factor use and productivity change in the alcoholic beverage industries 1 introductiondemands for wine beer and spirits are in view of their substitutable nature often studied in conjunction with one another heien and pompelli 1989 nelson 1999 yet the alcoholic beverage industries are connected by similarities in their production processes and inputs as well as by the demand substitutability of their products lea and piggott 1995 these industries are therefore usefully examined together when questions about technical change and productivity growth arise little recent attention has been given to the nature of technical adjustments in the beer sector and no such work seems ever to have been published on wine and spirits 1brewing and distilling and to a smaller extent winemaking have become increasingly mechanized during the past half century as they have in most other manufacturing sectors packaging rates are higher shelf lives longer and storage and transportation technology improved tremblay 1987 elzinga 1990 pp 216 219 iserentant 1995 piggott and conner 1995 gisser 1999 the fixed costs associated with these innovations have broadly speaking served as an incentive to build fewer and larger plants industry concentration in the beer sector rose dramatically from the mid 1930s through the mid 1980s plant numbers then expanded as microbreweries catered to the new demand for product variety and idiosyncrasy although four firm concentration continued to rise through the mid 1990s in the spirits sector domiciled largely in the south distillery numbers continue to decline spurred by declining aggregate demand as well as scale economies no such broad consolidation is taking place in the wine industry where several california and new york firms long have occupied a substantial market share instead wineries numbers have grown rapidly and uninterruptedly since 1970 proliferating in regions long thought inhospitable to wine grape production growing consumer interest in wine variety and microclimates a trend similar to that for microbrews has abetted this diversification goodhue et al 2000 prices in the alcoholic beverage industries have in real terms fallen substantially in the past 40 years net prices to brewers have dropped 37 to wineries 16 and to distillers 31 at the same time real wage rates generally have risen and except for brief instability during the 1970s so have capital rental prices real material prices in all three sectors rose from the 1950s through the 1960s fell through the 1970s then recovered by the mid 1990s to their early 1970s levels relative factor prices in the beer industry broadly representative of those in the other two sectors are shown in figure 1 wage rates rose relative to both capital and material prices until 1980 thereafter wages fell relative to capital but continued to rise relative to material prices u s bureau of the census various years expenditure shares illustrated in figure 2 suggest that the beer industry is the most capital intensive of the three sectors by the mid 1990s capital expenditures represented one third of beer production costs compared to only one fifth of wine and distilling costs on the other hand raw materials constituted little more than half of beer expenses but nearly 70 of wine and distilling costs labor accounted for only 10 12 of expenditures in any of these industries figure 2 seems to suggest that at least since the mid 1970s or early 1980s capital has substituted for labor and materials in all three sectors yet as figure 1 reveals much of these share changes are accounted for by the rising relative price of capital the substantial narrowing of output input price margins in the alcoholic beverage sector suggests that the sector has become more cost efficient through either technical change scale economies improved utilization rates or other means technical changes themselves can alter potential scale economies and productive capacities and hence prospects for future variations in industry structure

how does advertising depend on competition evidence from u s brewing the relationship between market structure and advertising has been extensively studied but has generated sharply opposing theoretical predictions as well as inconclusive empirical findings likely because of severe endogeneity concerns we exploit the 2008 merger of miller and coors in the u s brewing industry to examine how changes in local concentration affect firms advertising behavior well established regional preferences over beer brands and the sharp increase in concentration from the merger make this an excellent setting to analyze this question we find a significant positive effect of local market concentration on advertising expenditures a 100 point increase in the herfindahl hirschmann index measure of concentration increases advertising per capita by about 5 our findings shed light on how and when firms choose to deploy advertising the online appendix is available at https doi org 10 1287 mnsc 2017 2889 this paper was accepted by eric anderson marketing

international bargaining in the presence of global environmental change this model deals with the greenhouse effect that is to say with a problem of international pollution through a description of the bargaining process it aims to determine the different forms that may be taken by cooperation agreements between the countries involved we demonstrate in particular that under some conditions it is always possible for the countries to reach an agreement such agreements are the work of a group of so called leader countries characterized by their commitment in favour of cooperation these leader countries use transfers to induce other countries to join them but they can be insufficiently attractive to convince all the countries to cooperate so as we show in the discussion the cooperation is not necessarily total therefore the key of a common problem can be a partial cooperation and not necessarily a common cooperation

diversification and predation one common assumption in the post mcgee 1958 predatory pricing literature has been that the predatory firm must be larger have deeper pockets than the victim of the predation usually an entrant this assumption stems from a model of predation in which the contesting firms sell at levels below cost until one of the firms exits after exhausting its financial resources 1 in such a scenario the firm with greater financial resources will usually still be in business when the other firm exits on this basis some economists and judges would summarily dismiss any case in which the alleged predatee is larger than the alleged predator for example at least two members of the federal trade commission sided with the respondent in the recent ftc v general foods case 2 voicing the view that a smaller firm could

negotiating an agreement on global warming a theoretical analysis abstract the outcome of international negotiation on combatting global warming is derived and analyzed using a two country bargaining model it is shown that while side payments between countries will generally be part of an agreement some of these payments are made purely as a result of asymmetry in bargaining power and have nothing to do with the polluter pays principle or the victim pays principle factors affecting the outcome of negotiation include a country s size of population the welfare level at the disagreement point and the order of making offers the enforcement issue is also discussed

