efficient search on the job and the business cycle the paper develops a model of directed search on the job in which transitions of workers between unemployment and employment and across employers are driven by heterogeneity in the quality of firm worker matches the equilibrium is such that the agents value and policy functions are independent of the endogenous distribution of workers across employment states hence the model can be solved outside of the steady state and used to measure the effect of cyclical productivity shocks on the labor market productivity shocks are found to generate large fluctuations in workers transitions unemployment and vacancies when matches are experience goods but not when matches are inspection goods

technological regimes schumpeterian patterns of innovation and firm level productivity growth the paper investigates the relationships between technological regimes and firm level productivity performance and it explores how such a relationship differs in different schumpeterian patterns of innovation the analysis makes use of a rich dataset containing data on innovation and other economic characteristics of a large representative sample of norwegian firms in manufacturing and service industries for the period 1998 2004 first we decompose tfp growth into technical progress and efficiency changes by means of data envelopment analysis we then estimate an empirical model that relates these two productivity components to the characteristics of technological regimes and a set of other firm specific factors the results indicate that 1 tfp growth has mainly been achieved through technical progress while technical efficiency has on average decreased 2 the characteristics of technological regimes are important determinants of firm level productivity growth but their impacts on technical progress are different from the effects on efficiency change 3 the estimated model works differently in the two schumpeterian regimes technical progress has been more dynamic in schumpeter mark ii industries while efficiency change has been more important in schumpeter mark i markets

submarkets and the evolution of market structure we construct a model of industry evolution in which the central force for change is the creation and destruction of submarkets firms expand when they are able to exploit new opportunities that arrive in the form of submarkets they contract and ultimately exit when the submarkets in which they operate are destroyed this simple framework can transparently explain a wide range of well known regularities about industry dynamics most notably the subtle relationships between size age growth and survival data on the laser industry where submarkets are prominent further illustrate the ability of the model to explain distinctive patterns in the evolution of industries and firms

exporting does sales volume make a difference this research examines the effect that the size of a firm has on export activities perceived problems in exporting and attitudes toward exporting the results indicate that broad generalizations concerning the size of firms and exporting appear to be inappropriate

optimal ordering and pricing policies in a single period environment with multivariate demand and markdowns this paper investigates a single period inventory model in which the demand of the product is a deterministic multivariate function of price time and level of inventory models are formulated for the basic pricing case and the case with a price markdown during the season solution methodologies are presented for each case when the pricing decisions are predetermined and when they are decision variables comments on the practical use of this model are presented and sensitivity analysis is conducted on the decision variables and demand parameters

investments holdup and the form of market contracts the authors analyze incomplete contracts to induce efficient investment with exogenous switching costs fixed price contracts are efficient generate some rigidity in prices are renegotiated intermittently by possibly small amounts and when inflation is positive generate asymmetric responses to shocks all consistent with evidence on prices and wages with two sided specific investments efficiency requires prices to have sufficient escalator clauses to avoid renegotiation as observed in many long term contracts a third case with one sided specific investments can generate take or pay contracts and explain why firms sometimes pay for specific investments that appear to benefit employees directly

empirical implications of alternative models of firm dynamics abstract this paper considers two models of firm behavior that allow for heterogeneity among firms idiosyncratic or firm specific sources of uncertainty and discrete outcomes exit and or entry both the characteristics of firm level panel data sets and the nature of the questions we characteristically ask of them imply that models with these features are likely to underlie most detailed empirical work on microdata sets the models we consider are a bayesian learning model due to jovanovic 20 and a model of research and exploration due to ericson and pakes 11 the paper provides a simple set of empirical procedures to help determine which if either of these two models might be appropriate for alternative data sets we conclude by checking for the implications of the two models on an eight year panel of wisconsin firms the results indicate that one model is consistent with the data on manufacturing firms while the other is consistent with the data on retail trade journal of economic literature classification numbers c52 l60 l80

