bluuebunny/crossref_metadata_2025 huggingface dataset:
Operations assessment of hospitals in the Sultanate of Oman
Authors: Ramanathan Ramakrishnan
Published: January 2005

Purpose

The importance of health care is growing world‐wide, and the health sector is receiving a good proportion of public funds. As health‐care costs are increasing, efforts have been made to assess the operational efficiency of hospitals in many countries.

Design/methodology/approach

In this paper, the efficiencies of operation of 20 hospitals in the Sultanate of Oman are evaluated using Data Envelopment Analysis (DEA). The hospitals selected are Regional and Wilayat hospitals under the Ministry of Health, the Sultan Qaboos University Hospital and the hospital of the Royal Oman Police. Four outputs representing out‐patient visits, in‐patient services and surgical operations, and three inputs representing the number of beds and manpower are used in the analysis.

Findings

Using data for the year 2000, ten of the 20 hospitals are found to be efficient. A ranking of performance of efficient hospitals has been provided by computing their super‐efficiency scores. The patterns of efficiency changes over the time period 1999‐2000 are studied using the Malmquist Productivity Index (MPI) approach. It has been found that there is a decline in the efficiencies of hospitals during the period. The (geometric) average MPI of the hospitals during the period has declined, and the average technical efficiency change declined less compared with the average technology change.

Originality/value

This paper is one of the few published studies that evaluates the performance of hospitals in countries of the Middle East.
The impact of e‐business on supply chain management
Authors: Croom Simon R.
Published: January 2005

Purpose

E‐business systems and processes that use ubiquitous platforms such as web browser and internet have a profound impact on the management of inter‐organisational processes. Consequently, a major implication of e‐business is its impact on supply chain management. This paper focuses on the developments in e‐business system adoption and deployment in support of supply chain management.

Design/methodology/approach

The research conducted for this paper was empirical in nature, involving an interview study with a large sample of organisations and selected case study visits. Analysis of the impact of e‐business on supply chain strategy also examines three representative areas of supply chain management – procurement, customer relationship management, and fulfilment process.

Findings

E‐business systems deployment was also seen to act as a significant catalyst for each of the three areas examined, although this paper presents only the findings from the exploratory study.

Originality/value

From the research analysis it was possible to develop a normative, five‐stage, model classifying the evolution of e‐business systems deployment for supply chain management. Finally proposes the need for longitudinal research to surface the underlying dynamics of e‐business adoption and deployment.
Long‐term change in ground‐layer vegetation of deciduous forests of the North Carolina Piedmont, USA
Authors: TAVERNA KRISTIN , PEET ROBERT K. , PHILLIPS LAURA C.
Published: January 2005

In Southeastern North America residual mature deciduous forests have long been assumed to represent the stable endpoint of succession, with local compositional variation reflecting primarily variation in soils and topographic position. However, the long‐term stability of understorey vegetation in this region has rarely been examined due to the lack of reliable baseline data.

We resampled a series of permanently marked vegetation plots spanning a range of soil and site conditions in the Piedmont of North Carolina to evaluate compositional change in the understorey of putative ‘climax’ hardwood forests over a 23‐year period. We examined all ground‐layer species for change in total and native species richness at 25 m2and 1000 m2, change in species composition and variation in richness and composition with environment.

Although native and total species richness remained nearly constant, there was a significant decline in herb richness balanced by a strong increase in tree seedling richness. Species composition changed significantly across all plots with strong evidence of consistency in the direction of plot‐level compositional change.

Change in herb species richness over time was strongly correlated with environment at 25 m2. Sites with higher pH, percentage sand and soil cations exhibited less decline in herb species than other sites. Understorey richness tended to increase more over time on low‐elevation, mesic sites as opposed to higher, dry sites.

The systematic changes in herbaceous species richness and woody seedling abundance do not support the expectation of stability and may be due to the elimination of ground fires and widespread grazing in the early twentieth century, exotic species invasion or increases in white‐tailed deer populations.

The lack of stability we observed for mature vegetation of the Carolina Piedmont is likely to be representative of temperate forests in general. Our results suggest that the common practice of projecting vegetation change based on contemporary mature vegetation as the expected endpoint is unreliable and results obtained must be viewed with caution.
Trichostatin A attenuates airway inflammation in mouse asthma model
Authors: Choi J.‐H. , Oh S.‐W. , Kang M.‐S. , Kwon H.J. , Oh G.‐T. , Kim D.‐Y.
Published: January 2005

Background
Histone deacetylase (HDAC) inhibition has been demonstrated to change the expression of a restricted set of cellular genes. T cells are essential in the pathogenesis of allergen‐induced airway inflammation. It was recently reported that treatment with HDAC inhibitors induces a T cell‐suppressive effect.

Objective
The purpose of this study was to determine whether treatment with trichostatin A (TSA), a representative HDAC inhibitor, would reduce allergen‐induced airway inflammation in a mouse asthma model.

