rationality in the analysis of behavioral simulation models an important task in the analysis of a behavioral simulation model is to explain clearly how the model s organizational assumptions lead to its simulated behavior all too often model based arguments involve an uncomfortable leap of logic between equations and consequences this paper proposes two methods of analysis premise description and partial model testing which provide stepping stones between model equations and their simulated consequences premise description examines the bounded rationality of policies or decision functions in the model pointing out the process and cognitive limitations assumed in decisionmaking partial model tests expose the intended rationality of smalt combinations of policies showing that policies produce sensible actions with respect to their premises the application of those methods is illustrated with a simulation model of a sales organization in which sales force productivity is prone to decline the behavior of productivity is traced to dysfunctional interact

marshall and complexity a necessary balance between process and order according to alfred marshall economics is a complex science which deals with a very compound matter the concept of equilibrium is very widely referred to in his writings not only as a tool to be used in the analytical apparatus as is usually stressed but also and more important as an element that characterises the evolutionary framework of his analysis in the marshallian investigation of economic and social matters the term equilibrium indicates an indispensable degree of order whereas evolution denotes a vital continuous process that characterises every economic and social body the particular relation between equilibrium and evolution which characterises marshall s approach allows us to better understand the balanced interplay between order and process two categories that in marshall pervade every aspect of society considered as a highly complex body

path dependence competition and succession in the dynamics of scientific revolution what is the relative importance of structural versus contextual forces in the birth and death of scientific theories we describe a formal dynamic model of the birth evolution and death of scientific paradigms based on kuhn s structure of scientific revolutions the model represents scientific activity as a changing set of coupled institutions a simulated ecology of interacting paradigms in which the creation of new theories is stochastic and endogenous the model captures the sociological dynamics of paradigms as they compete against one another for members solve puzzles and recognize anomalies we use sensitivity tests and regression to examine the role of intrinsic versus contextual factors in determining paradigm success we find that situational factors attending the birth of a paradigm largely determine its probability of rising to dominance while the intrinsic explanatory power of a paradigm is only weakly relatedto the likelihood of success for those paradigms surviving the emergence phase greater explanatory power is significantly related to longevity however the relationship between a paradigm s strength and the duration of normal science is also contingent on the competitive environment during the emergence phase analysis of the model shows the dynamics of competition and succession among paradigms to be conditioned by many positive feedback loops these self reinforcing processes amplify intrinsically unobservable microlevel perturbations in the environment the local conditions of science society and self faced by the creators of a new theory until they reach macroscopic significance such path dependent dynamics are the hallmark of self organizing evolutionary systems we consider the implications of these results for the rise and fall of new ideas in contexts outside the natural sciences such as management fads

market segmentation strategies of multiproduct firms we analyze a multiproduct duopoly and ask whether firms should offer general purpose products or tailor their offerings to fit specific consumer needs offering a targeted product has two effects utility increases for some consumers due to increased fit whereas utility decreases for others due to increased misfit previous work has not considered these two effects jointly and has therefore not been able to capture the tradeoff inherent in market segmentation we show that in addition to the degree of fit and misfit the intensity of competition and the fixed cost of offering an additional product determine firms market segmentation strategies extending product lines to target more narrowly defined consumer segments has been a favorite strategy of brand managers for years popular buzzwords like one on one marketing and niche marketing underline its importance in practice in this context we ask to what extent market segmentation is justified from a profitability point of view consider a competitive environment in which each firm can either offer a general purpose product or segment the market by offering products that are tailored to consumers needs while a consumer ceteris paribus prefers a product that is targeted at her own segment she would rather buy a general purpose product than a product that is targeted at another segment segmenting the market therefore has two effects first if a consumer s preferred product is offered she is better off because she is able to buy a product that exactly fits her needs we call this positive aspect of market segmentation fit second if the consumer s preferred product is not offered she is worse off because she ends up with a product that does not satisfy her needs at all this negative aspect of market segmentation is denoted as misfit

