a globally flexible almost ideal demand system the almost ideal demand system is combined with the fourier expenditure system subject to the assumption that preferences are of the price independent generalized logarithmic class the resulting demand system has the desirable features of each of its components aggregate demand equations are consistent with preferences of a representative consumer and consistent estimates of elasticities are obtained for all observed prices application of the new demand system to u s consumption of meats and fish reveals that it fits the data well and that the restriction to the usual specification is rejected

the ethical challenge of management buy outs as a form of privatisation in central and eastern europe there has been a growing debate about the ethics of management buy outs mbos one possible criticism of the mbo is that it serves the interests of incumbent management at the expense of shareholders in this paper we develop the general arguments concerning the ethical aspects of the mbo to include other forms of buy out beyond going privates and apply the analysis to mbos as a mode of privatisation in central and eastern europe cee mbos are justified in this context postperestroika as a means of incentivising economic activity by giving managers an ownership stake in former state enterprises the actual mode of privatisation though raises issues of social justice and the criticism that mbos are at the expense of the broader social good the ethical problem for the cee is to balance the economic gains of a move to markets with the ethical risks to the agents of these markets

durable goods theory for real world markets the early 1970s witnessed three major advances in durable goods theory swan 1970 1971 and sieper and swan 1973 on optimal durability coase 1972 on time inconsistency and akerlof 1970 on adverse selection this paper surveys durable goods theory starting with these three contributions where much of the focus is on recent literature and on models that explain real world phenomena in addition to the ideas found in the contributions of swan coase and akerlof topics covered include why producers sometimes practice planned obsolescence the role of adverse selection in new car leasing and reasons for aftermarket monopolization

advertising learning and consumer choice in experience good markets an empirical examination this article empirically analyzes different effects of advertising in a nondurable experience good market a dynamic learning model of consumer behavior is presented in which i allow both informative effects of advertising and prestige or image effects of advertising this learning model is estimated using consumer level panel data tracking grocery purchases and advertising exposures over time empirical results suggest that in this market advertising s primary effect was that of informing consumers the estimates are used to quantify the value of this information to consumers and evaluate the welfare implications of an alternative advertising regulatory regime

the timing and magnitude of retail store markdowns evidence from weekends and holidays we examine daily prices of eight goods at seventeen retail stores collected in ann arbor michigan over a four month period from november 1 to february 28 we focus on weekly and seasonal price patterns and on the frequency of price markdowns or sales there were frequent markdowns in the intensive shopping period prior to christmas and a tendency for such sales to occur on weekends we interpret these findings as evidence that a significant number of markdowns are timed to occur when shopping intensity is exogenously high we complement the imperfect information based motives for sales in the literature by contributing an additional element based on the role of bulk shopping and increasing returns in the shopping technology

outsourcing retail pricing to a category captain the role of information firewalls it has been argued that retailers lack both the resources and capabilities to maximize category performance retailers may seek category management cm advice from a manufacturer referred to as a category captain cc a cc s recommendations affect all brands in the category not just her own despite an increase in the number of cc collaborations retailers are still concerned about manufacturer opportunism and militant behavior by manufacturers not selected as ccs whereas government agencies are worried about anticompetitive behavior that could harm consumers the federal trade commission recommends strictly enforced information firewalls within a cc s organization as a best practice guideline in this study we develop an empirical model and use policy simulations to quantify the impact of cc arrangements with information firewalls on retailers manufacturers and consumers we show how these effects could be influenced by the deactivation of vertical and horizontal information firewalls within the cc s organization

exchange rates and cash flows in differentiated product industries a simulation approach how do exchange rate changes impact firms cash flows we extend a simulation method developed in industrial organization to answer this question we use prices quantities and product characteristics for differentiated products coupled with a discrete choice framework and an assumption of price competition to estimate marginal costs for all producers using a monte carlo approach we generate counterfactual prices and profits for different levels of exchange rates we illustrate the method using the market for bottled water our results stress that even in a relatively simple market such as this one different brands face very different exchange rate risks consider a firm that produces a good in france using mainly local inputs and sells it abroad in locations that have a floating exchange rate vis a vis the euro profits and in turn the value of the firm are potentially exposed to exchange rate changes if the euro appreciates profits when measured in euros are likely to decrease how large is the decrease in profits similarly what is the impact of such an exchange rate change on the profits of an import competing firm these are the questions that a large literature on exchange rate exposure attempts to answer

