accounting rates of return many economic studies provide empirical evidence regarding cross sectional differences in firm profitability in most of these studies firm profitability is measured by an accounting rate of return net income dividend by the book value of assets hereafter arr rather than an economic rate of profit franklin fisher and john mcgowan define the firm s economic rate of profit irr as that interest rate which equates the present value of its net revenue stream to its initial outlay 1983 p 82 fisher and mcgowan examine the analytic relation between a firm s arr and its irr in a series of examples and conclude that the arr is such a bad surrogate for the irr that the results of arr based empirical studies are likely to be totally misleading p 91 william long and david ravenscraft 1984 have criticized the theoretical work of fisher and mcgowan because the nature of the analytic relationship between the arr and the irr in the context of highly simplified hypothetical examples may not be indicative of the nature of the relationship in empirical settings their criticism adopts the utilitarian view that the arr has to be treated as a suitable surrogate for the irr as long as no preferable alternative measure of profitability is available for empirical work this view has merit as long as the measurement error which is contained in the arr is random rather than systematic unfortunately the nature and extent of the measurement error which is contained in the arr in a particular empirical setting can only be determined unequivocally if the irr is unequivocally known in such a case of course there would be no need to rely on the arr at all due to this unhappy circle empirical research on firm profitability has continued to rely on the arr despite the fact that many persons reasonably believe that the results of such research may be totally misleading fisher and mcgowan g c harcourt 1965 while others reasonably believe that the results are reliable enough to form a basis for policy decisions long and ravenscraft recent work by y ijiri 1978 1979 1980 and by myself 1982 has shown that conditional irr estimates can be obtained from data in firms financial statements while these irr estimates are conditional they do abstract from certain extraneous factors that influence arrs and that differ across firms consequently the conditional irr estimates are free from some of the sources of measurement error which are known to contaminate the arr thus the conditional irr estimates can be used to provide evidence on whether these sources of measurement error have or have not affected the outcome of prior studies in which profitability was measured by the arr such evidence can help to objectively resolve the conflict between the opposing views on the reliability of arr based profitability research this paper uses conditional irr estimates to examine the properties of the measurement error in the arr in a study of the relationship between firm profitability and firm size the remainder of the paper is organized as follows in section i the theoretical work of fisher and mcgowan is used professor of accounting university of iowa iowa city ia 52242 i gratefully acknowledge the comments of william albrecht dan dhaliwal gary fethke franklin fisher scott linn william r kinney jr and the participants of a workshop at the university of florida on earlier versions of this paper 1 some authors for example william long and david ravenscraft 1984 have used the sales margin ratio earnings sales as a measure of profitability however if one views profitability as return per unit of sacrifice the sales margin ratio is not a profitability measure since it ignores the sacrifice or investment required to generate a dollar of sales consequently this paper does not attempt to shed any insight into prior studies that have relied on the sales margin ratio as a measure of profitability

strategic interaction across countries and multinational agglomeration an application to the cement industry agglomeration in foreign direct investment fdi is typically attributed to location specific characteristics such as natural resource advantages or production related spillovers between multinational firms the increasing collocation of the largest global firms in the cement industry since the 1980s is not easily attributed to either of these explanations this paper draws on theories of multimarket contact to test whether strategic interaction across national markets has influenced the successive market entry decisions generating the observed agglomeration we first establish that there is indeed nonrandom agglomeration of the six largest cement firms we next show that preexisting cross market interaction with current incumbents helps predict which firm will enter a given market and also the choice of market a given firm enters the association does not appear to be caused by strategic convergence or mimicry of recent entry events and cannot be explained by production side effects which depend only on

mutual forbearance and competition among security analysts research in industrial organization and strategic management has shown that rivals competing with each other in multiple markets are more willing to show each other mutual forbearance i e compete less aggressively within their spheres of influence i e the markets in which each firm dominates sell side equity analysts typically cover multiple stocks in common with their rivals we examine the impact of this multipoint contact for mutual forbearance on two key dimensions of competition among security analysts forecast accuracy and information leadership issuing earnings forecasts or stock recommendations that influence rival analysts we find that multipoint contact is associated with analysts exerting greater information leadership on stocks within their own spheres of influence we also find greater forbearance related to information leadership under regulation fair disclosure reg fd in contrast multipoint contact was not associated with greater forecast accuracy on stocks within analysts

dynamics of dyadic competitive interaction in this study of firms entries into and exits from each other s markets we link research on multipoint competition to the emerging action oriented dyadic approach to interfirm rivalry by specifying market interdependencies between pairs of firms that condition their potential for rivalry over time our dynamic analysis of competitive interactions between pairs of commuter airlines in california reveals the idiosyncratic and asymmetric market microstructures that characterize dyadic competitive relationships and helps explain why firms grapple vigorously with some of their competitors while being passive toward others we show that there is an inverted u shaped relationship between firms rates of entry into and exit from each other s markets and the level of multimarket contact in competitor dyads we also show how this basic curvilinear effect varies from dyad to dyad as a function of relative levels of multimarket contact with competitors in other dyads and the relative sizes of competitors in a focal dyad copyright 1999 john wiley sons ltd