Methods
BALB/c mice were intraperitoneally sensitized to ovalbumin (OVA) and challenged with an aerosol of OVA. TSA (1 mg/kg body weight) was injected intraperitoneally every 2 days beginning on day 1. Mouse lungs were assayed immunohistochemically for HDAC1, a major HDAC subtype, and for infiltration of CD4+ cells. The effect of TSA on airway hyper‐responsiveness (AHR) was determined, and the bronchoalveolar lavage fluid (BALF) of these mice was assayed for the number and types of inflammatory cells, and for the concentrations of IL‐4, IL‐5, and IgE.

Results
HDAC1 was localized within most airway cells and infiltrating inflammatory cells of asthmatic lungs. Treatment with TSA significantly attenuated AHR, as well as the numbers of eosinophils and lymphocytes in BALF. TSA also reduced infiltration of CD4+ and inflammatory cells and mucus occlusions in lung tissue, and decreased the concentrations of IL‐4, IL‐5, and IgE in BALF.

Conclusion
TSA attenuated the development of allergic airway inflammation by decreasing expression of the Th2 cytokines, IL‐4 and IL‐5, and IgE, which resulted from reduced T cell infiltration. Our results suggest that HDAC inhibition may attenuate the development of asthma by a T cell suppressive effect.
Serum concentrations of interferon‐γ and intercellular adhesion molecule‐1 eight years after an early respiratory syncytial virus infection
Authors: Juntti H. , Kokkonen J. , Dunder T. , Renko M. , Karttunen R. , Uhari M.
Published: January 2005

Background
Respiratory syncytial virus (RSV) infection may influence the development of recurrent wheezing and atopy, but the mechanisms are unclear.

Objective
The purpose was to evaluate serum concentrations of soluble intercellular adhesion molecule‐1 (sICAM‐1), CD14, IgE, IL‐5 and IFN‐γ in children 6–10 years after an RSV infection and their correlation with subsequent asthma and atopy.

Methods
Fifty‐one subjects admitted to hospital for RSV infection during the first year of life and controls matched for birth date and sex underwent clinical examinations including lung function, skin prick and blood tests.

Results
The RSV subjects had significantly higher serum concentrations of IFN‐γ and sICAM‐1 than the controls (for IFN‐γ 224.9 pg/mL (standard deviation (SD) 271.3) vs. 187.1 pg/mL (372.9), difference 37.8 pg/mL, 95% confidence interval (CI) −90.3 to 166.0, P=0.05; for sICAM‐1 170.2 ng/mL (SD 63) vs. 147.8 ng/mL (SD 57), difference 22.4 ng/mL, 95% CI −1.4 to 46.1, P=0.04). The RSV subjects with asthma had significantly higher concentrations of IFN‐γ than the controls with asthma, and the RSV subjects with wheezing during the previous 12 months had significantly higher concentrations of both IFN‐γ and sICAM‐1 than the controls with wheezing.

Conclusions
Children hospitalized for RSV infection in infancy still differ in IFN‐γ and sICAM‐1 production 6–10 years after the infection. The data suggest that the pathomechanism of asthma and wheezing after an early RSV infection may be different from that of children without an early RSV infection.
Mucosal symptoms elicited by fragrance products in a population‐based sample in relation to atopy and bronchial hyper‐reactivity
Authors: Elberling J. , Linneberg A. , Dirksen A. , Johansen J. D. , Frølund L. , Madsen F. , Nielsen N. H. , Mosbech H.
Published: January 2005

Background
Exposure to perfume and fragrance products may, in some individuals, cause symptoms from the eyes and airways. The localization, character and risk factors of such symptoms in the general population are unknown.

Objective
To investigate both the localization and character of symptoms from the eyes and airways elicited by fragrance products, and the associations between such symptoms and skin prick test reactivity (atopy), methacholine bronchial hyper‐reactivity (BHR), allergic rhinitis and asthma.

Methods
A questionnaire on mucosal symptoms elicited by fragrance products was posted to 1189 persons who had participated in a Danish population‐based study of allergic diseases in 1997/1998. The study included measurement of BHR, atopy, forced expiratory volume in 1 s (FEV1), and serum eosinophilic cationic protein (serum ECP).

Results
The response rate was 79.6%. Symptoms from the eyes or airways elicited by fragrance products were reported by 42%. BHR (adjusted odds ratio 2.3, 95% confidence interval 1.5–3.5) was independently associated with symptoms from the eyes and airways elicited by fragrance products. There were no significant associations between these symptoms and atopy, FEV1 or serum ECP.

Conclusions
Mucosal symptoms from the eyes and airways were common in this population. BHR was a significant and independent predictor of these symptoms. The lack of association with atopy suggested that IgE‐mediated allergic mechanisms do not play a major role in the development of these symptoms.
Pre‐ and post‐germination determinants of spatial variation in recruitment in the perennial herb Helleborus foetidus L. (Ranunculaceae)
Authors: GARRIDO JOSE L. , REY PEDRO J. , HERRERA CARLOS M.
Published: January 2005

Recruitment in plant populations is a multiphase sequential process. An integrated view of the relationships between the stages and processes involved is therefore needed, but few studies have analysed the direct and indirect effects concerned. We propose a causal model of these relationships and use structural equation modelling (SEM) and path analysis to investigate the direct and indirect effects of pre‐ and post‐germination processes on recruitment.

