women s suffrage political responsiveness and child survival in american history women s choices appear to emphasize child welfare more than those of men this paper presents new evidence on how suffrage rights for american women helped children to benefit from the scientific breakthroughs of the bacteriological revolution consistent with standard models of electoral competition suffrage laws were followed by immediate shifts in legislative behavior and large sudden increases in local public health spending this growth in public health spending fueled large scale door to door hygiene campaigns and child mortality declined by 8 15 or 20 000 annual child deaths nationwide as cause specific reductions occurred exclusively among infectious childhood killers sensitive to hygienic conditions

money supply announcements and real interest rates abstract current research on the relation between money and asset prices focuses on the reaction of asset prices to money supply announcements in this paper we use the real interest observed in the u k index linked bond market and the nominal interest rate observed in the nominal bond market to study the reaction of real interest rates and expected inflation to money surprises we find that monetary surprises have a strong effect on inflationary expectations we also find some evidence of a positive reaction of long term real interest rates to the m3 announcement

advertising random sales response and brand competition some theoretical and econometric implications this paper examines implications for the firm s advertising decisions under conditions of random sales response to advertising within the context of multibrand competition the competitive environment assumed is characterized not only by interactions among different companies within a given industry but also by inter actions among different brands produced by a single company a theoretical model is first formulated to examine the effect of uncertainty in the sales advertising relations and that of the firm s attitude toward risk on its advertising the theoretical results are then assessed by estimating an econometric model using the cigarette data copyright 1987 by the university of chicago

the productivity of working hours observations on munition workers most of them women are organised to examine the relationship between their output and their working hours the relationship is non linear below an hour s threshold output is proportional to hours above a threshold output rises at a decreasing rate as hours increase implications of this finding for the estimation of labour supply functions are considered the findings also link up with the current research on the effects of long working hours on accidents and injuries

closed loop advertising strategies in a duopoly using the lanchester model to describe the dynamics of the market where two firms compete for customers by advertising we solve the problem of determining an optimal advertising strategy for maximum discounted profits we develop both open and closed loop strategies and explain the relationship between them using a new mathematical approach we prove that our closed loop solution is a global nash equilibrium the closed loop strategy is time variant and depends linearly on the actual market share the time variant coefficient incorporates the discount factor its computation requires the solution of a backward differential equation and a set of two nonlinear differential equations for an initial value problem the closed loop advertising expenditures are proportional to the open loop advertising expenditures and to the square of the competitor s actual market share this provides a very practical adaptive control rule that allows the manager to adjust the actual advertising expenditure and to deviate f

why interest rates react to money announcements an explanation from the foreign exchange market abstract when the fed announces a money supply greater than had been expected interest rates rise why one explanation is that the market raises its estimate of the future rates of money growth and inflation and bids up nominal interest rates we offer contrary evidence on such days the dollar appreciates not depreciates an alternative explanation is that the market perceives the change in the money stock as a transitory fluctuation that the fed will reverse in the future the anticipated future tightening raises today s real interest rate causes a capital inflow and appreciates the dollar the result in fact observed

dynamic advertising and pricing in an oligopology a nash equilibrium approach a general dynamic oligopolistic price advertising model is formulated and open loop nash solutions are derived as a main result a generalisation of the well known dorfman steiner theorem to heterogenous oligopoly markets is presented furthermore a detailed discussion of long run equilibrium solutions is given for an important special case of the general model formulation it is shown that the optimal advertising policies are constant over time and constitute degenerated feedback solutions

selfish bakers caring nurses a model of work motivation abstract work contributes to people s self image in important ways we propose a model in which effort is unobservable and where individuals have a preference for being important to others this gives the following predictions 1 if a worker s effort is paid by his marginal productivity bakers effort is just like in the standard model 2 if a worker s wage is unaffected by his effort nurses more effort is provided than in the standard model 3 to prevent that shirkers become nurses nurses wages must be kept strictly lower than bakers income at this wage level there will be too few nurses 4 overinvestment in nursing equipment can be justified as a means to attract motivated nurses 5 even with full income compensation both nurses and bakers may experience a net utility loss when losing their job 6 similarly both nurses and bakers may prefer work to welfare even with full income compensation

dynamic promotional budgeting and media allocation this paper address the managerial problem of promotional budgeting and media allocation in a dynamic competitive framework we develop an extended lanchester model that is able to analyze multi instrument promotion in an oligopoly the competitors each with a different initial position as well as economic value of the market share and communication effectiveness adopt the strategy of maximizing their net present value of discounted profits taking the other players actions into account the resulting differential game is solved using a novel method providing both the open loop strategy and the closed loop strategy for each firm we prove that our solution is a global nash equilibrium we develop a simple formula that when applied to an open loop strategy readily generates a feedback strategy we also show that for both open and closed loop strategies the proportion of the budget allocated to each instrument is invariant with time and depends only on instrument effectiveness we illustrate the results and provide several managerial rules and discuss their application in practice finally we show that our model favorably compares with other model in the literature in explaining actual data