media markets and localism does local news en espanol boost hispanic voter turnout the same time the availability of these products reduces the consumption of local news not only because some consumers prefer national and global content to local information but also because local media products that lose a significant number of consumers are forced to cut qual ity and they may even cease to exist if their audience falls below a critical threshold for these reasons some scholars claim that the rise of integrated media markets undermines local civic engagement robert d putnam 2000 against this backdrop many regulatory agencies including the federal communications commission fcc of the united states seek to protect local media and promote localism for instance by limiting ownership concentration 1 however localism is desirable only if there are in fact positive spillovers from the provision of local content that can help justify the loss of private welfare that integrated media markets would provide in this paper we propose a simple test for the existence of spillovers from local news pro gramming asking if the presence of local television news affects civic behavior the ubiq uity of local news programming across all us metro areas makes it impossible to study its effects on the general population in contrast the availability of spanish language news has increased considerably in recent years providing us with an experiment to study the effect of local news on one important measure of civic engagement voter turnout in local elections in particular we use a differencing approach asking whether hispanic voter turnout is higher in relation to non hispanic turnout in metro areas with spanish language local television news our results indicate that spanish language local television news raises hispanic turnout by more than 4 percentage points local news targeted at hispanics has no effect on the participa tion of non hispanics and as one would expect a significantly smaller effect in years with a presidential race in markets with spanish language news about a quarter of hispanics turn to these programs our estimates thus imply that news in spanish caused about a fifth of spanish language news viewers to start voting interestingly hispanics with access to news in spanish do not increase the time they spend watching news content analyses of spanish language news programs in the united states find that these shows are much more likely to report on

co operation and unilateral commitment in the presence of global environmental problems this paper focuses on the link between group co operation and unilateral commitment of some countries in the presence of global environmental problems we show that in case of a failure of negotiation some countries can decide to commit unilaterally and reduce their emissions we call this behaviour precautionary commitment absence of international agreement does not mean global defection from the environmental issue we also show that the emergence of a non co ordinated global co operation can result from a strategic action from the members of the coalition the insiders of the coalition create an incentive for the non members to reduce without co ordinating their emissions

climate change heterogeneities and stability of international fiscal harmonization this paper analyzes the instability introduced into multilateral agreements by two types of heterogeneity heterogeneity of countries size and number of producing members and heterogeneity of lobbies asymmetric influence at the national versus the international level the work extends theoretical prospective analyses on environmental taxation as illustrated by the harmonization of fuel taxes we show that the acceptability of the tax set at the multilateral level depends on the type of coalitions that participate in the multilateral negotiation size and number of producing countries and the asymmetry in the local state level power of lobbies during negotiations

a reappraisal of interpreting rising concentration the case of beer there has been a tremendous amount of change in the structure and conduct of the post world war ii brewing industry most important concentration has risen scale economies have increased and advertising intensity especially television advertising has changed in a recent article in this journal william j lynk 1984 attempted to determine empirically how changes in concentration and technology affected brewing industry performance between 1974 and 1980 2 he found support for the competition hypothesis that cost reductions due to cost superiority or the exploitation of scale economies have dominated the possible market power effect of rising concentration and have caused output to increase and prices to fall thus the alternative or the exclusion hypothesis that large brewers have squeezed smaller rivals out of in contrast to the finding of william j lynk that rising concentration in the u s brewing industry caused industry output to expand and by his presumption prices to fall the results of this study show that concentration had no significant direct impact on post world war ii beer prices estimates from a reduced form price equation reveal that advertising and costs have had a significant positive effect on beer prices these results provide evidence that the rising concentration scale economies and advertising expenditures in the u s brewing industry generated higher beer prices between 1950 and 1971 i would like to thank william hallagan for bringing lynk s paper to my attention and james f ragan jr carol horton tremblay and an anonymous referee for their helpful comments on earlier drafts any remaining errors are my responsibility 1 for example the number of firms declined from 386 to 37 and the five firm concentration ratio increased from 23 to 71 between 1950 and 1978 see elzinga 1973 1982 keithahn 1978 ornstein 1981 and greer 1971a 1981 for excellent industry studies 2 in this paper industry performance is evaluated from the consumer s point of view for a given level of product quality if structure and conduct changes are beneficial to consumers by causing the market price to fall then industry performance has improved

transparency and economic policy we provide a two period model of political competition in which voters imperfectly observe the electoral promises made to other voters imperfect observability generates an incentive for candidates to offer excessive transfers even if voters are homogeneous and taxation is distortionary government spending is larger than in a world of perfect observability transfers are partly financed through government debt and the size of the debt is higher in less transparent political systems the model provides an explanation of fiscal churning it also predicts that groups whose transfers are less visible to others receive higher transfers and that imperfect transparency of transfers may lead to underprovision of public goods from the policy perspective the main novelty of our analysis is a separate evaluation of the transparency of spending and the transparency of revenues we show that the transparency of the political system does not unambiguously improve efficiency transparency of spending is beneficial but transparency of revenues can be counterproductive because it endogenously leads to increased wasteful spending

media competition and electoral politics we build a framework linking competition in the media market to political participation media outlets report on the ability of candidates running for office and compete for audience through their choice of slant citizens consume news only if the expected utility of being informed about candidates ability is sufficiently large for their group collectively our results can reconcile seemingly contradictory empirical evidence showing that entry in the media market can either increase or decrease turnout while information pushes up independent turnout partisans adjust their turnout to the ability of their preferred candidate and on average they vote less when informed

political economy of public policies insights from distortions to agricultural and food markets the agricultural and food sector is an ideal case for investigating the political economy of public policies many of the policy developments in this sector since the 1950s have been sudden and transformational while others have been gradual but persistent this paper reviews and synthesizes the literature on trends and fluctuations in market distortions and the political economy explanations that have been advanced based on a rich global data set covering a half century of evidence on commodities countries and policy instruments the paper identifies hypotheses that have been explored in the literature on the extent of market distortions and the conditions under which reform may be feasible

what happened to fortress europe external trade policy liberalization in the european union in an era when many fear the breakdown of the global trading order through the emergence of relatively closed regional trading blocs assessing the effects of european integration on external european union trade is particularly important surprisingly despite a severe recession accompanied by record levels of unemployment a history of increasing protection under similar economic circumstances and alarming predictions about fortress europe external trade policy in the region has liberalized in recent years prominent trade policy explanations emphasizing changing interest group demands or changing ideas of policymakers are inadequate to account for this significant change in trade policy instead much of this liberalization can be best understood as an unforeseen consequence of the single european act completing the single market undermined the effectiveness of national trade measures and made it difficult to enact new trade barriers thus producing a liberal bias in european policy