pricing and the news vendor problem a review with extensions in the newsvendor problem a decision maker facing random demand for a perishable product decides how much of it to stock for a single selling period this simple problem with its intuitively appealing solution is a crucial building block of stochastic inventory theory which comprises a vast literature focusing on operational efficiency typically in this literature market parameters such as demand and selling price are exogenous however incorporating these factors into the mode l can provide an excellent vehicle for examining how operational problems interact with marketing issues to influence decision making at the firm level in this paper we examine an extension of the newsvendor problem in which stocking quantity and selling price are set simultaneously we provide a comprehensive review that synthesizes existing results for the single period problem and develop additional results to enrich the existing knowledge base we also review and develop insight into a dynamic inventory extension of this problem and motivate the applicability of such models

exchange rate fluctuations firm size and export behavior an empirical investigation in this paper we examine how changes in the exchange rate and its volatility affect the export behavior of manufacturing firms we also investigate whether both exchange rate changes and exchange rate volatility affect firms of different sizes differently applying the two step system generalized method of moment estimator on our data for a sample of 221 pakistani manufacturing firms we find that the real exchange rate depreciation has positive impacts whereas the exchange rate volatility has negative impacts on firms exports we also find that compared to large sized firms small and medium sized exporting firms are more likely to benefit from currency depreciations yet regarding the effect of exchange rate volatility we find that the adverse impact of exchange rate volatility is weaker for large sized firms as compared to small and medium sized firms our findings confirm the presence of nonlinearity in export deterring favoring effects of exchange rate volatility depreciation on exporting behavior depending on firm size pakistan should design and implement export favoring preferential policies by emphasizing on real exchange rate stabilization and providing incentives to large firms to come into being small and medium sized enterprises should develop such export strategies that help reduce their size disadvantages particularly in managing exchange rate risks

international orientation as a precondition for export success every country particularly if it depends on foreign trade to such a high degree as the federal republic of germany has a vital interest in exploiting all its export opportunities the authors have developed a measurement concept focusing on the foreign orientation of business managers their empirical research suggests that as many as one third of the small and medium sized firms with a primarily domestic focus in their country could be turned into successful exporters the paper not only reveals obstacles to exporting as perceived by the managers of these companies but also points to specific measures to improve the efficiency of existing export promotion programs

on the relationship between firm size and export intensity export marketing literature supports the view that firm size is positively related to export intensity although the empirical findings have been mixed a number of theoretical arguments are used to support this proposition i e international marketing economies of scale limited managerial and financial resources of small firms decisionmaker s risk perception based on a large survey of the italian manufacturing industry the article falsifies the proposition and challenges some widely held assumptions in export marketing literature

a classification of literature on determining the lot size under quantity discounts abstract determining a lot size in the presence of either all units or incremental discounts has represented one of major interests of materials managers it is a common practice that the suppliers offer quantity discount to entice the buyers to purchase more and to achieve economies of scale for transportation and processing costs this paper will classify the literature on lot sizing determination under several types of discount schemes and discuss some of the significant literature in this area over two decades also some future research areas have been identified

one or more growth processes evidence from new italian firms the paper proposes a descriptive model of firm growth which assumes that learning processes are conditional on existing competencies of the firm and its founders we suggest the idea that firms who do not grow under all realizations of potentially profitable opportunities can be considered as zero learning in order to explain why some firms are zero learning and how these are different from growing ones we put forward and discuss the hypothesis that both start up size and founders pre entry history affect the firm s ability to adjust to market using a sample of 3 905 italian firms born in 1999 and 2000 we find that individual competencies influence start up size but not directly growth we also find a significant nonlinear relationship between start up size and growth implying that firms which were born smaller than a given size grow significantly less the results support the hypothesis that multiple and heterogeneous growth processes coexist and that the growth process of microfirms below a given organizational threshold may be structurally different in the long run from that of firms starting up above that threshold

quantity discounts under demand uncertainty to motivate buyers to increase their order quantity suppliers often rely on a well established and widely used approach they offer quantity discounts this practice is in large part driven to obtain improved economies in transportation through higher truckload utilization recently transportation rates which are increasing faster than other costs have become a larger portion of total net landed cost placing the traditional quantity discount practices under scrutiny many suppliers are left perplexed as to why their approach is not effective anymore and some are even concerned that their overall profits may have actually decreased due to their discount parameters in this paper we study a multiperiod model with a buyer facing stochastic end item demand and a supplier offering an all units quantity discount to him to understand better the dynamics of such systems we provide guidelines and insights on how to set effective discount parameters and when not to expect much from them we derive the opt

