network externalities technological progress and the competition of market contracts abstract network externalities are used to describe the fact that many modern products become more valuable the more users adopt products of the same technology where network externalities and technological progress exist the various kinds of inefficiencies discussed in the recent literature can be explained by different types of contracts the main categories analysed are simple market contracts update contracts and service contracts it is shown that these types of contract emerge endogenously from the incentive structure of profit maximizing firms competition between these contracts may substantially reduce inefficient allocations caused by network externalities

regional prices and real incomes in the uk official figures on regional incomes in the uk are compiled on a nominal basis this paper develops a contemporary measure of relative regional prices in the uk which suggests that the impact on r

sticky prices and deviations from the law of one price evidence from mexican micro price data abstract this paper uses a novel dataset of weekly sampled store level prices to study the impact of sticky prices on the volatility and persistence of intranational deviations from the law of one price lop the volatility of lop deviations is found to be increasing both on the distance separating two locations and on the degree of price stickiness sticky prices are also found to be systematically related to the persistence of lop deviations half lives of lop deviations are systematically larger for goods with stickier prices these observations are shown to accord well with the predictions of a dynamic general equilibrium model featuring real market segmentation and calvo pricing i also find evidence of remarkably fast convergence to the lop average half lives of lop deviations are in the order of 3 6 weeks and show that previously reported convergence estimates may be afflicted by a positive temporal aggregation bias

waves in consumption with interdependence among consumers this paper presents a model to analyze the development of consumption patterns when there are social interactions among consumers in particular a consumer in this model recognizes three reference groups a peer group of similar consumers with whom the consumer wishes to share consumption activities a distinction group from which the consumer wishes to distinguish him or herself and an aspiration group to which the consumer does not belong but wishes that he she did and with whom the consumer would like to share consumption activities the interplay of aspiration and distinction can lead to waves in consumption these can happen when for example the avant garde consumption of up market pioneers is copied by other types of consumer as the latter aspire to emulate the former the former in turn seek to distinguish themselves from these unwelcome companions by varying their consumption in consequence a particular consumption activity may start up market an then gradually proceed down the social spectrum more complex patterns with continuing cycles in consumption can also be found the paper argues that this model is not only applicable to the consumption behaviour of an elite or would be elite but is relevant in a wide range of consumption settings

the changing spatial concentration of income and poverty among suburbs of large us metropolitan areas after developing a longitudinal data base of civil divisions within 27 large metropolitan areas msas from the 1970 1990 us censuses this study examines changes in the spatial concentration of income and poverty within these msas a series of cross sectional analyses of geographical and social determinants of poverty rates and median household income are used to analyse whether the determinants are changing over time large older central cities in the north east and mid west have experienced increasing poverty and decreases in income relative to their own history and relative to their own suburbs there is some evidence of economic decline in the inner suburbs of these central cities relative to other suburbs but not relative to the central cities the geographical shifts in msa population among suburbs by income between 1970 and 1990 are analysed relative to initial social characteristics of civil divisions the study concludes that the filtering of older residential buildings to and the lower margi

wright meets markowitz how standard portfolio theory changes when assets are technologies following experience curves abstract we consider how to optimally allocate investments in a portfolio of competing technologies using the standard mean variance framework of portfolio theory we assume that technologies follow the empirically observed relationship known as wright s law also called a learning curve or experience curve which postulates that costs drop as cumulative production increases this introduces a positive feedback between cost and investment that complicates the portfolio problem leading to multiple local optima and causing a trade off between concentrating investments in one project to spur rapid progress vs diversifying over many projects to hedge against failure we study the two technology case and characterize the optimal diversification in terms of progress rates variability initial costs initial experience risk aversion discount rate and total demand the efficient frontier framework is used to visualize technology portfolios and show how feedback results in nonlinear distortions of the feasible set for the two period case in which learning and uncertainty interact with discounting we compare different scenarios and find that the discount rate plays a critical role