explaining cooperation under anarchy hypotheses and strategies what circumstances favor the realization of mutual interests in the absence of centralized authority and through what strategies can nations foster the emergence of cooperation by altering the circumstances that they confront elementary game theory suggests three sets of conditions that serve as proximate explanations of the incidence of cooperation and discord i payoff structure mutual and conflicting preferences 2 the shadow of the future single play and iterated games and 3 number of players two person and n person games each of these three attributes of context may be subject to willful modification nations may create the preconditions for cooperation through strategies to alter payoffs lengthen the shadow of the future and reduce the number of actors required to realize limited mutual interests

interpreting rising concentration the case of beer despite considerable long term progress in distinguishing conceptually between the fact of market power and the calculation of market concentration antitrust claimants the department of justice the federal trade commission ftc and private litigants continue to place substantial emphasis on defining a market computing market shares and calculating measures of concentration the operating supposition is virtually always that monopoly or market power is positively associated with concentration whether other offsetting characteristics are also associated with high concentration ordinarily receives less if any consideration the most often cited consideration weighing against an automatic condemnation of increased concentration say through horizontal merger is that costs market power and concentration may all be jointly related economic analysis suggests that if higher concentration brings with it is caused by or causes lower industry costs then it may also bring positive total benefits even if antitrust concern with industry concentration focuses on market power the ability of firms to restrict output and raise price the brewing industry among others has been a major target of this concern because of its high and rising concentration this paper sketches two alternative explanations for this change in industry structure competitive expansion by the more efficient brewers and anticompetitive exclusion of equally efficient but smaller brewers empirical analysis indicates that competition is the better hypothesis in explaining changes in the structure of the beer market

corporate unity in american trade policy a network analysis of corporate dyad political action this essay examines factors that produce political unity among large u s corporations advocating free trade expanding on old debates these data and analyses validate the importance of organizational and class cohesion approaches to corporate political action methodologically the political unity of pairs dyads of firms in trade policy activism is analyzed with quadratic assignment procedure regression shared membership in prominent policy networks and board interlocks positively predict corporate political unity across three areas of trade policy influence from the executive branch to the legislature non network organizational indicators also significantly predicted corporate trade policy activism the findings support business unity accounts of corporate political action and suggest that higher levels of firm embeddedness within intercorporate networks facilitate collective corporate political action

the principle of minimum differentiation holds under sufficient heterogeneity the so called principle of minimum differentiation stated by hotelling has been challenged by many authors this paper restores the principle by showing that n firms locate at the center of the market and charge prices higher than the marginal cost of production when heterogeneity in consumers tastes is large enough

power politics and international trade r recent literature attributes the relative scarcity of open international markets to the prisoner s dilemma structure of state preferences with respect to trade we argue that the prisoner s dilemma representation does not reflect the most critical aspect of free trade agreements in an anarchic international system namely their security externalities we consider these external effects explicitly doing so leads us to two conclusions 1 free trade is more likely within rather than across political military alliances and 2 alliances are more likely to evolve into free trade coalitions if they are embedded in bipolar systems than in multipolar systems using data drawn from an 80 year period beginning in 1905 we test these hypotheses the results of the analysis make it clear that alliances do have a direct statistically significant and large impact on bilateral trade flows and that this relationship is stronger in bipolar rather than in multipolar systems in the early 1970s students of international relations began what would become a long and heated debate about the political correlates of open international markets recently however an important element of consensus has begun to emerge most contributors to this debate now seem to agree that the prisoner s dilemma structure of state preferences with respect to trade explains the relative dearth of open international markets here we argue that what has become the standard prisoner s dilemma representation neglects the most critical aspect of free trade agreements in the anarchic international system namely their security externalities we consider these external effects explicitly in order to do so we construct and analyze a simple game theoretic model the results of this analysis demonstrate that tariff games between allies differ systematically from those played between actual or potential adversaries these differences imply that free trade is more likely within rather than across political military alliances however our analysis also suggests that the evolutionary prospects of alliances vary those that are the products of bipolar systems are more likely to evolve into free trade coalitions than are their multipolar counterparts less credible exit threats and clearer responsibilities for alliance stability explain the advantage of a bipolar system we test this argument using data drawn from an 80 year period beginning in 1905 the empirical analysis supports our argument it demonstrates that alliances have a direct statistically significant and large effect upon bilateral trade moreover it shows that on average alliances have a much stronger effect on trade in a bipolar than in a multipolar world 2

cost uncertainty and unilateral abatement unilateral abatement is sometimes advocated in order to set a good example that will make other countries follow the aim of this paper is to investigate whether existence of correlated cost uncertainty provides an incentive for a country to undertake unilateral abatement the theoretical model is driven by two main mechanisms first a learning effect as the follower country might reduce its risk premium as it can observe the cost level in the leader country second there is the public good effect i e the marginal benefit of abatement declines when abatement is a public good and other countries contribute to pollution reductions results shows that unilateral abatement would be efficient in reducing uncertainty about the unit costs of abatement if a country with low cost uncertainty would undertake abatement first while a country with initially high cost uncertainty would follow however countries may prefer to act simultaneously because of the larger uncertainties that are inherent in a sequential game

resource allocation to defensive marketing and manufacturing strategies abstract in this paper we investigate the coordinated use of marketing and manufacturing strategies to formulate a defensive business strategy for an incumbent firm upon market entry while defensive marketing strategies have been researched extensively little has been done on defensive manufacturing strategies and even less on coordinating these two we propose a formulation for the joint formation of a defensive strategy by the marketing and production functions under budget constraint considerations the incumbent firm may allocate its resourcesto advertising and distribution expenditures as well as to manufacturing investments to reduce the unit production cost the incumbent firm has also the option of simply allocating all of its resources purely to advertising and distribution we show that while there exist cases where the optimal reaction to entry involves investments in manufacturing improvements there are also cases where defense is in marketing strategies alone we identify the market conditions that promote such reactions to entry and also provide sensitivity analysis