a choice model for packaged goods dealing with discrete quantities and quantity discounts utility maximizing solutions to economic models of choice for goods with either discrete quantities or non linear prices cannot always be obtained using standard first order conditions such as kuhn tucker and roy s identity when quantities are discrete there is no guarantee that derivatives of the utility function are equal to derivatives of the budget constraint moreover when prices are nonlinear as in the case of quantity discounts first order conditions can be associated with the minimum rather than the maximum value of utility in these cases the utility function must be directly evaluated to determine its maximum this evaluation can be computationally challenging when there exist many offerings and when stochastic elements are introduced into the utility function in this paper we provide an economic model of demand for substitute brands that is flexible parsimonious and easy to implement the methodology is demonstrated with a scanner panel data set of light beer purchases the model is used to explore the effects of price promotions on primary and secondary demand and the utility of product assortment

the small the young and the productive determinants of manufacturing firm growth in ethiopia abstract this study examines the relationships between firm growth and firm size age and labor productivity using annual census based panel data on ethiopian manufacturing firms the study explicitly addresses the ongoing statistical concerns in firm growth models such as sample censoring regression to the mean and unobserved heterogeneity our empirical results indicate that firm growth decreases with size smaller firms have faster rates of growth than larger firms even after compensating for their higher attrition rates the negative relation between age and growth predicted by the learning model is found to apply only to younger firms labor productivity affects firm growth positively which indicates that there is a market selection process at work during the period of economic reforms in ethiopia

optimal pricing and inventory strategies with multiple price markdowns over time abstract we study a multiple period discount problem for products that undergo several price cuts over time in the high technology sector electronic component suppliers are often able to offer pre announced price cuts to buyers due to technological innovation that allows them to produce existing components at lower costs in this context suppliers are primarily concerned with the optimal pricing decisions for the components over their life spans in order to achieve the highest possible revenues accordingly the buying firms i e manufacturers or retailers also need to identify the corresponding optimal retail prices and order quantity for the finished products that utilize the components for which discounts are offered frequently in this research we develop a multiple period price discount model that addresses this issue extant research in the price discount literature focuses on supply chains pricing and inventory decisions in the presence of a single price discount the proposed model in contrast offers a systematic decision tool for identifying the optimal strategies throughout a product s life span our results show that a decentralized supply chain characterized by multi period discounts over a product s life typically achieves 75 percent supply chain efficiency we undertake a series of numerical experiments based on the model and discuss their managerial implications

the relationship between firm growth size and age estimates for 100 manufacturing industries this study uses a sample of all firms operating in 100 manufacturing industries to examine some aspects of firm dynamics it finds that firm growth the variability of firm growth and the probability that a firm will fail decrease with firm age it also finds that firm growth decreases at a diminishing rate with firm size even after controlling for the exit of slow growing firms from the sample gibrat s law therefore fails although the severity of the failure decreases with firm size copyright 1987 by blackwell publishing ltd

information sources for new ventures in the turkish clothing export industry recently born global firms have received considerable attention in the entrepreneurship and international business literature managers leading these new ventures typically face substantial resource constraints when seeking information critical to internationalization this paper examines how the owner operators of new ventures in the turkish clothing export industry utilize their informal and formal social networks to acquire the information they need to export successfully field research and a survey of 250 turkish clothing firm owners was conducted in istanbul turkey to explore this issue findings indicate that informal social ties particularly friends and family connections are key sources of information for new venture firm owners in this industry two formal organizations provide export information to entrepreneurs in the turkish clothing industry but only one was found to be easily accessible to new venture firm owners the istanbul textile and clothing exporters union itkib ols regression results reveal that new venture firm owners perceptions of itkib s importance can be explained by their perceived importance of various kinds of export oriented information offered by this organization in particular perceived importance of export law market research and export process information drive their perceptions of the importance of their itkib membership