default premiums in commodity markets theory and evidence we model the effect of nonperformance risk on forward and futures pricing and look for evidence of nonperformance risk in precious metals futures prices from the hunt brothers episode changes in default premiums are measured and related to the sequence of events in the metals markets during this period results suggest first that ex ante costs of nonperformance can be a significant priced factor in commodity markets and second that the arrival of new information is often associated with changes in these costs the evidence has implications for both theoretical and empirical research on commodity markets organized commodity markets offer traders an efficient medium in which to execute their hedging and speculative strategies in particular the markets have developed mechanisms that reduce the costs of nonperformance which would be substantial in the absence of an organized exchange devices such as margin requirements position limits daily marking to market price limit moves and the clearinghouse reduce the expected costs of distress and default in commodity markets while organized exchanges greatly reduce expected costs of nonperformance they do not eliminate such costs throughout the history of organized futures trading there have been many instances of markets collapsing or coming to the brink of collapse after a period of unusual trading activity the most prominent example in recent times is the near collapse of the new

the structure of equilibria in market share attraction models a market share attraction model of competitive effort allocation by two firms is formulated as a constant sum two person game the dependence of optimal competitive effort allocations on factors such as gross profit margins relative effectiveness of effort and attraction elasticity of effort is studied two versions of the model are developed in the first version effort budgets of both competitors are exogenously fixed in the second the competitors each choose both budget levels and allocations in each version of the model an important function of the parameters called the competitive advantage ratio indicates when it is optimal to either increase or decrease effort allocated in a market in response to changes in various measures of effectiveness implications of differences in the cost associated with each competitor s budget on equilibrium allocations are derived

how important is pro social behaviour in the delivery of public services a number of papers have suggested that pro social behaviour in the workplace may be sensitive to the institutional environment but there is little empirical research that attempts to test this directly using data on worker behaviour this is the aim of this paper we show that individuals in the non profit sector are significantly more likely to do unpaid overtime than those in the for profit sector however we find no evidence of adjustment along either the extensive or intensive margins when individuals change sectors the results of our analysis therefore point to selection and we find supporting evidence that individuals do self select on the basis of their propensity to donate labour

can futures market data be used to understand the behavior of real interest rates this paper examines whether futures market data can be used to understand the behavior of real interest rates several ways of examining the data indicate that futures market data are not particularly informative about real interest rates not only does this evidence cast some doubt on results in previous research that make use of futures market data to draw inferences about real interest rates but it also indicates that future research on real interest rates may need to turn to a different line of attack understanding the behavior of real interest rates is a central issue in financial economics in previous research on this topic several approaches have been used to measure real interest rates in one approach real interest rates have been calculated by subtracting survey data on inflation expectations such as the livingston data from nominal interest rates the problem with survey based measures of real interest rates is that they are only as good as the survey measure of inflation expectations and there may be little incentive for the survey respondents to answer accurately an even more telling criticism of survey based measures often ignored in the literature is that the behavior of market expectations in driven by economic agents ai the margin who are eliminating unexploited profit opportunities market expectations are unlikely therefore to be well measured by the average expectations of survey respondents 2 because of doubts about survey based measures of real interest rates other

a differential game model of a market of substitutable products abstract modern industrial organization often classifies groups of differentiated products that are fairly good substitutes to belong to the same market this paper develops a differential game model of a market of substitutable products to avoid the problem of time inconsistency we solve a feedback nash equilibrium solution for the game a set of state dependent equilibrium strategies is derived extensions of the model to a stochastic formulation and to an infinite time horizon specification are also provided

money bonds and foreign exchange in the theory of finance capital markets provide securities which allow the ownership of productive assets to be allocated among investors according to their willingness to bear risk in exchange for return and independently of their tastes for the productive services provided by the assets this paper uses the theory of finance to study the role of money as a productive asset and the transformation of money into a portfolio asset true to its purpose the capital market provides securities nominal bonds that allow an allocation of the current services of the money supply according to its current productivity and without regard for its future purchasing power risk and an allocation of the future purchasing power risk of the money supply according to the willingness of investors to bear this risk in exchange for return and without regard for investor needs for the future transactions services of money in open

