optimal shared savings contracts in supply chains linear contracts and double moral hazard in many supply chains consumption of indirect materials sold by a supplier to a customer for use in her production process can be reduced by efforts exerted by either party since traditional supply contracts provide no incentive for the supplier to exert such effort shared savings contracts have been proposed as a way to improve incentives in the channel leading to more efficient effort choices by the two parties such shared savings contracts typically combine a fixed service fee with a variable component based on consumption volume we formalize this situation using the double moral hazard framework in which both parties decide how much effort to exert by trading off the cost of their effort against the benefits that they will obtain from reduced consumption we also extend the double moral hazard framework to analyze a broader class of cost of effort functions than considered so far including the linear cost of effort functions commonly found in practice we show that the supplier can still always induce the optimal second best equilibrium with a linear shared savings contract under this broader class of functions however the behavior of the optimal contract as a function of the problem parameters becomes more complex we illustrate how small changes in the problem parameters can turn profits from being a well behaved to a poorly behaved function of the contract and provide some theoretical characterization of this phenomenon the practical significance of this is that simple linear contracts are sufficient in many double moral hazard contexts even for the broader class of functions we consider but care must be taken in selecting the optimal contract parameters

optimal pricing and return policies for perishable commodities this paper considers the pricing decision faced by a producer of a commodity with a short shelf or demand life a hierarchical model is developed and the results of the single period inventory model are used to examine possible pricing and return policies the paper shows that several such policies currently in effect are suboptimal these include those where the manufacturer offers retailers full credit for all unsold goods or where no returns of unsold goods are permitted the paper also demonstrates that a policy whereby a manufacturer offers retailers full credit for a partial return of goods may achieve channel coordination but that the optimal return allowance will be a function of retailer demand therefore such a policy cannot be optimal in a multi retailer environment it is proven however that a pricing and return policy in which a manufacturer offers retailers a partial credit for all unsold goods can achieve channel coordination in a multi retailer environment this article was originally published in marketing science volume 4 issue 2 pages 166 176 in 1985

political economic markets perts and pests in food and agriculture j i lyniversity of california berkeley jjept of agricultural and resource economic l working paper al cljdare i lorking paper 0 231 politic eco lic l rxets a d pests i j food l ti achiculture by per ts cordon c rausser ja nlnl tt junot tlon a riii ent st ticn giannini fou 1cl itiol1of ar ricultllrnj econo ll i cs july 11 w

optimal policies for a capacitated two echelon inventory system this paper demonstrates optimal policies for capacitated serial multiechelon production inventory systems extending the clark and scarf 1960 model to include installations with production capacity limits we demonstrate that a modified echelon base stock policy is optimal in a two stage system when there is a smaller capacity at the downstream facility this is shown by decomposing the dynamic programming value function into value functions dependent upon individual echelon stock variables we show that the optimal structure holds for both stationary and nonstationary stochastic customer demand finite horizon and infinite horizon results are included under discounted cost and average cost criteria

promotion of the agricultural sector and political power in austria in most industrialized countries farmers as a small and well orgnized group are ableto influence government decisions to get rent creating proposals enacted two different viewsare presented to explain why the chicagoan view efficient redistribution hypothesis and the virginian view inefficient outcome of political bargaining a vertically structuredempirical model of the austrian farm sector is employed to test both hypotheses quantitativeresults of the welfare transfers from consumers taxpayers to farmers and agribusiness firmsare derived and the political weights of these groups are presented

managing a noncooperative supply chain with limited capacity we consider a two stage serial supply chain with capacity limits where each installation is operated by managers attempting to minimize their own costs a multiple period model is necessitated by the multiple stages capacity limits stochastic demand and the explicit consideration of inventories with appropriate salvage value functions a markov equilibrium policy is found intuitive profit dominance allows for existence of a unique equilibrium solution which is shown to be a modified echelon base stock policy this equilibrium policy structure is sustained in the infinite horizon a numerical study compares the behavior of the decentralized system with the first best integrated capacitated system the performance of this decentralized system relative to the integrated system across other parameters can be very good over a broad range of values this implies that an acceptable system performance may be attained without the imposition of a contract or other coordinating mechanism which themselves may encounter difficulties in implementation in the form of negotiation execution or enforcement of these agreements we find instances where tighter capacities may actually enhance channel efficiency we also examine the effect of capacity utilization on the system suboptimality