confronting the science value split notes on feminist economics institutionalism pragmatism and process thought what changes must economics undergo if it is to become a more adequate discipline furthering of survival and flourishing this essay argues that a break must be made from contemporary mainstream economics at the level of ontology i e about the nature of reality drawing on neglected traditions of pragmatist philosophy and process metaphysics some elements of old institutionalist economics and late twentieth century natural science it demonstrates that ample argument exists for a view of the world as open evolving and permeated with value furthermore feminist scholarship offers an explanation for why such a worldview faces an uphill battle for acceptance copyright 2003 oxford university press

product differentiation and endogenous disutility abstract this paper models the choice of degree of focus or general purposeness available to firms by endogenizing transportation costs in an address model of horizontal differentiation the formulation is in three stages entry focus or design competition and price competition the strategic effect of product design is analyzed the equilibrium level of general purposeness is shown to depend critically on neighbor exclusivity the latter and more generally market structure and product diversity are shown to depend on the cost of producing general purpose products if general purposeness is free to design and produce only two firms enter the market and set large transportation costs underproviding product diversity

a policy approach to the environmental impacts of technological lock in abstract the broadening spectrum of environmental problems the uncertainty regarding their scale and duration and their possible irreversibility in the context of the growing social preference for environmental quality make it necessary to undertake an ex ante approach to the link between productive activity and environmental quality this link lies in technology and the right approach is to understand how the process of technological change can lead towards sustainability the added value of evolutionary economics in the context of environmental policy resides mainly in the fact that it warns that certain inferior environmental technologies may be locked in to the economic system the results of our model show that it would be advisable to undertake policies expressly aimed at the process of sustainable technological change applying an ex ante precautionary approach in a way that is complementary to the conventional equilibrium oriented environmental policies the nature of these policies and how they might be implemented are questions we will address from this novel approach to the concept of sustainable development in short the main objectives of this paper are to understand more fully the dynamics of the process of technological change its role in sustainable development and to assess the implications of this dynamic approach to techno environmental policy to achieve these goals we have developed an agent based model abm using distributed artificial intelligence dai concepts drawn from the general methodology of social simulation

congestion reducing investments and economic welfare in a hotelling model abstract we investigate optimal quality provision where quality is determined by congestion duopolists make congestion reducing investments and then compete in prices we find that an unregulated market leads to insufficient investment and that price cap below the equilibrium price eliminates this inefficiency

economics and the self organisation approach alfred marshall revisited the economics of alfred marshall is reassessed in the light of new developments in the natural sciences whereby a nonequilibrium thermodynamic approach is adopted to analyze self organization in dissipative structures it is argued that there is a clear correspondence between marshall s treatment of time irreversibility and this modern approach particularly when the latter is set in an informational context thus his principles is viewed as a very useful starting point in adapting the self organization approach for application in economics the main features of such a post marshallian approach to economics are discussed and compared with the mechanical approach of neoclassicism copyright 1993 by royal economic society

monopolistic competition with endogenous specialization in the familiar spatial model of monopolistic competition on the circle a product is identified by a single locational characteristic representing its brand or variety the ability of a variety to compete with other varieties a given distance away its specialization as quantified by transportation losses or how rapidly the melting iceberg melts is exogenously given in the standard model here specialization is a choice variable selected by the firm a monopolistically competitive general equilibrium is derived where the degree of specialization is endogenously determined along with other variables implications are noted the central contribution is to show that the effect of endogenizing specialization is to make the hotelling lancaster chamberlin model of monopolistic competition isomorphic to the analytically much more tractable dixit stiglitz ethier formulation without sacrificing the appealing concept of product distance

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

a novel closed loop supply chain based on the quality of returned products abstract closing an existing real world supply chain and modelling the resultant network are challenging practices this paper investigates the possibility of closing the chain in a textile company and the effects of such a decision on the profits of the chain the paper addresses one of the common problems in modelling the return rates of backward chain since inaccuracy in estimation of such rates leads to incorrect results the present model forgoes the need for commonly used predetermined rates by proposing a conditional quality based segmentation policy addition of a secondary chain as a recovery option quality dependent incentive rates and flexibility of the model in defining quality are also among novel points of this paper first a bi objective model is proposed to formulate the chain which includes the manufacturers distributors and customers in the forward chain and remanufacturing repairing and recycling centers in the backward chain this model is applicable to industries with zero waste strategy and similar recovery facilities second an extensive sensitivity analysis is carried out on a case study from textile industry the results reveal that increase in rate of returns with low medium qualities leads to higher profits since they create more suitable environmental economical business opportunities moreover closing the supply chain of the company increases the impact of distributors collectors performance on the final profits hence managers of the company need to adopt a pricing policy in favor of the distributors collectors which equals to lower repairing remanufacturing and purchase costs from manufacturers and higher sales prices to customers manufacturers and recycling center