money supply announcements and interest rates does monetary policy matter abstract most current explanations of the effect of money supply announcements on the rate of interest center on central bank policy this paper analyzes a flexible price macroeconomic model where present and future monetary policy have no influence on either interest rates or real output but monetary data signal information about real economic activity which influences both short and long term real rates of interest the magnitude of the interest rate response is shown to depend on the difference in the income elasticities of currency and deposit demand and the relative size of monetary and real disturbances to the economy

product assortment in a triopolgy producers of super premium ice cream such as haagen dazs offer a smaller assortment of flavors than the producers of lesser quality ice cream examples of this phenomenon can be found in other industries as well in many industries the producers of higher quality products offer a smaller assortment of flavors colors sizes patterns textures fragrances tones styles models designs types or other options this paper explores when and why producers of super premium products should find it profitable to offer a smaller assortment than the producers of nonpremium products we derive a nash equilibrium both on prices and product assortments for a triopoly at the nash equilibrium we show that additional product quality increased consumer price sensitivity and greater assortment costs discourages product assortment we also show that a larger market potential greater competitive costs and sharper competition encourage more assortment by the super premium producer

an equilibrium analysis of defensive response to entry using a coupled response function model we determine the optimal response to competitive entry in a market characterized by a market share attraction model the response of an incumbent is limited to changes in prices advertising and distribution expenditures brand positions are assumed to be fixed we also assume that the entrant s position is chosen exogenously and that the sales potential of the market is constant after proving the existence of a unique nash equilibrium we show that the optimal response depends on the relative market share of the incumbents the response by nondominant brands with market shares less than 50 mirrors the prediction by decoupled response function models reduce price advertising and distribution spending for the dominant brand having a market share of 50 the response is to reduce price and increase marketing spending this finding explains previous empirical results that could not be addressed by the decoupled models

modeling response to advertising and pricing changes for v 8 cocktail vegetable juice this paper is based on a series of studies undertaken for v 8 cocktail vegetable juice over a five year period the studies were a consequence of management questions regarding the effectiveness of a new advertising campaign the best media mix for this campaign and the apparent wear out of the advertising copy the studies included controlled experimentation estimation of advertising response functions and exploration of price sensitivity following major price increases by v 8 it was found that the short term response to advertising was s shaped and that the new creative approach rather than expenditure levels alone accounted for by far the largest component of the impact of advertising on sales it was also found that for a short period following the major price increases v 8 became extremely price sensitive however after about six months the marginal impact of price returned to historical levels the application of results at campbell soup company their relationship to the literature and their implications for both researchers and practitioners are discussed

on modeling the advertising operations interface under asymmetric competition abstract using a market share attraction structure of advertising competition and following a supermodular game approach this article demonstrates for an asymmetric oligopoly the directional impact of changes in model parameters on the marketing controlled variables of all rivals advertising budgets and the operations controlled variables of all rivals ordered quantities importantly the various changes are examined analytically empirically and numerically in both non dominated and dominated asymmetric oligopolies in this regard the results indicate that firms in a dominated oligopoly one firm of market share larger than or equal to 50 behave differently compared to firms in a non dominated oligopoly each firm of market share less than 50 in response to changes in model parameters furthermore changes in model parameters are investigated in terms of their relative influential impact on a variety of equilibrium measures in this regard the findings indicate that for the analyzed model the marketing parameters exert much more influence on the equilibrium measures than the operations parameters additionally a change in the mode of competition from non cooperation oligopoly to cooperation joint ownership dictates that strong asymmetric firms of favorable marketing and operations parameters continue advertising but at lower levels and weak asymmetric firms of less favorable parameters cease advertising altogether

differential game models in management science abstract this paper reviews a number of differential games applications to management science and operations research problems published with a few exceptions during the last decade the purpose of the article is to provide the reader with an up to date account of the state of the art within this field after having stated in an introduction the general differential games framework as well as some conceptual problems we proceed to review the models which have been divided into the following functional areas investment consumption and employment production inventories and maintenance marketing advertising pricing and rd bargaining natural resources and pollution the survey concludes with some remarks on applicability solvability and directions for future research

optimal pricing and advertising in a durable good duopoly abstract this paper analyzes dynamic advertising and pricing policies in a durable good duopoly the proposed infinite horizon model while general enough to capture dynamic price and advertising interactions in a competitive setting also permits closed form solutions we use differential game theory to analyze two different demand specifications linear demand and isoelastic demand for symmetric and asymmetric competitors we find that the optimal price is constant and does not vary with cumulative sales while the optimal advertising is decreasing with cumulative sales comparative statics for the results are presented