long run welfare under externalities in consumption leisure and production a case for happy degrowth vs unhappy growth in this paper we contribute to the debate on the relationship between growth and well being by examining an endogenous growth model where we allow for externalities in consumption leisure and production we analyze three regimes a decentralized economy where each household makes isolated choices without considering their external effects a planned economy where a myopic planner fails to recognize both leisure and consumption externalities but recognizes production externalities and a planned economy with a fully informed planner we first compare the balanced growth paths under the three regimes and then we numerically investigate the transition to the optimal balanced growth path we provide a number of findings first in a decentralized economy growth or labor or both are greater than in the regime with a fully informed planner and hence are sub optimal from a welfare standpoint second a myopic intervention which overlooks consumption and leisure externalities leads to more growth and labor than in both the decentralized and the fully informed regime third we provide a case for happy degrowth a transition to the optimal balanced growth path that is associated with downscaling of production a reduction in private consumption and an ongoing increase in leisure and well being

multimarket competition theory and evidence the multimarket perspective identifies potential entrants as existing firms in related markets the paper uses this new framework to analyze entry strategies and entry deterrence successful entry permitting and entry deterring strategies require understanding of the feedbacks from the entry market to the home market and vice versa the multimarket perspective integrates literature on industrial organization and strategic management

strategic group formation and performance the case of the u s pharmaceutical industry 1963 1982 the focus of this paper is on three major questions 1 what is the theoretical rationale for the strategic group concept 2 does strategic group membership have performance implications and 3 are strategic groups and membership in strategic groups stable characteristics of industries a statistical procedure is proposed to longitudinally identify strategic groups the empirical setting is the u s pharmaceutical industry over the period 1963 82 while performance differences are found in terms of market share profitability differences between groups are not observed neither are differences found in terms of risk and risk adjusted performance these results are attributed to the existence of performance variation within each strategic group a dynamic model of competitive repositioning is proposed which helps integrate the findings from the study

smallholder market participation under transactions costs maize supply and fertilizer demand in kenya abstract this paper assessed the effects of transactions costs relative to price and non price factors on smallholder marketed surplus and input use in kenya a selectivity model was used that accounts for the effects of transactions costs assets technology and support services in promoting input use and generating a marketable surplus output supply and input demand responses to changes in transactions costs and price and non price factors were estimated and decomposed into market entry and intensity the results showed that while transactions costs indeed have significant negative effects on market participation institutional innovations such as group marketing are also emerging to mitigate the costs of accessing markets output price has no effect on output market entry and only provides incentives for increased supply by sellers on the other hand both price and non price factors have significant influence on adoption and intensity of input use overall the findings suggest that policy options are available other than price policies to promote input use and marketed surplus the paper concludes with implications for policy to induce greater input output market participation among smallholders in africa

societal metabolism working hours and degrowth a comment on sorman and giampietro can we choose whether to degrow sorman and giampetro in this special issue argue that degrowth can only be forced upon us it will never be the outcome of voluntary or collective choice in this commentary i argue instead that although sooner or later we will have to degrow because of bio physical limitations we still have a choice of how to do it constructing a positive vision of degrowth as an inspirational political project that mobilizes citizens increases the likelihood of a prosperous way down i agree with the authors that in an energy scarce world we will have to work more to maintain the same level of material affluence but i contend that under conceivable conditions we might be equally happy with less work less energy and less material affluence a multi scalar analysis of societal metabolism is essential for the evaluation of degrowth policies and trajectories however unlike what sorman and giampietro suggest there is nothing in existing metabolic analyses that suggests that a prosperous degrowth trajectory is a priori impossible

firm scope experience historic multimarket contact with partners centrality and the relationship between structural holes and performance this study investigates characteristics that affect the relationship between firms positions in a network of collaborative ties with other firms and their performance firms located in similarly structured networks rich in structural holes may obtain different performance results depending on their 1 capacity to absorb heterogeneous information 2 ability to protect against partner noncooperation and 3 bargaining power in this paper i argue that firms with a wide scope of experience have superior absorptive capacity for dealing with heterogeneous information hence such firms will be able to extract performance improvements from network positions rich in structural holes furthermore firms with a high level of historic multimarket contact mmc with their partners are able to reduce the risks of partner noncooperation hence augmenting their performance compared to firms in open networks that do not enjoy mmc with their own partners finally firms of low centrality in the industry s network of alliances will extract performance benefits from enhancing bargaining power as a result of exploiting brokerage opportunities in open networks these arguments are corroborated in a study of relationships formed among investment banks advising on the merger and acquisition transactions in the united kingdom between 1992 and 2001

the dynamics of multimarket competition in exploration and exploitation activities prior studies of multimarket contact have investigated exploitation rather than exploration activities we contrast effects of multimarket contact on entry and exit dynamics in these two settin

