where do markets come from production markets have two sides producers are a fully connected clique transacting with buyers as a separate but aggregated clique each producer is a distinctive firm with a distinctive product each side continually monitors reactions of the other through the medium of a joint social construction the schedule of terms of trade each producer is guided in choice of volume by the tangible outcomes of other producers not by speculation on hypothetical reactions of buyers to its actions each producer acts purely on self interest based on observed actions of all others summarized through a feedback process the summary is the terms of trade schedule which reduces to constant price only in limiting cases the market emerges as a structure of roles with a differentiated niche for each firm explicit formulae both for firms and for market aggregates are obtained by comparative statics methods for one family of assumptions about cost structures and about buyers evaluations of differentiated products not just any set of firms can sustain terms of trade with any set of buyers there prove to be three main kinds of markets and three sorts of market failure within a parameter space that is specified in detail one sort of market paradox has a madison avenue flavor another is more conventional grind and a third crowded is a new form not included in any existing theory of markets current american industrial markets are drawn on for 20 illustrations of which three are presented in some detail inequality in firms market shares measured by gini coefficients is discussed

the global award for entrepreneurship research the international award for entrepreneurship and small business research was introduced in 1996 and it is now firmly established as the most prestigious award for outstanding research contributions in this subject area thanks to a generous donation from the swedish entrepreneur rune andersson it has been possible to make a number of changes aimed at strengthening global recognition of the prize even further the name is being changed to the global award for entrepreneurship research the financial side to the prize is being roughly doubled to 100 000 euros and the system for nomination evaluation and selection of future award winners is becoming more structured and transparent we present here the background to and the organization s behind the award briefly categorize the winners in the 1996 2008 period describe the present and the future system for nomination evaluation and selection of award winners and discuss the criteria for the selection of prize candidates and award winning contributions

the labour demand of firms an alternative conception based on the capabilities approach the aim of this paper is to offer a theoretical framework for the analysis of labour demand alternative to the neoclassical one taking as its starting point the conception of the firm that derives from the capabilities or competence based theories of the organization after briefly reviewing the essential elements of this approach to the firm we tackle a range of diverse aspects such as the link between labour demand decisions and the firm s strategic planning and its determinants the characterisation of labour demand as a demand for productive competencies the consequences that these competencies are embedded in human beings or the relative independence between labour demand decision making and the process of wage setting in general terms this conception of labour demand allows us to incorporate many of the main peculiarities of labour and the demand for it from a number of different areas of heterodox economics particularly from institutional and post keynesian economics and it fits in with the conventional literature on internal labour markets and labour market segmentation

competition cooperation and innovation organizational arrangements for regimes of rapid technological progress abstract discussions of the link between firm size and innovation are outmoded because the boundaries of the firm have become fuzzy in recent decades strategic alliances constellations of bilateral agreements among firms are increasingly necessary to support innovative activities such alliances can facilitate complex coordination beyond what the price system can accomplish while avoiding the dysfunctional properties sometimes associated with hierarchy antitrust law and competition policy need to recognize that these new organizational forms are often the functional antithesis of cartels though they may have certain structural similarities a more complete understanding of bilateral contracts and agreements ought to reveal when and how cooperation can support rather than impede innovation and competition

the social structure of a national securities market in this article a national securities market the stock options market is characterized as a social structure represented by the networks of actors who traded options on the floor of a major securities exchange trading among actors exhibited distinct social structural patterns that dramatically affected the direction and magnitude of option price volatility the argument that this market is socially structured is constructed in four parts behavioral assumptions about the nature of economic actors models of micronetworks models of macronetworks and price consequences in the ideal typical model of the market actors are assumed to be hyperrational and never to act opportunistically with these behavioral assumptions the micronetworks of actors should be expansive a condition which would result in undifferentiated and homogeneous macronetworks such macronetworks would tend to reduce the volatility of option prices but in the empirical market studied here actors are subject to bounded rationality a

evolutionary theorizing in economics modern economic analysis oriented toward understanding the workings of economies that make extensive use of markets came into existence with three guiding questions all central in adam smith s 1776 1937 the wealth of nations one question concerned order without any central authority guiding and commanding action how is economic activity coordinated the second question was the challenge of explaining the prevailing constellation of prices inputs and outputs what explains the price of labor and the rent of land the third question addressed the processes of economic progress or development smith and other early economists clearly were impressed by the inventiveness the energy and the growing productivity generated by the evolving market economy how to understand its dynamics the first two questions have defined continuing central concerns of the discipline of economics since they first were posed over two centuries ago when not posed in the context of an economy that is understood as in the process of developing they seem to pull the focus of theorizing toward equilibrium conditions the third question concerned with the processes driving economic progress pulls the theorizing toward an evolutionary orientation the question of economic development has waxed and waned in centrality to the discipline as has the importance of evolutionary theorizing during the first several decades of the twentieth century evolutionary thinking and language was widespread in economics but as one contrasts the economic