two way product recovery in a closed loop supply chain with variable markup under price and quality dependent demand abstract this article considers a two way product recovery in a two echelon closed loop supply chain which comprises one manufacturer and one retailer for trading a single product the market demand of the product is linearly dependent on selling price and product quality the retailer sets the selling price with a variable markup on the wholesale price of the manufacturer the manufacturer also sets his wholesale price with a fixed markup on the production cost of the product the retailer recovers the used product in two ways he collects from consumers the used products which is a fraction of newly sold products in the forward channel he also collects the used products through an exchange offer and replaces a fraction of the collected used products by new ones we analyze the proposed model under four different decision structures decentralized nash game manufacture led and retailer led stackelberg games and centralized cooperative game structures we then compare these policies to identify the best policy we also examine the feasibility of the cooperative game through a bargaining model to examine the effects of key model parameters on the decisions we perform a sensitivity analysis for a numerical example

a robust fuzzy optimization model for carbon efficient closed loop supply chain network design problem a numerical illustration in electronics industry abstract environmentalism has become an important global issue in the present century during the recent years the closed loop green supply chain management has been increasingly a center of attention as a result of governmental laws and legislations regarding the environmental effects of any activity and the soaring consumers expectations in this study effort has been made to investigate a facility location allocation model for a multi product closed loop green supply chain network consisting of manufacturing remanufacturing and collection inspection centers as well as disposal center and markets to design the network we have proposed a mixed integer linear programming model capable of reducing the network total costs the model has been so developed as to consider such environmental objectives as reducing the rate of carbon dioxide emission in the environment throughout the network in question moreover the model has been developed using a robust fuzzy programming approach to investigate the effects of uncertainties of the variable costs as well as the demand rate on the network design to solve the bi objective programming model use has been made of the e constraint approach and a numerical illustration of copiers industry is used to show the applicability of the proposed optimization model results have revealed that the model is capable of controlling the network uncertainties as a result of which a robustness price will be imposed on the system

symmetric equilibrium existence and optimality in differentiated product markets abstract equilibrium existence and optimality are analysed in a market for products differentiated by their variety a game of three stages is analysed firms enter in the first stage choose varieties in the second stage and choose prices in the third stage the existence of subgame perfect equilibria is established at equilibrium products are symmetrically located in the space of characteristics and are offered at equal prices the surplus maximizing solution is characterized and it is shown that surplus maximizing product diversity is lower than the equilibrium one

the impact of technological and organizational innovations on employment in european firms by using firm level data provided by the fourth community innovation survey cis4 for a selected number of eu countries this article explores the employment impact of innovation extending the analysis to organizational change the empirical evidence presented shows that both technological and organizational innovation exert a positive impact on employment mainly indirectly that is by improving growth performances in firms the strength of these indirect effects have been found to vary across different types of innovations despite the limits imposed by data at our disposal the evidence presented seems to somewhat diminish the relevance of the labor displacing effects of the process innovation the latter being strong and clearly visible only within the manufacturing industry and only when process innovations are combined with organizational changes copyright 2012 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