serial supply chains with economies of scale bounds and approximations we consider two models of stochastic serial inventory systems with economies of scale for which the forms of optimal policies are known in the first model each stage has a fixed order quantity while in the second model there is a fixed order cost for external supplies for each model we show that the optimal policy parameters can be bounded and approximated by a series of independent single stage optimal policy parameters we further construct closed form bounds and approximations for the single stage solutions and apply them to the serial systems these results provide simple and effective solutions that will help to facilitate implementations in practice they also allow us to see the connections between the serial and single stage systems and sharpen our intuition on optimal policy parameters and system behavior

endogenous price policies and international wheat prices comment in a 1983 article in this journal sarris and freebairn claim to model international wheat prices as cournot equilibrium prices resulting from the interaction of national excess demand functions national pricing policies are determined so as to maximize a domestic welfare function specified as a weighted sum of producer and consumer surplus government revenue and a price variability measure the function is maximized subject to the pricing policies of all other countries in the sarris and freebairn model each country assumes that any pricing policy which it implements such as the imposition of a tariff will not affect the world price we contend that this assumption is not consistent with the usual determination of a cournot equilibrium in the cournot oligopoly model each firm takes account of the price implications of the output it sets therefore we reformulate sarris and freebairn s model to account for the impact of policies on the world price and recalculate the implicit welfare weights for wheat trading countries in the traditional cournot oligopoly model each firm takes account of production levels set by it and other firms although each naively expects no response from its rivals the cournot nash equilibrium is a point at which no trader acting unilaterally can do better than playing its optimal strategy given that all other traders are playing their optimal strategies interaction between the traders leads to convergence to an equilibrium from which none would want to move in contrast to the traditional model sarris and freebairn derive their solution on the simplifying assumption that every trading country takes the world price as given this implies that each country is concerned with domestic objectives and is not concerned with other countries reactions to its policies in other words we posit a cournot oligopoly problem p 215 in fact sarris and freebairn posit zero conjectural variations i e each trader conjectures that its rivals will not vary their policies as in a cournot model but assume no effect on world prices this latter assumption is not consistent with a cournot model in a cournot nash model traders assume that rivals do not respond to their policies although these zero conjectures are subsequently found to be incorrect although unanticipated retaliation does occur and by imposing the assumption of a given world price and that market power remains unused sarris and freebairn are led to conclude that with equal weights on all components of the welfare function the optimal policy for the country is a free trade one p 216 this conclusion is consistent with the simplifying small country assumption however it is unlikely that countries with market power will ignore it in setting tariffs after dropping this assumption our calculations presented in table 1 show that the optimal policies are nonzero even if weights are equal the method used here for obtaining the cournot nash solution involves calculating the firstorder conditions to maximize a weighted welfare function for each country the reaction functions showing how each country reacts to tariffs imposed by others can then be derived the functions can be solved simultaneously to obtain the cournotnash solution 2 consider a homogenous product traded between n countries with linear demand and supply curves

the competitive newsboy we consider a competitive version of the classical newsboy problem in which a firm must choose an inventory or production level for a perishable good with random demand and the optimal solution is a fractile of the demand distribution and investigate the impact of competition upon industry inventory a splitting rule specifies how initial industry demand is allocated among competing firms and how any excess demand is allocated among firms with remaining inventory we examine the relation between equilibrium inventory levels and the splitting rule and provide conditions under which there is a unique equilibrium our most general result is that if all excess demand is reallocated i e there is perfect substitutability then competition never leads to a decrease in industry inventory

endogenous price policies and international wheat prices vanzetti and kennedy s herein vk comment on our earlier paper sarris and freebairn gives us the opportunity first to clarify the differences in the models to present a generalization of the analysis that includes their results as well as ours as special cases and then to point out some salient features of our model that seem to have been unnoticed by them consider our model of a homogenous commodity produced consumed and traded by n countries which are characterized by the following linear demand and supply curves notation follows vk except that we maintain the additive random variables and hence keep the time subscript

on markov equilibria in dynamic inventory competition we provide a review of the types of equilibria typically found in operations management inventory papers and a discussion on when the commonly used stationary infinite horizon open loop equilibrium may be sufficient for study we focus particularly on order up to and basestock equilibria in the context of inventory duopolies we give conditions under which the stationary infinite horizon equilibrium is also a markov perfect closed loop equilibrium these conditions are then applied to three specific duopolies the first application is one with stockout based substitution where the firms face independent direct demand but some fraction of a firm s lost sales will switch to the other firm the second application is one where shelf space display stimulates primary demand and reduces demand for the other firm s product the final application is one where the state variables represent goodwill rather than inventory these specific problems have been previously studied in both the single period and or stationary infinite horizon open loop settings but not in markov perfect closed loop settings under the markov perfect setting a variety of interesting dynamics may occur including that there may be a so called commitment value to inventory