cross sectoral variation in the volatility of plant level idiosyncratic shocks we estimate the volatility of plant level idiosyncratic shocks in u s manufacturing we measure the variation in revenue total factor productivity not explained by either industry or economy wide factors or by establishments characteristics we find that idiosyncratic shocks are much larger than aggregate shocks accounting for about 80 of the overall uncertainty faced by plants plants in the most volatile sector are subject to about six times as much idiosyncratic uncertainty as plants in the least volatile we provide evidence suggesting that idiosyncratic risk is higher in industries where the extent of creative destruction is likely to be greater

on the dynamics of unemployment and wage distributions postel vinay and robin s 2002 sequential auction model is extended to allow for aggregate productivity shocks workers exhibit permanent differences in ability while firms are identical negative aggregate productivity shocks induce job destruction by driving the surplus of matches with low ability workers to negative values endogenous job destruction coupled with worker heterogeneity thus provides a mechanism for amplifying productivity shocks that offers an original solution to the unemployment volatility puzzle shimer 2005 moreover positive or negative shocks may lead employers and employees to renegotiate low wages up and high wages down when agents individual surpluses become negative the model delivers rich business cycle dynamics of wage distributions and explains why both low wages and high wages are more procyclical than wages in the middle of the distribution

price protection in the personal computer industry price protection is a commonly used practice between manufacturers and retailers in the personal computer pc industry motivated by drastic declines of product values during the product life cycle it is a form of rebate given by the manufacturer to the retailer for units unsold at the retailer when the price drops during the product life cycle it is a controversial policy in the pc industry because it is not clear how such a policy benefits the supply chain and its participants we show that price protection is an instrument for channel coordination for products with long manufacturing lead times so the retailer has a single buying opportunity a properly chosen price protection credit coordinates the channel for products with shorter manufacturing lead times so the retailer has two buying opportunities price protection alone cannot guarantee channel coordination when wholesale prices are exoge nous however when the price protection credit is set endogenously together with the wholesale prices channel coordination is restored in the two buying opportunity setting with fixed wholesale prices we show that price protection has two primary impacts 1 shifting sales forward in time and 2 increasing total sales finally we present a simple numerical example that suggests given the current economics of the pc industry that price protection under fixed wholesale prices may benefit the total chain and the retailer but hurt the manufacturer

a deteriorating inventory model with a temporary price discount abstract inventory models considering a temporary price discount have recently become an active area of research in this study an extension is made to consider the fact that some commodities may deteriorate during storage the models also incorporate three additional assumptions that have been neglected by researchers two models for the exponentially deteriorating items with a temporary price discount are developed for a regular and non regular inventory replenishment time our goal in this research is to maximize the total cost saving during the temporary price discount order cycle a numerical example is provided to illustrate the theory

the public pay gap in britain small differences that don t matter the existing literature on inequality between private and public sectors focuses on cross section differences in earnings levels forward looking agents however care about income and job mobility too which we show are substantially different between the two sectors using data from the bhps we estimate a model of income and employment dynamics allowing for unobserved heterogeneity in the propensity to be employed in eitherjob sector we detect a positive average public premium both in income flows and in the present discounted sum of future income flows we also find that income inequality is lower but more persistent in the public sector there is an ongoing debate as to whether public sector workers experience better or worse pay conditions than their private counterparts a recurring message in the recent literature is that although raw differences can be large most are likely to reflect differences in the composition of the workforce both in terms of observed characteristics such as age and education and in terms of unobserved characteristics nevertheless a look at labour markets in the two sectors suggests that individuals do perceive some differences between the sectors katz and krueger 1991 document the fact that blue collar workers are willing to queue to obtain public sector jobs whereas highlyskilled workers are notoriously hard to recruit and retain in the public sector the focus of most of the literature on public pay gaps is on cross section differences in earnings levels 2 yet the public private differences are arguably equally marked in terms of income mobility income volatility and job loss risk than in terms of mean income levels public sector employers are widely perceived to offer more job security 3 there is also plentiful evidence of relative wage compression in the public sector moreover as we shall point out public sector incomes are substantially more persistent over time than private sector incomes the motivating point of this article is that forward looking agents are likely to care about income and job mobility as well as income levels so that a more general assessment of the existence and magnitude of a public premium should be based on