emission policies and their analysis for the design of hybrid and dedicated closed loop supply chains abstract government legislation and consumer awareness on carbon emissions have required industries to seek alternative ways to reorganize their supply chains therefore industries have to consider not only the activities in the forward supply chain but also in the reverse supply chain an integrated supply chain that combines the activities of both the forward and reverse supply chains is referred to as the closed loop supply chain clsc there are two main types of clsc structures hybrid and dedicated in this research we analyze the effect of carbon emissions consideration on the design of both hybrid and dedicated clscs in particular we develop a set of integrated mixed integer linear programming milp models to quantify and compare both of the environmental and economic impacts of carbon emissions policies carbon cap carbon tax and carbon cap and trade and market factors scale effect product return rate and the customer demand on the design of clscs with respect to both clsc structures our analysis shows that when market conditions are considered total cost and total emissions are more sensitive to customer demand than to the scale effect and the product return rate when an industry faces fluctuation on the quantity of the returned products adopting a dedicated clsc would lead to a lower total cost under cap and trade policy dedicated clsc can produce less total emissions we also observe that dedicated clsc is more cost efficient under carbon cap policy and hybrid clsc is more emissions efficient when the carbon tax is introduced

evolution of economy and environment an application to land use in lowland vietnam abstract this paper analyses the interactions between land use institutions and culture in the context of climatic extremes in vietnam although there has been a long history of examining the evolutionary nature of markets and institutions within an institutional economics framework developing the institutional economic approach to include society environment interactions allows examination of processes which facilitate and constrain economic development for example this approach is used here to explain adaptation processes whereby climatic risk affects collective responses these responses form an evolutionary link between institutions culture resources and the physical environment the paper argues that historically climatic risks have been a factor in technological and political response within the agrarian society of vietnam in the sense that climatic extremes have acted as triggers to some significant social upheavals in the past century the impacts of colonialism political change and related changes in social organisation have significantly altered the social basis of resilience to climate extremes

the importance of focus to market entrants abstract one of the most difficult questions facing entrepreneurs is how broadly to serve a heterogeneous market that is whether it is better to serve a narrow segment of the market hoping to flourish by gaining a relatively high and increasing market share within that segment or whether it is better to attempt to appeal to a broader cross section of the market thereby allowing the firm to succeed with a lower market share among the customers whom it is targeting a narrower focus permits more concentrated use of fixed resources facilitates the building of customer loyalty and lowers the threat of retaliation from generalist incumbents but requires a much higher market share within the firms target market to succeed porter 1980 has identified three generic strategies available to firms low cost differentiation and focus by focus he means that the firm should develop the ability to serve a particular target customer group very well often at the expense of other potential customer groups implicit in the firm s choice to adopt a focus strategy is that it must address the question of how broadly to focus in terms of any given product attribute given its resources and opportunities a fundamental element of the firm s choice of focus is that it is affected by and in turn affects that of its rivals that is focus is a strategic variable in the sense of the word strategic meant by game theorists each firm s optimal choice of action depends on the actions taken by other firms the literature on the optimal degree of focus for new ventures has reached very mixed conclusions the early authors looking at the question were fairly consistent in their recommendation that a highly focused or niche strategy was generally most appropriate later authors recommended that new ventures should enter markets aggressively facing larger incumbents head on the latest studies develop what we describe as a contingency approach arguing that the best approach depends on industry conditions we think that this literature is now at a point where we can advance our understanding by looking at specific industries in some detail as our understanding expands broader empirical work is becoming increasingly difficult because of the number of factors that must be built into any cross sectional model of new venture performance we hope then to develop an understanding of one industry that is generally similar in nature to many other industries from this understanding conclusions of interest to both researchers and practitioners can be drawn future studies of other industries with different fundamental structures will provide similar benefits more specifically this paper is an empirical inquiry into the microbrewery segment of the u s brewing industry designed to investigate the relative merits of specialist firms different degrees of focus the question addressed is whether focus affects specialist firms short run performance in an industry where there are entrenched generalists as well as many new entrpreneurial specialist entrants the analysis confirms several widely held beliefs of industry participants and observers that microbreweries are far more likely to attempt to serve too broad a market segment than to focus too narrowly that microbreweries are in direct competition with imports and that microbreweries benefit from having many microbrewery rivals within the same state furthermore there appear to be some small learning and or reputation effects in the operation of microbreweries as well as a minor novelty factor that benefits recently opened establishments we must note however that the majority of the variation in the performance of microbreweries stems from differences in the management organization or market of individual breweries not captured explicitly by other variables included in the study this finding perhaps should not be surprising given the huge variation in the backgrounds skills and outlooks of microbrewery owners during the segment s early days the lessons learned from this research are of obvious importance to entrepreneurs in many industries it is a very common situation for an entrepreneur to enter a stable industry in which established firms are already in place serving a broad cross section of the market our findings show that in such circumstances a narrowly focused approach to the market is best we can think of numerous examples of where entrepreneurs have either succeeded by focussing on a particular segment of the market or failed by not doing so in fact there are many cases in which firms have done first one and then the other for example and people express airlines at first flourished by focussing on the needs of budget conscious leisure travellers and then collapsed in part because it began to try to serve business travelers and others who are less price sensitive on certain routes one of the hallmarks of an entrepreneurial business is that it suffers severe resource constraints because the entrepreneur s choice of breadth of focus will have profound effects on the resource requirements of the business it is clear that the choice of which segment or segments of the market on which to focus is a fundamental decision made by all entrepreneurs this paper serves to illustrate the importance of this focus decision and to provide some guidance for entrepreneurs concerning the appropriate degree of focus to adopt in entering an established market

