limit theorems for markets with sequential bargaining this paper models trade as a non coopertative strategic game played at an inlinite sequence of dates a single indivisible commodity is traded buyers and sellers have transferable utility and are characterized by their reservation utilities they meet at random and bargain over the price at which a single unit of the good will be exchanged under a variety of circumstances it is shown that as the costs of search and bargaining become negligible the outcome of the game converges to the competitve flow equilibrium even when there is complete information journal of economic literature classification numbers 022 19x7

the technical efficiency of vacuum pan sugar industry of india an application of a stochastic frontier production function using panel data abstract a stochastic production frontier method is used to examine technical efficiency among indian vacuum pan sugar factories over a five year period most factories are close to indian best practice in terms of technical efficiency smaller firms and firms with access to sweeter cane are likely to be more efficient than other firms while publicly owned firms are less efficient there are transitory positive effects of a long crushing season on technical efficiency

agricultural support policies in imperfectly competitive markets why market power matters in policy design most agricultural policy analysis assumes that markets are perfectly competitive despite increasing evidence to the contrary we demonstrate that the interaction of market power and government intervention may lead to outcomes that are counter to key results of policy analysis for perfectly competitive markets we show that market power may reduce or eliminate entirely the net welfare benefits from removing two traditional support mechanisms price floors and deficiency payments and may increase considerably the government s cost of implementing either of them accordingly optimally designed price support measures may improve welfare in the presence of downstream oligopoly and or oligopsony power copyright 2011 oxford university press

assessing the importance of oligopsony power in agricultural markets oligopoly competition among few sellers is the cornerstone of industrial organization io conversely its sister concept oligopsony competition among few buyers is scarcely mentioned for example oligopsony is not discussed in the entire two volume handbook of industrial organization and monopsony is mentioned only in the context of incentives to integrate vertically two reasons apparently account for io economists lack of interest in buyer market power i they don t think it s very important and ii they don t believe it presents any unique modeling issues relative to seller market power scherer and ross illustrate this first viewpoint arguing that average concentration on the buyers side in manufacturing is undoubtedly lower than seller concentration p 519 tirole in his masterful treatise on io theory illustrates the second dispatching monopsony power in one sentence naturally the conclusions regarding monopoly power would also hold as well for monopsony power p 65 we argue that this dismissive treatment of buyer market power is not reasonable for economists interested in agriculture and agricultural markets the scherer and ross viewpoint may apply when considering generic inputs such as labor capital and energy competition for these inputs is apt to exceed competition for the outputs they produce because firms cross product market boundaries to compete for these inputs and there is essentially no branding among input buyers to diminish price competition among them moreover these inputs are typically mobile hence in elastic supply to individual buyers limiting the exercise of oligopsony power even in geographic settings where relatively few buyers prevail this view of input markets does not apply however to first handler markets for the raw agricultural commodities that are inputs into the processed or fresh packed food products we identify the following distinctive structural characteristics of these markets

rethinking the market technology relationship for innovation abstract this paper revisits the what causes innovation market pull or technology push debate to argue that the conceptualisation is flawed and that the firm is the only agent capable of innovative action the paper differentiates between use need and intended use to obtain greater precision with respect to the technology market matching process that is fundamental to innovation the validity of the approach is demonstrated through empirical examples these examples also show the value of distinguishing between two types of market concept used by the innovating firm these are the reference market which is a traded product that is a principal source of use ideas for the mental construction of the innovation market concept it is the latter that can be thought to guide the construction of innovative production technology

business strategies in more and less innovative firms in canada abstract this study investigates differences in the policies being pursued by more innovative and less innovative firms it focuses on a broad group of strategies in marketing finance production management and human resources and asks whether there are key areas in which the strategies being followed by more and less innovative firms differ it also investigates how the activities of firms in each of these areas differ finally it compares the performance of more and less innovative firms the study finds that more innovative firms place a greater emphasis on management human resources marketing financing government programs and services and production efficiencies each of these areas is important finally more innovative firms are more successful than less innovative firms