mutual forbearance in experimental conglomerate markets we conduct economic experiments to gauge the level of cooperation between conglomerate rivals first we run control experiments to observe cooperation between subjects acting as duopolists in one of two markets in the control experiments subject pairs choose a quantity xi or yi from a payoff matrix in a repeated game relatively less cooperation is observed in the y market than in the x market a second series of experiments then combines the two payoff matrices to create a conglomerate setting facing each other in two markets opponents now choose an xi yi pair each period we find that conglomeration encourages more coperation in the y market but less cooperation in the x market time series analysis of our conglomerate subjects choices strongly supports the recent game theoretic propositions in bernheim and whinston 1990

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

competitor analysis and foothold moves a foothold is a small position that a firm intentionally establishes within a market in which it does not yet compete we extend theory on competitive dynamics to examine relationships between comp

the red queen in action the longitudinal effects of capital investments in the mobile telecommunications sector organizations undertake capital investments in technology to generate revenues or decrease costs and thereby enhance profitability however red queen type responses by competing organizations in the form of rapid imitation and escalating of technology investments erode the ability of the investing organizations to sustain gains in profitability productivity gains from these investments may persist but they may not translate into sustained profitability gains owing to declining prices brought about by a hypercompetitive environment the emergence and erosion of benefits attributable to capital investments is examined by decomposing profitability into productivity price recovery product mix and capacity utilization and by regressing each performance measure on past technology investments a polynomial distributed lag model is estimated with quarterly data for 30 firms in the mobile telecommunications services sector from 1996 to 2005 the results indicate that capital investments are positively associated with productivity of current and future periods and their association with profitability is only positive in the future after six quarters these results highlight a unique outcome of the red queen hypothesis simply by imitating learning and investing in technology due to competition is beneficial to all firms in the industry

coupon redemption and the demand for frozen concentrated orange juice a switching regression analysis a switching regression model was estimated and used to study the impact of florida department of citrus coupon promotional programs on the demand for frozen concentrated orange juice the empirical results show that discounts and information provided by coupons were effective in increasing the demand for fcoj and that the fdoc s coupon programs had positive impacts on the probability of using coupons for purchasing fcoj moreover different types of coupon promotions had different impacts and coupon users and nonusers demonstrated different degrees of response to price changes

impacts of prices and transactions costs on input usage in a liberalizing economy evidence from tanzanian coffee growers despite improvements in production incentives agricultural output in africa remained sluggish through the 1990s low use of purchased inputs may be part of the cause of persistently low productivity in african agriculture this article analyzes the roles of relative prices and transactions costs in explaining low use of chemical inputs among tanzanian coffee growers a sample selection model indicates that output prices exert great influence on input purchases and that both fixed and variable transactions costs affect input use decisions travel costs in input and output markets have distinct effects on input usage implying distinct avenues for interventions to promote more intensive use of agricultural inputs

efficiency equity tradeoffs and the scope for resource reallocation in agricultural research evidence from nigeria on the basis of projected economic and poverty impacts of alternative commodity research programs this article assessed efficiency and equity tradeoffs and the scope for research resource reallocation in nigeria given the importance of major food staples to both poor and nonpoor households in production and consumption introducing a poverty dimension revealed no significant shift in priorities compared with those implied by efficiency the results showed that neither the additional benefits to the poor nor the foregone benefits to society are significant from prioritizing research according to equity relative to efficiency criteria as current priorities are supported by neither efficiency nor equity criteria however there is considerable scope for maximizing research benefits to the poor through informed reallocation of research resources the article concludes with a discussion of the patterns of resource reallocations implied by efficiency and equity criteria

hypercompetition in a multimarket environment the role of strategic similarity and multimarket contact in competitive de escalation the effect of intra industry heterogeneity on hypercompetitive escalation and de escalation in a multimarket environment is examined the authors study two critical dimensions of intra industry heterogeneity strategic similarity which captures similarity in competitive orientation and multimarket contact which captures the degree of overlap between rivals in the multiple markets of the industry theory predicts that both variables influence the intensity of rivalry and competitive disruption the predictions in the literature about the effect of strategic similarity on the intensity of rivalry are mixed while strategic group theory proposes that strategic similarity may lead to lower rivalry other theories focusing on product differentiation the resource based view of the firm and hypercompetitive escalation predict that strategic similarity may actually increase rivalry those diametrically opposed propositions are captured as alternative hypotheses of the effect of strategic similarity with r

the moderating role of submarket dynamics on the product customization firm survival relationship in this paper we examine how the provision of product customization services affects firm survival integrating literatures on industry evolution product related adapting services and entry deterrence we hypothesize that the relationship between product customization the costly modification of a product to cater to customer needs and firm survival differs across industries based on the extent of submarkets we argue that in industries that feature submarkets more prominently the positive association between product customization and firm survival is stronger for two conceptually distinct and empirically distinguishable mechanisms customizing firms enter new submarkets and also deter potential entry we conclude that offering product customization services has strategic benefits that sometimes outweigh the cost of coordinating with customers