technological innovations and sectoral change transformative capacity adaptability patterns of change an analytical framework following up on recent debates about sectoral systems of innovation and production the paper introduces a heuristic framework for analyzing and explaining distinct patterns of technology based sectoral change the concept is based on two interrelated influencing factors the first is the sectoralspecific transformative capacity of new technologies themselves that is their substantial or incremental impact on socioeconomic and institutional change in a given sectoral system the second is the sectoral adaptability of socioeconomic structures institutions and actors confronted with the opportunities presented by new technologies the first factor the sectoral transformative capacity of new technologies enables us to identify the technology based pressure to change and adjust the structural institutional and organizational architectures of the sectoral system the second complementary factor sectoral adaptability helps us to discern the distinct social patterns of anticipating and adopting this technology based pressure the specific interplay between the two influencing factors creates distinguishable modes of sectoral transformation ranging from anticipative and smooth adjustments to reactive and crisis ridden patterns of change even processes of radical sectoral change continue over longer periods of mismatch and are characterized by numerous and mostly gradual organizational structural and institutional transformations

competition with targeted product design price variety and welfare abstract we consider the price and welfare effects of competition in targeted product design in the context of the salop circle model changes in product design lead to demand rotations that set the stage for our analysis with an exogenous number of firms we show that the degree of targeted product design tends to increase with the number of firms moreover under reasonable conditions price increasing competition takes place for intermediate levels of the number of firms this effect is associated with the possibility of lower consumer welfare with endogenous firm entry an interesting insight from our analysis is that in some situations an increase in market size or a technological progress that reduces entry costs both might reduce consumers welfare

prospective voluntary agreements for escaping techno institutional lock in the paper looks for evolutionary policy responses to techno institutional lock in a persistent state that creates systemic market and policy barriers to technological alternatives we address the coordination role for authorities rather than corrective optimisation and elaborate three evolutionary policy objectives including fostering of i the diversity of technological options ii common vision for the implementation of technological alternatives and iii changes in social and physical networks we use these objectives to analyse documented experiences from environmental voluntary agreements and foresight activities we argue that combining the virtues of these tools into a new policy tool named prospective voluntary agreement can help facilitate an escape from techno institutional lock in the merit of the prospective voluntary agreement lies with the enhancement of collaborative policy cultures and inter sectoral and interdisciplinary stakeholder learning that creates commitment to desired action for escaping lock in d 2005 elsevier b v all rights reserved

design and planning of a closed loop supply chain with three way recovery and buy back offer abstract due to strict environmental legislations and competitive economics worldwide closed loop supply chain clsc management has been receiving increasing attention in order to improve the return rate of used products in this paper a recovery framework is proposed by employing buy back offer at retailer level the proposed recovery framework is integrated with an optimization model for a multi period clsc under demand and capacity uncertainty to determine optimal buy back price that needs to be offered to consumers so that the minimum collection limit set by the legislators is fulfilled as well as overall cost of the integrated system is minimized the developed model addresses the possibility of three way recovery options namely product remanufacturing component remanufacturing and raw material recovery to determine the optimal manufacturing remanufacturing and recycling quantity sensitivity analysis suggests that there is a trade off between the extra benefit generated through remanufacturing and the cost of acquisition of used products due to the employment of buy back offer a condition for the buy back offer to be simultaneously advantageous for both manufacturer and retailer under revenue sharing contract is derived a comparative study is also undertaken to examine the performance of the clsc when collection is made through buy back offer vs third party collection the proposed clsc model is further extended by adding a separate demand for remanufactured products and the performance of the initial model with the extended model is compared