inequality control rights and rent seeking sugar cooperatives in maharashtra this paper presents a theory of rent seeking within farmer cooperatives in which inequality of asset ownership affects relative control rights of different groups of members the two key assumptions are constraints on lump sum transfers from poorer members and disproportionate control rights wielded by wealthier members transfers of rents to the latter are achieved by depressing prices paid for inputs supplied by members and diverting resulting retained earnings the theory predicts that increased heterogeneity of landholdings in the local area causes increased inefficiency by inducing a lower input price and a lower level of installed crushing capacity predictions concerning the effect of the distribution of local landownership on sugarcane price capacity levels and participation rates of different classes of farmers are confirmed by data from nearly 100 sugar cooperatives in the indian state of maharashtra over the period 1971 93

dynamic matching and bargaining games a general approach this paper presents a new characterization result for competitive allocations in quasilinear economies this result is informed by the analysis of non cooperative dynamic search and bargaining games such games provide models of decentralized markets with trading frictions a central objective of this literature is to investigate how equilibrium outcomes depend on the level of the frictions in particular does the trading outcome become walrasian when frictions become small existing specifications of such games provide divergent answers the characterization result is used to investigate what causes these differences and to generalize insights from the analysis of specific search and bargaining games

the rate of convergence to perfect competition of matching and bargaining mechanisms abstract we study the steady state of a market with incoming cohorts of buyers and sellers who are matched pairwise and bargain under private information a friction parameter is the length of the time period until the next meeting we provide a necessary and sufficient condition for the convergence of mechanism outcomes to perfect competition at the linear rate in which is shown to be the fastest possible among all bargaining mechanisms the condition requires that buyers and sellers always retain some bargaining power the bargaining mechanisms that satisfy this condition are called nonvanishing bargaining power nbp mechanisms simple random proposer take it or leave it protocols are nbp while k double auctions k da are not we find that k das have equilibria that converge to perfect competition at a linear rate converge at a slower rate or even do not converge at all

dynamic matching two sided incomplete information and participation costs existence and convergence to perfect competition consider a decentralized dynamic market with an infinite horizon and participation costs in which both buyers and sellers have private information concerning their values for the indivisible traded good time is discrete each period has length and each unit of time continuums of new buyers and sellers consider entry traders whose expected utility is negative choose not to enter within a period each buyer is matched anonymously with a seller and each seller is matched with zero one or more buyers every seller runs a first price auction with a reservation price and if trade occurs both the seller and the winning buyer exit the market with their realized utility traders who fail to trade continue in the market to be rematched we characterize the steady state equilibria that are perfect bayesian we show that as converges to zero equilibrium prices at which trades occur converge to the walrasian price and the realized allocations converge to the competitive allocation we also show the existence of equilibria for sufficiently small provided the discount rate is small relative to the participation

bargaining in dynamic markets abstract we study non stationary markets in which traders are randomly matched to bargain over the price of a heterogeneous good or the terms of a partnership the economy consists of a continuum of players drawn from a finite set of types players exogenously enter the market over time and exit upon trading at every date matching probabilities for each pair of types are determined by the endogenous distribution of trader types in the market the balance of bargaining power at any stage depends on variations in potential gains from trade the inflows of new traders the structure of agreements at future dates and the induced frequency of trading opportunities we establish that an equilibrium always exists moreover all equilibria that lead to the same evolution of the economy are payoff equivalent however we show that multiple self fulfilling expectations about the trajectory of the economy generating distinct equilibrium dynamics and payoffs may coexist

design and policy choices for technology extension organizations abstract governments anxious to assist the smes in their countries to survive and grow face not only policy choices about how to assist with technology financial resources and business direction but also the complex issues of how to design organizations that can deliver these policies effectively this study is a comparative analysis of how technology extension te organizations are designed to support smes in seven countries the study focuses on the design requirements for such organizations and on the design choices that have been used to satisfy the design requirements given different policy frameworks prescriptive advice on the design of te organizations is offered to both policy makers and managers of such organizations

