market and committee based mechanisms in the creation and diffusion of global industry standards the case of mobile communication abstract the existing literature on industrial standards almost exclusively focuses on pure market competition this paper shows how and why both governments and firms have had a strong effect on the creation of global standards in the mobile communication industry through a hybrid system of committees and markets according to our model governments can and did influence forecasted and actual installed base for systems in the mobile communications industry through their influence on product demand e g by determining the amount of competition in the market and the number of and degree of openness in the standards in particular the choice of a single standard by either a large single country or region dramatically and instantaneously increased the forecast for the standard s domestic installed base thus causing other countries to also adopt the standard

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

catch up cycles and changes in industrial leadership windows of opportunity and responses of firms and countries in the evolution of sectoral systems this study proposes a framework that aims to explain why successive changes in industry leadership called also the catch up cycle occur over time in a sector in catch up cycles latecomer firms and countries emerge as international leaders whereas incumbents lose their previous positions new leaders are then dethroned by newcomers to identify factors at the base of catch up cycles this article adopts a sectoral system framework and identifies windows of opportunity that may emerge during the long run evolution of an industry this study proposes three windows related to the specific dimensions of a sectoral system one dimension is related to changes in knowledge and technology the second dimension pertains to changes in demand and the third includes changes in institutions and public policy the combination of the opening of a window technological demand or institutional policy and the responses of firms and other components of the sectoral system of the latecomer and incumbent countries determines changes in industrial leadership and catch up sectors differ according to the type of windows that may open and the responses of firms and other components of systems empirical evidence of catch up cycles is presented from six sectors namely mobile phones cameras semiconductors steel mid sized jets and wines

sticks and carrots two incentive mechanisms supporting intra group cooperation abstract in this note we introduce two distinct incentive mechanisms that support dynamic intra group cooperation in the context of prisoner s dilemma payoffs rewards for cooperating and punishments for defection where the rewarding or punishing party may be outside the relationship

successive changes in leadership in the worldwide mobile phone industry the role of windows of opportunity and firms competitive action abstract we take a historical perspective to gain insight into the determinants of changes in industrial leadership in the global mobile phone industry from the beginning of the 1980s to 2012 the theoretical foundation of our analysis is a the concept of windows of opportunity proposed by industry evolution studies i e changes in the technological regulatory and consumer demand environment offering latecomers the opportunity to overtake leading rivals and b the concept of action aggressiveness proposed by the competitive dynamics literature i e the extent to which a firm forcefully takes a large number and a wide variety of actions to outperform its competitors we show that the potential for leadership changes is greater for firms that are able to undertake aggressive competitive actions at the time when significant windows of opportunity are open in particular we analyze the determinants of two leadership changes 1 in the second half of the 1990s when the us giant motorola lost its number one position dethroned by its finnish competitor nokia and 2 in the first half of the 2010s when samsung of south korea caught up with nokia

technological regimes catching up and leapfrogging findings from the korean industries abstract this paper examines the experiences of selected industries in korea to identify the stylized facts in the process of technological capability building and thereby to sort out the conditions for the catching up to occur to explain the process we have built a model of technological and market catching up a special attention has been given to the question of whether there has been a case of leapfrogging in any industry in korea and if so what are the conditions for its incidence in our framework we first measure the degree of catching up in terms of market shares in the world then we focus on catching up in technological capabilities in explaining the different record and prospects of korean industries in market catching up in the model technological capability is determined as a function of both technological effort and the existing knowledge base as determinants of technological effort we look at the technological regimes of the industries such as cumulativeness of technical advances fluidity predictability of technological trajectory and the properties of knowledge base using this model we explain the different technological evolution of the selected industries in korea including the d ram automobile mobile phone consumer electronics personal computer and machine tool industries we find three different patterns of catching ups path creating catching up cdma mobile phone path skipping catching up d ram and automobile and path following catching up consumer electronics personal computers and machine tools we interpret the first two case of catching up as leapfrogging unlike the argument by perez and soete perez c soete l 1988 catching up in technology entry barriers and windows of opportunity in dosi et al eds technical change and economic theory pinter publishers london we find that important r d projects except automobiles where only private r d was involved involved both private and public capacities and that entry was not driven by endogenous generation of knowledge and skills but by collaboration with foreign companies