the state and american trade strategy in the pre hegemonic era trade policy is commonly seen as a product of domestic interest group politics despite the obvious economic distortions introduced by trade barriers protectionism recurs we are often told because producers organize more readily than consumers and dominate the political process in this demand side explanation of protection the state is seen as the empty receptacle of societal bargaining with no independent voice or role

firms and tariff regime change explaining the demand for protection although it is commonly argued that there is a connection between tariff levels and business conditions this hypothesis has not been subjected to systematic empirical analysis or given any theoretical basis the author presents two complementary theories of the movement of tariff levels in response to changing business conditions both explain tariff changes in terms of the changing political demands of business firms and both rely on the business cycle to drive these changing demands one theory is a conventional argument about changing opportunities for entry and exit the other treats firms as satisficers the theories yield similar predictions preliminary empirical analysis while consistent with both does not differentiate between them

informative advertising with differentiated products in this paper we study the role of promotional expenditures by sellers in a model of product differentiation advertising conveys full and accurate information about the characteristics of products heterogeneous consumers who have no source of information other than advertisements seek to purchase the products that best fit their needs despite the roles played by advertising in improving the matching of products and consumers and in increasing the elasticity of demand faced by each firm we find that the market determined levels of advertising are excessive given the extent of diversity in the market we derive a promotional equilibrium based on a specific information transmission technology paying explicit attention to the structure of consumer information and its impact on firms demand curves this allows us to study the effects of changes in the advertising technology including an increased ability to target messages to specific groups of consumers on the equilibrium in the product market we find that decreased advertising costs may reduce profits by increasing the severity of price competition

the partisan paradox and the u s tariff 1877 1934 whereas historical accounts of u s tariff policy from 1877 to 1934 emphasize the pivotal role of parties previous quantitative studies have failed to identify significant partisan effects a formal model of policymaking in which strong parties aggregate voters preferences provides empirical equations to test for partisan effects subsequent time series analysis shows that even after controlling for interest group demands partisan control of government did significantly affect the tariff moreover during the period under study the two political parties enacted tariff policies that benefited different sets of producer groups at the expense of others thus political institutions did play a significant role in shaping the interests that influence u s foreign economic policy

environmental protection a theory of direct and indirect competition for political influence how is it that environmental groups can have a strong impact on environmental policy but without much lobbying this paper develops a model of direct lobbying the government and indirect persuading the public competition for political influence and finds that they are complementary however an increase in the effectiveness of public persuasion or a rise of public environmental awareness induces substitution between the two the findings establish that the empirical phenomenon of lack of political contribution from environmental groups may not be related to financial constraints but to their greater effectiveness in public persuasion and growing public environmental awareness the size of its economic stake and hence the associated lobbying effort and the efficiency of its organization in exerting political influence how then can we explain why some environmental groups have been very successful against polluting industries when the latter s economic stakes seem very high and they lobby more and their interests are more efficiently organized some might suggest that the reason for the success of the environmental movement is that environmental groups have large memberships and can provide block votes 2 however according to olson 1965 a large membership of an interest group is not necessarily an advantage and it is still uncertain whether environmental groups are able to mobilize their members to cast votes based on such affiliations this paper suggests an alternative explanation by developing a theory of direct and indirect competition between special interests for political influence rather than marshalling block votes a primary feature of our framework is that two opposing interest groups an environmentalist group and an industrialist group compete directly and indirectly for political influence in a three stage game the indirect competition takes place in the first stage in which interest groups exert effort in persuading the public to indirectly influence government policy the direct competition takes place in the second stage in which interest groups exert effort in

information and strategic political polarisation we develop a model of electoral competition in which two opportunistic candidates select their policy position and invest in quality policy positions are observed and during the campaign the press reveals some information about quality we demonstrate that when information is imperfect the blackdowns median voter theorem fails to hold for intermediate information levels the unique equilibrium is such that candidates propose policies different from the median voter s bliss point by contrast convergence to the median occurs when quality is almost always or almost never revealed we also show that a profit maximising press may collect more information than socially optimal during the 1995 electoral campaign in belgium the vld a traditionally right wing

growth waves systemic openness and protectionism there is a distinctively repetitive quality about trade policy problems domestic economic growth slows producers seek protection against foreign competitors and national decision makers raise barriers to trade while at the same time criticizing their counterparts in other governments for engaging in similar practices because trade is one of the more important topics in international and comparative political economy and because this scenario has played itself out more than a few times it is not surprising that a number of theorists have sought to model the underlying processes thought to produce movements toward and away from protectionism by now a variety of different types of approaches ranging from the cognitive to the systemic have been tried systemic structure ideas and ideology surplus capacity business cycles and shifts in elite orientation and domestic coalitions in response to external crises have been emphasized as principal theoretical foci our position is that the different levels of analysis and alternative foci all have merit and utility what they lack is an appreciation for the underlying systemic processes that link together these various facets of the political economy we seek to develop a theoretical argument that explicates these underlying processes the argument centers on recurring growth waves characterized in alternating pattern by the ascent of system leaders and the subsequent successful attempt of technological followers to catch up with the leaders the downturns of the growth waves produce conditions favoring protectionism but we contend the form and the intensity of protectionism that are likely to be produced will depend on which of the two types of growth waves is in progress ascent waves are characterized by the emergence of new technological leaders and a consequent increase in the gap between the leaders and the technological followers during the periods of structural transition and intense

the political economy of the tariff cycle how can protectionism and free trade succeed one another our answer focuses on the changing balance of private actors political demands these actors acquire interests in tariff policies because their assets are spatially concentrated and trade in these assets is subject to various limitations actors in regions experiencing no new investment in an established industry old regions have interests that sometimes differ from those in regions where there is new investment we show that old regions have no reason to be involved in tariff politics at business cycle peaks during troughs whether a state becomes more or less protectionist depends ceteris paribus on the relative political strength of old import competing and old exporting interests if old import competing industries outweigh the old exporters then protection will tend to increase at the trough and decrease at the peak of a business cycle the opposite result occurs when old exporters are more influential