the reaction of stock prices to unanticipated changes in money a note much of the past work on the money stock market relationship centered on the question of whether money is a leading indicator of stock prices studies by sprinkel 22 homa and jaffee 10 and hamburger and kochin 8 supported the view that past increases in money lead to increases in equity prices the implication of this work was that investors could earn above normal proflts by using a trading strategy based on the observed behavior of the money stock this contradicts the efficient markets hypothesis which asserts that current asset prices reflect all available information so that no such trading strategy can exist subsequent research by cooper 3 pesando 17 rozeff 21 and rogalski and vinso 19 has shown that past money changes do not contain predictive information on stock prices upholding the efficient markets view this paper investigates whether the response of common stock prices to weekly money announcements is consistent with the efflcient markets hypothesis unlike the above research therefore the focus is on the very short run response of stock prices to both anticipated and unanticipated announced changes in money recent work by berkman 1 grossman 7 urich and wachtel 25 and roley 20 indicates that short term interest rates respond only to the unexpected component of the announcement with short term rates rising when the announced change in money exceeds the expected change berkman also examined the reaction of stock prices finding that an unanticipated increase in the money supply depressed share prices lynge 13 found that positive money announcements lowered stock prices but since he did not distinguish expected from unexpected money growth his results do not bear directly on the efficient markets issue in investigating the response of stock prices to weekly money announcements survey data on market participants forecasts of the announced weekly change

dynamic model of fresh fruit promotion a household production approach many studies consider the dynamic effects of commodity promotion on demand but few derive the theoretical basis for these effects in a model of optimal consumer behavior this study develops a dynamic household production model of u s fresh fruit consumption which it uses to evaluate the effectiveness of advertising and promotion expenditures by the washington apple commission estimates from a dynamic dual generalized leontief system show direct advertising to be marginally more effective than retail promotion in increasing apple sales but advertising has positive spillover effects to sales of other fruits whereas promotion reduces sales of competing products

promotions and incentives in nonprofit and for profit organizations using data from the 1992 95 multi city study of urban inequality an employer survey the authors document a new empirical finding that workers are less likely to receive promotions in nonprofit organizations than in for profit firms the study also uncovers evidence that wage increases associated with promotion were of comparable magnitudes in the two sectors as was the potential for within job wage growth nonprofits were less likely than for profits to base promotions on job performance or merit nonprofits were less likely to use output contingent incentive contracts to motivate workers and the observed difference in promotion rates between the nonprofit and for profit sectors was more pronounced for high skilled than for low skilled workers the authors also propose a theory that potentially explains the broad pattern of evidence they uncover based on the idea that nonprofit workers are more intrinsically motivated attracted to their work for reasons transcending material compensation than are f

using game theory to model competition the article is an exposition of the basic concepts of noncooperative game theory and their application to advertising product and price competition

pulsation in a competitive model of advertising firm s cost interaction the literature reveals contradiction between theoretical results superiority of uniform policy under a concave advertising response function and empirical results concavity of the advertising response function and the superiority of a pulsation policy to reconcile the above difference this paper offers a resolution based on 1 the concavity of the advertising response function 2 the convexity of the firm s cost function and 3 over advertising the resolution is reached upon maximizing the net profit per unit time over the infinite planning horizon subject to an exogenous advertising budget constraint theoretical results for monopolistic markets are found mostly generalized to competitive markets a numerical example is introduced to gain more insight into the theoretical findings and an approach is introduced and implemented to empirically assess the shape of a firm s cost function and the advertising policy to be employed

occupational social value and returns to long hours this paper examines the phenomenon of uncompensated long hours in jobs with pro social characteristics and presents evidence that long hour wage premiums and occupational social value are substitutes in compensating salaried workers who supply hours exceeding the standard working week i show that the social value of an occupation in particular the degree to which jobs involve helping or providing service to others is inversely related to long hour pay allowing for heterogeneity in the degree to which workers value their job s helping orientation lets me explore how gender differences in employees attitudes toward pro social behaviour can explain some of the observed occupational sorting trends and gender differences in long hour compensation women tend to be more strongly drawn to helping occupations and at the same time receive lower long hour premiums in these jobs relative to men i offer a theoretical framework to rationalize the empirical trends

predicting advertising pulsing policies in an oligopoly a model and empirical test given that firms pulse in advertising should firms pulse in or out of phase it is shown that out of phase maximizes the oligopoly profits and is also the markov perfect equilibrium of the infinite horizon game the basic intuition for this result comes from the following fact it is more profitable to increase consideration when the competitor s consideration is lower evidence from several product categories seems to support this theoretical result

changing interest rate responses to money announcements 1977 1983 abstract this paper investigates when and how the response of interest rates to money announcements changed in recent years the response of both short and long rates rises in october 1979 but drops during 1981 during mid 1982 the response of long rates raises again but without a change in the response of short rates despite a number of ex post explanations for these shifts none of the major hypotheses of why interest rates respond to money announcements provides a complete ex ante explanation of these response shifts