what difference does dynamics make the case of digital cameras abstract when the well known blp model is applied to products with rapid technological changes and declining prices it tends to yield implausible results a sequence of increasingly sophisticated dynamic demand models most recently gowrisankaran and rysman 2009 hereafter gr have been developed to overcome these problems we apply both models to new data on the us digital camera market in addition we demonstrate that the gr model can be specified as a blp model plus an additional set of terms this suggests that a dynamic model can be estimated as a blp model plus a non parametric function which is less computationally demanding as a first step to implementing this semi parametric approach we estimate a blp model augmented with age as a proxy for the non parametric component we find that demand for digital cameras is more elastic when demand dynamics is accounted for in both the dynamic model and the blp model with the age proxy this suggests that the market is more competitive though the results are consistent with firms engaging in intertemporal price discrimination merger simulations predict the lowest price and quantity changes using the gr model

additional information for comments on alternative models of demand for automobiles by charlotte wojcik abstract in a recent paper in this journal econ lett 68 2000 113 wojcik argues that the nested logit is likely to be superior to demand specifications we and others have used in recent empirical work we review the relevant models and their uses consider her application and find that her conclusions are incorrect

product differentiation cost reducing mergers and consumer welfare cost synergies are an explicitly recognized justification for a two firm merger and empirical techniques are now widely used to assess the impact of cost reducing mergers on prices and welfare in the post merger market we show that if the merger occurs in a vertically product differentiated market then the merger will lead to a reduction in product offerings that limits the usefulness of pre merger empirical estimates indeed we further show that in such markets two firm mergers will typically lead to higher prices regardless of the merger s cost savings jel classifica tion l10 l41 differentiation des produits fusions pour reduire les couts et bien etre du consommateur les synergies de couts sont une justification explicitement reconnue pour la fusion de deux firmes et il existe des techniques empiriques vastement utilisees pour mesurer l impact des fusions visant areduire les couts sur les prix et le niveau de bien etre dans le marcheapres la fusion on montre que si la fusion se produit dans un marchede produit differencieintegreverticalement alors la fusion reduit l even tail de produits ce qui limite l utilitedes estimations empiriques faites avant la fusion de plus on montre que dans de tels marches les fusions de deux firmes finissent par engendrer des prix plus eleves quelles que soient les reductions de couts auxquelles on en arrive

applied welfare economics with discrete choice models economists have been paying increasing attention to the study of situations in which consumers face a discrete rather than a continuous set of choices such models are potentially very important in evaluating the impact of government programs upon consumer welfare but very little has been said in general regarding the tools of applied welfare economics indiscrete choice situations this paper shows how the conventional methods of applied welfare economics can be modified to handle such cases it focuses on the computation of the excess burden of taxation and the evaluation of quality change the results are applied to stochastic utility models including the popular cases of probit and logit analysis throughout the emphasis is on providing rigorous guidelines for carrying out applied work this abstract was borrowed from another version of this item

mergers with differentiated products the case of the ready to eat cereal industry traditional merger analysis is difficult to implement when evaluating mergers in industries with differentiated products i discuss an alternative which consists of demand estimation and the use of a model of postmerger conduct to simulate the competitive effects of a merger i estimate a brand level demand system for ready to eat cereal using supermarket scanner data and use the estimates to 1 recover marginal costs 2 simulate postmerger price equilibria and 3 compute welfare effects under a variety of assumptions the methodology is applied to five mergers two of which occurred and for which i compare predicted to actual outcomes