the newsboy problem under progressive multiple discounts abstract previous research on the newsboy problem is based on the assumption that excess inventory is either discounted once and sold or disposed of real world settings especially in the apparel industry involve many cases where multiple discounts are used under multiple discounts a retailer has a series of discounts that are progressively used as the product remains on the shelf in this paper we formulate and solve a newsboy problem with multiple e discounts the new problem is solved with the objectives of 1 maximizing the expected profit and 2 maximizing the probability of achieving a target profit we show that multiple discounts when possible provide higher expected profit than using a single discount we verify the analytical results using numerical integration and illustrate the results with numerical examples

an exact algorithm for the capacitated total quantity discount problem in this paper we analyze the procurement problem of a company that needs to purchase a number of products from a set of suppliers to satisfy demand the suppliers offer total quantity discounts and the company aims at selecting a set of suppliers so to satisfy product demand at minimum purchasing cost the problem known as total quantity discount problem tqdp is strongly np hard we study different families of valid inequalities and provide a branch and cut approach to solve the capacitated variant of the problem capacitated tqdp where the quantity available for a product from a supplier is limited a hybrid algorithm called help heuristic enhancement from lp is used to provide an initial feasible solution to the exact approach help exploits information provided by the continuous relaxation problem to construct neighborhoods optimally searched through the solution of mixed integer subproblems a streamlined version of the proposed exact method can optimally solve in a reasonable amount of time instances with up to 100 suppliers and 500 products and largely outperforms an existing approach available in the literature and cplex 12 2 that frequently runs out of memory before completing the search

comparative analysis of firm demographics and survival evidence from micro level sources in oecd countries in this paper we present cross country evidence on firm size distribution firm demographic and post entry performance for 10 oecd countries we use harmonized firm level data drawn from business registers or social security records these data enable international comparisons and the identification of idiosyncratic country effects while average firm size differs across countries due to both sectoral specialization and within sector characteristics we find similar degrees of firm churning across countries in most of them about 20 of firms enter and exit most markets every year and about 20 40 of entering firms fail within the first 2 years of life however post entry growth of successful entrants is much higher in the usa than in europe which may be indicative of barriers to firm growth as opposed to barriers to entry

the decision maker and export entry and expansion this paper examines the varied empirical findings of the relationship between firm individual characteristics and foreign entry expansion behavior the results support the view that such activity is neither exclusively determined by structural or managerial factors and is really the result of interaction between both types of variables the paper proposes that foreign entry and expansion can best be understood as an adoption of innovation type behavior

a supplier s optimal quantity discount policy under asymmetric information in the supply chain literature an increasing body of work studies how suppliers can use incentive schemes such as quantity discounts to influence buyers ordering behaviour thus reducing the supplier s and the total supply chain s costs various functional forms for such incentive schemes have been proposed but a critical assumption always made is that the supplier has full information about the buyer s cost structure we derive the optimal quantity discount policy under asymmetric information and compare it to the situation where the supplier has full information

manufacturer overseas distributor relations and export performance the export arrangement which makes use of overseas distributors is examined in this article although this method is important for many manufacturers operating in foreign markets there are reservations about the performance levels that are achieved under such arrangements it is suggested that there is an important link between the performance level achieved and the very nature of the relationship that exists between the manufacturer and overseas distributor the authors assert also that the nature of the manufacturer overseas distributor relationship is associated with certain characteristics of the participating companies namely their stake in the relationship their experience and their uncertainty surrounding the relationship these propositions are tested and largely corroborated through analysis of data collected from 41 companies in canada and the uk

quantity discounts managerial issues and research opportunities marketing managers frequently administer pricing policies involving substantial quantity discounts however our understanding of the precise role of these discounts and their design is quite limited this paper reviews and integrates the economics and marketing literature and presents a detailed analysis of the policies of four firms in order to i specify the variety of motivations for quantity discounts ii provide guidelines to managers in designing quantity discount schedules and iii set out the most fruitful directions for future research

wage tenure contracts in a frictional labour market firms strategies for recruitment and retention a common assumption in equilibrium search and matching models of the labour market is that each firm posts a wage to be paid to any worker hired this paper considers the implications of firms posting contracts in a random matching model with on the job search more complex contracts enable firms to address both recruitment and retention problems by for example increasing the wage with tenure the effect on the labour market is to reduce turnover below the level required for efficient matching of workers to firms copyright 2004 wiley blackwell