dynamic optimal control models in advertising recent developments this paper presents a review of recent developments that have taken place in the area of dynamic optimal control models in advertising subsequent to the comprehensive survey of the literature by sethi in 1977 the basic problem underlying these models is that of determining optimal advertising expenditures and possibly other variables of interest over time for a firm or a group of competing firms under consideration this optimization is done subject to some dynamics that define how these variables translate into sales and in turn into profits the purpose of this update is twofold on the one hand new contributions in the areas already treated in the earlier survey are reviewed on the other hand new trends in the advertising literature since 1977 such as quality as an additional marketing instrument cumulative sales models pulsing advertising and advertising as a part of corporate models of the firm are discussed the models covered in this update are organized under six headings models with ca

the economics of vocation or why is a badly paid nurse a good nurse abstract given the longstanding shortage of nurses in many jurisdictions why could not nursing wages be raised to attract more people into the profession we tell a story in which the status of nursing as a vocation implies that increasing wages reduces the average quality of applicants attracted the underlying mechanism accords with the notion that increasing wages might attract the wrong sort of people into the profession and highlights an in efficiency wage mechanism particular to vocations which makes wages sticky up wards the analysis has implications for job design in vocation based sectors such as nursing and teaching

a comparison of futures and forward prices abstract this paper uses the pricing models of cox ingersoll and ross 1981 richard and sundaresan 1981 and french 1982 to examine the relation between futures and forward prices for copper and silver there are significant differences between these prices the average differences are generally consistent with the predictions of the futures and forward price models however these models are not helpful in describing intra sample variations in the futures forward price differences this failure is apparently caused by measurement errors in both the price differences and in the explanatory variables

working long hours and early career outcomes in the high end labor market this study establishes empirically a positive but nonlinear relationship between weekly hours and hourly wage growth for workers who put in over 47 hours per week 5 extra hours are associated with a 1 increase in annual wage growth this correlation is not present when hours are lower the relationship is especially strong for young professionals data on promotions provide evidence in support of a job ladder model that combines higher skill sensitivity of output in higher level jobs with heterogeneous preferences for leisure the results can be used to account for part of the gender wage gap

commodity own rates real interest rates and money supply announcements abstract this paper develops a measure of the real interest rate that is based on commodity own rates the rate at which one can contract to exchange units of a commodity today for units of the commodity in the future we use this measure to study the impact of money supply announcements on the real interest rate we find that money shocks have little effect on one and three month real interest rates however there is a strong positive relation between money shocks and six and twelve month real interest rates

advertising strategies in a dynamic oligopoly the author uses a dynamic model of oligopolistic advertising competition in which competitors are assumed to make a series of single period advertising decisions with salvage values attached to achieved sales in each period as the foundation for empirical analysis of the competitive situation involving the three largest ready to eat cereal manufacturers kellogg general mills and the post division of philip morris general foods the primary insight of the author s empirical analysis is that general mills places a higher future value on achieved sales than do the other competitors in the market

optimal wages in the market for nurses an analysis based on heyes model in a recent paper the economics of vocation or why is a badly paid nurse a good nurse anthony heyes posits a novel adverse selection mechanism whereby the average quality of nurses employed is declining in the wage and evaluates the consequences for an optimizing monopsonistic national health service nhs i conduct a standard welfare analysis here based on the proposed model it turns out that contrary to concerns raised by heyes the nhs will always choose a wage that is lower than the wage chosen by a welfare maximizing social planner nurse are underpaid i also extend the analysis to the case of a competitive labor market for nurses

wages and performance based pay evidence from the nlsy abstract the link between performance and pay should be strongest where performance is more accurately observed brown industrial and labor relations review 1990 43 1655 1825 rand journal of economics 1992 23 366 375 more productive workers self select into jobs with performance based pay consequently workers whose pay is based on performance should earn more than those whose pay is not based on such measures this paper adds to the literature on the subject by providing new empirical evidence for brown s model using the national longitudinal surveys of youth nlsy data

differential game models of advertising competition abstract differential game methodology combines two attractive features that are critical to the study of advertising competition dynamics and multi competitor decision making a focused review of two decades of differential game modeling of advertising competition indicates that insights gained to date while valuable are of a limited nature and research in the area needs to extend beyond present limits four recent studies are offered as examples of possible directions to follow in continued research

when time binds substitutes for household production returns to working long hours and the skilled gender wage gap we provide evidence that constraints that prevent highly skilled women from working long hours hinder gender pay equality we show that relaxing one such constraint by increasing the supply of subs