consumer behaviour theory and empirical evidence a survey this survey is designed to emphasize the relationship between empirical a nd theoretical considerations in the analysis of consumer behavior a lthough it focuses primarily on analysis at the individual or micro l evel it tries where possible to draw implications for the estimati on of aggregate relationships the importance of micro level analysis stems from the rapid expansion in available panel and survey data se ts this development has generated its own theoretical and empirical issues many of which are raised in this survey copyright 1988 by royal economic society

reform in hungary abstract the paper examines reform issues facing hungary concentrating on sequencing the liberalisation of domestic markets international trade and demonopolisation creating competitive conditions in product and factor markets is a precondition for the success of other reforms trade liberalisation could play a key role but is constrained by the large debt so demonopolisation is a critical first step if privatisation is to be undertaken quickly there is an argument for making transfers proportional to the implied asset value of state pensions and reducing subsequent pension payments

characteristics of demand for pharmaceutical products an examination of four cephalosporins we model demand for four cephalosporins and compute own and cross price elasticities between branded and generic versions of the four drugs we model demand as a multistage budgeting problem and we argue that such a model is appropriate to the multistage nature of the purchase of pharmaceutical products in particular the prescribing and dispensing stages we find quite high elasticities between generic substitutes and also significant elasticities between some therapeutic substitutes

the deadweight costs of taxation in new zealand when revenue is raised through taxation a number of costs are imposed on the community the most obvious of these is the cost accounted for by the amount of the revenue a cost which is borne by consumers and producers in the particular market in which the tax is imposed looking at the community as a whole this cost is offset to some extent by gains to those who benefit from the expenditure financed by the revenue however important additional costs may arise from changes in behaviour induced by taxation these incentive costs will be incurred if people tum to less preferred substitutes as a result of taxation or employ less satisfactory methods of production losses created in this way are known as deadweight costs or are sometimes referred to as the excess burden of taxation the size of deadweight losses is influenced by a range of factors but they are likely to be largest when the actions of producers and consumers are highly responsive to after tax prices when existing marginal tax rates are high and when savings are highly responsive to after tax returns since the responsiveness of economic activity to changes in after tax prices is the critical determinant of the size of deadweight costs a major part of this study has been concerned with obtaining estimates of the key consumer and producer price elasticities these elasticity estimates are then a key input into a small scale general equilibrium model from which deadweight cost estimates for new zealand are derived making use of duality theory the small scale general equilibrium model equates supplies of goods from producers with the demand for them from consumers and the government consumer and government budget constraints are included and the balance of payments on current account and the budget deficit are specified exogenously producers supplies are specified as producer price derivatives of the profit

demand for differentiated durable products the case of the u s computer printer market i introduction this paper aims to provide a theoretical and empirical description of consumer behavior in a dynamic market for differentiated durable goods the computer hardware industry serves as an example of the type of market we consider markets for computer systems and components as well as for many other high technology products exhibit some striking similarities that are of particular concern for an empirical economist as follows products are differentiated in multiple dimensions in addition to price products are durable yielding consumption services over multiple periods product quality rapidly improves over time empirical work on estimating differentiated product demand systems has been dominated by static discrete choice models with random utility see berry levinsohn and pakes 1995 goldberg 1995 and nevo 2001 among others however markets for durable goods exhibit several features at odds with their assumption of myopic consumer behavior first traditional static discrete choice models implicitly assume that consumers participate in the market every period choosing one of the available products or an outside option thus the fraction of consumers who do not buy any product in a given period could only be explained by the high value they assign to the outside alternative for durable goods however purchases are made infrequently and result in a consumer s exiting the market for a significant period of time hence the model needs to account for consumers outflow from the market arising from their purchase decisions second a static framework may give a misleading picture of the aggregate sales time pattern in a dynamic industry in many markets for durable products it is not uncommon to see rapidly improving product quality and falling prices given any reasonable set of consumer preferences over the product characteristics space static discrete choice models for such an industry will tend to predict an upward trend in aggregate sales this fails to account for a variety of patterns commonly seen in the data third the evolution of product quality leads to the possibility of intertemporal demand substitution by forgoing a current purchase the consumer retains the option to buy a potentially better product in the future hence the decision of when to buy may be just as important for consumers as the decision of what to buy this trade off cannot be accounted for in the static framework the purpose of this paper is to remedy these shortcomings of static discrete choice models in durable goods markets with particular attention paid to technological change and the dynamics of new products adoption the paper presents a dynamic model of consumer demand for differentiated durable products that explicitly accounts for consumers expectations of future product quality and consumers outflow from the market that arises endogenously from their purchase decisions in this model the consumer faces a sequence of static discrete choice problems over a non stationary choice set we show that for a subclass of random utility models which include the multinomial logit and the mcfadden 1978 generalized extreme value gev model there exists a scalar valued sufficient statistic that determines the value of the option to postpone the purchase this allows us to model industry evolution over a vastly reduced state space and to formalize the consumer s decision of when to buy as an optimal stopping problem a solution to that problem defines the hazard rate of product adoptions while the nested discrete choice model determines the alternative specific purchase probabilities integrating individual decisions over the population distribution generates rich dynamics of aggregate and product level sales the paper proceeds to present monte carlo evidence that ignoring the time dimension of consumer choice will induce a downward bias in the estimates of consumer preferences over quality sometimes reversing the sign of the coefficients