public policy and catching up by developing countries in global industries a simulation model this paper examines the effects of different public policies strengthening capability building favouring firms learning protectionism and support of entry of new domestic firms on the catch up of a latecomer with respect to an incumbent country in changing and uncertain technological environments the effects of these policies are analysed with a simulation model first separately and then jointly to assess possible complementarities we reach several results first we confirm that capability building and firms learning are important drivers of catch up second we find that when a large technological discontinuity takes place entry support favours catch up while protectionism has the opposite effect protectionism favours catch up only when no technological discontinuity opens up third we find that depending on the technological conditions different policy complementarities exist therefore different policy mixes should be at the base of a country catch up strategy these results add to the previous literature on public policy and catching up by developing countries in an industry by distinguishing the different effects of various types of public policy and relating them to the technological conditions that are present in an industry

equilibrium binding agreements abstract we study equilibrium binding agreements the coalition structures that form under such agreements and the efficiency of the outcomes that result we analyze such agreements in a context where the payoff to each player depends on the actions of all other players thus a game in strategic form is a natural starting point unlike the device of a characteristic function explicit attention is paid to the behavior of the complementary set of players when a coalition blocks a proposed agreement a solution concept and its applications are discussed journal of economic literature classification numbers c70 c71

a one stage model of link formation and payoff division abstract in this paper we introduce a strategic form model in which cooperation structures and divisions of the payoffs are determined simultaneously we analyze the cooperation structures and payoff divisions that result according to nash equilibria strong nash equilibria and coalition proof nash equilibria we find that no cycle will be formed if a player claims a positive amount for the formation of one of its links and that a player does not necessarily profit from a central position in a cooperation structure journal of economic literature classification numbers c71 c72

strategy proofness and essentially single valued cores revisited abstract we consider general allocation problems with indivisibilities where agents preferences possibly exhibit externalities in such contexts many different core notions were proposed one is the individually rational core ir core whereby blocking is only allowed via allocations where the non blocking agents receive their endowments we show that if there exists an allocation rule satisfying individual rationality efficiency and strategy proofness then for any problem for which the ir core is non empty the allocation rule must choose an ir core allocation and all agents are indifferent between all allocations in the ir core we further show that the result cannot be generalized to supersets of the ir core we apply our result to housing markets coalition formation and networks

industrialization convergence and patterns of growth the long run behavior of national growth rates has long been of great interest because it sheds light on future income disparities across countries as well as the prospective income of individual countries recently the interest has been further stimulated for the neoclassical growth model 6 31 and new endogenous growth models 16 26 yield sharply different predictions while the neoclassical growth model predicts that countries with similar preferences and technology will converge to similar levels of per capita income endogenous growth models predict that there will be no such tendency in this regard a substantial body of empirical study has examined whether the regression of the growth rate on the level of income per capita indeed produces a negative coefficient as predicted by the neoclassical model evidence is mixed however in particular the regression results are very sensitive to the selection of countries typically the results for relatively developed countries are consistent with the convergence hypothesis 3 11 but the results for the samples including less developed countries are rather in conflict with the convergence argument 9 27 the goals of this paper are 1 to document a stylized nonlinear humped pattern in growth 2 to demonstrate how an explicit recognition of this pattern helps reconcile the conflicting results on convergence and the conditional convergence result below and 3 to suggest a potential explanation for the humped pattern from a view of industrialization section ii shows that there exists an economically and statistically significant hump in the growth rate of postwar cross country data on average middle income countries grew the fastest high income countries the next and low income countries the slowest thus a negative correlation between growth rates and income per capita is observed when low income countries are excluded from the sample but no such correlation is found for a larger class of countries to find the factors that can explain the fast growth of middle income countries this paper first considers the most widely used three explanatory variables in growth regressions the investment to gdp ratio the percentage of age group enrolled in secondary education and the rate of population growth both parametric and nonparametric analyses show that these variables cannot explain the humped pattern middle income countries grew far faster than could be explained by

participative democracy and local environmental issues the present paper deals with the management of environmental quality at the level of a city more precisely we propose two different contractualisms among citizens that allow them to reduce the polluting emissions caused by their consumption of both a private and a collective good in the first contractualism the mayor proposes to citizens to establish neighbourhood committees they have the responsibility of defining the total amount of polluting emission by private and public transportation means in their neighbourhood it comes out that the mediation of the neighbourhood committees brings out a lower total pollution than in the case where each individual citizen acts on his own interest however the emission level brought out by the neighbourhood committees is not pareto optimal on the other hand extending the first coalitional game by a supplementary stage focused on bargaining between the neighbourhood committees allows us to define a participative democracy procedure this two stage procedure brings about a pareto optimal pollution level 2008 elsevier b v all rights reserved

