discrimination in an equilibrium search model i construct an equilibrium search model where some employers have a distaste for hiring minority workers and show that this bias results in economic discrimination against minority workers although only unprejudiced firms hire minority workers minority workers receive lower wages than workers not facing discrimination whenever any employers in the market have a distaste for minority workers one implication of the model is that gender or racial wage differentials understate the utility loss from discrimination in addition the wages of minority workers increase when their proportion increases in the labor market

inter industry r d spillovers what difference do they make the analytical framework of d aspremont and jacquemin the american economic review 1988 78 1133 1137 is extended to a two industry two firm perindustry model allowing for r d spillovers to occur within industries as well as between industries in the first part of the paper we analyze the impact of intra and inter industry r d spillovers on the level of strategic r d investments output profits and total welfare when firms compete in both the r d and output stage in the second part we compare the equilibrium outcomes that result from r d cooperation which includes both intra and inter industry r d agreements inter industry r d spillovers have a very important effect on a firm s incentives to invest in r d both directly and indirectly because of their influence on the likely impact of intra industry r d spillovers also r d agreements that cut across industries may be more socially beneficial than cooperatives whose membership comes from a single industry

on the organization of cooperative research and development theory and evidence abstract it has become increasingly prevalent that business firms often rival firms join forces in cooperative r and d to develop new technologies that they can use in their downstream business equity research joint ventures and non equity co development are the two major modes of organization and they differ in how ownership rights over newly developed technologies are assigned this paper addresses the question of when cooperative r and d should be carried out in a research joint venture as opposed to a co development program in a setting of contractual incompleteness the nature of the downstream business of participating firms is shown to determine the organization of cooperative r and d empirical evidence that is consistent with the theoretical analysis is also presented

on the design of stable joint ventures abstract an analytical model is developed to study the problem of designing stable joint ventures aimed at jointly developing and supplying a new technology the analysis focuses on the extent to which traditional motives for joint ventures like cost sharing synergy effects or technological spillovers may shape the incentives for firms to cheat on the arrangement and hence despite larger cooperative benefits endanger the formation of a stable agreement the cheating firm although supplying the contractually specified inputs to the venture manages to keep its knowhow proprietary while benefiting from the loyal partner s know how through spillovers from the venture only if know how can be kept sufficiently proprietary within the venture will synergy effects stimulate the formation of a stable joint venture increasing the profitability of cooperation while at the same time stifling the incentives to cheat but if know how becomes difficult to appropriate synergy effects may increase the incentives to cheat resulting in no agreement at least when both parties have perfect foresight

disclosure of know how in research joint ventures abstract research joint ventures rjvs usually face technical uncertainty their expected cost typically depending on the know how disclosed by the partners however the partners have little incentive to share their know how when they are simultaneously competitors in other markets in this setting we show that sometimes profitable rjvs do not start when the disclosure of know how is not contractible and characterize the incentive contracts when they exist we also analyze rjvs as an alternative to licensing contracts for the transmission of know how finally we show that the eec s technology policy based on cost subsidies has negative consequences on firms incentives to share know how

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

an analysis of cooperative research and development i analyze the effects of cooperative research whereby member firms agree to share the costs andfruits of a research project before they undertake it in this model industrywide agreements tend to have socially beneficial effects when the degree ofproduct market competition is low when there are r d spillovers in the absence of cooperation when a high degree of sharing is technologically feasible and when the agreement concerns basic research rather than development activities i show that a royalty free cross licensing agreement among any number offirms lowers the equilibrium level of innovation even though it increases the efficiency of r d through sharing

research joint ventures and optimal r d policy with asymmetric information abstract when to allow research joint ventures rjvs or not is an important instrument in the development of an optimal r d policy the regulator however is unlikely to know all the relevant information to regulate r d optimally the extent to which there exist appropriability problems between the firms is one such variable that is private information to the firms in the industry in a duopoly setting we analyze the characteristics of a second best r d policy where the government can either allow rjvs or not and give lump sum subsidies to the parties involved the second best r d policy without subsidies will either block some welfare improving rjvs or allow some welfare reducing ones with lump sum subsidies the second best policy trades off the expected subsidy cost with allowing welfare decreasing rjvs or blocking welfare increasing ones