understanding corporate coherence theory and evidence abstract multiproduct firms are perceived to be coherent in their scope yet there is no strong theoretical foundations to explain coherence in modern industrial organization theory this paper shows that as u s manufacturing firms grow more diverse they maintain a constant level of coherence between neighboring activities this finding runs counter to the idea that firms with many activities are generally more incoherent a framework is then presented which appeals to the nature of enterprise learning path dependencies and the nature of the selection environment to explain the ubiquity of coherent diversifiers

the knowledge problem entrepreneurial discovery and austrian market process theory abstract using a stylized model of the used car market we extend the formal theory of the austrian market process in three directions first we incorporate the knowledge problem and entrepreneurial alertness for the discovery of previously unknown information second we allow for the possibility that entrepreneurs may make mistakes third we describe the effect of entrepreneurial behavior on disequilibrium market adjustment we give conditions under which an equilibrium exists for an austrian market process with these elements and we analyze the stability properties of the equilibrium furthermore we show that the model has interesting welfare properties a commodity tax may increase or decrease welfare journal of economic literature classification number d50

strategizing by firms in the presence of markets for resources strategizing by firms from the resource based view is concerned with the process through which firms acquire a distinctive bundle of resources that is costly and time consuming for competitors to duplicate or imitate a central question facing any firm therefore is its strategy for accumulating the resources that underpin its production activities in this article the process of resource accumulation is discussed as one involving potentially both internal resource development and external resource acquisition from the perspective of the strategic issues involved in making a choice between these options emerging markets for technologies and know how through licensing and other forms of resource exchange have opened up new avenues through which firms may jostle for advantage the article is concerned with three major aspects of this process illustrating the discussion with cases from biotechnology and pharmaceuticals first the strategizing by firms around the internal development vs external sourcing issue is discussed as informed by the practices of leading firms and how these lend greater variety of strategic options for firms second the potential competitive advantages as well as disadvantages to be secured by firms through the process of external sourcing as compared with the well known potential advantages accruing to incumbents through internal development such as time compression diseconomies and causal ambiguity and third the criteria to be used by firms to strategically evaluate resources individually as contrasted with the strategic evaluation of the resource bundle or totality these criteria it is argued turn on the issues of marginal value contribution resource complementarities and synergies resource variety and transferability involving intellectual property issues successful firms it is argued expand their options through blending internal resource accumulation with external resource leverage thereby deepening their distinctive dynamic capabilities this approach extends the framework of the rbv enabling it to encompass resource driven schumpeterian competition and such aspects of industrial dynamics as specialization modularization and imitative challenge copyright 2003 oxford university press

an introduction to the law and economics of intellectual property although economists have written on topics of intellectual property for a long time the impact of economics on public policy in this area has been slight especially as compared to the influence of professional writings in areas such as antitrust and taxation we believe that too few of the profession s resources have been devoted to these issues and that of those resources that have been employed too few have been devoted to empirical analyses we hope that this introductory essay and the three papers that follow will stimulate interest in this subject this introductory essay first describes some of the basic economic tradeoffs involved in intellectual property law and then describes the framework of the law in the six areas described above patent copyright semiconductor protection trademark trade secret and misappropriation it is intended both to provide thumbnail descriptions of the various intellectual property regimes to economists working in this area and to indicate where additional economic research might be useful

micro and macro elasticities in a life cycle model with taxes we build a life cycle model of labor supply that incorporates changes along both the intensive and extensive margin and use it to assess the consequences of changes in tax and transfer policies on equilibrium hours of work we find that changes in taxes have large aggregate effects on hours of work moreover we find that there is no inconsistency between this result and the empirical finding of small labor elasticities for prime age workers in our model micro and macro elasticities are effectively unrelated our model is also consistent with other cross country patterns

the macrodynamics of sorting between workers and firms we develop an equilibrium model of on the job search with ex ante heterogeneous workers and firms aggregate uncertainty and vacancy creation the model produces rich dynamics in which the distributions of unemployed workers vacancies and worker firm matches evolve stochastically over time we prove that the surplus function which fully characterises the match value and the mobility decision of workers does not depend on these distributions we estimate the model on us labour market data from 1951 2007 and predict the fit for 2008 12 we use the model to measure the cyclicality of mismatch between workers and jobs