efficient income redistribution for a small country using optimal combined instruments abstract in this paper i improve gardner s surplus transformation curve framework by assuming that governments are able to vary many policy instruments simultaneously instead of only one i use my framework to find the combination of the currently used instruments which provides the most efficient income redistribution for the austrian bread grains market comparing the most efficient policy with the actual policy reveals that 464 10 6 austrian shillings were wasted i theoretically compare for a small country the transfer efficiency of every possible pair of the four major agricultural policy instruments floor price production quota co responsibility levy and deficiency payments without considering the marginal cost of public funds mcf deficiency payments cum quota equal to a fully decoupled direct income support is the most efficient policy succeeded by floor price cum quota and floor price cum deficiency payments if the mcf is taken into account the ranking crucially depends on the market parameters the transfer level and the value of the mcf for the austrian bread grains market i empirically demonstrate that given the present support level a fully decoupled direct income support redistributes income most efficiently as long as the mcf is lower than 1 17 beyond this value a floor price cum quota policy becomes more efficient a floor price cum deficiency payments policy is never superior to the floor price cum quota

price support to the ec agricultural sector an optimal policy politicians in all developed countries including the ec countries have consistently chosen to support the farmers through the market and thus slowed down the adaptation of the agricultural sector to lower prices which would otherwise have taken place the main principle of ec agricultural policy which was formulated in the 1960s was to guaran tee farmers prices significantly above world market prices for a number of key products to secure the income of farmers at a reasonable level

inventory management under market size dynamics we investigate the situation where a customer experiencing an inventory stockout at a retailer potentially leaves the firm s market in classical inventory theory a unit stockout penalty cost has been used as a surrogate to mimic the economic effect of such a departure in this study we explicitly represent this aspect of consumer behavior incorporating the diminishing effect of the consumers leaving the market upon the stochastic demand distribution in a time dynamic context the initial model considers a single firm we allow for consumer forgiveness where customers may flow back to the committed purchasing market from a nonpurchasing latent market the per period decisions include a marketing mix to attract latent and new consumers to the committed market and the setting of inventory levels we establish conditions under which the firm optimally operates a base stock inventory policy the subsequent two models consider a duopoly where the potential market for a firm is now the committed market of

an approach for developing an optimal discount pricing policy this paper addresses the problem of why and how a seller should develop a discount pricing structure even if such a pricing structure does not alter ultimate demand the situation modeled is most appropriate where the seller s product does not represent a major component of the buyer s final product where the demand for the product is derived or where the price is only one of many factors considered in making a purchase decision a model of buyer reaction to any given pricing scheme is developed to show that there exists a unified pricing policy which motivates the buyer to increase its ordering quantity per order thereby reducing the joint buyer and seller ordering and holding costs as a result the seller is able to reduce its costs while leaving the buyer no worse off and often better off the model is extended to handle variable ordering and shipping costs and situations where the seller faces numerous groups of buyers each having different ordering policies finally a case study is presented explicitly showing how the proposed pricing policy can be applied to the situation of a large seller selling to a number of different buyer groups

political preference functions and public policy reform a model of policy making is developed where governments seek to maximize support from social groups through the combination of both pert social welfare increasing and pert welfare transferring policies the implicit weights of a political preference function shift with a change in the relative cost of interest group organizing attention is paid to the degree of wealth transfers as total social welfare increases because of pert policy changes the model demonstrates that in the case of two competing groups the weight given to one group in the allocation of social surplus will increase as total social welfare increases with a bias toward the other group the relative weights placed on consumers and producers based on pest policies alone are misleading indicators of the political influence of groups a number of general implications of this political economic analysis for the reform of public policies are investigated

economic theory and farm politics what can economics offer in the explanation of politics the first accomplishment is to reduce the subject to a maximization problem analogous to others encountered in economic theory a second accomplishment is to make this problem interesting to make it really illuminating about politics both steps are difficult and the accomplishments have been only partial viewing politics as maximization may seem unreasonably austere and narrow but it is what distinguishes the contribution of economics from that of political scientists or more general social observers empirical work by economists on farm politics typically brings in these broader concerns but this paper attempts instead to justify the narrower approach and to explore its implications its organization is first to spell out details of the contribution of economic theory to explaining politics second to review work on agricultural policies in relation to this theory and finally to discuss implications for positive versus normative economics in policy analysis

lower bounds for multi echelon stochastic inventory systems we establish lower bounds on the minimum cost of managing certain production distribution networks with setup costs at all stages and stochastic demands these networks include serial assembly and one warehouse multi retailer systems we obtain the bounds through novel cost allocation schemes we evaluate the bounds performance for one warehouse multi retailer systems by comparing them with simple heuristic policies the bounds are quite tight for systems with a small number of retailers we also present simplified proof of known optimality results for serial and assembly systems