willingness to accept compensation for the environmental risks of oil transport on the amazon a choice modeling experiment abstract this paper looks at the question of whether subsistence level indigenous people place a value on the preservation of ecosystems independent of direct impacts of environmental change such as impacts on their production activities the economics literature generally suggests that non use values don t exist among the poor and in the informal sector of the economy we examine this issue through a choice modeling experiment a survey was conducted of rainforest communities who live on the banks of the amazon river rio solimoes in the vicinity of proposed oil and gas pipelines the data were analyzed in the choice modeling framework revealing relatively high amounts of compensation that were necessary in order to accept the potential ecosystem damages associated with oil transport even if the people were completely compensated for direct damages such as loss of access to productive resources these results suggest that environmental quality is important for its own sake a result that is very different from the implicit assumption among many economists

using choice experiments to value the natura 2000 nature conservation programs in finland this paper is concerned with the preferences of the finnish households for a controversial nature conservation program the european union s natura 2000 network since the program was mainly based on biological considerations it met strong public opinions from different interest groups in finland using the choice experimental method we attempt to estimate the values that the finnish households would place on different preservation levels it is found that the mean willingness to accept for a decrease in the nature preservation area is much greater than the mean willingness to pay for an increase by the same amount also the marginal willingness to pay becomes zero after an initial increase in the natural preservation area which is consistent with our earlier findings in a binary choice valuation study policy implications of these results are also discussed in relation to different decision criteria

the degree of spillovers and the number of rivals for maximum effective r d abstract the amount of cost reduction or effective r d that results in a symmetric sequential nash equilibrium with quadratic payoffs and differentiated goods is shown to increase with spillovers in oligopolies with a few rivals and to achieve a maximum for spillovers that are not perfect in industries with many firms similar tendencies apply for consumer surplus profits and static welfare more rivals typically lead to reduced investments output and profitability while consumer surplus and welfare increase or at least do not decrease limited entry in markets with a few rivals may enhance innovative investments profitability and consumer surplus if only product differentiation and spillovers are sufficiently high and r d costs sufficiently low too many rivals will then again lead to reductions and a decrease in static welfare

using choice experiments to value the environment this paper we outline the choice experiment approach to environmental valuation this approach has its roots in lancaster s characteristics theory of value in random utility theory and in experimental design we show how marginal values for the attributes of environmental assets such as forests and rivers can be estimated from pair wise choices as well as the value of the environmental asset as a whole these choice pairs are designed so as to allow efficient statistical estimation of the underlying utility function and to minimise required sample size choice experiments have important advantages over other environmental valuation methods such as contingent valuation and travel cost type models although many design issues remain unresolved applications to environmental issues have so far been relatively limited we illustrate the use of choice experiments with reference to a recent uk study on public preferences for alternative forest landscapes this study allows us to perform a convergent validity test on the choice experiment estimates of willingness to pay

job discrimination market forces and the invisibility hypothesis the invisibility hypothesis holds that the job skills of disadvantaged workers are not easily discovered by potential new employers but that promotion enhances visibility and alleviates this problem then at a competitive labor market equilibrium firms profit by hiding talented disadvantaged workers in low level jobs consequently those workers are paid less on average and promoted less often than others with the same education and ability as a result of the inefficient and discriminatory wage and promotion policies disadvantaged workers experience lower returns to investments in human capital than other workers

innovative strategic groups in multinational industries abstract differences in innovative strategies between groups of domestic and multinational enterprises are analyzed within a two stage game model that incorporates the asymmetries in transaction costs between the two species of enterprises nash and cooperative behaviour is shown to result in different equilibrium r d strategies with the multinational companies doing typically more r d for larger markets and domestic companies focusing on specific market segments survey data from companies operating in eleven high tech multinational industries in belgium provide support for these strategic differences and show how they are related to company performance