the systems dynamics of endogenous population growth in a renewable resource based growth model abstract this paper evaluates the dynamic effects of adding an endogenous process for human population growth into a renewable resource based economic growth model endogenizing human population growth in a static constant technology form of the model gives rise to a dynamically complex system with the possibility of multiple steady states of several types and unusual comparative static responses to changes in the system s parameters adding technological progress to the model gives rise to the possibility of multiple sustainable paths for the variables in the system these results reinforce concerns raised by ecological economists about systems stability and sustainability since exogenous shocks to the system could move the economy from higher welfare to lower welfare equilibria or in the model with technological progress from higher welfare to lower welfare sustainable growth paths moreover this kind of dynamic complexity adds to the management challenge faced by policy makers who could confront the necessity of maneuvering the economy among different equilibria or sustainable growth paths

time allocation and home production technology abstract this paper studies the effect of the relative productivity between the market sector and the home sector on time allocation a novelty of the paper is to jointly estimate home productivity and the elasticity of substitution between market goods and home hours which is accomplished through structural estimation based on income decile level data with a high elasticity of substitution and a slower growth rate of productivity in the home sector relative to the market sector the model can produce key data patterns of time allocation in both the cross sections and time series quantitatively relative productivity can account for 32 of the variation in market hours and 18 of the variation in home hours

separations sorting and cyclical unemployment abstract this paper establishes a new fact about the compositional changes in the pool of unemployed over the us business cycle using microdata from the current population survey for the years 1962 2012 it documents that in recessions the pool of unemployed shifts toward workers with high wages in their previous job and that these shifts are driven by the high cyclicality of separations for high wage workers the paper finds that standard theories of wage setting and unemployment have difficulty in explaining these patterns and evaluates a number of alternative theories that do better in accounting for the new fact jel e24 e32 j31 j63 j64

the cyclicality of the opportunity cost of employment the flow opportunity cost of moving from unemployment to employment consists of forgone public benefits and the forgone consumption value of nonworking time we construct a time series of the opportunity cost of employment using detailed microdata and administrative or national accounts data to estimate benefits levels eligibility take up consumption by labor force status hours taxes and preference parameters the opportunity cost is procyclical and volatile over the business cycle the estimated cyclicality implies far less unemployment volatility in leading models of the labor market than that observed in the data irrespective of the level of the opportunity cost

the consequences of rigid wages in search models the standard theory of equilibrium unemployment the mortensen pissarides search and matching model cannot explain the magnitude of the business cycle fluctuations in two of its central elements unemployment and vacancies modifying the model to make the present value of wages unresponsive to current labor market conditions amplifies fluctuations in unemployment and vacancies by an order of magnitude significantly improving the performance of the model despite this the welfare consequences of such rigid wages is negligible jel e24 e32 j30 j41 j63 j64

taxation of human capital and wage inequality a cross country analysis wage inequality has been significantly higher in the united states than in continental european countries ceu since the 1970s moreover this inequality gap has further widened during this period as the us has experienced a large increase in wage inequality whereas the ceu has seen only modest changes this paper studies the role of labor income tax policies for understanding these facts we begin by documenting two new empirical facts that link these inequality differences to tax policies first we show that countries with more progressive labor income tax schedules have significantly lower before tax wage inequality at different points in time second progressivity is also negatively correlated with the rise in wage inequality during this period we then construct a life cycle model in which individuals decide each period whether to go to school work or be unemployed individuals can accumulate skills either in school or while working wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks progressive taxation compresses the after tax wage structure thereby distorting the incentives to accumulate human capital in turn reducing the cross sectional dispersion of before tax wages we find that these policies can account for half of the difference between the us and the ceu in overall wage inequality and 76 of the difference in inequality at the upper end log 90 50 differential when this economy experiences skill biased technological change progressivity also dampens the rise in wage dispersion over time the model explains 41 of the difference in the total rise in inequality and 58 of the difference at the upper end

a renewable resource based ramsey model with costly resource extraction this paper derives the analytical solution of arenewable resource based ramsey economy withcostly resource extraction the goal is toascertain whether costly resource extractioncan induce nonlinear dynamical properties in the system we find that the solution for a model with constant technology can exhibit multiple steady states and the comparative statics effects for consumption utility and the stock of nature capital areambiguous in a number of different cases moreover thesolution for a model with exogenous technological progress exhibits unusual comparative dynamics andthe possibility of multiple balanced growthpaths an increase in the rate of technologicalprogress induces a long run growth rate in per capitaconsumption that depends on parameters of the productionfunction overall technological progress inthe model can be less beneficial than in the standardeconomic growth model in which resourceextraction is costless