in defence of degrowth abstract this article defends the proposal of sustainable degrowth a starting premise is that resource and co2 limits render further growth of the economy unsustainable if degrowth is inevitable the question is how it can become socially sustainable i e a prosperous and stable rather than a catastrophic descent pricing mechanisms alone are unlikely to secure smooth adaptation a full ensemble of environmental and redistributive policies is required including among others policies for a basic income reduction of working hours environmental and consumption taxes and controls on advertising policies like these that threaten to harm the economy are less and less likely to be implemented within existing market economies whose basic institutions financial property political and redistributive depend on and mandate continuous economic growth an intertwined cultural and political change is needed that will embrace degrowth as a positive social development and reform those institutions that make growth an imperative sustainable degrowth is therefore not just a structuring concept it is a radical political project that offers a new story and a rallying slogan for a social coalition built around the aspiration to construct a society that lives better with less

to be different or to be the same it s a question and theory of strategic balance this paper addresses the performance consequences of firm level strategic similarity past research observed that firms face pressures to be different and to be the same by differentiating firms reduce competition by conforming firms demonstrate their legitimacy both reduced competition and legitimacy improve performance this paper begins building a theory of strategic balance by synthesizing the differentiation and conformity perspectives the theory directs attention to intermediate levels of strategic similarity where firms balance the pressures of competition and legitimation empirical support for the theory is found in a longitudinal study of commercial banks several suggestions for developing a theory of strategic balance conclude the paper the theory s major implication is that firms should be as different as legitimately possible copyright 1999 john wiley sons ltd

multimarket contact and collusive behavior traditional analyses of industrial behavior typically link the exercise of market power in an industry to internalfeatures such as demand conditions concentration and barriers to entry nevertheless some economists have remained concerned that external factors such as contact across markets may also play a significant role in determining the level of competitiveness in any particular industry in this article we examine the effect of multimarket contact on the degree of cooperation that firms can sustain in settings of repeated competition we isolate conditions under which multimarket contact facilitates collusion and show that these collusive gains are achieved through modes of behavior that have been identified in previous empirical studies of multimarketfirms

organizational design and the intensity of rivalry we analyze the effect of managerial compensation schemes and organizational structure on competitive behavior in imperfectly competitive product markets previous research suggests that in cases of strategic substitutability firms tend to choose organizational structures and compensation systems that commit the firm to behaving aggressively in the product market reducing firm and industry profits in contrast we show that while compensation and structure in isolation lead to excessive aggressiveness the combination of these two internal choice variables may reverse the outcome organizational design can be used as a commitment device to reduce competitive rivalry finally we find that in equilibrium firms may choose to be different one firm is decentralized and uses incentives that commit it to being aggressive while the other is centralized and uses incentives that commit it to being soft hence endogenous firm heterogeneity in the form of organizational differentiation allows firms to avoid a mutually detrimental outcome

degrowth taking stock and reviewing an emerging academic paradigm degrowth has evolved within a decade from an activist movement into a multi disciplinary academic paradigm however an overview taking stock of the peer refereed degrowth literature is yet missing here we review 91 articles that were published between 2006 and 2015 we find that the academic degrowth discourse occupies a small but expanding niche at the intersection of social and applied environmental sciences the discourse is shaped by authors from high income mainly mediterranean countries until 2012 articles largely constitute conceptual essays endorsed by normative claims more recently degrowth has branched out into modelling empirical assessments and the study of concrete implementations authors tend to agree in that economic growth cannot be sustained ad infinitum on a resource constraint planet and that degrowth requires far reaching societal change whether degrowth should be considered as a collectively consented choice or an environmentally imposed inevitability constitutes a major debate among degrowth thinkers we argue that the academic discourse could benefit from rigid hypotheses testing through input output modelling material flow analysis life cycle assessments or social surveys by analyzing the potentials for non market value creation and identifying concrete well being benefits the degrowth discourse could receive wider public support and contribute to a paradigmatic change in the social sciences

demand analysis of fresh and frozen finfish and shellfish in the united states household expenditures for at home consumption on three species of shellfish and five species of finfish were analyzed factors explaining the variation of expenditures on seafood commodities were own price household income coupon value household size geographic region urbanization race and seasonality own price elasticities ranged from 0 45 flounder sole to 1 13 oysters expenditures on fishery products were more sensitive to changes in household size than to changes in household income cross price effects of red meat and poultry were not statistically significant for comparison purposes estimates of own price income and household size elasticities from the literature were made with this set of elasticities