coalition formation as a dynamic process abstract we study coalition formation as an ongoing dynamic process with payoffs generated as coalitions form disintegrate or regroup a process of coalition formation pcf is an equilibrium if a coalitional move to some other state can be justified by the expectation of higher future value compared to inaction this future value in turn is endogenous it depends on coalitional movements at each node we study existence of equilibrium pcfs we connect deterministic equilibrium pcfs with unique absorbing state to the core and equilibrium pcfs with multiple absorbing states to the largest consistent set in addition we study cyclical as well as stochastic equilibrium pcfs

strategy proofness and essentially single valued cores in this paper we search for solutions to various classes of allocation problems we hand results pertaining to housing markets are much more encouraging roth 1982b shows that in the context of housing markets the core correspondence which is shown to be single valued by roth and postlewaite 1977 is strategy proof moreover ma 1994 shows that it is the only solution that is pareto efficient individually rational and strategy proof

explaining divergence in catching up in pharma between india and brazil using the nsi framework since the mid twentieth century the national objective of india and brazil has been to develop industrial capabilities in essential sectors such as pharmaceuticals at the outset they shared some common features a considerable period of lax intellectual property rights regimes a large internal market and a reasonably strong cadre of scientists and engineers however over sixty years india has had much more success in building indigenous capabilities in pharmaceuticals than brazil at least to date why in exploring the answer to this question we show that in both countries the design of state policy played a crucial role and the endogenous responses in the national system of innovation consisted of two parts on the one hand most of the time the predicted and desired outcome was partially realized and on the other hand there were invariably other unpredicted responses that emerged the latter unexpected elements which were specific to the two countries pushed them along distinctive trajectories

climate clubs overcoming free riding in international climate policy notwithstanding great progress in scientific and economic under standing of climate change it has proven difficult to forge inter national agreements because of free riding as seen in the defunct kyoto protocol this study examines the club as a model for international climate policy based on economic theory and empirical modeling it finds that without sanctions against non participants there are no stable coalitions other than those with minimal abatement by contrast a regime with small trade penalties on non participants a climate club can induce a large stable coalition with high levels of abatement jel q54 q58 k32 k33

endogenous formation of coalitions the formation of coalitions is a fundamental problem in game theory by a coalition is meant a group of players e g economic or political agents which decide to act together as one unit relative to the rest of the players this includes the instances of syndicates unions cartels blocks political parties parliamentary coalitions etc we would like to emphasize that forming a coalition does not eliminate the individual players as decision makers in all interactions with the other players coalition members act as one unit it may be useful to think of a representative agent taking their place 2 however this arrangement will continue only as long as each player finds it desirable to act this way further bargaining occurs among the members of each coalition on how to divide what they obtained together thus the existence of coalitions implies that the interactions among the players will be conducted on two levels first among the coalitions and second within each coalition most of the existing models in economics and game theory assume that the coalition structure is given exogenously instead we try here to obtain it as an endogenous outcome of our model namely we want to be able to predict which coalitions will in fact form in each given situation 3 our theory combines two kinds of game theoretic concepts value and stability the basic idea is first to evaluate the players prospects in the various coalition structures and then based on these values to find which ones are stable we will call this value coalition structure value or cs value for short the reason we are considering coalition structures i e partitions of the set of players into disjoint coalitions rather than just coalitions is that in general players may find it to their advantage to join forces in some situations and to act separately in others all depending on the way the other participants are organized this implies that both the value and the stability concepts should depend on the entire coalition structure the cs value we analyze in this paper was first developed by owen 7

endogenous trading bloc formation in a north south global economy the majority of the trading blocs to date are between similar countries rather than between developed and developing countries this paper provides a rationale for why trading blocs among similar countries may arise as an equilibrium phenomenon it develops a model of an asymmetric world economy in which there are at least four countries the countries are differentiated with respect to their market size and they choose their trading partners in the coalition proof nash equilibrium either there is global free trade or free trade areas are formed among similar countries la plupart des blocs commerciaux sont formes de pays similaires plutot que de pays developpes et en voie de developpement ce memoire explique pourquoi ce genre de resultat peut emerger en tant que phenomene d equilibre on developpe un modele d economie mondiale asymetrique dans lequel il y a au moins quatre pays les pays different par la taille et la nature de leurs marches et choisissent leurs partenaires commerciaux dans un equilibre libre de coalitions a la nash ou bien il existe un regime global de libre echange ou bien des zones de libre echange entre pays similaires emergent