easter island historical anecdote or warning for the future two standard solutions for the malthusian trap involve institutional reforms and technological progress using easter island as an example we investigate the hypothetical role that technological progress and population management reform might have played in preventing the collapse of the island s civilization the model includes a composite manufactured good and a composite harvested renewable resource fertility is assumed to rise with per capita income the resource s carrying capacity and intrinsic growth rate as well as labor s harvesting productivity are subject to technological progress fertility is subject to population management reform the model yields a system of two simultaneous nonlinear non autonomous differential equations we first study the system s steady states the system is then parameterized for easter island and its comparative dynamics are investigated in simulations we find that technological progress can generate large fluctuations in population renewable resources and per capita utility sometimes resulting in system collapse with high fertility rates the population and the resource vanish none of the simulations investigated here exhibit a constantly growing per capita utility over time finally we evaluate the applicability of these results to contemporary societies 2000 elsevier science b v all rights reserved

towards a theory of entrepreneurial teams abstract this article examines the role of entrepreneurial teams in processes of entrepreneurial discovery it addresses two main questions the first investigates the implications of economic theory for the possibility of team entrepreneurship because leading economic theories focus almost exclusively upon individual decision makers we propose a broader notion of entrepreneurship that includes enterprising teams as well as individuals we define entrepreneurship as a profit seeking problem solving process that takes place under conditions of structural uncertainty the second question examines the conditions that are conducive to joint entrepreneurial action and the formation of entrepreneurial teams we suggest that bounded structural uncertainty and perceived strong interdependence arising from common interest can jointly prime team entrepreneurship

patents licensing and market structure in the chemical industry abstract the strategies of rent appropriation and industry structure are inter dependent how firms use patents depends upon industry structure and in turn affects industry structure in the 19th century market leaders in the chemical industry combined patents and secrecy to deter entry within cartels patents were used to stabilize cartels and organize technology licensing the role of patents changed in the less concentrated post world war ii markets in bulk organic chemicals and petrochemicals chemical producers use licensing as an important means of generating revenue from process innovations the increased importance of technology licensing is closely related to the emergence of a class of specialized process design and engineering firms that have played an important role in the development and diffusion of process innovations

on the social structure of markets economic theorists have seldom discussed the social structures behind markets even though market trading relies heavily on seller buyer roles and personal relations among traders this paper considers the structural basis of markets and proposes a layered approach which accommodates a wide range of competitive and relational trade within a definition of markets that distinguishes them from non market exchange giving due regard to social structures lays bare the institutional character of markets and provides a rationale for case studies of how particular markets function

the distribution of schumpeterian and kirznerian opportunities despite their presence in modern entrepreneurship theories empirical investigations of opportunity types are scarce we develop a 5 dimensional bipolar scale to measure the extent in which opportunities are schumpeterian or kirznerian drawing on this measure we examine the shape of the opportunity distribution in relation to the environment and the characteristics of individuals who exploit them across a sample of 181 new products introduced by high tech entrepreneurs we find that pure schumpeterian and kirznerian types are rare but rather opportunities display varying degrees of membership to one or the other type the distribution is more skewed toward schumpeterian opportunities for larger ventures with a strategic focus on future needs and operating in growing markets in contrast kirznerian opportunities are more frequently pursued by small ventures and by entrepreneurs that are young with a strategic focus on present needs and who are less innovative in their behavior

towards a theory of the technology based firm abstract the modern firm is a very viable economic institution drawing strength from a competitive market economy with embedded super markets for corporate control and sub markets for internal organization the technology based firm in addition draws strength from its co evolution with modern science and technology and vice versa and thereby becomes increasingly important however received theories of the firm of which there are many have not particularly taken account of technology and technology based firms nor their management this paper takes an empirical point of departure from recent findings regarding the positive relationship between technology diversification on the one hand and corporate growth and business diversification on the other these findings are not readily explainable by received theories of the firm which the paper reviews and the findings are thus taken as an explanandum for a proposed approach to formulate a theory of the technology based firm the approach is compatible with various other theoretical approaches such as the resource based the transaction cost and the evolutionary approach but specifically takes the idiosyncrasies of technology i e technical competence as well as management into account through notably strong economies of scale scope speed and space associated with the combination of different technologies and resources the technology based firm is subjected to specific dynamics in its growth and diversification and shifts of businesses and resources in particular a technology based firm tends to engage in technology diversification thereby becoming multitechnological as such the technology based firm has incentives to economize on increasingly expensive new technologies by pursuing strategies of internationalization on both input and output markets technology related business diversification external technology marketing and sourcing r d rationalization and technology related partnering