lead markets country specific drivers of the global diffusion of innovations abstract globally successful innovations have commonly been preferred first in one country or region before being adopted internationally countries that first adopt an internally successful innovation can be described as lead markets this paper presents the lead market concept of developing global innovations the lead role of a market is discussed first theoretically and then by use of a system of five country specific factors demand advantages price advantages export advantages transfer advantages and market structure advantages the applicability of this system of lead market factors is then evaluated in a detailed case study of the cellular mobile telephone industry it is finally suggested that companies can harness lead markets for the development of global innovations by developing and refining innovations in close interaction with the local environment of a lead market a company can focus on a narrow range of preferences and feedback lowering the risk of being locked into idiosyncratic environments and generate true global innovations a method for identifying potential lead markets is briefly discussed

prices and regional variation in welfare one would expect regional differences in prices to influence conclusions concerning levels and distributions of well being although there is anecdotal evidence of significant price dispersion across regions there is no governmental source of data that measures differences in price levels in this paper i integrate estimates of regional prices with expenditure data from the consumer expenditure surveys to assess the influence of price differences on living standards in the united states while prices have little effect on inequality estimates of poverty and the standard of living change substantially with the inclusion of regional price variation

technological clusters with a knowledge based principle evidence from a delphi investigation in the french case of the life sciences abstract recent works in the theory of technical change show the effect of irreversibility and lock in on the diffusion and creation of innovation processes which are able to stop the development of a generic technology therefore industrial policies play a major role in selecting and supporting the innovative process the purpose of this paper is to prove the possibility to derive a typology of future innovations in terms of generic technology from a delphi type technology survey thus it is possible to get a better understanding of the industrial dynamics and to design an interesting tool for industrial policies or for firm strategies as far as they aim at developing stable technological trajectories this is applied to the french case of the life sciences the paper suggests interesting explanatory trajectories in order to fight against diseases such as cancer alzheimer or schizophrenia

measuring the spatial price differences in china with regional price parity methods the measurement of prices has been an important field in economics and a spatial price index is very useful in comparing the standards of living and well being across regions in a country this paper intends to measure the regional price parities rpps across different provincial areas in china with an urban sample of 140 goods and services in 2015 according to the framework of the international comparison program icp methodology the results show that the rpps that were estimated with commonly used approaches such as the gini elteto koves szulc geks geary khamis gk and weighted country product dummy wcpd are only slightly different the rpps of three regions including guangdong shanghai and zhejiang are greater than 1 with beijing 1 while the other 27 regions are all lower than 1 which represents price levels that are less than beijing in the extrapolation of the rpps from 2000 to 2014 a significant descending trend is found for the standard deviation series of the rpps over time that shows that the price differences across regions decreased during the extrapolating period this finding provides evidence of a phenomenon of spatial price converging in china finally a study on the deflation of provincial aggregates with the rpps reveals that the spatial price adjustment will change the ranks or relative importance of different regions in the country especially the measurement of income inequality proves that the gini coefficients of provincial income deflated by the rppgeks are all lower than the gini coefficients of unadjusted incomes

international income inequality measuring ppp bias by estimating engel curves for food there are large differences between rich and poor people in the world this is of major concern to economists as well as to policy makers the magnitude of the dif ferences however depends on the measure used for comparisons to illustrate per capita income in china is more than five times larger if one uses penn world table pwt 1 incomes rather than exchange rate based ex incomes in this paper we study pwt incomes which aim at correcting for price level dif ferences across countries and identify the bias in them by estimating engel curves for food furthermore we study the relationship between the bias and the income of a country the pwt produces purchasing power parity ppp adjusted incomes and thus the associated bias is referred to as the ppp bias having estimated the bias in pwt incomes we provide new estimates of real income and refer to these as the engel curve ec incomes by comparing the estimated ec incomes and the pwt incomes the issue of how the bias influences estimated inequality is discussed finally we discuss whether ex incomes which simply transform each country s nominal income into one common currency provide better estimates of income than do pwt incomes this paper reports three main findings first there is substantial and systematic ppp bias in the pwt incomes the poorer the country the more its income tends to be overestimated 2 second the ppp bias causes a substantial and robust underesti mation of international inequality the gini index increases substantially when one adjusts for the bias third whereas pwt incomes provide better estimates than the ex incomes for the richer countries the ex incomes which implicitly assume that ppp holds provide better estimates for the poorer countries as we know that price levels differ across countries there is consensus that the seminal work on establishing the pwt was a well founded initiative and the data have been extensively used 3 still although many studies rely on pwt data few focus on the ppp bias in this dataset some contributors focus on one component of the bias however the so called substitution bias and use macro data to measure this