gender differences in pensions the causes of gender differences in pensions are examined for retirees and employees using the 1982 newly entitled beneficiary survey and the 1979 and 1988 may current population surveys for both retirees and the employed population much of the gender gap in coverage is accounted for by gender differences in labor market characteristics while children and marriage have a negative effect on female coverage among retirees even after controlling for labor market characteristics the negative effect is not observed among more recent groups of female employees finally recent convergence of male and female labor market characteristics contributed to a decline in the coverage gap during the 1980s

demographic variables in demand analysis in this paper the authors discuss five procedures for incorporating demographic variables into theoretically plausible demand systems translating scaling and the gorman reverse gorman and implicit prais houthakker procedures these five procedures are used to incorporate a single demographic variable the number of children in a household into the generalized ces demand system using household budget data for the united kingdom for the period 1966 1972 excerpt

airline code share alliances and their competitive effects abstract code share alliances have become a prominent feature in the competitive landscape of the airline industry however policy makers are extremely hesitant to approve proposed code share alliances when the potential partners route networks have significant overlap the main concern is that an alliance may facilitate price collusion on partners overlapping routes this article shows how policy makers can use a structural econometric framework to quantify the competitive effects of proposed code share alliances where potential alliance partners compete on overlapping routes in the prealliance industry as an example i apply the econometric model to the delta continental northwest alliance this proposed alliance was initially greeted with skepticism by the u s department of transportation owing to the potential partners unprecedented level of route network overlap for the markets considered in my analyses it appears as though the ultimate approval of the alliance by policy makers was justified

the gains from merger or collusion in product differentiated industries a merger in an industry with differentiated products increases the market power of the merging firms to the extent that their products are close substitutes and that other firms produce only more distant substitutes such a merger makes the residual demand curve of each partner steeper by shifting each in the direction of the industry demand curve 2 the extent of this increase in market power depends upon the own elasticity of demand for each merging firm s product as well as the cross elasticity of demand for each with all other firms products as a result evaluating the effect of a merger between two firms with n 2 other competitors would seem to require the estimation of at least n2 parameters all of the price elasticities of demand a formidable task that extremely difficult estimation task is unnecessary however the necessary information is contained in the slopes of the two single firm residual demand curves before the merger and the extent to which the merged firm will face a steeper demand curve for example suppose a merger between two u s brewing firms say pabst and anheuser busch were proposed it is not particularly important to determine whether it is competition from miller or competition from stroh or from heileman or which puts the most effective brake on anheuser busch s pricing only the total effect of these other firms and the particular effect of competition from pabst are of interest this paper proposes econometric procedures for estimating the demand system that merger partners will face based only on pre merger data the key to the procedures is that the effects of all other firms in the industry are summed together formally we start with a model of an n firm product differentiated industry manipulation of the model removes the prices and quantities of all but two firms this reduces the dimensionality of the problem to manageable size rather than an n firm demand system we estimate a two firm residual demand system in this way the technique extends our econometric method for