the contributions of the economics of information to twentieth century economics in the e eld of economics perhaps the most important break with the past one that leaves open huge areas for future work lies in the economics of information it is now recognized that information is imperfect obtaining information can be costly there are important asymmetries of information and the extent of information asymmetries is affected by actions of e rms and individuals this recognition deeply affects the understanding of wisdom inherited from the past such as the fundamental welfare theorem and some of the basic characterization of a market economy and provides explanations of economic and social phenomena that otherwise would be hard to understand i introduction the century coming to a close has seen vast changes in economics in both ideas and methodology upon ree ection it is remarkable however how many of the seeds of advances in this century were sowed in the previous i would argue that perhaps the most important break with the past one that leaves open huge areas for future work lies in the economics of information the recognition that information is imperfect that obtaining information can be costly that there are important asymmetries of information and that the extent of information asymmetries is affected by actions of e rms and individuals has had profound implications for the wisdom inherited from the past and has provided explanations of economic and social phenomena that otherwise would be hard to understand in this essay i wish to argue that information economics has had directly and indirectly a profound effect on how we think about economics today eighteenth and nineteenth century antecedents to be sure marshall and other nineteenth century economists talked about problems of imperfect information but with one exception discussions of information were obiter dicta caveats at the end of the analysis they were never at the center

unemployment rate dynamics and persistent unemployment under rational expectations this paper develops a model of unemployment rate dynamics that provides an explanation of persistent cyclical unemployment that does not involve persistent expectational errors or other nonoptimizing behavior our results are based on the interaction of search dynamics and inventory adjustments an important element in these dynamics appears to be heterogeneity in the labor force which can be characterized as consisting of a relatively small group of high turnover individuals who comprise the bulk of normal unemployment and a larger group of low turnover individuals who dominate movements in cyclical unemployment our empirical results provide support for this theory as we demonstrate that the appropriately measured probability of becoming employed during a recovery falls relative to normal because of the unusually high proportion of low turnover individuals who have lost permanent jobs as aresult recovery is much slower than is indicated by normal relationships although each individual is searching optimally this abstract was borrowed from another version of this item

development ecological resources and their management a study of complex dynamic systems abstract human well being depends to a large extent on services provided by ecological systems in poor countries this dependence is more transparent than in industrialised countries where the dependence is more indirect effective management of these systems requires a good understanding of their properties and in particular a knowledge of the dynamics of the systems in the article the dynamics of one simple system is analysed economically the system is a lake and the interaction between the run off of nutrients into the lake and the growth of either algae eutrophication in lakes in northern europe and north america or water hyacinths in lakes in southern and eastern sfrica is studied it turns out that the dynamics exhibit bifurcation points so that there are two basins of attraction if the system flips to one basin and it is regarded desirable to return to the other basin there will be hysteresis assuming that there are different users of the lake a differential game is constructed that captures the strategic interests of the users the resulting equilibrium shows first the conventional negative externality that will force the system to a different basin od attraction finally we investigate the use of a tax for bringing back the system to a pareto optimum

austrian and industrial organization perspectives on firm level competitive activity and performance drawing on the austrian school of economics and the structure conduct performance s c p paradigm of industrial organization the authors present and test a dynamic model of competitive activity and performance they examine the model in two stages first they explore the influence of industry level and firm level cooperative mechanisms on firm level competitive activity second they examine the effect of firm and industry level competitive activity on firm performance the authors use the dynamic model of competitive activity to examine the complex linkages between the firm s environment its actions and its performance outcomes they report a longitudinal analysis of a sample of 1 903 competitive moves undertaken in the software industry hypothesis testing supports the relationships in the model argued from the austrian perspective but provides only partial support for those derived from the s c p paradigm firm level cooperative mechanisms are found to increase the firm s competitive activity a

complex actions and simple outcomes how new entrepreneurs stay in business in this paper the entrepreneur within the new small firm is regarded as taking complex rather than simple actions which determine whether he or she will remain in business thus instead of simply choosing output as in the standard analysis of the competitive firm the entrepreneur may take actions which involve choices about markets finance organisation innovation and much else besides to explore this approach very detailed information on actions within small firms is required it is shown how this was obtained by a fieldwork study of new business starts using data from this fieldwork a rich statistical picture was created of actions within the new small firm in turn this permitted econometric analysis of actions that help a new small firm to stay in business over a three year period this indicates that the crucial actions which enable a small firm to stay in business are the rapid repayment of debt and the willingness to sacrifice short run profit for growth there is also evidence that staying in business is fostered by tight control of the wage bill especially by substituting other labour inputs for full time employees

towards an interdisciplinary theory of entrepreneurship entrepreneurship is one of the least understood topics in economics the rising significance of small companies and especially of start ups for the creation of new jobs has been an intensively discussed subject for nearly one decade but there is still no theory of entrepreneurship

gender and industry differences in employment cyclicality evidence over the postwar period this paper explains how cyclical patterns of employment vary between genders and across industries and how these two factors are related by gender differences in the industry distribution of workers evidence shows that men s employment is more procyclical than women s and that men s overrepresentation in highly volatile industries more than accounts for the gender gap in employment cyclicality