calculating rural urban food price differentials from unit values in household expenditure surveys a comparison with existing methods and a new procedure while purchasing power parity ppp between countries has received a great deal of attention ppp calculations within countries have received less attention the idea that one unit of currency has the same purchasing power in all regions in large countries is false this paper addresses this limitation by proposing a methodology for calculating rural urban ppp in india the paper introduces a concept of item specific ppp that exploits the analogy with an item specific equivalence scale the methodology relies on demographically varying preferences to estimate ppp the results underline the need to incorporate spatial differences in ppp calculations in countries with heterogeneous preferences copyright 2012 oxford university press

dual technological trees assessing the intensity and strategic significance of technological change abstract the paper addresses the issue of the potential impact of technological innovation on competition it aims at reviewing abernathy and utterhack s dominant technology dosi s technological trajectories clark s design hierarchies abernathy and clark s transilience concepts we recognize that the intensity of innovation falls along a continuum and introduce the concept of micro radical innovation we choose to qualify the strategic significance of technological change through the transilience concept leading to the principle of competence relatedness we introduce dual technological trees dtt as a way to present a hierarchical map of the many technological options that may be searched to fulfil a certain generic function in the market place the complex and unpredictable nature of technology is recognized the paper essentially suggests to map the various technological options and suboptions that one would think plausible at the present time keeping in mind that technology will end up finding its own peculiar ways the dynamic interaction between the dtt and some customer concept tree on the market side is also discussed we finally turn to the use of the dtt to assess the potential strategic significance of innovation several examples are presented

estimating real income in the united states from 1888 to 1994 correcting cpi bias using engel curves this paper provides the first estimates of overall cpi bias prior to the 1970s and new estimates of bias since the 1970s it finds that annual cpi bias was 0 1 percent between 1888 and 1919 and rose to 0 7 percent between 1919 and 1935 annual cpi bias was 0 4 percent in the 1960s and then rose to 2 7 percent between 1972 and 1982 before falling to 0 6 percent between 1982 and 1994 the findings imply that we have underestimated growth rates in true income in the 1920s and 1930s and in the 1970s

quality quantity and spatial variation of price this paper develops and implements a method for estimating price elasticities of demand using cross sectional household survey data geographically clustered households report unit values which when corrected for quality effects and for measurement error indicate the underlying spatial variation in prices and can be matched to variation in demand patterns a simple model of quality choice is proposed while the correction for measurement error exploits the clustered design of such surveys data from a 1979 household survey from the ivory coast are used to estimate price elasticities for beef meat fish cereals and starches copyright 1988 by american economic association

tortoises and hares choice among technologies of unknown merit recent work in the area of competing technologies and increasing returns has largely been concerned with the effectiveness of the market in delivering optimal outcomes the existence of inefficient market outcomes suggests that there might be a place for intervention in the technology choice process this paper develops a model of sequential choice in which the choice process is subject to centralized control the model is used to show that intervention can increase the expected present value of the technology adoption process it remains however that one technology and not necessarily the best will come to dominate the market copyright 1991 by royal economic society

the law of one price evidence from the transitional economy of china abstract this paper applies the recently developed econometric methods of panel unit root tests and nonlinear mean reversion to investigate price convergence in china the largest transitional economy in the world we find that prices did converge to the law of one price in china for an overwhelming majority of goods and services based on a large panel data set the finding sheds light on the extent of the market economy in china and casts doubt on young s proposition that the economic reform has led to the fragmentation of chinese domestic markets