estimation of a model of entry in the airline industry this paper considers the effect of an airline s scale of operation at an airport on the profitability of routes flown out of that airport the empirical methodology uses the entry decisions of airlines as indicators of underlying profitability the results extend the empirical literature on airport presence by providing a new set of estimates of the determinants of city pair profitability these estimates imply that city pair profits increase in airport presence and decrease rapidly in the number of entering firms the literature on empirical models of oligopoly entry is also extended via a focus on the role of differences between firms

estimating multiple discrete choice models an application to computerization returns buyers in many markets face multiple discrete choices they can purchase multiple units as well as multiple brands at the same time this paper presents a multiple discrete choice model for the analysis of differentiated products demand users maximize profits by choosing the number of units of each brand they purchase i estimate the model using micro level data on the demand for personal computers i use the estimated demand structure to assess the welfare gains from computerization and technological innovation in peripherals the estimated return on investment in personal computers is 92 moreover a 10 increase in the performance to price ratio of microprocessors leads to a 2 2 gain in the estimated user surplus the personal computer pc market is of interest to industrial organization economists because of its size the continual technological change and above all because of the farreaching implications of pcs on the economy as a whole several distinct features make pc demand difficult to model pcs are a differentiated durable good in constant technological evolution moreover buyers make multiple discrete choices firms according to our data spread their purchases of pcs over different brands at the same time they buy pcs in blocks several units of each brand that they have chosen the aim of the paper is to present a model that captures these features and to use this model to estimate the welfare gains from computerization classical discrete choice models allow one choice among mutually exclusive alternatives in contrast the proposed framework allows users to demand multiple units and multiple brands the model can be applied to other cases of multiple discrete choices e g the composition of airline fleets car holdings per household the fields of the faculty in economics departments household cereals consumption or any other good consumed in more than one variety during a relevant time period although pervasive multiple discrete choice problems have received little attention because of their complexity a central issue regarding the pc market is the current controversy in the economics literature about the computerization puzzle this puzzle stems from the empirical finding that computerization has had no effect on firm productivity griliches and siegel 1991 and morrison and berndt 1990 contrary to those results hendel 1994 and lichtenberg 1995 using more disaggregate data than most previous studies report excess returns to computerization this indicates that data aggregation may have created the computerization puzzle in this paper i present a model consistent with the basic

choice inconsistencies among the elderly evidence from plan choice in the medicare part d program comment consumers enrollment decisions in medicare part d can be explained by abaluck and gruber s 2011 model of utility maximization with psychological biases or by a neoclassical version of their model that precludes such biases we evaluate these competing hypotheses by applying nonparametric tests of utility maximization and model validation tests to administrative data we find that 79 percent of enrollment decisions from 2006 to 2010 satisfied basic axioms of consumer theory under the assumption of full information the validation tests provide evidence against widespread psychological biases in particular we find that precluding psychological biases improves the structural model s out of sample predictions for consumer behavior

one is almost enough for monopoly it has been argued that two factors product durability and potential entry may force a monopolist to price at marginal cost this article shows that when these two forces coexist the tendency toward competition may be negated first we prove that durable goods oligopolists without commitment powers may attain joint profits arbitrarily close to those of a monopolist with perfect commitment power second we demonstrate that the presence of a potential entrant may enable a durable goods monopolist to act as if he had commitment power thus potential as well as actual entry may restore monopoly power

flexible and semiflexible consumer demands with quadratic engel curves in this paper we introduce three flexible consumer demand systems in which expenditures on goods are quadratic functions of income we view these alternatives as to the demand systems used heretofore in the empirical modeling of rank three demands namely those in which expenditure shares are quadratic functions of the logarithm of income curvature conditions required by theory can be imposed locally during the estimation for each and a semiflexible version can be estimated for illustrative purposes we estimate various forms of two of the systems using canadian data on seven categories of goods for the period 1947 to 1995