integrating western and eastern european markets changing trade preferences in traditional manufacturing sectors in the european union although general trade theories are useful for specifying which groups support or oppose trade these frameworks see preferences as static and do not explain how they change over time instead this article proposes a dynamic perspective that considers how economic adjustment and liberal trade policies alter trade preferences the article examines why the traditionally protectionist german textile and apparel sectors accept the recent trade agreements with eastern europe producers can exploit technological and product changes by gaining access to export markets furthermore to take advantage of low labor costs abroad producers shift production to these countries for later reimportation lower trade barriers are therefore attractive to producers this strategy is also supported by increasingly liberal trade policy orientations in germany the european union eu and the general agreement on tariffs and trade gatt german producers have therefore modified their protectionist focus to a qualified suppo

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

the demand for international regimes international regimes can be understood as results of rational behavior by the actors principally states that create them regimes are demanded in part because they facilitate the making of agreements by providing information and reducing transactions costs in world politics increased interdependence among issues greater issue density will lead to increased demand for regimes insofar as regimes succeed in providing high quality information through such processes as the construction of generally accepted norms or the development of transgovernmental relations they create demand for their own continuance even if the structural conditions such as hegemony under which they were first supplied change analysis of the demand for international regimes thus helps us to understand lags between structural change and regime change as well as to assess the significance of transgovernmental policy networks several assertions of structural theory seem problematic in light of this analysis hegemony may not be a necessary condition for stable international regimes past patterns of institutionalized cooperation may be able to compensate to some extent for increasing fragmentation of power

radio s impact on public spending if informed voters receive favorable policies then the invention of a new mass medium may affect government policies since it affects who is informed and who is not these ideas are developed in a voting model the model forms the basis for an empirical investigation of a major new deal relief program implemented in the middle of the expansion period of radio the main empirical finding is that u s counties with many radio listeners received more relief funds more funds were allocated to poor counties with high unemployment but controlling for these and other variables the effects of radio are large and highly significant

the limitations of structural theories of commercial policy if a structural theory is one that purports to explain behavior in terms of environmental conditions and that largely eschews analysis of the internal processes of decision makers then it is difficult to identify a theory of commercial policy which is not structural most microeconomic theory is structural so are most balance of power theories in the realm of theories of commercial policy hegemonic stability theories as well as some recently developed theories of international tariff levels fit this description in the latter category judith goldstein s work which attempts to account for american commercial policy in terms of the ideology of american central decision makers and charles kindleberger s ambitious sketch of a general theory of 19th century tariff changes in terms of the diffusion of liberal ideology constitute lonely examples of nonstructural research strategies

an information rationale for the power of special interests political decisions are often biased in favor of special interests at the expense of the general public and they are frequently inefficient in the sense that the losses incurred by the majority exceed the gains enjoyed by the minority this article explains the bias in terms of information asymmetries and the free rider problem first incumbents increase their reelection prospects by biasing policy toward groups that are better able to monitor their activities second because smaller groups are better able to overcome the free rider problem of costly monitoring policy will be biased in their favor third the effect of asymmetric monitoring on voter welfare is ambiguous the inefficiencies created by the policy bias are offset by a positively valued selection bias incumbents of above average quality are more likely to survive voter scrutiny than are low quality types

unemployment collective bargaining and the demand for protection there is a widespread consensus among nonacademic observers that labor unions with large numbers of unemployed members have been central actors in political coalitions demanding protectionist trade policies since the mid 1970s in advanced industrial societies yet trade unions and unemployment are hardly mentioned in most theories of the politics of international trade the purpose of this paper is to develop a theoretical framework for understanding the importance of unemployment as a determinant of protectionist demands that is consistent with optimizing behavior on the part of union members and firms models of labor negotiations derived from cooperative bargaining theory are used to illustrate why the material benefits of protection received by union members and their employers in protected industries increase when union members are unemployed even when workers are risk neutral and capital is immobile

the march of an economic idea protectionism isn t counter cyclic anymore conventional wisdom holds that protectionism is counter cyclic tariffs quotas and the like grow during recessions while that may have been a valid description of the data before the first world war it is now inaccurate since the second world war protectionism has not been counter cyclic tariffs and non tariff barriers simply do not rise systematically during downturns i document this new stylised fact with a panel of data covering over 180 countries and 40 years using over a dozen measures of protectionism and six of business cycles i test and reject a number of potential reasons why protectionism is no longer counter cyclic a diagnosis of exclusion leads me to believe that modern economics may well be responsible for the decline in protectionism s cyclic behaviour economists are more united in their disdain for protectionism than virtually any other concept this in turn leaves one optimistic that the level of protectionism will continue to decline along with its cyclicality andrew k rose

the new york times and the market for local newspapers recent technological advances have dramatically lowered the cost of transmitting information over large distances in the late 1990s the new york times implemented a national distribution strategy expanding delivery in over 100 cities using cross sectional and longitudinal data on local newspaper circulation times penetration and local newspapers characteristics we find that as times circulation grows in a market local newspaper circulation declines among college educated readers local newspapers reposition toward local and away from national coverage raising circulation among individuals without a degree availability of national newspapers in local markets changes the relationship between local preferences and local products

the emergence of cooperation among egoists this article investigates the conditions under which cooperation will emerge in a world of egoists without central authority this problem plays an important role in such diverse fields as political philosophy international politics and economic and social exchange the problem is formalized as an iterated prisoner s dilemma with pairwise interaction among a population of individuals results from three approaches are reported the tournament approach the ecological approach and the evolutionary approach the evolutionary approach is the most general since all possible strategies can be taken into account a series of theorems is presented which show 1 the conditions under which no strategy can do any better than the population average if the others are using the reciprocal cooperation strategy of tit for tat 2 the necessary and sufficient conditions for a strategy to be collectively stable and 3 how cooperation can emerge from a small cluster of discriminating individuals even when everyone else is using a strategy of unconditional defection