non cooperative and cooperative game theoretic models for usage based lease contracts abstract in this paper we study game theoretic models for lease contracts by which the owner lessor rents a piece of equipment to a user lessee the lessee decides on the optimal lease period and usage rate and the lessor is responsible for developing a maintenance policy for the equipment two non cooperative game theoretic models and a cooperative model are developed to describe the relationships between the two decision makers in the non cooperative simultaneous move game the lessee and the lessor act simultaneously and independently to make their decisions in the leader follower non cooperative game the lessor is the leader who specifies the maintenance policy first and the lessee as the follower decides on the lease period and usage rate accordingly for these two games the nash and stackelberg equilibria are obtained respectively for the cooperative game we derive the solution targeting on total profit maximization and show that this solution can be implemented as an equilibrium using a nonlinear transfer payment contract besides we compare the nash equilibrium stackelberg equilibrium and the total maximum solution to each other and our results show that the lessee and lessor can gain more profit from the cooperative contract than from the non cooperative alternatives numerical examples are provided to demonstrate the different solution methodologies and the value of cooperation

efficient supply contracts for fashion goods with forecast updating and two production modes we examine the problem of developing supply contracts that encourage proper coordination of forecast information and production decisions between a manufacturer and distributor of high fashion seasonal products operating in a two mode production environment the first production mode is relatively cheap but requires a long lead time while the second is expensive but offers quick turnaround we focus on contracts of the form w1 w2 b wherewi is the wholesale price offered for production modei andb is a return price offered for items left over at the end of the season we find that such a contract can coordinate the manufacturer and distributor to act in the best interest of the channel the pricing conditions needed to ensure an efficient solution vary depending on the degree of demand forecast improvement between periods and the manufacturer s access to forecast information we also examine whether these conditions ensure a pareto optimal solution with respect to two traditional production settings

a capacitated production inventory model with periodic demand for a single product single stage capacitated production inventory model with stochastic periodic cyclic demand we find the optimal policy and characterize some of its properties we study the finite horizon the discounted infinite horizon and the infinite horizon average cases a simulation based optimization method is provided to compute the optimal parameters based on a numerical study several insights into the model are also provided

competitive and cooperative inventory policies in a two stage supply chain we investigate a two stage serial supply chain with stationary stochastic demand and fixed transportation times inventory holding costs are charged at each stage and each stage may incur a consumer backorder penalty cost e g the upper stage the supplier may dislike backorders at the lower stage the retailer we consider two games in both the stages independently choose base stock policies to minimize their costs the games differ in how the firms track their inventory levels in one the firms are committed to tracking echelon inventory in the other they track local inventory we compare the policies chosen under this competitive regime to those selected to minimize total supply chain costs i e the optimal solution we show that the games nearly always have a unique nash equilibrium and it differs from the optimal solution hence competition reduces efficiency furthermore the two games equilibria are different so the tracking method influences strategic behavior we show that the system optimal solution can be achieved as a nash equilibrium using simple linear transfer payments the value of cooperation is context specific in some settings competition increases total cost by only a fraction of a percent whereas in other settings the cost increase is enormous we also discuss stackelberg equilibria

a political economic analysis of u s rice export programs to japan and south korea a game theoretic approach the uruguay round agreement on agriculture ur has contributed to the increase in u s and world rice trade since 1994 despite this the japanese and korean rice markets continue to be characterized by high levels of trade intervention this paper attempts to analyze both import markets incorporating econometric estimates and public choice theory in a game theoretic framework various scenarios are analyzed the results show that the overall nash equilibrium occurs with a 4 tariff reduction for japan and korea under the u s market development program which includes the market access program and foreign market development program

causes of u s farm commodity programs this paper i s an attempt to explain variations by commodity in producer protection afforded by farm price support programs since the1930s particularly emphasized are theideas that these programs are essentially income redistributional measures and that given political forces the programs are attempts to redistribute efficiently variables associated with the cost to producers of generating political pressure and the social cost deadweight losses of redistribution are both found to be empirically important copyright 1987 by university of chicago press

history institutions and economic performance the legacy of colonial land tenure systems in india we analyze the colonial land revenue institutions set up by the british in india and show that differences in historical property rights institutions lead to sustained differences in economic outcomes areas in which proprietary rights in land were historically given to landlords have significantly lower agricultural investments and productivity in the post independence period than areas in which these rights were given to the cultivators these areas also have significantly lower investments in health and education these differences are not driven by omitted variables or endogeneity problems they probably arise because differences in historical institutions lead to very different policy choices