a note on feedback sequential equilibria in a lanchester model with empirical application we study in this paper dynamic equilibrium advertising strategies in a duopoly with asymmetric information structure and sequential play the advertising model of lanchester is used in a game where the relevant solution concept is feedback stackelberg equilibrium which is subgame perfect an algorithm is devised for the computation of this equilibrium and numerical results are reported and discussed using a data set from the cola market we obtain the resulting advertising strategies and provide a comparison with closed loop and open loop nash equilibria

estimation uncertainty and optimal advertising decisions in this paper we develop a normative model that is built on an empirically relevant foundation we observe that decision makers among them advertisers rely on estimated relationships in reaching resource allocation decisions and we investigate the normative implications of this process in particular we explore the effects of uncertainty stemming from the use of sample estimates of population parameters in general we find that ignoring this estimation related uncertainty leads to suboptimal decisions

optimal advertising strategies this paper considers advertising policies for a very general class of response functions it is shown that if a pulsing policy is used awareness or sales eventually settle down to a steady cycle and the average response over the cycle is a decreasing function of the length of the cycle when response shows increasing returns to scale it is possible in theory to use a device called chattering to replace the true response by a straight line which lies above the true response in the region in which chattering is used a numerical example is given to show how the optimal policy can be computed when part of the response is linear and the results obtained are compared with those of the best practicable approximation to chattering it is shown that the problem of maximising awareness or sales subject to a budget constraint is structurally identical with maximising profit after advertising with or without a constraint in either case it is possible that for part of the time the optimal policy involves chattering

introduction to the special issue empirical generalizations in marketing it is our hope that some of the empirical generalizations presented in this volume would be of practical value to management some of the generalizations help codify our knowledge they are discussed in several papers some can serve as useful guidelines in the generation of strategic marketing options in addition we hope that this volume would stimulate additional research and actions by marketing scientists in industry and academia

competition and incentives with motivated agents a unifying theme in the literature on organizations such as public bureaucracies and private nonprofits is the importance of mission as opposed to profit as an organizational goal such mission oriented organizations are frequently staffed by motivated agents who subscribe to the mission this paper studies incentives in such contexts and emphasizes the role of matching the mission preferences of principals and agents in increasing organizational efficiency matching economizes on the need for high powered incentives it can also however entrench bureaucratic conservatism and resistance to innovations the framework developed in this paper is applied to school competition incentives in the public sector and in private nonprofits and the interdependence of incentives and productivity between the private for profit sector and the mission oriented sector through occupational choice jel d23 d73 h41 l31 the late twentieth century witnessed a historic high in the march of market capitalism with unbridled optimism in the role of the profit motive in promoting welfare in the production of private goods moreover this generated a broad consensus on the optimal organization of private good production through privately owned competitive firms when it comes to the provision of collective goods no such consensus has emerged debates about the relative merits of public and private provision still dominate this paper suggests a contracting approach to the provision of collective goods it focuses on two key issues how to structure incentives and the role of competition between providers at its heart is the idea that organizations that provide collective goods cohere around a mission 2 thus production of collective goods can be viewed as mission oriented

performance pay and wage inequality an increasing fraction of jobs in the u s labor market explicitly pay workers for their performance using bonus pay commissions or piece rate contracts using data from the panel study of income dynamics we show that compensation in performance pay jobs is more closely tied to both observed and unobserved productive characteristics of workers than compensation in non performance pay jobs we also find that the return to these productive characteristics increased faster over time in performance pay than in non performance pay jobs we show that this finding is consistent with the view that underlying changes in returns to skill due for instance to technological change induce more firms to offer performance pay contracts and result in more wage inequality among workers who are paid for performance thus performance pay provides a channel through which underlying changes in returns to skill get translated into higher wage inequality we conclude that this channel accounts for 21 of the growth in the variance of male wages between the late 1970s and the early 1990s and for most of the increase in wage inequality above the eightieth percentile over the same period

an oligopoly model of dynamic advertising competition abstract an oligopoly model is presented that allows the determination of feedback nash equilibrium advertising strategies for an oligopoly analyses of symmetric and asymmetric oligopolies with the model show that unit contribution and advertising effectiveness have positive effects on a competitor s own advertising and steady state sales while discount rate and decay rate have negative effects an asymmetric analysis further shows that unit contribution and advertising effectiveness affect positively and discount rate and decay rate negatively a competitor s rivals advertising but have effects in opposite directions regarding rivals steady state sales the symmetric and asymmetric analyses also show that steady state sales per competitor decline with the number of competitors in the oligopoly while total oligopoly steady state sales increase the model is applied empirically to the triopolistic competition involving anheuser busch sabmiller and molson coors in the beer industry