government control of the media abstract we present a formal model of government control of the media to illuminate variation in media freedom across countries and over time media bias is greater and state ownership of the media more likely when the government has a particular interest in mobilizing citizens to take actions that further some political objective but are not necessarily in citizens individual best interest however the distinction between state and private media is smaller large advertising markets reduce media bias in both state and private media but increase the incentive for the government to nationalize private media media bias in state and private media markets diverge as governments become more democratic whereas media bias in democracies and autocracies converge as positive externalities from mobilization increase

the pass through of beer taxes to prices evidence from state and federal tax changes i introduction alcohol excise taxes are a common form of taxation used by the federal government and state governments alike serving the dual purpose of raising revenue and protecting the public health through reduced consumption 1 from a policy perspective it is crucial to understand how alcohol taxes are passed through to prices if higher taxes are to be levied standard economic theory predicts that taxes are at most fully passed through in a competitive market where firms are price takers however the market for beer in the united states can be best categorized as an oligopoly and beer stands out as the most prevalent type of alcohol consumed in the country 2 theories in imperfect competition suggest various possibilities of tax shifting including over and under shifting to prices in oligopolistic markets as fullerton and metcalf 2002 discuss an over shifting of tax can occur because of both the existence of market power and the strategic behavior of firms under shifting is also possible when the burden of higher taxes is shifted to labor in the form of lower wages or to other factors of production ultimately the amount of the tax pass through is an empirical question and therefore the main goal of this study is to provide new estimates of the magnitude of the beer tax pass through to prices in the united states when legislators consider changing beer taxes precise and recent estimates of the pass through rate are required to understand how the tax change will affect retail prices to our knowledge there are only a few existing studies that empirically estimate the pass through rate of alcohol taxes to prices in the united states using quarterly state level data from 1982 to 1997 young and kwapisz 2002 find that taxes on beer spirits and wine are over shifted to retail prices specifically the authors estimate that a 1 increase in the tax per barrel of beer increases the retail beer price by a range of 1 67 1 88 kenkel 2005 uses the 2002 tax hike in alaska to perform before after analyses and concludes that alcohol taxes are more than fully passed through to prices kenkel finds that the average pass through rate for off premise consumption is 2 14 2 03 and 1 57 for budweiser bud light and heineken respectively although a novel study in various ways the lack of a control group and the study s focus just on alaska raises questions regarding the external validity of the results stehr 2007 uses price data from the third quarter editions of the american chamber of commerce research association accra from 1990 to 2004 and finds that the magnitude of the pass through of beer taxes to prices is 0 94 this point estimate suggests that beer taxes are almost fully passed through to prices and a confidence interval around the estimate includes values greater than one however stehr s study only includes state and year fixed effects in the model as additional control variables and excludes other potential determinants of both alcohol prices and taxes also it is unclear as to why the study only uses the third quarter editions of accra when tax changes may occur any time during the year reflecting on the existing studies in the united states it must be emphasized that the most recent data used ends in 2004 since then the beer industry has experienced two major mergers of leading producers sabmiller and coors in 2007 followed by anheuser busch and inbev in 2008 given this restructuring within the industry new estimates of the tax pass through rate are warranted in terms of studies outside the united states bergman and hansen 2010 analyze the tax pass through rate in denmark using the liquor tax cut in 2003 the beer tax increase in 1997 and the beer tax cut in 2005 the authors find evidence of over shifting during the incidence of tax hikes and under shifting during the events of tax cuts carbonnier 2013 studies differences between the ad valorem taxes and per unit excise taxes in france and finds that the per unit excise taxes are over shifted whereas ad valorem taxes are under shifted to prices

performance in a hostile world economic growth in capitalist democracies 1974 1982 many recent studies argue that labor organization and government partisanship were important determinants of the economic performance of the advanced industrial democracies during stagflation they do not however take into account the potential impact on performance of position in the international economy the relationships reported may therefore be largely spurious even when the strong effects of international position most notably the extent of dependence on imported sources of oil were controlled for domestic political structures remained powerful determinants of economic performance during stagflation corporatist political economies dominated by leftist governments in which labor movements were densely and centrally organized and market political economies in which labor was much weaker and rightist governments were predominant performed significantly better than the less coherent cases in which the power of labor was distributed asymmetrically between politics and the market

toward a business cycle model of tariffs a modified interest group model links movements in tariffs to changes in the level of economic activity within nations this model is introduced and tested for tariff behavior in the 19th and early 20th centuries in three nations the united states great britain and germany empirical analysis lends strong support to the model s central thesis that tariffs are sensitive to movements within a business cycle tariff changes occurring in the three nations with the exception of british tariff increases generally conform to the expectations of the model furthermore business cycle sensitivity provides an explanation of the behavior of tariffs superior to two prominent alternatives those based on ideology and on hegemonic stability

strategic behaviour of incumbent firms in the uk abstract the main purpose of this paper is to examine the incidence of strategic behaviour in the uk by means of a questionnaire study performed across three broad manufacturing industries food electrical engineering and chemicals of the strategies which have received substantial theoretical attention r d and advertising appear widely used patenting pricing and excess capacity much less so vertical instruments such as purchasing policy also stand out as important but possibly only a minority of firms in our sample actively pursue strategic instruments

television and voter turnout i use variation across markets in the timing of television s introduction to identify its impact on voter turnout the estimated effect is significantly negative accounting for between a quarter and a half of the total decline in turnout since the 1950s i argue that substitution away from other media with more political coverage provides a plausible mechanism linking television to voting as evidence for this i show that the entry of television in a market coincided with sharp drops in consumption of newspapers and radio and in political knowledge as measured by election surveys i also show that both the information and turnout effects were largest in off year congressional elections which receive extensive coverage in newspapers but little or no coverage on television