cooperation on capacitated inventory situations with fixed holding costs in this paper we analyze a situation in which several firms deal with inventory problems concerning the same type of product we consider that each firm uses its limited capacity warehouse for storing purposes and that it faces an economic order quantity model where storage costs are irrelevant and assumed to be zero and shortages are allowed in this setting we show that firms can save costs by placing joint orders and obtain an optimal order policy for the firms besides we identify an associated class of costs games which we show to be concave finally we introduce and study a rule to share the costs among the firms which provides core allocations and can be easily computed

a critical assessment of the political preference function approach in agricultural economics abstract the policy preference function ppf approach has become popular with economists seeking to explain the origin of government policies in this paper a distinction between positive and normative work with the ppf concept is made positive work is shown to suffer from a variety of shortcomings including the misspecification of traditional ppfs and the failure to consider the importance of institutions constraints and the interaction between different commodity policies these weaknesses are reflected in the counter intuitive results of a simple ppf model designed to reflect the interaction between the ec s wheat and barley policies furthermore it is demonstrated that ppf weights change as a result of both political preferences and market parameters hence changes in ppf weights cannot be attributed to changes in preferences alone test of the axioms of revealed preference theory are used to demonstrate that even though ppf weights derived for the ec s wheat and barley markets have fluctuated considerably since the early 1970s we are not able to conclude that there has been a shift in political preferences the paper concludes with some comments about the use of ppfs in a normative framework the underlying assumption that policy makers optimise seems not surprisingly often to lead practitioners to the conclusion that observed policies are not so bad after all economists should also beware of the tendency to overlook possible differences between the ppf and the social welfare function

newsvendor bounds and heuristic for optimal policies in serial supply chains we consider the classicn stage serial supply systems with linear costs and stationary random demands there are deterministic transportation leadtimes between stages and unsatisfied demands are backlogged the optimal inventory policy for this system is known to be an echelon base stock policy which can be computed through minimizingn nested convex functions recursively to identify the key determinants of the optimal policy we develop a simple and surprisingly good heuristic this method minimizes 2 n separate newsvendor type cost functions each of which uses the original problem data only these functions are lower and upper bounds for the echelon cost functions their minimizers form bounds for the optimal echelon base stock levels the heuristic is the simple average of the solution bounds in extensive numerical experiments the average relative error of the heuristic is 0 24 with the maximum error less than 1 5 the bounds and the heuristic which can be easily obtained by simple spreadsheet calculations enhance the accessibility and implementability of the multiechelon inventory theory more importantly the closed form expressions provide an analytical tool for us to gain insights into issues such as system bottlenecks effects of system parameters and coordination mechanisms in decentralized systems

decentralizing cross functional decisions coordination through internal markets a firm faces many problems that are inherently cross functional to solve them successfully requires the coordinated actions of many functional representatives acting in a decentralized setting functional managers however respond to their own individual incentives and may consequently fail to maximize the overall profits of the firm we examine this issue in a setting in which the output of early actions limits the range of later actions and we propose an incentive scheme that allows the system to be successfully decentralized our mechanism is based on linear transfer prices for the intermediate output that are implemented through an internal market a market maker buys the output from one function and sells it to another she is not obliged to sell at the same price at which she bought and may set prices solely to provide incentives we illustrate the flexibility of the scheme by applying it to several models in the operations management literature

in search of rational government what political preference function studies measure and assume political preference function ppf studies assume that policy making can be described by a mathematical problem in which a rational government maximizes a function of interest groups welfares the purpose of my paper is to explain in depth ramifications of ppf study assumptions and methodology ppf studies that attempt to measure interest group political power do so by measuring marginal rates of transformation along a pareto frontier one can estimate political power with a ppf only if observed policies are pareto efficient which may depend on the assumed number of interest groups and policy instruments marginal rates of transformation need not reveal anything meaningful about interest group political power and may incorrectly measure the direction of transfers

the role of inventory in delivery time competition the paper operationalizes the notion of shortage cost by considering the behavior of customers and competing firms and examines the role of inventory in response time competition we start with a single firm production control model in which customers are characterized by their preferences of price quality and delivery time the optimal production inventory policy and the optimal choice between make to order and make to stock operations are determined in simple newsboy like formulas the basic model is then extended to an n firm market game in which firms compete for orders from the aspect of early delivery one could think of this setting as an oligopoly racing market the analysis shows that competition can breed a demand for produce to stock just as other economic phenomena such as economies of scale uncertainty or seasonality can induce make to stock and that delivery time competition increases the buyer s welfare while decreasing the producer s welfare