human capital and unemployment dynamics why more educated workers enjoy greater employment stability why do more educated workers experience lower unemployment rates and lower employment volatility empirically these workers have similar job finding rates but much lower and less volatile separation rates than their less educated peers we argue that on the job training being complementary to formal education is the reason for this pattern using a search and matching model with endogenous separations we show that investments in match specific human capital reduce incentives to separate but leave the job finding rate essentially unaffected the model generates unemployment dynamics quantitatively consistent with the data finally we provide novel empirical evidence supporting the mechanism studied in the paper this article is protected by copyright all rights reserved

national accounts and environmental resources in the paper optimal growth theory is used to derive the appropriate definition of the net national product concept when there are environmental resources and environmental damage to take into account the basic conclusions are that conventional defined np should be corrected by deducting environmental damage and adding the value of the net change of all resources

unemployment insurance takeup rates and the after tax value of benefits the recent decline in the unemployment insurance ui takeup rate has puzzled researchers using administrative data with accurate information on the potential level and duration of benefits we examine whether a separating employee receives ui we find a strong positive effect of the benefit level on takeup and smaller effects of the potential duration and the tax treatment of benefits simulations indicate that the recent inclusion of ui in the income tax base can account for most of the previously unexplained decline in ui receipt

contestable markets an uprising in the theory of industry structure presents a transcript of the presidential address delivered at the 94th meeting of the american economic association on december 29 1981 discussion of developments in the theory of industry structure welfare attributes of contestable markets behavior characteristics of oligopoly equilibrium intertemporal vulnerability to inefficient entry ebsco

shared quality uncertainty and the introduction of indeterminate goods the purpose of this paper is to introduce a new category of goods indeterminate goods which will be compared with the classical framework of experience search and credence goods nelson 1970 darby and karni 1973 this concept sheds new light on the nature and status of quality uncertainty through the following hypothesis uncertainty about the product s quality can be shared by all agents of the market and this uncertainty can be non neutral and disrupt the market we identify three types of shared uncertainty about the product s characteristics and the corresponding problems that can arise shared uncertainty due to the emergence of a product hirschman 1974 shared uncertainty concerning the past of a product basing ourselves on the art market and finally shared uncertainty regarding the future impacts of a product through empirical data on product safety

the optimal organization of research evidence from eight case studies of pharmaceutical firms abstract in this paper we examine the results of interviews of scientists and executives in eight pharmaceutical companies on the issue of how best to organize the rd when the firm is playing catch up in an area of science where it is weak and when governmental policies force firms to carry out r d in particular locations

anticipated and unanticipated wage changes wage risk and intertemporal labor supply in this article i estimate how labor supply responds to anticipated wage growth unanticipated wage growth and wage risk using the 1989 93 panel section of the bank of italy survey of households income and wealth shiw which collects individual expectations of future wages the use of subjective expectations has several advantages first they provide information on the evolution and riskiness of future wages that the econometrician may never hope to observe moreover this avoids the need for specifying instruments for the growth rate of wages finally forecast errors can be directly controlled for thus avoiding inconsistency in short panels

property rights entrepreneurship and coordination abstract the notion of plan coordination enjoys a central place in the analysis of institutions and competitive market processes the conventional wisdom is that institutions and policies vary in the extent to which they promote competition and how quickly and completely they bring individuals plans into closer coordination with one another kirzner has provided the most fully elaborated statement on the use of coordination as a positive analytical device for explaining market dynamics and as a normative criterion for evaluating economic policies we identify the core propositions in his analysis that elucidate how economic coordination depends upon that most fundamental of market institutions the system of private property rights we also probe into kirzner s claims about inherent limitations in our ability to compare the coordinative potential of alternative property rights systems we unpack the consequences of these core propositions using the economic theory of property rights we also examine kirzner s assertion that dynamic competition including schumpeterian innovation is necessarily coordinative in its market effects we find that his argument rests on the implicit assumption that property rights remain constant during the process of market adjustment we provide a case study of the advent of commercial aviation as a potential counterexample to his claims