choice set heterogeneity and the role of advertising an analysis with micro and macro data abstract the authors show how to use microlevel survey data from a tracking study on brand awareness in conjunction with data on sales and advertising expenditures to improve the specification estimation and interpretation of aggregate discrete choice models of demand in a departure from the commonly made full information assumption they incorporate limited information in the form of choice sets to reflect that consumers may not be aware of all available brands at purchase time they find that both the estimated brand constants and the price coefficient are biased downward when consumer heterogeneity in choice sets is ignored these biased estimates can lead firms to make costly price setting mistakes in addition the tracking data enable the authors to identify separately two processes by which advertising influences market shares they find that advertising has a direct effect on brand awareness inclusion in choice set in addition to its effect on consumer preferences increase in utility this

hungary s transition to the market the case against a big bang hungary paul hare and tamas revesz among eastern european countries hungary s great advantage is that it began economic reforms in 1968 and slowly introduced the institutions of a market economy during the 1980s these measures laid the foundation for a gradual transition to the market without the need for any sharp break with the past policy mistakes were of course made the most serious extending over several years was the 1970s investment boom funded by foreign capital which contributed to hungary s large debt burden despite this the government accounts are not now in substantial deficit and the balance of payments on current account is in modest surplus nevertheless managing the external debt is now the most difficult of hungary s problems it is important that hungarian joint ventures and privatization are now attracting significant quantities of foreign capital given the quite rapid pace of liberalization since the late 1980s the government s commitment to further changes and a reasonably satisfactory macroeconomic balance though inflation is worrying there is no case for a big bang approach in hungary such a shock could only disrupt established market relationships and expectations with little benefit the most valuable forms of aid for hungary would be debt relief and unrestricted access for hungary s products to ec markets

linear and quadratic spline models for consumer demand functions this paper combines flexible functional form techniques which provide local approximations to indirect preferenc es with respect to prices and incomes with spline techniques that provide global approximations with respect to real income the main technical problem is that real income or utility is an unobserved variable starting with the normalized quadratic expenditure functio n linear and quadratic spline models are introduced theoretically and are empirically estimated using japanese consumer data for four goods fo r the years 1970 87 the semi nonparametric literature initiated by a r gallant is reviewed and a limited semi nonparametric property is claimed to hold for the spline models presented in the paper

monetary and exchange rate policies during eastern europe s transition some lessons from further east over the past three years eastern europe has embarked upon a transition from state ownership and central planning to a market system with pri vate ownership and enterprise this transition is now taking place in the former soviet union monetary institutions and policies as well as trade and exchange regimes played a major role in the collapse of the old system through open and hidden inflationary pressures and inefficiency insulated from world trade competition not surprisingly they now constitute the centrepiece of this radical transformation

the assessment microeconomics of transition in eastern europe the dramatic political events of 1989 and 1990 when almost all the communist governments of eastern europe collapsed and new democratic governments were elected into office gave rise to a brief spell of euphoria the dead or dying hand of communism was lifted from the region and a future of capitalist abundance was supposedly as sured this naive but perfectly understandable euphoria was quickly dispelled by the grim economic reality facing the new governments al though nearly everywhere there was a commit ment more or less strong to bring about a transition to a market type economy a transition typically requiring stabilization extensive liberalization and privatization there was far less agreement on the speed sequencing and precise modalities of the process at the same time in certain countries much needed reform programmes could neither be agreed nor implemented effectively because of political disputes over the very nature and existence of the states concerned table 1 summarizes the economic and political situation in the whole re gion as of summer 1991

testing restrictions in a flexible dynamic demand system an application to consumers expenditure in canada traditionally restrictions on systems of demand equations have been tested using static models whilst being estimated with time series data this paper develops a vector time series model of expenditure shares in the context of a singular dynamic demand system the model allows for non symmetric and non homogeneous short run behaviour the homogeneity and symmetry restrictions are only examined in the long run structure results based on canadian time series data are presented and reject the current practise of static modelling while restrictions suggested by economic theory are not rejected when imposed on the long run structure