can degrowth overcome the leakage problem of unilateral climate policy abstract unilateral climate policy suffers from carbon leakage i e the partial offset of the initial emission reduction by increases in other countries different than most typically discussed climate policies degrowth not only aims at reducing the fossil fuel use in an economy but rather besides other social and political goals at a reduction of all factor inputs which may lead to different leakage implications we conduct the first investigation of degrowth in a multi country setting in order to i compare the leakage effects of national pure emission reduction policies to degrowth scenarios ii identify underlying channels by decomposing the implied emission changes into scale composition and technique effects and iii investigate which country characteristics determine degrowth s relative effectiveness to overcome the leakage problem using a structural gravity model we find that degrowth indeed significantly reduces leakage by keeping the sectoral composition of the country more stable and reducing uncommitted countries incentives to shift towards more energy intensive production techniques the higher effectiveness of degrowth in reducing carbon emissions is most pronounced for small and trade open economies with comparatively clean production technologies

jealousy and equilibrium overconsumption the idea that the happiness of an individual depends upon the consumption of others is widely viewed as an important feature of our shared social existence recent research in finance has used this idea through consumption externalities to explore asset pricing anomalies consumption externalities potentially break the link between pareto optimality and competitive equilibria and open the door for beneficial government intervention e g lars ljungqvist and harald uhlig 2000 in this paper we delineate two effects that a consumption externality may have an increase in aggregate consumption may a raise the marginal utility of individual consumption relative to leisure and or b lower an individual s utility level we refer to a as keeping up with the joneses henceforth kuj following jordi gali 1994 and we refer to b as jealousy jealousy is a distinct concept from kuj under kuj an individual derives greater utility from additional own consumption relative to leisure when others consume more at the same time higher per capita consumption holding fixed individual consumption can trigger either jealousy so that individual utility falls or admiration so that individual utility rises in section i of this paper we show that jealousy implies that the laissez faire equilibrium consumption level is greater than the optimal level whether preferences exhibit kuj is not necessary for this main result intuitively in the presence of jealousy consumption is similar to pollution overpollution exists because individuals do not take into account the cost of polluting on others not because an increase in economywide pollution makes the return to individual polluting higher similarly overconsumption exists because individuals do not take into account the negative effect of own consumption on jealous others things go in the opposite direction when individuals are admiring in section ii we consider a functional form that encompasses several existing models we show that jealousy determines the optimal tax to correct overconsumption and that kuj is mainly important for asset pricing

de growth and welfare in an equilibrium model with heterogeneous consumers this paper studies equilibrium growth and voluntary degrowth allowing for heterogeneous and time varying preferences the approach is based on applying a dynamic equilibrium model with externalities in production consumption and leisure preference heterogeneity regarding status competition is modeled by asymmetric consumption externality parameters whereas heterogeneity regarding voluntary simplicity is incorporated by allowing for agent specific restrictions on maximum consumption equilibrium is studied in terms of a balanced growth path bgp numerical examples suggest that degrowth triggered by voluntary simplicity by a subset of consumers less affected by status competition has a positive effect on the aggregate welfare under externalities in consumption and leisure a reduction in status competition increases the aggregate welfare and reduces the equilibrium growth rate simulations suggest that a time varying equilibrium in the heterogeneous preference model with two consumer classes is well approximated by a constant bgp

sales at risk a test of the mutual forbearance theory of conglomerate behavior in seeking to understand the implications of the large amount of diversification and conglomeration that has occurred in the united states since the mid 1960s some economists have revived the mutual forbearance hypothesis first presented by edwards 1955 several papers have attempted to formalize or test this hypothesis which states that multimarket contacts mmcs among firms have the potential for facilitating collusion in one or more of the markets where these contacts occur using 1976 data from the federal trade commission s line of business study an earlier paper feinberg 1982 developed a framework for evaluating mmcs and inthis paper tests the mutual forbearance theory of conglomerate behavior at both company and industry levels using 1976 data from the federal trade commission s line of business program this theory states that companies meeting rivals in more than one market will be able to facilitate collusion in one or all of those markets at the company level the evidence supports the theory showing salesat risk a measure of the importance of multimarket contacts to increase price cost margins in the moderate range of concentration where collusion is feasible but difficult to achieve without mutual forbearance the industry level results are weaker casting some doubt on the hypothesis associate professor of economics pennsylvania state university this paper was begun while i was a consultant to the line of business program at the federal trade commission the manager of the line of business program has certified that he has reviewed and approved the disclosure avoidance procedures used by the staff of the line of business program to insure that the data included in this paper do not identify individual company line of business data views expressed here are my own and not necessarily those of the federal trade commission i would like to thank william long george pascoe david ravenscraft melvin reder and an anonymous referee for their help on this project 1 these studies often refer to terms other than mutual forbearance e g spheres of influence extended interdependence they include adams 1974 reynolds 1976 heggestad and rhoades 1978 areeda and turner 1979 strickland 1980 feinberg 1982 1984 scott 1982 and feinberg and sherman 1985