joint replenishment and pricing decisions in inventory systems with stochastically dependent supply capacity abstract in this paper we study a joint optimization problem of replenishment and pricing for a periodic review inventory system with random supply capacity when making replenishment and pricing decisions at the beginning of each period the firm only knows the supplier s available capacity in the current period but does not know what will be the available capacity in future periods the salient feature of our model is that the random supply capacities for different periods are dependent several stochastic dependency structures are considered for the supply capacity sequence including the one lag and the multi lag dependency we show that the optimal inventory control policy is of the modified base stock type and the base stock level is decreasing in the available capacity of the current period and that the optimal pricing policy is a list price coined with markdown and markup this paper generalizes the work of federgruen and zipkin federgruen a zipkin p 1986a an inventory model with limited production capacity and uncertain demands i the average cost criterion mathematics of operations research 11 193 207 federgruen a zipkin p 1986b an inventory model with limited production capacity and uncertain demands ii the discounted cost criterion mathematics of operations research 11 208 215 in which the supply capacity and selling price are assumed to be fixed constants and the work of federgruen and heching federgruen a heching a 1999 combining pricing and inventory control under uncertainty operations research 47 454 475 on joint optimization of replenishment and pricing with unlimited supply capacity

the unemployment volatility puzzle is wage stickiness the answer i discuss the failure of the canonical search and matching model to match the cyclical volatility in the job finding rate i show that job creation in the model is influenced by wages in new matches i summarize microeconometric evidence and find that wages in new matches are volatile and consistent with the model s key predictions therefore explanations of the unemployment volatility puzzle have to preserve the cyclical volatility of wages i discuss a modification of the model based on fixed matching costs that can increase cyclical unemployment volatility and is consistent with wage flexibility in new matches

a pricing model for clearing end of season retail inventory the problem of setting prices for clearing retail inventories of fashion goods is a difficult task that is further exacerbated by the fact that markdowns enacted near the end of the selling season have a smaller impact on demand in this article we present discrete time models for setting clearance prices in such an environment when demand is deterministic we compute optimal prices and show that decreasing reservation prices lead to declining optimal prices when demand is stochastic and arbitrarily correlated across planning periods we obtain bounds on the optimal expected revenue and on optimal prices we also develop a heuristic procedure for finding near optimal prices and test its accuracy through numerical experiments these experiments reveal new insights for practitioners for example the penalty for choosing clearance price once and keeping it unchanged for the remainder of the selling season is found to be small when either the mean reservation prices do not change appreciably over time or when they drop sharply after the first period

on the job search productivity shocks and the individual earnings process individual labor earnings observed in worker panel data have complex highly persistent dynamics we investigate the capacity of a structural job search model with i i d productivity shocks to replicate salient properties of these dynamics such as the covariance structure of earnings the evolution of individual earnings mean and variance with the duration of uninterrupted employment or the distribution of year to year earnings changes specifically we show within an otherwise standard job search model how the combined assumptions of on the job search and wage renegotiation by mutual consent act as a quantitatively plausible internal propagation mechanism of i i d productivity shocks into persistent wage shocks the model suggests that wage dynamics should be thought of as the outcome of a specific acceptance rejection scheme of i i d productivity shocks this offers an alternative to the conventional linear arma type approach to modelling earnings dynamics structural estimation of our model on a 12 year panel of highly educated british workers shows that our simple framework produces a dynamic earnings structure which is remarkably consistent with the data

the empirical content of the job search model labor mobility and wage distributions in europe and the us abstract job search models of the labor market hypothesize a very tight correspondence between the determinants of labor turnover and individual wage dynamics on one hand and the determinants of wage dispersion on the other this paper offers a systematic examination of whether this correspondence is present in the data by estimating a rudimentary partial equilibrium job search model on a three year panel of individual worker data covering 10 european countries and the u s we find that our basic job search model fits the data surprisingly well this also allows us to point at a number of interesting empirical regularities about wage distributions our results suggest that cross sectional data on individual wages contain the basic information needed to obtain a reliable measure of the magnitude of labor market frictions as measured by a parameter of the canonical job search model finally we use our results in a cross country comparison of the intensity and nature of job to job turnover we arrange countries into two different groups according to their turnover intensity we further show that the nature of job to job turnover is very different between those two groups turnover is predominantly voluntary in low turnover countries whereas it is to a large extent involuntary in high turnover countries