empirical analysis of closed loop duopoly advertising strategies closed loop perfect equilibria in a lanchester duopoly differential game of advertising competition are used as the basis for empirical investigation two systems of simultaneous nonlinear equations are formed one from a general lanchester model and one from a constrained model two empirical applications are conducted in one involving coca cola and pepsi cola a formal statistical testing procedure is used to detect whether closed loop equilibrium advertising strategies are used by the competitors rather than open loop strategies in the second application involving anheuser busch and miller the general model is estimated results indicate that closed loop equilibria better explain dynamic advertising competition than do open loop equilibria also closed loop equilibrium advertising strategies implied by model estimates show that competitive advertising levels may or may not be monotonic in market share

an empirical investigation of advertising strategies in a dynamic duopoly the equilibrium profit maximizing advertising policies of firms operating in a dynamic duopoly are derived by linking in a single framework the econometric estimation of the market response function and the technique of differential games that characterizes dynamic competitive behavior we use the lanchester model of combat to represent the system dynamics that capture the competitive shifts due to investments in advertising by the two market rivals we determine the equilibrium advertising levels using both closed and open loop policies we also compare these equilibrium advertising policies for each firm to those obtained using an optimal control theory formulation wherein the advertising spending levels of the rival are assumed to be known the empirical results obtained by analyzing the advertising rivalry between coke and pepsi for the period 1968 1981 under the above three alternative spending policies provide some interesting insights into the nature of competition between these two market rivals a significant contribution of this paper is to extend the existing literature on advertising competition by integrating theoretical and empirical analyses

real and nominal interest rates under uncertainty the fisher theorem and the term structure this paper examines the relation between nominal and real interest rates and the nominal and real term structure under uncertainty we show that two separate risk terms cause the fisher theorem to fail one risk term is related only to the variability of money prices while the other is related to the purchasing power riskiness of the nominal bond monetary policy can affect the value of both these risk terms we also show that the pure expectations hypothesis of the term structure fails for both real and nominal bonds because of risk premia even if the economy is neutral with respect to monetary policy monetary policy can alter the nominal term structure

risk sensitive dynamic market share attraction games we present partial results showing that risk sensitive oligopolists would spend less on advertising than would their risk neutral counterparts the model is an infinite horizon stochastic game in which each firm s goodwill is a random function of both its own and its competitors current and past advertising expenditures single period firm profits have a market share attraction form each firm seeks to maximize its expected exponential utility of the sum of discounted profits we analyze the impact that risk sensitivity and other parameters have on equilibrium advertising strategies by exploiting the special structure of the stochastic game model journal of economic literatureclassification number c73

the signalling role of base and money announcements and their effects on interest rates abstract this paper demonstrates that unexpected changes in the announced monetary base have an impact on interest rates above and beyond the impact of unexpected changes in the announced money supply in addition both money supply and monetary base announcements are shown to have a significant signalling role for subsequent changes in monetary aggregates however in contrast to several leading hypotheses it appears that the observed link between monetary announcements and interest rates is not attributable to the signals that announcements provide about the subsequent behavior of money and the base

competitive dynamic advertising a modification of the case game abstract in this paper we consider a modified version of the advertising differential game of case 1979 we derive non cooperative nash equilibria for open loop controls as well as for feedback strategies we consider finite and infinite planning horizons the feedback equilibrium is shown to be robust against stochastic disturbances of the state equation

the structure of expectations of the weekly money supply announcement abstract this paper examines the structure of expectations of the weekly money supply announcement in the late 1970s the data used are from a weekly telephone survey of money market participants the rationality and structure of expectations are explored with the data organized in three ways the mean response to each weekly survey the pooled sample of individual responses and time series of responses by each individual in the survey the effect of data aggregation on rationality tests is investigated the structure of the expectations data are also examined and it is found that both strong regressive influences and adaptive learning characterize the data

the effects of overtime pay regulation on worker compensation proponents claim that a statutory overtime premium by raising the relative cost of overtime may encourage firms to substitute employment for overtime hours the author argues that there will be no real effects if firms reduce straight time wages so as to offer the same package of weekly compensation and hours of work that was acceptable initially empirical analysis suggests that wage differentials do arise to mitigate the purely demand driven effects predicted by previous models but these differentials are not large enough to neutralize overtime pay regulation completely copyright 1991 by american economic association