antecedents of convergence and divergence in strategic positioning the effects of performance and aspiration on the direction of strategic change this paper investigates drivers of convergence and divergence in strategic positioning in terms of resource allocation decisions the study based on the behavioral theory of the firm suggests two unexplored kinked curve relationships between performance gaps and strategic convergence divergence first the study suggests a negative relationship between a focal firm s performance relative to aspiration levels and strategic convergence divergence where the slope is steeper when performance is above the aspiration level second it suggests a positive relationship between a target firm s performance relative to a focal firm s performance and strategic convergence divergence where the slope is steeper when a target firm s performance is below a focal firm s performance empirical analysis of dyad level data in the u s food processing industry reveals that the direction of a firm s strategic change is shaped by its aspiration level its performance level and the performance gap between it and the firm it selects as a model this study contributes to the current literature by offering preliminary indications of when and how a firm moves closer to or further away from other competing firms in its strategic position

the application and economic interpretation of selectivity models substantial differences in economic interpretations may be inferred from the estimated selectivity model results using the demand for frozen concentrated orange juice fcoj as an example the study suggests that the consumption patterns are quite similar between national brand and private label when the marginal effects and elasticities are evaluated based on actual observations rather than unobserved latent variables results show that private label fcoj is considered as a normal inferior good if the income effect is assessed based on actual potential purchases the estimated cents off elasticities for private label fcoj also vary substantially depending on which approach is used

can the survivor principle survive diversification the survivor principle holds that the competitive process weeds out inefficient firms so that hypotheses about efficient behavior can be tested by observing what firms actually do this principle underlies a large body of empirical work in strategy economics and management but do competitive markets really select for efficient behavior is the survivor principle reliable we evaluate the survivor principle in the context of corporate diversification asking if survivor based measures of interindustry relatedness are good predictors of firms decisions to exit particular lines of business controlling for other firm and industry characteristics that affect firms portfolio choices we find strong robust evidence that survivor based relatedness is an important determinant of exit this empirical regularity is consistent with an efficiency rationale for firm level diversification though we cannot rule out alternative explanations based on firms desire for legitimacy by imitation and attempts to temper

reformulating the foundations of consumer choice theory and environmental valuation abstract the burgeoning field of environmental valuation has raised serious doubts about the fundamental axioms of consumer choice theory the general validity of the walrasian system and methodological individualism this paper examines these aspects of consumer choice theory paying particular attention to the pioneering contributions of georgescu roegen we argue that evidence from psychology game theory anthropology and contingent valuation surveys reveals a more complex pattern of decision making than that described by neoclassical utility theory we discuss the notions of the invariance of preferences non satiation the principle of complementarity lexicographic preferences and the hierarchy of wants with reference to environmental valuation we also discuss the notion of marginal utility of money the validity of the walrasian system and methodological individualism using scaling concept in hierarchy theory we then address the conflict between theory and reality by introducing a probabilistic binary choice scheme under uncertainty about environmental attributes we argue that these extensions are necessary to account for consumer choices revealed in environmental valuation surveys we conclude with the hope that a reformulation of consumer choice theory based on realistic models of human behavior can be the basis for a viable alternative to neoclassical welfare economics

the japanese beer wars initiating and responding to hypercompetition in new product development in the mid 1980s the japanese beer industry a stable oligopoly in which competition had traditionally been limited to well understood nonprice dimensions experienced an outbreak of new product hypercompetition which saw a ten fold increase in the industry s new product introduction rate produced a major shake up in firms competitive positions and forced firms to transform themselves in fundamental ways in order to compete effectively surprisingly this hyper competition occurred despite heavy government regulation of the industry driving it were a variety of demographic dietary social economic and distribution trends which affected demand for beer plus the existence of a major player asahi on the edge of bankruptcy and therefore sufficiently desperate to risk a frontal attack on the industry leader kirin at the firm level substantial internal change and the building of new organizational capabilities were required both to initiate and respond to hypercompetition examining in detail th

the energetic metabolism of societies and the degrowth paradigm analyzing biophysical constraints and realities the belief that it is possible to have a perpetual economic growth based on fossil energy has been challenged since the 1970s however only in the last decade is this issue re emerging once again because of the predicaments of climate change and peak oil many finally start to perceive that an economic degrowth entailing a downscaling of the current size and pattern of socio economic systems seem unavoidable in this paper we analyze the implications the feasibility and the desirability of possible trajectories of downscaling from an energetic perspective the quantitative analysis is based on the methodological approach of societal metabolism and it provides a dynamic accounting of the profile of energy flows required and consumed by societies in relation the expression of a given set of societal functions this analysis makes it possible to check two types of constraints external constraints supply and sink side limits for the whole and internal constraints the feasibility of energy budget of the various parts of the society expressing the required functions the analysis of the metabolic pattern of a sample of developed countries is used to discuss possible implications of i demographic changes ii the declining supply of net energy sources and iii the effects of the jevons paradox within such an analysis a few assumptions and recipes of the degrowth movement seem problematic i population is and will remain as a relevant variable to be considered ii the proposed reduction in working hours seem to be impractical unless a major catastrophe will reset current civilization to pre industrial standards and iii voluntary reduction of personal energy consumption even if a welcome adjustment alone will not solve the existing problems in the final part of the paper future energetic road maps are questioned within the realm of post normal science can we plan degrowth if we are serious about the need of doing something completely different societies will have to learn how to deliberate under uncertainty within the realms of flexible management and stop planning for either growth or degrowth moreover before suggesting policies it would be wise first to try to understand the option space