price floors and technical inefficiency in india s sugar processing industry in india cane is processed into sugar by cooperatives public enterprises and private for profit firms the indian government sets a unique floor price for each processor that is increasing in the firm s effectiveness in converting cane into sugar the floor price binds for public and private firms but not for cooperatives which rebate profits to members we argue that this price floor policy creates a disincentive for private and public firms to be technically efficient in converting cane to sugar in support of this hypothesis an analysis of 593 indian sugar factories from 1992 to 2007 reveals statistically significant differences in technical efficiency with cooperatives being the most efficient and public firms least efficient we estimate welfare losses due to the technical inefficiency attributable to the price floor policy and argue that it can be eliminated by enacting policy to base price floors upon quality of the cane input received by a factory

a walrasian rubinstein and wolinsky model we provide a full dynamic analysis of a continuous time variant of rubinstein and wolinsky 1985 matching and bargaining model with unbalanced flows of buyers and sellers the focus is on the price limit as the frictions of search are removed it is found that a necessary and sufficient condition for the limit price to be walrasian at all times is the alignment of the initial buyer and seller stocks with the flows

public sector support for innovating smes innovation support for smes is considered from the point of view of the needs of smes in the context of a specific regional economy london s lee valley region as identified in the literature and more specifically in a survey of 100 innovating smes in the study region attention is focused on the innovation support needs that relate to the size characteristics of smes the difficulties of financing innovation are shown to stem from the attitudes of sme owner managers as well as from supply side failures the paper examines four different innovation support instruments taken as constituting key elements of the support system within the region drawing on the findings of interviews with client businesses the paper considers the strengths and weaknesses of each policy instrument conclusions relate to the overall impact of innovation support provision in particular the need for greater integration in the design and implementation of policy instruments

convergence to perfect competition of a dynamic matching and bargaining market with two sided incomplete information and exogenous exit rate abstract consider a decentralized dynamic market with an infinite horizon and incomplete information in which buyers and sellers values for the traded good are private and independently drawn time is discrete each period has length and each unit of time a large number of new buyers and sellers enter the market within a period each buyer is matched with a seller and each seller is matched with zero one or more buyers every seller runs a first price auction with a reservation price and if trade occurs the seller and winning buyer exit with their realized utility traders who fail to trade either continue in the market to be rematched or exit at an exogenous rate we show that in all steady state perfect bayesian equilibria as approaches zero equilibrium prices converge to the walrasian price and realized allocations converge to the competitive allocation

walras retrouve decentralized trading mechanisms and the competitive price we extend the standard analysis of decentralized markets to allow for the possibility that traders interact simultaneously with more than one trader on the opposite side of the market in contrast with the literature we reconcile the walrasian equilibrium with the outcome of decentralized strategic trade we show that there exist generic matching technologies that determine local market conditions such that as market frictions vanish the equilibrium price is the one that would result in the static walrasian market our analysis highlights the importance of local market conditions for the determination of equilibrium prices

managerial efficiency and the schumpeterian link between size market structure and innovation revisited this research uses a unique survey on innovation conducted in belgian high tech industries to investigate a the effects of managerial efficiency on the firm s innovative activity and b the effects of controlling explicitly for managerial efficiency on the schumpeterian like relationship that firm size and market concentration are both conducive to innovation the key findings are managerial efficiency is an important determinant of the firm s innovation performance only when one controls for managerial variables considered as success factors for innovation the schumpeterian effect of the impact of the firm s market share emerges for a wide range of measures of performance which confirms rothwell s suggestion 18 that small firms have a advantage in the management of their innovation

dynamic markets with competitive bidding the model features a dynamic market in steady state in which prices are determined in first price auctions it combines competition over time familiar from the pairwise meeting models with instantaneous bidding competition it inquires how different properties of the model determine the relative importance of these two aspects of the competition and in particular how the non market clearing price result of the matching and bargaining models is affected by the

competitive pricing and efficiency in search equilibrium we consolidate and generalize some results on price determination and efficiency in search equilibrium extending models by rubinstein and wolinsky and by gale heterogeneous buyers and sellers meet according to a general matching technology and prices are determined by a general bargaining condition when the discount rate r and search costs converge to 0 we show that prices in all exchanges are the same and equal the competitive market clearing price given positive search costs efficiency obtains iff bargaining satisfies hosios condition and r 0 when prices are set by third party market makers however we show that search equilibrium is necessarily efficient