nash game model for optimizing market strategies configuration of platform products in a vendor managed inventory vmi supply chain for a product family this paper discusses how a manufacturer and its retailers interact with each other to optimize their product marketing strategies platform product configuration and inventory policies in a vmi vendor managed inventory supply chain the manufacturer procures raw materials from multiple suppliers to produce a family of products sold to multiple retailers multiple types of products are substitutable each other to end customers the manufacturer makes its decision on raw materials procurement platform product configuration product replenishment policies to retailers with vmi price discount rate and advertising investment to maximize its profit retailers in turn consider the optimal local advertising investments and retail prices to maximize their profits this problem is modeled as a dual simultaneous non cooperative game as a dual nash game model with two sub games one is between the retailers serving in competing retail markets and the other is between the manufacturer and the retailers this paper combines analytical iterative and ga genetic algorithm methods to develop a game solution algorithm to find the nash equilibrium a numerical example is conducted to test the proposed model and algorithm and gain managerial implications

the terms of trade between the united kingdom and british india 1858 1947 abstract the commodity terms of trade of the united kingdom with british india for 1858 1947 are calculated unit value indexes for a sample containing over three quarters of uk india trade indicate a slight improvement for the united kingdom from 1858 to 1917 this improvement was likely attributable to falling transport costs for british imports and was therefore not associated with a decline in india s terms of trade with britain for 1917 47 there was substantial uk terms of trade improvement a rise not due solely to declining transport costs and which ceteris paribus thus implied that india s terms of trade with the united kingdom deteriorated the 1917 47 uk improvement brought the amount of increase for the whole 1858 1947 period to an annual average of almost 1

a policy preference function for government intervention in the u s wheat market this paper estimates a policy preference function that explains the government s choices of target prices government held wheat stocks and public wheat research funding the policy preference function depends on producers surplus consumers surplus and budget expenditures an important innovation in this paper is the inclusion of interactions between public research expenditures and other public policy variables results indicate that the government places a premium of 25 to 45 on the welfare of wheat producers of relative to budget expenditures while wheat consumers welfare is discounted as much as 50 relative to budget expenditures the purpose of this paper is to provide an explanation of government commodity programs stock accumulations and research expenditures in the u s wheat sector the explanation is based on a policy preference function ppf that depends on producers surplus consumers surplus and budget expenditures it is assumed that target prices reductions in or additions to government stocks and public research expenditures are chosen to maximize the policy preference function the central contribution of the paper is the estimation of a function that is consistent with the observed government interventions in the u s wheat market that is the paper explains the observed target prices government sales and public research expenditures as rational behavior by a government which seeks to maximize the estimated policy preference function the approach in this paper is based on the political interest group theories of peltzman and becker applications of these ideas to agriculture include rausser and freebairn s description of the beef industry gardner s 1985 analysis

on manufacturing marketing incentives stereotypically marketing is mainly concerned about satisfying customers and manufacturing is mainly interested in factory efficiency using the principal agent agency paradigm which assumes that the marketing and manufacturing managers of the firm will act in their self interest we seek incentive plans that will induce those managers to act so that the owner of the firm can attain as much as possible of the residual returns one optimal incentive plan can be interpreted as follows the owner subcontracts to pay the manufacturing manager a fixed rate for all capacity he delivers each marketing manager receives all of the returns from his product in turn all managers pay a fixed fee to the owner under this plan the marketing managers will often complain about the stock level decisions even though these levels are announced in advance under a revised plan the owner can eliminate such complaints by delegating the stocking decisions to the respective marketing managers without any loss this plan is interpreted as requiring the owner to make a futures market for manufacturing capacity paying the manufacturing manager the expected marginal value for each unit of capacity delivered receiving the realized marginal value from the marketing managers and losing money on average in the process

coordination mechanisms in decentralized serial inventory systems with batch ordering this paper studies a periodic review serial supply chain in which materials are ordered and shipped according to r nq policies three information scenarios are considered depending on the level of information available echelon local and quasilocal in the echelon scenario each stage can access the inventory and cost information within its echelon comprising the stage itself and all downstream stages in the local scenario each stage only accesses its own local information finally in the quasilocal scenario each stage knows its local information plus the actual customer demands we propose coordination schemes that regulate the stages to achieve the supply chain s optimal cost under each information setting all these coordination schemes fit comfortably within an emerging practice called supply chain finance which includes the organization and technology needed to implement them

colonialism landlords and public goods provision in india a controlled comparative analysis what is the impact of colonialism on public goods provision this article examines india once the world s largest colony while recent studies of the indian case are divided they overwhelmingly r