exchange of indivisible goods and indifferences the top trading absorbing sets mechanisms there is a wide range of economic problems that involve the exchange of indivisible goods with no monetary transfers starting from the housing market model of the seminal paper by shapley and scarf 1974 to problems such as the kidney exchange or the school choice problem the classical solution to many of these models is to apply a mechanism called top trading cycles attributed to david gale which satisfies good properties for the case of strict preferences in this paper we propose a family of mechanisms called top trading absorbing sets mechanisms which generalize the top trading cycles to the general case in which individuals are allowed to report indifferences while preserving a maximal possible set of its desirable properties

public policies and the art of catching up matching the historical evidence with a multicountry agent based model in this paper we study the effects of industrial policies on international convergence using a multi country agent based model which builds upon dosi et al 2019b the model features a group of microfounded economies with evolving industries populated by heterogeneous firms that compete in international markets in each country technological change is driven by firms activities of search and innovation while aggregate demand formation and distribution follows keynesian dynamics interactions among countries take place via trade flows and international technological imitation we employ the model to assess the different strategies that laggard countries can adopt to catch up with leaders market friendly policies industrial policies targeting the development of firms capabilities and rd protectionist policies focusing on tariffs only we find that markets cannot do the magic in absence of government interventions laggards will continue to fall behind on the contrary industrial policies can successfully drive international convergence among leaders and laggards while protectionism alone is not necessary to support catching up and countries get stuck in a sort of middle income trap finally in a global trade war where developed economies impose retaliatory tariffs both laggards and leaders are worse off and world productivity growth slows down

on coalitional semivalues in this paper we propose a characterization of the coalitional value for transferable utility games owen 1977 and we define and study coalitional semivalues which are generalizations of semivalues dubey neyman and weber 1981

linking the technological regime to the technological catch up analyzing korea and taiwan using the us patent data this article examines the relationship between the technological regime and the technological catch up using us patent data this study first extends the notion of technological regimes as more appropriate for the catching up context before it goes on to develop the quantitative expressions of technological regime variables then it investigates in which technological classes technological catch up tends either to occur or not to occur and what affects the speed of the catch up this study has found that catching up is more likely to happen in those technological classes with shorter technological cycle time and more initial stock of knowledge and that among those candidate classes the actual speed of catch up varies depending on appropriability and knowledge accessibility this implies that the factors that determine the occurrence of catch up and the speed of catch up are different comparing the level of technological capability of the advanced and catching up economies the article has found that catching up countries tend to achieve high levels in the technological sectors with shorter cycle time easier access to knowledge and higher appropriability whereas the advanced countries show the exactly opposite performances the study also confirms the organizational selection hypothesis such that the firms of different organizations and strategies show divergent degrees of fitness in the different environment or technological regime we find that the korean firms find themselves more fitted to technological regimes featured by low appropriability and high cumulativeness persistence whereas the taiwanese firms are more fitted to technological regimes featured by high appropriability and low cumulativeness persistence our findings are consistent with the following characterization of the firms in korea and taiwan the korean firms dominated by the so called chaebols especially in patent registrations are characterized as less flexible large diversified conglomerates and pursing more independent r d and learning strategies the taiwanese firms are characterized as more flexible network based specialized firms and pursuing more cooperative r d and learning strategies copyright 2006 oxford university press

vertical integration with endogenous contract leadership stability and fair profit allocation abstract this paper studies vertical integration in serial supply chains with a wholesale price contract we consider a business environment where the contracting leader may be endogenously changed before and after forming the integration a cooperative game is formulated to normatively analyze the stable and fair profit allocations under the grand coalition in such an environment our main result demonstrates that vertical integration is stable when all members are pessimistic in the sense that they are sure that they will not become the contracting leader if they deviate from the grand coalition we find that in this case the grand coalition s profit must be allocated more to the retailer and the members with higher costs nevertheless we also show the conditions under which the upstream manufacturer can have strong power as in traditional supply chains

exchange in a general market with indivisible goods abstract we show how to restrict trades in exchange markets with heterogeneous indivisible goods so that the resulting restricted exchange markets the fixed deal exchange markets have a unique core allocation our results on fixed deal exchange markets generalize classical results on the shapley scarf housing market in which each agent owns one good only furthermore we define the class of fixed deal exchange rules for general exchange markets and prove that these are the only exchange rules that satisfy strategyproofness individual rationality and a weak form of efficiency