persistence of employment fluctuations a model of recurring job loss standard models of employment fluctuations cannot reconcile the unemployment rate s remarkable persistence with the high job finding rates found in worker flows data a matching model emphasizing high hazard rates among newly formed firm worker matches can resolve this shortcoming in the model matches are experience goods consequently newly employed workers face higher hazard rates following a job loss workers may experience several short lived jobs before finding stable employment at an aggregate level an initial burst of job loss precipitates a steady flow of recurring job loss a simulation shows that this recurring job loss can account for the fact that the unemployment rate remains elevated for as much as 4 or 5 years following an initial jump intuitively the labour market frictions associated with the difficult and time consuming process of matching unemployed workers with appropriate jobs represent an appealing way to enhance conventional dynamic general equilibrium models of economic fluctuations that generally exhibit very little internal propagation of business cycle shocks 1 nevertheless although conventional matching models such as the canonical mortensen and pissarides 1994 model successfully explain many other important features of the labour market they fail to explain the high degree of persistence observed in the u s unemployment rate the primary reason for this failure is that data on labour market flows show that unemployed workers actually find jobs quite quickly therefore following a shock that triggers a burst of job loss the high job finding rate implies that the unemployment rate in these models returns quite rapidly back toward its average level this represents a significant obstacle to the notion that frictions in the labour market account for much of the propagation of business cycle shocks this paper asserts that existing matching models fail to capture an important feature of the labour market that can reconcile the dramatic persistence of the unemployment rate with the evidence of high job finding rates specifically although unemployed workers find jobs quickly the newly found jobs often last only a short time after an initial job loss a worker may experience several short lived jobs before settling into more stable employment this recurring job loss slows the pace at which the unemployment rate returns to its normal level following an adverse shock

business cycles unemployment insurance and the calibration of matching models this paper theoretically and empirically documents a puzzle that arises when an rbc economy with a job matching function is used to model unemployment the standard model can generate sufficiently large cyclical fluctuations in unemployment or a sufficiently small response of unemployment to labor market policies but it cannot do both variable search and separation finite ui benefit duration efficiency wages and capital all fail to resolve this puzzle however either sticky wages or match specific productivity shocks can improve the model s performance by making the firm s flow of surplus more procyclical which makes hiring more procyclical too

comparative advantage and unemployment worker heterogeneity in productivity and labor supply is introduced into a matching model workers who earn high wages and work high hours are identified as those with strong market comparative advantage high rents from being employed the model is calibrated to match separation job finding and employment in the sipp data the model predicts a big drop in employment for workers with weak comparative advantage during recessions but the data show that workers with strong comparative advantage also display sizable employment fluctuations implying that aggregate employment fluctuations are not explained by the responses of workers with small rents to employment

screening and labor market flows in a model with heterogeneous workers we construct a monetary model in which workers are heterogeneous and productivity is worker specific resulting in time varying deviations between the average productivity of employed and unemployed workers we assume the worker specific component of productivity which we label as the worker s efficiency level is unobservable ex ante by firms and job search is nondirected by interviewing an unemployed worker firms can observe the worker s efficiency level workers with low overall productivity may be interviewed but not hired as firms screen these workers out during the interview process we show that screening amplifies the volatility of the exit rate from unemployment capturing the idea that firms become more selective in a recession reducing the vacancy yield relative to a model with homogeneous levels of efficiency following a negative productivity shock the

is the firm an individual this paper shows how three new institutionalist theories try but ultimately fail to support the firm as individual thesis first marx hart s idea of property rights and coase williamson s notion of transaction costs are insufficient to substantiate the market firm dichotomy second hayek s constructionist view presents the firm as opposed to the market as a designed order no different from artifacts such as tables and cars third vanberg s constitutionalist theory also fails to support the firm as individual thesis the paper suggests that the consented goal notion is a fruitful ground upon which to build the firm as individual thesis

absorptive capacity coauthoring behavior and the organization of research in drug discovery we examine the interface between for profit and publicly funded research in pharmaceuticals firms access upstream basic research through investments in absorptive capacity in the form of in house basic research and pro publication internal incentives some firms also maintain extensive connections to the wider scientific community which we measure using data on coauthorship of scientific papers between pharmaceutical company scientists and publicly funded researchers connectedness is significantly correlated with firms internal organization as well as their performance in drug discovery the estimated impact of connectedness on private research productivity implies a substantial return to public investments in basic research

control aversion and the search for external financing in swedish smes the discussion on growth see storey 1997 and control aversion cressy 1995 chittenden et al 1996 cressy and olofsson 1996 in small and medium sized firms has been attracting an increasing amount of attention our purpose in this article is to identify under what circumstances small and medium sized firms are prepared to accept outside control in the business firm in order to grow in the article it is argued that technology development financial strength size and perceived need to grow change firms attitudes towards external financiers the change in attitude towards more openness eventually leads to an actual behaviour where the principals choose to apply for external finance in the form of bank loans a linear structural equation modelling program lisrel is used to analyse a sample of 281 swedish firms the firms all have less than 200 employees and the sample includes both manufacturing and service firms