economic history and modern india redefining the link this paper argues that to restore the link between economic history and modern india a different narrative of indian economic history is needed an exclusive focus on colonialism as the driver of india s economic history misses those continuities that arise from economic structure or local conditions in fact market oriented british imperial policies did initiate a process of economic growth based on the production of goods intensive in labor and natural resources however productive capacity per worker was constrained by low rates of private and public investment in infrastructure excessively low rates of schooling social inequalities based on caste and gender and a delayed demographic transition to lower birthrates and the resultant heavy demographic burden placed on physical capital and natural resources

coordinated decisions for substitutable products in a common retailer supply chain abstract this paper studies coordination mechanisms in a supply chain which consists of two suppliers with capacity uncertainties selling differential yet substitutable products through a common retailer who faces price sensitive random demand of these two products we develop in a noncompetitive setting three coordination models revenue sharing return policy and combination of revenue sharing and return policy and contrast them with a basic and uncoordinated model we are able to establish the ordinal relationship among the retailer s ordering and pricing decisions and analytically compare the performances between certain models when two suppliers are identical we find that the retailer s ordering and pricing decisions in the model with return policy in the case of identical suppliers are independent of demand or supply uncertainty our numerical results reveal that the performances of coordination models in the case of nonidentical suppliers resemble those in the case of identical suppliers we find that the retailer will place a larger order quantity in models where her average cost per unit sold is smaller we also find that product substitutability and uncertainties have different effects on chain performances

a decomposition approach for a class of capacitated serial systems we study a class of two echelon serial systems with identical ordering production capacities or limits for both echelons demands are assumed to be integer valued for the case where the lead time to the upstream echelon is one period the optimality of state dependent modified echelon base stock policies is proved using a decomposition approach for the case where the upstream lead time is two periods we introduce a new class of policies called two tier base stock policies and prove their optimality some insight about the inventory control problem in n echelon serial systems with identical capacities at all stages and arbitrary lead times everywhere is also provided we argue that a generalization of two tier base stock policies which we call multitier base stock policies are optimal for these systems we also provide a bound on the number of parameters required to specify the optimal policy

the culture of entrepreneurship abstract we study the cultural process through which a society inculcates an entrepreneurial spirit people work for a guaranteed wage or operate a firm whose risky return depends on business expertise the latter is culturally acquired within the family or outside and people may choose an occupation different from the one they were socialized into a cultural bias towards safer occupations from colonial and post colonial policies leads to stagnation where entrepreneurs do not upgrade technology because of their proficiency with existing methods an aggregate productivity shock can tip this economy towards growth led by established businesses a human capital shock where existing business expertise is less useful is more disruptive growth occurs through the emergence of a new class of entrepreneurs we conclude that culture is not destiny it adapts even when some cultural traits do not

tariffs quotas and domestic content protection some political economy considerations in this paper we have focused our attention on the relation between the configuration of protection seeking and of rent seeking interests and the choice of the protection instruments in doing so we have abstracted from the problem of nonequivalence of tariffs and quotas recent writings on product differentiation rodriguez 1979 donnenfeld 1984 have thrown new light on this old issue it may well be that the discussion is of key importance to the understanding of industry s predilection for quantitative restraints we also failed to deal with the question on nonequivalence of restrictive measures under conditions of uncertainty finally we touched only peripherally on the interaction among state it is perhaps more realistic to regard trade barrier formation as a game among nations as in baldwin and clarke 1985 every player seeks at once to protect its import substituting industries and to promote its exports by putting up barriers and by demanding that others lower theirs this approach is more suited however to explain the severity of restraints than it is to explain the nature of restraints which is the problem at hand trade restrictions have a protective and a revenue effect in less developed countries with ineffectual internal revenue collecting systems revenue seeking governments may ally themselves with protection seeking emergent industries and institute high tariffs tariffs and quotas may coexist if the trade restriction seeking alliance includes traders voluntary export restraints the newest of the protective devices may be popular because they circumvent international treaties and short circuit cumbersome procedures associated with changes in tariffs or quotas but they also have the virtue of inviting foreign exporters to act like price setters the harm to the foreign exporters is thereby mitigated in fact exporters may be gainers hence the danger of retaliatory action on the part of foreign governments is lessened domestic content legislation is a unique device in that the same domestic factor benefits from protection and also collects the protection created revenue we show the formal identity between the south african situation in which the maximum black white worker ratio is a binding constraint and regulations requiring that a given percentage of the value of the product be domestically produced we also derive formally the maximum permissible foreign content ratio which is optimal from the point of view of the protected interests in our analysis we have said virtually nothing about the victims of protectionism a discussion of the impact of the various measures on those who bear the cost of protection would doubtless deepen our understanding of the problem we should thus consider the magnitude of the deadweight loss and of the income transfer and the concentration or dispersion of the losers last but not least we should consider the question of awareness thus the cost impact of a tariff is easier to perceive than that of a quota with the cost of a ver or of domestic import content rule the most difficult to calculate of all it may be that the principle of the hiding hand is as important to the new political economy as the benthamite principles were to the old