managing quantity quality and timing in indian cane sugar production ex post marketing permits or ex ante production contracts private sugar processors in andhra pradesh india use an unusual form of vertical coordination they issue permits to selected cane growers a few weeks before harvest these permits specify the amount of cane to be delivered during a narrow time period this article investigates why processors create uncertainty among farmers using ex post permits instead of ex ante production contracts the theoretical model predicts that ex post permits are more profitable than ex ante contracts or the spot market under existing government regulations in the sugar sector which include a binding price floor for cane and the designation of a reserve area for each processor wherein it has a legal monopsony for cane the use of ex post permits creates competition among farmers to increase cane quality which increases processor profits and farmer costs empirical analysis supports the hypothesis that farmers operating in private factory areas have higher unit production costs than do their counterparts who patronize cooperatives

bilateral matching and bargaining with private information we study equilibria of a dynamic matching and bargaining game dmbg with two sided private information bilateral bargaining the model is a private information replica of mortensen and wright 2002 there are two kinds of frictions time

combining technology and corporate strategy in small high tech firms abstract the gap between technology management and business planning in the small high tech firm has been variously described as an opportunity area a source of strategic weakness and a root cause of competitive disadvantage similarly the link between technology strategy and corporate strategy has been viewed as a natural concomitant of growing maturity in the small high tech firm an integral and necessary evolution in corporate philosophy and a positive task for an increasingly professional management team the purpose of this paper is to report on an empirical research project into these issues a survey of 223 small high tech firms located on science parks was carried out though the analysis presented here concentrates on the 150 or so of the sample that carried out in house r d work the discussion indicates a strong evolutionary effect within which firms demonstrate a high degree of informality and flexibility in early stages of the firm s life in terms of both technology strategy and overall business strategy as the firm develops formality increases significantly and the technology push imperative gives way to a powerful market orientation the results give empirical support to a number of concepts that have been developed in the literature in small high tech firms and also raise a question about the impact of multinationality on the development of such firms

a decentralized market with common values uncertainty non steady states we analyse a market where i trade proceeds by random and anonymous pairwise meetings with bargaining ii agents are asymmetrically informed about the value of the traded good and iii no new entrants are allowed once the market is open we show that information revelation and efficiency never obtain in equilibrium even as discounting is removed this holds whether the asymmetry is two sided or one sided in some cases there exist equilibria where a substantial amount goes untraded this contrasts with the earlier literature which was based on the steadystate equilibria of a model where agents enter the market every period

the measurement and sources of technical inefficiency in the indonesian weaving industry production function models are estimated with a time series of cross section data on indonesian weaving establishments the sources of technical inefficiency are investigated three firm attributes are identified as being potentially related to firm efhciency tbey are firm ownership age and size the importance of these attributes as sources of inefficiency in the indonesian weaving industry is investigated and the implications of the find ings discussed

does competition help co operation co operative sugar factories in western india are economically successful even though rife with factional politics since they are not heavily subsidised what makes them operate efficiently political competition between elected leaders of neighbouring factories drives them to compete economically this in turn drives them to expand innovate and diversify production nothing in the standard rhetoric of co operation explains this tendency toward competitive risk taking likewise standard economic theories of competition overlook the political forces which drive these industrial leaders

would indian farmers benefit from liberalization of world cotton and sugar markets rich country support programs for cotton and sugar producers are frequently claimed to be detrimental for developing country farmers this study investigates whether a reduction in protectionist policies for organization for economic cooperation and development cotton and sugar producers would have a measurable effect on the welfare of indian farmers the fact that these sectors are intensively regulated within india might suggest that any such effect will be small however this study shows econometrically that prices in indian rural markets closely follow world prices and that indian farmers are flexible in the medium to long run in changing production according to price signals from these markets depending on the crop and the nature of liberalization producer surplus increases from 4 2 to 22 3 in the long run