internal r d expenditures and external technology sourcing abstract the paper examines the two way relationship between external r d activities and internal r d expenditures on a cross section of flemish r d active companies the analysis extends the classical explanatory variables like size diversification ownership structure and technological opportunities to include the impact of various external sourcing strategies r d cooperation and to a lesser extent r d contracted out are found to have a significant positive effect on internal r d but only if the companies have absorptive capacity in the form of a full time staffed r d department at the same time firms are found to be more frequently engaged in r d cooperation the more they spend on internal r d

the alert and creative entrepreneur a clarification israel m kirzner is the 2006 winner of the international award for entrepreneurship and small business research the fsf nutek award in this prize lecture he argues that a number of those who have commented on his work have misunderstood certain aspects of his theoretical system and as a result the common distinction in the literature between schumpeterian and kirznerian entrepreneurs is flawed he also argues that his understanding of the market process set in motion by entrepreneurial decisions provides a theoretical underpinning for public policy vis a vis entrepreneurship professor kirzner s main contributions to the economics of entrepreneurship were also presented and evaluated by douhan et al small business economics 29 1 2 213 223 2007

worker search effort as an amplification mechanism abstract it is well known that the diamond mortensen pissarides model exhibits a strong trade off between cyclical unemployment fluctuations and the size of rents to employment introducing endogenous job search effort reduces the strength of the trade off while bringing the model closer to the data ignoring worker search effort leads to a large upward bias in the elasticity of matches with respect to vacancies merging the american time use survey and the current population survey new evidence in support of procyclical search effort is presented average search effort of the unemployed is subject to cyclical composition biases

the meaning of the market process essays in the development of modern austrian economics part i the market process approach 1 market process theory in defence of the austrian middle ground 2 the meaning of the market process part ii the emergence of the austrian view 3 the austrian school of economics 4 carl menger and the subjectivist tradition in economics 5 menger classical liberalism and the austrian school of economics 6 the economic calculation debate lessons for austrians 7 ludwig von mises and friedrich von hayek the modern extension of austrian subjectivism part iii some new explorations in the austrian approach 8 prices the communication of knowledge and the discovery process 9 economic planning and the knowledge problem 10 knowledge problems and their solutions some relevant distinctions 11 welfare economics a modern austrian perspective part iv some related issues emerging from the austrian approach 12 self interest and the new bashing of economics 13 discovery private property and the theory of justice

technological regimes and sectoral patterns of innovative activities this paper focuses on the relationships between observed patterns of innovative activities within a sector and the related context and underlying microeconomic processes that might account for them it claims that there are some invariant features with respect to relative prices and incentives mechanisms of learning and knowledge accumulation that greatly affect the rate and structure of innovative activity these features are different across sectors the paper proposes that the specific pattern of innovative activity of a sector can be explained as the outcome of different technological regimes that are implied by the nature of technology and knowledge the notion of technological regime provides a synthetic representation of some of the most important economic properties of technologies and of the characteristics of the learning processes that are involved in innovative activities copyright 1997 by oxford university press

entrepreneurship in a modern network economy n ijkamp p 2003 entrepreneurship in a modern network economy reg studies 37 395 405 in this survey paper the literature on entrepreneurship is summarized from the perspective of geographical seedbed conditions and network constellations we argue that in many cases urban areas offer favourable incubator conditions for innovative entrepreneurship as a result of economies of density and the opportunities created by the city as a nucleus of a broader network both local and global clearly network participation by creative entrepreneurs does not necessarily need an urban base although informal spatial networks among specific business segments e g ethnic niches may be favourable for economic performance we conclude that a modern entrepreneur tends to become increasingly a creative network operator and manager n ijkamp p 2003 l esprit d entrepise dans une economie de reseau moderne reg studies 37 395 405 cet article cherche a resumer la documentation sur l esprit d entreprise du point d

israel m kirzner an outstanding austrian contributor to the economics of entrepreneurship israel m kirzner is the 2006 winner of the international award for entrepreneurship and small business research in this essay we present and evaluate his main contributions to the economics of entrepreneurship

the origins and dynamics of taiwan s r d consortia a series of collaborative r d ventures have emerged in taiwan within a quite distinctive institutional framework unlike the case of many of the collaborative arrangements between established firms in the us europe or japan where mutual risk reduction is frequently the driving influence in the case of taiwan it is technological learning upgrading and catch up industry creation that is the object of the collaborative exercises the taiwan r d alliances were formed hesitantly in the 1980s but have flourished in the 1990s as institutional forms have been found which encourage firms to cooperate in raising their technological levels several alliances could be counted in taiwan in the late 1990s bringing together firms and public sector research institutes with the added organizational input of trade associations and catalytic financial assistance from government the article discusses the evolving organizational architecture of these r d alliances utilizing several case studies and seeks to draw comparisons between these institutional innovations in taiwan and established collaborative arrangements in the usa japan and europe