new indices of money supply and the flexible laurent demand system the article begins by surveying the existing results on the new divisia monetary aggregates charts display the differences in behavior between the divisia aggregates and the federal reserve s official simple sum monetary aggregates the article then compares system wide fit for the simple sum and divisia monetary aggregates when used as data in the joint estimation of a system of demand equations the demand system is derived from a new laurent expansion approximation to the reciprocal indirect utility function the laurent expansion provides a better behaved remainder term than that of the more commonly used taylor series the results favor the divisia aggregates

corporate entrepreneurs and privatized firms in russia ukraine and belarus abstract this paper provides a preliminary examination of the development of corporate entrepreneurship in privatized firms in russia belarus and ukraine three countries with a common background as part of the soviet union but with different incentives and constraints on entrepreneurship since the beginning of transition using large scale surveys of newly privatized companies the paper shows that there are differences in the nature and extent of entrepreneurship in established businesses in the three countries the paper utilizes representative samples of general directors in 105 privatized russian enterprises 100 privatized ukranian enterprises and 68 privatized enterprises in belarus evidence is presented that suggests that russian privatized firms have lower insider stakes greater outside ownership less employee voice and greater managerial power within the firm than is the case in belarus and ukraine the active monitoring of managers by outsiders may be an important aspect of the transformation of russian firms to efficient commercially viable entities in ukraine and belarus a lack of outside involvement in corporate governance may lead to managerial opportunism and low incentives to attract outside strategic investors including foreign partners russia appears to be building a stronger platform for the future development and effectiveness of entrepreneurship than is the case in ukraine and belarus the findings provide evidence of the importance of direct involvement and the development of relationships to counteract the shortcomings of the legal infrastructure and financial reporting mechanisms in general the findings of the study for russia show that in the current hostile and rapidly changing environment entrepreneurial priorities and actions so far have primarily focused on controlling cash flow seeking new markets and redefining businesses through retrenchment and restructuring although it is as yet too early to examine the longer term effects of the changes in entrepreneurial conditions the paper presents the first large scale comparative evidence of the indications of a divergence in entrepreneurial development between the three countries there was a greater incidence of turnover among the senior management team in russia managers in ukraine and belarus had more diverse strategic objectives in contrast to those in russia where managers have behaved in a more realistic fashion by focusing on retrenchment for academics the study s findings suggest further research is needed to examine the longer term nature and effects of corporate entrepreneurship compare entrepreneurship in new start ups in the three countries and compare with corporate entrepreneurship elsewhere in emerging markets and the barriers to the development of corporate entrepreneurship for practitioners and policy makers the study highlights the need to develop and enforce an appropriate regulatory framework which strengthens the rules of the game under which corporate entrepreneurship operates

bayesian efficiency analysis with a flexible form the aim cost function in this article we describe the use of gibbs sampling methods for drawing posterior inferences in a cost frontier model with an asymptotically ideal price aggregator nonconstant returns to scale and composed error an empirical example illustrates the sensitivity of efficiency measures to assumptions made about the functional form of the frontier we also examine the consequences of imposing regularity through parametric restrictions alone

how to reform a planned economy lessons from china the countries of eastern europe and the former soviet union have been flooded with advice from the west on how to liberalize their planned econo mies this advice is unfortunately offered in an empirical vacuum no one knows how these econo mies will react to the proposed liberalization meas ures there exists however a neglected source of information china offers a long time series of data over a decade s worth on the effects of reforms on a planned economy china s reforms were gradual but their cumulative effect has been large and they have been remarkably successful china s experiments provide some practical les sons on what kinds of reforms can work elsewhere the dominant school of thought among economists favours the big bang policy of reforming quickly and according to a comprehensive plan partial reforms in this view are useless they will be negated by the remnants of the planning system the proponents of big bang reform have been influential with poland czechoslovakia and rus sia announcing plans for a rapid transition to capi talism