noisy advertising and the predation rule in antitrust analysis can advertising by dominant firms pose a predatory threat theoretically the answer clearly is yes however empirical evidence indicating the importance of this theoretical finding is largely missing economists empirical studies of advertising which typically focus on the question of whether high levels of advertising are indicative of the presence of a barrier to entry or signal that advertising information can substitute for consumption experience usually employ average advertising levels that hide strategically focused price cuts or changes in short term advertising rates

north south climate change negotiations a sequential game with asymmetric information this article determines the conditions under which thesouthern countries should act together or separately whilenegotiating with the north about climate change policy andabout the conditions for future southern engagement the papermodels the international negotiations with complete and withasymmetric information in a dynamic framework results showthat depending on their characteristics the differentplayers can obtain benefits delaying the moment of theagreement

veto points veto players and international trade policy much of the literature on foreign economic policy focuses on the preferences of societal groups to explain policy decisions here however the author emphasizes the effects of domestic political i

a simultaneous equations model of coffee brand pricing and advertising this paper explores the relationship between a differentiated brand s market share and its price in the con text of a model that recognizes the endogeneity of the brand s advertising behavior and pricing decisions the empirical analysis suggests that general foods charged higher prices for its regular grind maxwell house coffee in geographic areas where the brand s market share was relatively large available cross sectional time series data and company documents sug gest that this empirical relationship is attributable to the preference grocery retailers have for putting dominant coffee brands on special rather than cross sectional variations in costs market concentration or consumer tastes i introduction r his paper explores the relationship between a differentiated brand s market share and its price in the context of a model that recognizes the endogeneity of the brand s advertising behav ior and pricing decisions by using price as the measure of economic performance rather than accounting profits and by recognizing that adver tising is determined simultaneously with price the empirical tests reported here avoid some of the more serious problems of structure perfor mance studies moreover by focusing on the rela tionship between a single brand s market share and price this study analyzes the unilateral mar ket power of a differentiated brand as well as the effect of market wide concentration on a brand s prices the empirical analysis focuses on the hypothe sis that the general foods corporation charged higher prices for its regular grind maxwell house coffee in geographic areas where the brand s market share was large during the 1970s we identify a statistically significant positive relation ship between maxwell house s wholesale price

bilateral or multilateral bargaining in the face of global environmental change this model deals with the problem of the greenhouse effect a problem of transfrontier pollution it consists of determining through the description of a bargaining process the conditions under which it is preferable for the developing countries to speak with a united voice and those conditions under which it is preferable for them to negotiate separately one from the other in particular it is shown that the agreements arising from the bargaining cannot be equitable and for that reason they include only a limited number of countries

coordination versus prisoners dilemma implications for international cooperation and regimes the study of political institutions in general and international cooperation in particular has been beneficially influenced by the prisoners dilemma pd game model but there is a mistaken tendency to treat pd as representing the singular problem of collective action and cooperation by relaxing the assumptions of 2 2 games and developing an alternate model of the coordination game i show how some cooperation problems have very different properties from those found in pd the analytical results of the two games are compared across several important dimensions number of strategies available number of iterations of the game numbers of players and the distribution of power among them the discussion is illustrated with specific problems of international cooperation and the implications of alternative cooperation problems for the formation and performance of international regimes are explored the basic solutions for pd and coordination have divergent ramifications for the institutionalization stability and adaptability of regimes and for the role of hegemony in the international system however the coordination model does not replace the pd model but complements and supplements it as a way to understand the diversity of political institutions these results are widely applicable to areas of politics beyond international relations

selective reporting of factual content by commercial media the authors study the market for factual content and examine whether competition increases or decreases its provision factual content is supplied by commercial media firms which observe a set of facts depicting the state of the world and selectively decide how to report them consumers value content that matches their opinion which incentivizes media firms to slant their reports by omitting certain facts novel features in the authors model include consumers ability to anticipate the media s incentives for slant and the requirement that all media stances must be supported by facts furthermore consumers find reports with more facts to be more convincing despite consumers ability to detect slant and their demand for factual support the research shows that competition results in consumers reading fewer facts and being unable to update their prior beliefs about the state of the world the authors also find that a monopoly medium may be more polarizing than competitive media and that polarized report

national television and the market for local products the case of beer information technology lowers the cost of distributing information to dispersed consumers because national firms reap larger benefits from new media than firms serving only local consumers media innovations may reduce the market for local products this paper considers the effect of television on the market for local beer using market level data on television penetration local breweries and brewery production from 1945 1960 results show that increases in television penetration are associated with fewer local breweries and less local beer production the results indicate that the industrial organization of media markets can affect the structure of markets for local products

electoral competition and special interest politics have fixed positions on some issues but vary their positions on others in order to attract votes and campaign contributions in this context we examine whether special interest groups are governed by an electoral motive or an influence in their campaign giving and how their contributions affect the equilibrium platforms we show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups the party that is expected to win a majority of seats caters more to the special interests

caveat innovator strategic and structural characteristics of new product introductions abstract the assumptions underlying models of strategic behavior by incumbents are evaluated using a case study of a ground coffee product introduction the assumption underlying earlier strategic models that the entrant does not know the incumbent s payoffs after strategic have been tested does not appear to apply instead strategic behavior is observed to hinge on ex ante uncertainty about the structure of the payoff matrix and the incremental decision making which this uncertainty spawns in this environment strategies which create noise can slow learning and delay entry

mass media competition political competition and public policy if better informed voters receive favourable policies then mass media will affect policy because mass media provide most of the information people use in voting this paper models the incentives of the media to deliver news to different groups the increasing returns to scale technology and advertising financing of media firms induce them to provide more news to large groups such as taxpayers and dispersed consumer interests and groups that are valuable to advertisers this news bias alters the tradeoff in political competition and therefore introduces a bias in public policy the paper also discusses the effects of broadcast media replacing newspapers as the main information source about politics the model predicts that this change should raise spending on government programmes used by poor and rural voters