commodity prices money surprises and fed credibilit strict monetarist theory in an extreme form holds that excessive money growth or the expectation of future money growth shows up immediately in the rapid inflation of goods prices however it is widely argued that for most goods prices are in fact sticky in the short run and reflect money growth only in the long run if one seeks a sensitive market measure of the perceived looseiless or tightness of monetary policy one must look elsewhere than at the general price level interest rates being determined in quickly adjusting financial markets are free to respond immediately to expectations regarding monetary policy in 1981 and 1982 every friday at 4 10 p m eastern standard time the federal reserve board would announce the money stock for the week ending nine days previously if the announced money stock was different from what the market had been expecting interest rates generally jumped in the same direction clearly they were responding to revisions of the expected future path of the money stock but nominal interest rates are an ambiguous indicator of expectations on the one hand an announced increase in the money stock may be received by the market as indicating a higher

the relation between forward prices and futures prices abstract this paper consolidates the results of some recent work on the relation between forward prices and futures prices it develops a number of propositions characterizing the two prices these propositions contain several testable implications about the difference between forward and futures prices many of the propositions show that equilibrium forward and futures prices are equal to the values of particular assets even though they are not in themselves asset prices the paper then illustrates these results in the context of two valuation models and discusses the effects of taxes and other institutional factors

an empirical study on the lanchester model of combat for competitive advertising decisions this paper presents an empirical study on the lanchester model of combat for competitive advertising decisions three issues are evaluated i the specification of the market share response model ii the effect of inflation on the estimation of the response model and iii the performance of competitive strategies it is shown that a the square root function that is used in previous studies is often inappropriate to characterize the market share response model b market share variations are more responsive to current advertising expenditures c closed loop nash equilibrium strategies are better competitive advertising strategies for firms to maximize profits than open loop nash equilibrium strategies and d finally general perfect equilibria nash equilibrium strategies developed by case are usually not good competitive advertising strategies for firms to maximize profits

recent developments in dynamic advertising research a variety of continuous time differential functions have been developed to investigate dynamic advertising problems in business and economics fields since major dynamic models appearing before 1995 have been reviewed by a few survey papers we provide a comprehensive review of the dynamic advertising models published after 1995 which are classified into six categories i nerlove arrow model and its extensions ii vidale wolfe model and its extensions iii lanchester model and its extensions iv the diffusion models v dynamic advertising competition models with other attributes and vi empirical studies for dynamic advertising problems for each category we first briefly summarize major relevant before 1995 models and then discuss major after 1995 models in details we find that the dynamic models reviewed in this paper have been extensively used to analyze various advertising problems in the monopoly duopoly oligopoly and supply chain systems our review reveals that the diffusion models have not been used to analyze advertising problems in supply chain operations which may be a research direction in the future moreover we learn from our review that very few publications regarding dynamic advertising problems have considered the supply chain competition we also find that very few researchers have used the diffusion model to investigate the dynamic advertising problems with product quality as a decision variable and the pricing decision has not been incorporated into any extant lanchester model the paper ends with a summary of our review and suggestions on possible research directions in the future

on the generalizability of advertising pulsation monopoly results to an oligopoly this paper introduces for the first time an analytical framework for modeling and analyzing sales response to advertising pulsation for competitive markets of mature products in continuous time for discrete piecewise policies that allow unequal cycle lengths employing a nash equilibrium solution concept this study supported with numerical analysis demonstrates that there is an oligopolistic as opposed to a monopolistic justification for advertising at a constant rate in the presence of concave response functions or advertising according to a pulsing policy in the presence of s shaped response functions the article employs a modeling framework whereby each of a set of competitors responses to advertising spending is governed mainly by lanchester type response is used to analyze the game resulting from cyclical advertising policies that are strictly adhered to by all players a non discounted averaged performance is used to assess the purported optimality of different variants of piecewise constant policies

female voting power the contribution of women s suffrage to the growth of social spending in western europe 1869 1960 women s suffrage was a major event in the history of democratization in western europe and elsewhere public choice theory predicts that the demand for publicly funded social spending is systematically higher where women have and use the right to vote using historical data from six western european countries for the period 1869 1960 we provide evidence that social spending out of gdp increased by 0 6 1 2 in the short run as a consequence of women s suffrage while the long run effect is three to eight times larger we also explore a number of other public finance implications of the gender gap

rat race redux adverse selection in the determination of work hours in law firms this paper describes an organizational setting in which professional employees are required to work inefficiently long hours the focus of the authors investigation is large law firms the income sharing that characterizes legal partnerships creates incentives to promote associates who have a propensity to work very hard law firms use indicators of this propensity especially an associate s record of billable hours in promotion decisions reliance upon work hours as an indicator leads to a rat race equilibrium in which associates work too many hours the authors find evidence in support of this conclusion with data they collected from two large law firms copyright 1996 by american economic association