monopolistic competition and general purpose products most models of monopolistic competition study the question of the optimal degree of product differentiation by looking at the number of firms that will locate in characteristics space this is somewhat restrictive the development of general purpose products means that the needs of quite heterogenous consumers can be satisfied with the same homogenous product the private and social incentives to produce general purpose products are studied in this paper within the circular road model of monopolistic competition the degree of general purposeness of a product is approximated by its per unit distance transport costs it is shown that there are strong forces leading the market to supply products whose transport costs are excessively low

the three p s of total risk management current risk management practices are based on probabilities of extreme dollar losses e g measures like value at risk but these measures capture only part of the story any complete risk management system must address two other important factors prices and preferences together with probabilities these compose the three p s of total risk management this article describes how the three p s interact to determine sensible risk profiles for corporations and for individuals guidelines for how much risk to bear and how much to hedge by synthesizing existing research in economics psychology and decision sciences and through an ambitious research agenda to extend this synthesis into other disciplines a complete and systematic approach to rational decision making in an uncertain world is within reach

planning for sustainability as a learning concept abstract the major theme of the following discussion is the importance of a transdisciplinary approach to guide sustainability related planning and management activities the proposed approach involves much more than the usual interaction between partners from different disciplines a revised process is needed to allow real cooperation in sustainability planning this process will require a more open recognition of the subjective priorities that become the framework of sustainable development issues of various interest groups and disciplines the sustainable development agenda should be more geared towards learning processes than projected future outcomes learning is enhanced through a participatory framework inclusive of stakeholder interests insights from a broad range of disciplinary areas including the science of complexity sociology philosophy law economics and management are presented to support this position the conventional stranglehold of disciplinary thinking in policy circles limits the capacity of our decision makers to unravel the complexity of all real world environmental policy and management problems policy making needs to embody respect for that complexity and allow flexibility to promote perpetually evolving learning as a fundamentally transdisciplinary framework ecological economics has some prospect to represent these interests in a purposeful and necessarily pragmatic way

toward prospective voluntary agreements reflections from a hydrogen foresight project abstract there is substantial interest in promoting the emergence of a hydrogen based energy economy if successful this would represent a policy led discontinuous transition away from existing fossil fuel based systems such a move has few precedents and few policy tools exist to manage such a complex and uncertain endeavour furthermore existing hydrocarbon energy systems can be considered techno institutional complexes tic which have developed through the path dependent co evolution of physical technologies and social institutions these complexes have numerous structures that ensure their perpetuation and create important barriers to the implementation of alternatives like hydrogen based systems the authors explore the application of prospective voluntary agreements pva as a policy tool process that can help facilitate a move towards a hydrogen based economy through foresight and negotiation from this perspective we look at the recent case of the nordic hydrogen energy foresight project for evidence

a culture theory commentary on meyer and peng s theoretical probe into central and eastern europe meyer and peng s decade award article and retrospective integrate economic and sociological theories of transaction costs firm resources and institutions and apply them to firms in central and eastern europe in ways that can inform and be informed by culture theory culture theorizing in ib typically uses dimensions of values and norms to analyze the ib implications of the underlying logics that characterize patterns of thought action and interaction of countries and other large societies transaction cost theorizing helps explain the social forces that link cultural group boundaries with country boundaries firm resource theory can be informed by the toolbox metaphor to understand cultural patterns in the resources that firms in a particular locale have most readily available neo institutional theory particularly its political science thread cautions ib scholars to represent governmental arrangements and policies as arising from cultural norms and values rather than as independent variables that spring de nova from government leaders integrative analyses like the decade award article and retrospective point out links and complementarities among diverse theories but need to take care lest superficial similarities in how terms like institution and culture are used in different theories mask fundamental conceptual differences