endogenous choice of trade policy instruments abstract recently developed theories of endogenous trade policy formation have attempted to explain tariffs as the result of economic interest seeking by individuals or groups this note demonstrates that tariffs will not emerge as a policy choice if income is redistributed solely through trade policy induced factor price changes a production tax cum subsidy will be adopted as both gainers and losers are better off than with a tariff

effects of sourcing structure on performance in a multiple product assemble to order supply chain abstract this paper addresses the strategic pricing decisions of a decentralized assemble to order system and the effects of sourcing structure on system performance we consider an assemble to order system consisting of two substitute products and three components manufactured by different suppliers demand for the products is price sensitive the selling prices for the products are jointly determined by firms in the system we study the system under both centralized and decentralized decision making situations for the centralized system we demonstrate that there exists a unique optimal pricing solution for the decentralized system we show that there exists a unique nash equilibrium in the players pricing game we further analyze the effects of different sourcing structures on the system performance and the assembler s performance we find that reduction of suppliers in the system does not guarantee improvement of system performance different sourcing structures have different impacts on performance when the two dedicated components are sourced from a single supplier and the common component is sourced from another independent supplier the system and the assembler s performance become worse we show that the decentralized system can be effectively coordinated and the system performance can be improved with a simple profit sharing contract finally we provide comprehensive numerical examples to demonstrate some important managerial insights

inventory sharing and rationing in decentralized dealer networks an increasing number of manufacturers have started to pursue a strategy that promotes inventory sharing among the dealers in their distribution network in this paper we analyze a decentralized dealer network in which each independent dealer is given the flexibility to share his inventory we model inventory sharing as a multiple demand classes problem in which each dealer faces his own customer demand with high priority and inventory sharing requests from other dealers with low priority assuming that each dealer uses a base stock and threshold rationing policy for his inventory stocking and inventory sharing decisions we explicitly model the interactions between the dealers through inventory sharing and obtain aclosed form cost function for each dealer based on the steady state distribution of the inventory levels at the two dealers we then provide a detailed supermodularity analysis of the inventory sharing and inventory rationing game in which each dealer has a two dimensional strategy set stocking level and rationing level we show that the full sharing game in which dealers precommit to sharing all of their on hand inventory and the fixed sharing level game in which dealers precommit to sharing a portion of their on hand inventory are supermodular and thus a pure strategy nash equilibrium is guaranteed to exist for the rationing game in which dealers precommit to their stocking levels we show that there exists a dominant strategy equilibrium on the dealers sharing rationing levels finally a comprehensive computational study is conducted to highlight the impact of the manufacturer s incentives subsidies and or transshipment fees on the dealers sharing behavior

the quantity flexibility contract and supplier customer incentives consider a supply chain consisting of two independent agents a supplier e g a manufacturer and its customer e g a retailer the latter in turn serving an uncertain market demand to reconcile manufacturing procurement time lags with a need for timely response to the market such supply chains often must commit resources to production quantities based on forecasted rather than realized demand the customer typically provides a planning forecast of its intended purchase which does not entail commitment benefiting from overproduction while not bearing the immediate costs the customer has incentive to initially overforecast before eventually purchasing a lesser quantity the supplier must in turn anticipate such behavior in its production quantity decision this individually rational behavior results in an inefficient supply chain this paper models the incentives of the two parties identifying causes of inefficiency and suggesting remedies particular attention is given to the quantity flexibility qf contract which couples the customer s commitment to purchase no less than a certain percentage below the forecast with the supplier s guarantee to deliver up to a certain percentage above under certain conditions this method can allocate the costs of market demand uncertainty so as to lead the individually motivated supplier and customer to the systemwide optimal outcome we characterize the implications of qf contracts for the behavior and performance of both parties and the supply chain as a whole

tariffs subsidies and welfare with endogenous policy abstract it is a well established proposition of trade theory that in the absence of directly trade related distortions or policy goals subsidies are superior to tariffs for achieving any economic or non economic objective this paper shows that once the endogeneity of the distortion or non economic objective is allowed for the welfare ranking of various policies can be reversed the particular model analyzed is one where the level of non economic objectives that have to be fulfilled itself depends on the policy tools considered to fulfill them with this arises from the public good nature of tariffs compared to subsidies