price markdown scheme in a multi echelon supply chain in a high tech industry this paper studies the price markdown scheme in a supply chain that consists of a supplier a contract manufacturer cm and a buyer retailer the buyer subcontracts the production of the final product to the cm the cm buys the components from the supplier and charges the buyer a service fee for the final product produced the price markdown is made possible by the supplier with the development of new manufacturing technologies that reduce the production cost for the sourced component consequently the buyer adjusts the retail price in order to possibly stimulate stronger demand that may benefit both the supplier and the buyer under this scenario we identify the optimal discount pricing strategies capacity reservation and the stocking policies for the supplier and the buyer we also investigate the optimal inventory decision for the cm to cope with the price discount by considering both demand and delivery uncertainties our results suggest that higher production cost accelerates the effects of higher price sensitivity on lowering the optimal capacity and stocking policies in the supply chain the effect of mean demand error on the optimal prices is relatively marginal compared with that from price sensitivity we also found that increasing the standard deviation of the random demand does not necessarily increase the stocking level as one would predict the results show that delivery uncertainty plays an important role in the inventory carried beyond the price break we discuss potential extensions for future research

an equilibrium model of health insurance provision and wage determination we investigate the effect of employer provided health insurance on job mobility rates and economic welfare using a search matching and bargaining framework in our model health insurance coverage decisions are made in a cooperative manner that recognizes the productivity effects of health insurance as well as its nonpecuniary value to the employee the resulting equilibrium is one in which not all employment matches are covered by health insurance wages at jobs providing health insurance are larger in a stochastic sense than those at jobs without health insurance and workers at jobs with health insurance are less likely to leave those jobs even after conditioning on the wage rate we estimate the model using the 1996 panel of the survey of income and program participation and find that the employer provided health insurance system does not lead to any serious inefficiencies in mobility decisions

global delivery models the role of talent speed and time zones in the global outsourcing industry global delivery models gdms are transforming the global it and business process outsourcing industry gdms are a new form of client specific investment promoting service integration with clients by combining client proximity with time zone spread for 24 7 service operations we investigate antecedents and contingencies of setting up gdm structures based on comprehensive data we show that providers are likely to establish gdm location configurations when clients value access to globally distributed talent and speed of service delivery in particular when services are highly commoditized findings imply that coordination across time zones increasingly affects international operations in business to business and born global industries

firm dynamics in manufacturing and services a broken mirror this article represents a first attempt in exploring firm dynamics in the service industry as a whole a huge body of empirical literature is focused on manufacturing firms while only recent contributions shed some light in selected services sectors using a unique data set from the italian national institute for social security inps we compare the patterns of entry growth and survival performance of firms belonging to the manufacturing and to the service industry it turns out that industry dynamics in services in terms of stylized facts seem to mirror the one in manufacturing moreover the positive impact of firm size on survival is reduced when age is controlled for suggesting the existence of a learning mechanism more pronounced in manufacturing than in services copyright 2007 oxford university press

the two faces of market support how deployment policies affect technological exploration and exploitation in the solar photovoltaic industry the recent years have seen a strong rise in policies aiming to increase the diffusion of clean energy technologies while there is general agreement that such deployment policies have been very effective in bringing technologies to the market it is less understood how these policies affect technological innovation to shed more light on this important question we conducted comparative case studies with a global sample of 9 firms producing solar photovoltaic pv modules complemented by in depth interviews with 16 leading pv industry experts we propose that on the one hand policy induced market growth serves as an important catalyst for innovative activity as it raises the absolute level of firm investments in technological exploration on the other hand however deployment policies create an incentive for firms pursuing more mature technologies to shift their balance between exploitation and exploration toward exploitation firms focusing on less mature technologies cannot tap the potentials of exploitative learning to the same extent as those with more mature technologies therefore stimulating strong market growth may raise the barrier to market entry for less mature technologies we conclude that when designing deployment policies great care should be taken to avoid adverse effects on technological diversity and a premature lock in into more established technologies