an equilibrium framework for the analysis of a degrowth society with asymmetric agents sharing and basic income abstract this paper presents a novel equilibrium framework allowing for asymmetries in the initial wealth allocations labour supplies as well as in the preferences of optimizing agents the framework is applied to study a degrowth society where a subset of agents voluntarily limit their material consumption thereby complying with voluntary simplicity vs at micro level the utility maximization problems of asymmetric agents are formulated and solved for optimal labour supplies new macro level equilibrium solutions accounting for wealth inequality are presented based on different labour supply models the equilibrium welfare is measured using a bernoully nash aggregate an increase in the share of the vs type agents implies a degrowth transition to a lower level of average consumption analysis of the equilibrium framework shows that degrowth whereby average market based consumption falls improves the equilibrium welfare assuming the vs type agents have sufficient resources enabling a reduction in labour supplies sharing collaborative consumption and basic income support welfare increasing degrowth any growing economy can eventually reach the size at which degrowth would improve the welfare simulations suggest that degrowth can also yield a pareto improvement in welfare

new organizational forms and strategies for managing in hypercompetitive environments strong forces of change globalization demographic shifts e g aging population and declining fertility rates advances in information technology demassification of society and hypercompetition are reshaping the competitive landscape worldwide as a result companies in most industries are not only undergoing rapid and radical change but are also experiencing a fundamental shift in the rules of competition and the way the game of competition is played the old genteel stable oligopolies that defined competition during the 20th century are rapidly restructuring in their place are emerging markets fraught with uncertainty diverse global players rapid technological change widespread price wars and seemingly endless reorganization that transition is occurring not only in the united states but also in europe latin america and asia in this issue we demonstrate that as predicted by those early researchers a dramatic and far reaching shift has occurred in the nature of competition in most ind

hubs and high fares dominance and market power in the u s airline industry this article estimates the importance of route and airport dominance in determining the degree of market power exercised by an airline the results indicate that an airline s share of passengers on a route and at the endpoint airports significantly influences its ability to mark up price above cost the high markups of a dominant airline however do not create much of an umbrella effect from which carriers with smaller operations in the same markets can benefit the article suggests a number of possible explanations for this asymmetry

multimarket contact economies of scope and firm performance we integrate the efficiency and competitive effects of product market scope choice into a comprehensive model of economic performance and empirically test the model in the context of the u s airli

less is more the influence of aspirations and priming on well being abstract if resource consumption is to be reduced through economic de growth individuals in industrialized countries may have to accept a reduction in their consumption levels in democratic societies implementing this process requires the consent of a majority of the population however as long as people have high reference levels of consumption lower consumption will induce feelings of loss and hence evoke resistance this paper summarizes recent experimental evidence on some of the factors that determine the utility costs involved in decreasing consumption the results suggest that the acceptance of economic de growth would be facilitated if people s material aspirations were moderated and the extent to which material achievements are emphasized in our daily environment were reduced an analysis of the financial and economic crisis that developed during 2008 suggests that it will not contribute to either of these points rather by increasing the public s focus on the economic sphere even beyond pre crisis levels it may lead to a further decrease in the acceptance of de growth policies in the population

multimarket contact competition and pricing in banking abstract in this paper we assess the impact of multimarket contact of banks on their market power by means of a simultaneous equation model in which the divergence of price from marginal cost is a function of multimarket linkages the model is estimated using aggregate data from the italian regions for the years 1997 2009 our results show that multimarket contact is positively and significantly correlated to the market power index and is also connected to both home and non home market concentration the evidence is robust to changes in model specification and multimarket contact measures and supports the idea that firms which have a greater amount of contact are more likely to collude

voluntary simplicity lifestyles and energy conservation this paper presents a behavioral index for measuring an individual s tendency towards a lifestyle of voluntary simplicity characterized by ecological awareness attempts to become more self sufficient and efforts to decrease personal consumption of goods the index is shown to predict energy conservation and intention to purchase solar equipment