limited contract enforcement and strategic renegotiation this paper presents a strategic theory of contract renegotiation in this theory suboptimal contracts are put in place initially to protect one party against undesirable a ctions by another party and are renegotiated once the danger is past the authors develop a model to establish the cases in which simple contracts cannot achieve desirable outcomes so that only a complicated contract or renegotiation will serve unlike most previous accounts of contract renegotiation this theory does not rely on exogenous uncertainty to motivate renegotiation copyright 1988 by american economic association

arbitraging a discriminatory labor market black workers at the ford motor company 1918 1947 the 1918 47 employee records of the ford motor company provide a rare opportunity to study a firm willing to hire black workers when similar firms would not the evidence suggests that ford did profit from discrimination elsewhere but not by paying blacks less than whites an apparent wage equity constraint prevailed resulting in virtually no racial variation in wages inside ford an implication was that blacks quit ford jobs less often than whites holding working conditions constant arbitrage profit came from exploiting this nonwage margin as ford placed blacks in hot dangerous foundry jobs where quit rates were generally high

using conjoint analysis to derive estimates of compensating variation abstract we use several approaches to derive estimates of hicksian compensating variation from conjoint ratings data the different estimation approaches produced mixed results with respect to consistency with utility theory statistical significance of key variables magnitude of welfare estimates and confidence bounds on welfare estimates these findings suggest conjoint analyses are not a panacea for the problems being debated regarding contingent valuation and travel cost methodologies and conjoint questions appear to share many of the advantages and disadvantages associated with dichotomous choice contingent valuation questions

complementary resources and cooperative research a model of research joint ventures among competitors we present a model of research joint ventures in which if firms have highly complementary skills and resources then they prefer to cooperate in areas where the technology is highly appropriable as in applied research the model also indicates that large firms have a greater incentive to cooperate because they are better positioned to capture the benefits of a research venture these findings seem to explain why cooperative research among rival firms in japan has been applied rather than basic and conducted frequently among large companies but firms prefer as small a partner as possible to limit the sharing of research results creating a tension that may make cooperative efforts among rivals difficult to manage for this reason cooperation with organizations such as universities or nonprofit institutions may be a viable alternative for firms looking for complementary skills and resources

inter firm complementarities in r d a re examination of the relative performance of joint ventures we compare duopoly outcomes between two alternative modes of research and development rd the reverse holds for high spillovers when rjvs yield higher technological improvement they also yield higher industry profit and social welfare

choice modelling and its potential application to tropical rainforest preservation abstract loss of rainforest occurs in part because of a global market failure problem markets routinely transmit signals about international demands for forest products such as timber but fail to transmit signals about demands for preservation to make efficient resource allocation choices decision makers need some framework to estimate the non use values that might be held by an international community for rainforest preservation non market valuation techniques can be used for this purpose but framing and other problems limit the application of the contingent valuation method cvm an alternative technique choice modelling cm appears to hold some promise because it can be used to model complex situations and to frame choices consistent with real life choices in this paper a cm experiment to assess the values that australians hold for rainforest conservation in vanuatu is reported the experiment disguises effectively the issue of interest rainforest conservation in vanuatu within a pool of other conservation locations also the experiment demonstrates that choice tradeoffs may involve a variety of environmental and socio economic factors rather than be concentrated on some monetary tradeoff the results demonstrate that a variety of predictive and valuation tools can be gained from a cm experiment and suggest that further development is warranted

an economic model of international joint venture strategy the strategic choice between joint ventures licensing agreements and mergers is analysed using eight key factors suggested by internalisation theory the model explains the increasing role of international joint ventures in the 1980s in terms of the accelerating pace of technological innovation and the globalisation of markets it offers a range of predictions about the formation of joint ventures within industries across industries across locations and over time it exploits a powerful modelling technique that has many other applications in international business strategy