taxation and the political economy of the tariff traditional accounts of u s tariff policy emphasize trade strategies and interest group politics this article makes a departure it opens with an observation up until world war i the tariff was the largest single source of federal government revenues it then explores the significance of tariffs as taxes theoretically and empirically in its first part the article develops a theory of taxation politics and applies it to the tariff in its second part it submits the theory to an empirical test modeling changes in u s tariff rates from 1829 to 1940 the politics of tariff revision it argues followed from two characteristics of the tariff as tax from the extent of the treasury s dependence upon it and from the distributive pattern of its burdens and benefits taken together the article concludes revenue dependence and distributive incidence account for several diverse aspects of american tariff policy including the structure of its coalitions the shifts in its objectives and the timing of its innovations

an economic analysis of transboundary air pollution between finland and the former soviet union the net benefits of bilateral cooperation between finland and the former soviet union on reducing sulphur emissions are evaluated for both parties the analysis is based on a sulphur transportation model and on estimated abatement cost functions it is shown that efficient cooperation may entail financial transfers from finland to the soviet union

the dynamics of negotiated protectionism r ecent protectionism by the united states has principally taken the form of negotiated barriers to trade such as voluntary export restraints these barriers tend to evolve over time and to display three patterns which we label institutionalized temporary and sporadic protectionism cartel theory and studies of the politics of protection suggest that the dynamics of negotiated protectionism will depend on three variables the barriers to entry into an industry the size of the domestic industry and the exit barriers for domestic firms low barriers to entry will lead to institutionalized protectionism when the domestic industry is large and exit difficult temporary protectionism results when the domestic industry is small and exit easy and sporadic protectionism is likely when barriers to entry are high brief studies of u s protectionism in textiles and apparel steel footwear televisions and automobiles illustrate the value of this framework t rade protectionism has often been thought of as a unilateral act by a sovereign state yet much protectionism during the 1970s and 1980s has been negotiated rather than unilaterally imposed voluntary export restraints vers and similar arrangements have become the preferred means by which the united states has sought to cartelize industrial sectors threatened by imports such negotiated protectionism has been particularly evident in five industries in the united states during part or all of the last quarter century in textiles and apparel steel footwear television sets and autos the united states has negotiated trade restrictions with numerous foreign exporters while the u s government has occasionally provided unilateral measures of protection for small industries all u s administrations since world war ii have been reluctant to countenance general schemes of protection for major industries yet beginning with the eisenhower administration s negotiations in textiles in 1956 virtually every u s president has actively sought vers for economically and politically sensitive industrial sectors

markets beer in germany and the united states between 1950 and 2000 the four firm producer concentration ratio for beer increased from 22 to 95 in the united states and anheuser busch s share of domestic output ballooned from 6 to 54 percent in germany concentration has risen but it remains low in 2000 the four firm producer concentration ratio was just 29 and the eight firm ratio in germany was smaller than the one firm ratio in the united states in 2005 after five years of important mergers involving big brewers the german beer industry was still much less concentrated than its american counterpart in this article i discuss several candidate explanations for the failure of beer producer concentration to rise as much in germany as in the united states the relevance of the new technologies to german brewers the preferences of german consumers the rules for advertising on german television and other factors largely absent from the consensus interpretation of american experience i find that market structure depends on a remarkably broad range of factors extending well beyond technological opportunity and market size

between free trade and protectionism strategic trade policy and a theory of corporate trade demands conventional theories of the political economy of trade argue that industries in import competing businesses favor protectionism while multinational firms and export dependent corporations advocate unconditional free trade however many multinational industries have recently advocated strategic trade policies that is they are willing to support free trade at home only if foreign markets are opened or foreign governments reduce subsidies to their firms if demands for strategic trade policy were adopted by the united states they could represent a threat to the general agreement on tariffs and trade gatt and the multilateral trading system this article seeks to explain the emergence of these new corporate trade demands and thereby broaden theories of the political economy of trade the article begins with the widely supported position that multinational and export oriented firms prefer unconditional free trade building on concepts from theories of industrial organization and international trade the article then hypothesizes that rising economies of scale and steep learning curves will necessitate that these firms have access to global markets via exports if growing dependence on world markets is combined with foreign government subsidies or protection the trade preferences of firms will shift from unconditional free trade to demands that openness at home be contingent on openness overseas the manner in which firm demands then get translated into industry demands will vary with the industry s structure if the industry consists of firms with symmetric strategies it will seek strategic trade policy but if the industry is highly segmented it will turn toward protectionism the article concludes with a preliminary test of these hypotheses in four brief studies of the politics of trade in the semiconductor commercial aircraft telecommunications equipment and machine tool industries

politics at the water s edge parties voters and the use of force abroad this article examines the effects of party politics and presidential election cycles on u s recourse to force abroad i analyze a game theoretic model to generate predictions about these effects in the unique time consistent equilibrium outcome of the one shot game policy varies across political parties in a subgame perfect equilibrium outcome of the repeated game the use of force is invariant to the partisan composition of government in neither case does policy respond to the electoral cycle an empirical analysis supports the predictions of the repeated game between 1870 and 1992 u s recourse to force abroad responds neither to partisan politics nor to the domestic political calendar it responds only to changes in u s power status and to the advent of general wars

electoral competition with informed and uninformed voters i present a model of electoral competition in which candidates raise campaign contributions by choosing policies that benefit interest groups and then expend those contributions to influence voters who are uninformed about the policies informed voters however vote based on those policies so candidates face a trade off between choosing a policy to generate funds to attract the uninformed vote and choosing a policy to attract the informed vote electoral equilibria are characterized for two categories of policies particularistic and collective in the case of particularistic policies the equilibrium policies of the candidates are separated if the proportion of uninformed voters is sufficiently high and the degree of separation is an increasing function of that proportion the model is extended to include the public financing of elections and incumbency advantages for the case of collective policies the candidates locate at the median of the ideal points of the informed voters and contributions are zero