living by the golden rule multimarket contact in the u s airline industry this paper examines empirically the effects of multimarket contact on pricing in the u s airline industry the analysis of the time series and cross sectional variability of airline fares in the 1000 largest domestic city pair routes reveals the presence of statistically significant and quantitatively important multimarket effects fares are higher in city pair markets served by carriers with extensive interroute contacts these findings are consistent with the claims of industry experts that airlines live by the golden rule i e that they refrain from initiating aggressive pricing actions in a given route for fear of what their competitors might do in other jointly contested routes during his testimony mr steven b elkins senior director of marketing systems development for northwest airlines cited an example in which northwest lowered fares on night flights that were flying with empty seats in a number of routes from minneapolis and upper midwest cities to various west coast cities he said that continental airlines swiftly responded by cutting prices in important northwest markets mr elkins s memo advises northwest pricing analysts we will live by the golden rule in his testimony he explained that the golden rule in that context was that i did not want my pricing analyst initiating actions in another carrier s market like chicago for fear of what that other carrier might do to retaliate wall street journal october 9 1990 p b1

a selectivity model of household food marketing behavior in sub saharan africa the agricultural household s discrete decision of whether to participate in coarse grain markets is separated here from the continuous decision of how much to sell or buy conditional on participation failure to participate in markets results from high fixed transactions costs a selectivity model endogenously switches households into alternative market participation states correcting for bias caused by the exclusion of unobservable variables affecting both discrete and continuous decisions improved market information increases the probability of participation by sellers while access to cereals processing technology increases quantities transacted by both sellers and buyers conditional on participation

a study of degrowth paths based on the von neumann equilibrium model abstract this paper revisits the von neumann equilibrium model from a degrowth perspective degrowth can be either planned or autonomous based on voluntary simplicity vs characterized by voluntary constraints on the private consumptions any share of the working population is allowed to limit their private consumptions or ecological footprint degrowth means a lower economic growth rate as well as reductions in the usage of materials and fossil energy however when the economy cannot fit within the biophysical boundary despite such reductions degrowth can also mean a deliberate transition towards lesser and cleaner production of a smaller number of goods taking ecological boundaries into consideration may thus switch the direction of an economy from growth to degrowth degrowth is consistent with economic equilibrium in the dynamic input output model degrowth equilibrium results when a critical mass of the population prioritizes diminishing the ecological deficit over increasing the output levels green growth can take place during degrowth while the economy gradually shrinks the interest profit rate in macroeconomic equilibrium is negative due to the conservation target excessive consumption has negative value to vs type agents degrowing private consumptions implies less work more leisure and better quality of the environment improving social welfare degrowth can be advanced by adopting a more cooperative production system or by imposing high ecological taxes the equilibrium model yields an argument for basic income as a means of supporting welfare during degrowth and of compensating for unpaid work the open economy version of the model shows reduced scope for intra industry trade between similar countries

status effects and negative utility growth this paper explains the observed stagnation of happiness measures through a growth model in which agents care about conspicuous consumption normal goods confer direct utility while status goods confer utility only at the expense of others firms can improve the quality of both goods through r d the nash equilibrium of the consumer game results in the share of expenditure on status goods increasing with the number of times the status good has been improved as the economy grows resources for innovation are transferred entirely to status good r d the resulting long run rate of utility growth is negative

optimal versus sustainable degrowth policies abstract this paper introduces a natural resource and pollution in a ramsey growth model which relies on the postulates of ecological economics it studies the impact of voluntary degrowth policies on production and welfare the instrument of these policies is a tax on the natural resource these public policies are implemented after the downturn of the households welfare following from the increased pollution two kinds of policies are considered and rely either on an optimality criterion or on an intergenerational equity criterion with respect to the laissez faire case they decrease both production and pollution but increase welfare classes of sustainable degrowth paths characterized by time constant or time increasing tax rates are determined

a study on financial opportunity costs of growing local varieties of sorghum in ethiopia implications for on farm conservation policy abstract the increasing interest in on farm conservation is driven by its diverse attractive features its participatory nature and its flexible and dynamic features its capacity to maintain not only crop diversity but the knowledge that evolves with it and the chance it offers to link conservation with utilization and farmers livelihoods to implement this strategy on a sustainable basis policy incentives are crucial this paper argues that opportunity costs farmers face have a role to play to design sound policy incentives taking sorghum as an example opportunity costs have been examined in this paper using data collected from 198 farmers in eastern ethiopia the average opportunity costs suggest the size of the required policy incentives and they are the basis to estimate the national conservation costs for on farm conservation the regression analysis shows that opportunity costs increase with access to output markets and extension output price access to input supply experience in growing improved varieties and the relative importance of the crop on the contrary plot quality input price and oxen ownership are reducing the opportunity costs the paper then concludes outlining the policy implications of the empirical findings to incentive design for on farm conservation

celestial bodies and satellites energy issues models and imaginaries in denmark since 1973 abstract this article uses the history of macroeconomic energy modelling in denmark as a case for presenting a theoretical framework which describes issues publics and imaginaries as an important nexus for energy policy the story evolves around the actions tensions and entanglement of two publics the traditionalist and the environmentalist and presents macroeconomic modelling as an instrument for issue articulation and the construction of energy policy imaginaries the article concludes that macroeconomic modelling is an effective instrument for articulating the economic realities of energy policy and that economic growth plays a key role in these articulations by determining the basic preconditions for collective imaginaries of energy system futures