on the emergence of an mfn club equal treatment in an unequal world motivated by gatt we endogenize the formation of a club whose members have to abide by the mfn principle of non discrimination the underlying model is that of oligopolistic intraindustry trade while an mfn club does not alter average tariff levels across countries it increases aggregate world welfare makes non members worse off and can immiserize its high cost members these results imply that i core wto rules such as mfn are valuable even if multilateral negotiations deliver limited trade liberalization and ii the distributional effects of mfn maybe one reason why developing countries have been granted special and differential treatment at the wto jel classification f13 f10 f15

a competitive partnership formation process a group of heterogeneous agents may form partnerships in pairs all single agents as well as all partnerships generate values if two agents choose to cooperate they need to specify how to split their joint value among one another in equilibrium which may or may not exist no agents have incentives to break up any existing partnerships or form new partnerships this paper proposes a dynamic competitive adjustment process that always either finds an equilibrium or exclusively disproves the existence of any equilibrium in finitely many steps when an equilibrium exists partnership and revenue distribution will be automatically and endogenously determined by the process moreover several fundamental properties of the equilibrium solution and the model are derived

sectoral systems of innovation and production the concept sectoral system of innovation and production provides a multidimensional integrated and dynamic view of sectors it is proposed that a sectoral system is a set of products and the set of agents carrying out market and non market interactions for the creation production and sale of those products a sectoral systems has a specific knowledge base technologies inputs and demand agents are individuals and organizations at various levels of aggregation they interact through processes of communication exchange co operation competition and command and these interactions are shaped by institutions a sectoral system undergoes change and transformation through the co evolution of its various elements 2002 elsevier science b v all rights reserved

an alternative interpretation of conditional convergence results this paper focuses on the endogeneity of the investment to gdp ratio and the population growth rate two of the most frequently used control variables in cross country growth regressions for the convergence test the summers heston data 1988 show that the former rises and the latter declines with income growth when the indirect yet endogenous effects through these control variables are taken into account and simultaneity bias is corrected relatively high income countries appear to grow faster than low income countries this interpretation sharply contrasts with the conditional convergence interpretation based on the assumption of exogenous control variables copyright 1996 by ohio state university press

firm organization industrial structure and technological innovation abstract the formal and informal structures of firms and their external linkages have an important bearing on the rate and direction of innovation this paper explores the properties of different types of firms with respect to the generation of new technology various archetypes are recognized and an effort is made to match organization structure to the type of innovation the framework is relevant to technology and competition policy as it broadens the framework economists use to identify environments that assist innovation

quantitative overeducation and cooperative game theory abstract overeducation is an empirical phenomenon in two dimensions qualitative and quantitative quantitative overeducation addresses a firm s decision to train more employees than needed one explanation for this decision is modeled in this article that of classical bargaining power the main idea is that after investing in human capital the employer uses employees outside the firm to raise the bargaining power when he negotiates with the employees within the firm on how to share the profit of the firm to model this we use cooperative game theory for the first time the labor market is modeled by a coalition structure and the payoffs are determined by the value casajus 2009

public investment and economic growth this article uses an extension of mankiw romer and weil s augmented solow swan growth model to examine whether public investment has a distinct role as a determinant of economic growth it considers both the predictions of the model in steady state and in transition to steady state for the steady state model there is no significant effect from public investment on the level of output per worker using standard ordinary least squares ols methods for the transition model it observes a significant contribution to economic growth from public investment when instrumental variables methods are used however the associated standard errors are much larger and the contribution of public investment is statistically insignificant

incentive compatibility in a market with indivisible goods abstract in a market in which each trader s initial endowment is one unit of an indivisible good there exists an incentive compatible procedure for reaching a competitive allocation this contrasts with some recent results for similar problems

sharing the surplus an extension of the shapley value for environments with externalities economic activities both on the macro and micro level often entail wide spread externalities this in turn leads to disputes regarding the compensation levels to the various parties affected we propose a method of deciding upon the distribution of the gains costs of cooperation in the presence of externalities when forming the grand coalition is efficient we show that any sharing rule satisfying efficiency linearity dummy player and a strong symmetry axioms can be obtained through an average game adding an additional axiom we identify one unique rule satisfying these properties