the headquarters determine the firm s organizational structure and we analyze which sourcing mode outsourcing or vertical integration is chosen for which of the asymmetric inputs if suppliers investment choices are strategic complements the firm may keep the technologically more important input inside its boundaries and outsource the less important supplier the firm also tends to keep more sophisticated inputs in house while choosing an external supplier organization for simpler and for low cost components these theoretical predictions are consistent with numerous case studies and recent empirical evidence on the internal organization of firms

the existence of marginal cost pricing equilibria with increasing returns the competitive mechanism fails in economies with nonconvex technologies competitive equilibria do not exist in general and pareto optima are no longer equilibria the search for alternative mechanisms in economies with increasing returns was developed and resulted in the principle of marginal cost pricing modern economic theory has returned to the foundations of marginal cost pricing theory in a general equilibrium framework the existence of equilibria with marginal cost pricing in economies with increasing returns and a more general type of nonconvexities is analyzed in this paper the case of differentiable economies where all production sets are limited by smooth surfaces is developed the principles of the proof are also extended to the nondifferentiable case