the effect of return and price adjustment policies on a retailer s performance abstract product returns cost retailers billions of dollars annually consumers return products they are dissatisfied with and may return and repurchase products in order to obtain a discount when temporary price drops occur in this paper we analyze the effect of return policies durations on retailers who offer periodic discounts and those that do not we also examine the effects of offering a price adjustment protection policy and its optimal duration we compare policies in which money back refunds are given versus those where noncash refunds e g gift cards are used we find that using noncash refunds can significantly reduce the cost of providing a return policy and may even make such a policy profitable we also find that for retailers who already offer consumers periodic price discounts offering a price adjustment policy with the same duration as the return policy can be optimal and can considerably reduce the cost of the return policy the later assertion holds even if the price adjustment protection does not lead to an increase in demand

dynamic pricing in the presence of inventory considerations research overview current practices and future directions the benefits of dynamic pricing methods have long been known in industries such as airlines hotels and electric utilities where the capacity is fixed in the short term and perishable in recent years there has been an increasing adoption of dynamic pricing policies in retail and other industries where the sellers have the ability to store inventory three factors contributed to this phenomenon 1 the increased availability of demand data 2 the ease of changing prices due to new technologies and 3 the availability of decision support tools for analyzing demand data and for dynamic pricing this paper constitutes a review of the literature and current practices in dynamic pricing given its applicability in most markets and its increasing adoption in practice our focus is on dynamic intertemporal pricing in the presence of inventory considerations

a theory of firm growth learning capability knowledge threshold and patterns of growth abstract this paper focuses on the dual role of r d knowledge generation and the technological competence enhancing effect of r d and its implication for the endogenous evolution of r d productivity and the pattern of firm growth in particular based on the evolution of firm specific r d productivity or technological competence this paper derives a simple r d based model of firm growth capable of explaining various aspects of firm growth the model proposes three prototype patterns of firm growth depending on both firm and industry specific characteristics the former includes firm specific technological competence enhancing capability and the initial level of technological knowledge and the latter includes industry specific r d appropriability specifically firms with low technological competence enhancing capability tend to follow a convergent growth pattern in which firm growth gradually declines while firms with high technological competence enhancing capability tend to exhibit either a sustained or a vicious growth pattern depending on the initial size of their technological knowledge stock an empirical analysis of unique data on firm growth and technological capability provides supportive evidence for the role of technological competence enhancing capability in conditioning the pattern of firm growth

pricing policies under direct vs indirect channel competition and national vs store brand competition abstract this paper analyzes channel pricing in multiple distribution channels under competition between a national brand nb and a store brand sb where an nb can be distributed both through a direct channel e channel and an indirect channel local stores but an sb can be distributed only through an indirect channel we first explore cross brand and cross channel pricing policies formulating the problem as a nash pricing game we reach two findings 1 brand loyalty building is profitable for both an nb and an sb and 2 marketing decisions are more restrictive for an nb channel than they are for the sb channel we next assess supply chain coordination and reach two findings 1 wholesale price change does not coordinate the supply chain and 2 an appropriate combination of markup and markdown prices can achieve both supply chain coordination and a win win outcome for each channel

channel coordination and quantity discounts this paper presents a model for analyzing the impact of joint decision policies on channel coordination in a system consisting of a supplier and a group of homogeneous buyers the joint decision policy characterized by the unit selling price and the order quantity is coordinated through quantity discounts and franchise fees both the annual demand rate and the operating cost including the purchase ordering and inventory holding costs depend on the joint decision policy employed this paper contributes by integrating work addressing quantity discounts on inventory and ordering policies and work focusing on the control mechanism provided by quantity discounts in channel coordination it is shown that the optimal all unit quantity discount policy is equivalent to the optimal incremental quantity discount policy in achieving channel coordination furthermore it is shown that quantity discounts alone are not sufficient to guarantee joint profit maximization the analyses of the general models are illustrated by specific analytical results obtained for a given demand function