We collected information on seed production, pre‐dispersal seed losses, seed removal from the ground, seedling emergence and mortality, and seedling recruitment during the first year after emergence from 1 × 1 m plots centred on reproductive individuals in three geographically distant populations of the perennial herb Helleborus foetidus.

The results suggest some congruence between the three populations and indicate that post‐germination processes shape the spatial variation in recruitment more than pre‐germination processes. Although between‐plot variation in recruitment was mostly explained by seedling emergence and mortality, factors such as seed production and removal still have significant effects on recruitment through various, and frequently contrasting, pathways.

Path analysis is a powerful analytical tool for revealing important aspects of the recruitment dynamics of plant populations and the factors determining their spatial variation. Such aspects, including indirect effects, are difficult to quantify with other, more classical, approaches to recruitment.
Life on the exponential curve – time to rattle the academic cage? A view from the street
Authors: Kernick David
Published: January 2005

The history of health service research has been characterized by an overwhelming volume of literature that has little impact on those who actually get on and do the work. The focus has been on an examination of why evidence is not accommodated into practice and how the barriers to implementation can be reduced. The fact that the evidence‐based product may not be relevant to those at whom it is directed had not until recently been considered a possibility. Over the past 20 years there has been a consolidation of two cultures in the National Health Service – the academic/researcher and the clinician/practitioner. This paper sets the two cultures within the context of a community of practice framework and argues that the emphasis should move away from managing the interface to a fundamental reappraisal of the health service academic community.
Regression to the mean: treatment effect without the intervention
Authors: Morton Veronica , Torgerson David J.
Published: January 2005

Regression to the mean (RTM) is a widespread statistical phenomenon. It is a group phenomenon that occurs whenever an extreme group is selected from a population based on the measurement of a particular variable. If a second measurement is then taken for the same group, the second mean will be closer to the population mean than the first measurement. This decrease (or increase) can be mistakenly attributed to a treatment effect; the conclusion can be drawn that an effect results from treatment when it in fact results from chance. Any intervention that is aimed at a group or characteristic that is very different from the average will appear to be successful because of RTM. It is therefore important that any genuine reductions because of the treatment are separated out from the effect of RTM. If the problem is ignored then this will lead to errors in the interpretation of results and, potentially, decisions made on the evidence of those results. This paper highlights the importance of the issue and its effects on many common clinical, public health and managerial decisions.
Psychosocial profiling: a holistic management tool for non‐compliance*
Authors: Baines Lyndsay S , Zawada Edward T , Jindal Rahul M
Published: January 2005

Abstract:  We introduce a new concept of psychosocial profiling as a tool that provides the transplant team with a psychosocial framework for identification, intervention and management of non‐compliance. This will also increase our understanding of emotional problems experienced by patients before transplant, as a result of living with the uncertainty and medical side effects of chronic illness. Psychosocial profiling is adaptable throughout the transplant process and gives every patient an opportunity of psychosocial support to help him or her into a position of emotional stability and compliance with their medications and postoperative care. Implementation of this strategy will move health care professionals from being gatekeepers to managers and facilitators of holistic care in recipients of transplants.
Nephrotic syndrome after stem cell transplantation
Authors: Stevenson William S , Nankivell Brian J , Hertzberg Mark S
Published: January 2005

Abstract:  Nephrotic syndrome occurs rarely after bone marrow transplantation. We describe three patients with myeloid malignancy who developed nephrotic syndrome from 5, 22 and 25 months after allogeneic stem cell transplantation (SCT), confirmed by electron microscopy as membranous glomerulonephritis in two and minimal change glomerulonephritis in one. Proteinuria was initially severe in all and clinically distinct from prior graft‐vs.‐host disease in two patients. While all responded initially to prednisolone and cyclosporine therapy, two recipients with high‐risk leukemia developed late solid organ and bone marrow relapse of their disease, which ultimately proved fatal. The third patient remains alive and disease‐free with minimal proteinuria off immunosuppressive therapy. Hence, the onset of de novo high‐grade proteinuria after allogeneic SCT should prompt renal histological confirmation, and a trial of immunosuppressive therapy after other causes of nephritic syndrome have been excluded.
Prevalence, characteristics, and outcome of BK virus nephropathy in Japanese renal transplant patients: analysis in protocol and episode biopsies
Authors: Namba Yukiomi , Moriyama Toshiki , Kyo Masahiro , Imamura Ryoichi , Shi Yi , Ichimaru Naotsugu , Oka Kazumasa , Takahara Shiro , Okuyama Akihiko
Published: January 2005

Abstract:  Background:  BK virus nephropathy (BKN) is recognized as a cause of graft loss in renal transplant patients. This may be related to the introduction of new and potent immunosuppressive regimens. In Japan, our experience regarding its prevalence, clinical significance, and outcome is still limited. In this study, our primary purpose is to outline the prevalence, outcome, and clinical characteristics of BKN as observed at Osaka University Hospital.

Methods:  We retrospectively analyzed 112 biopsy specimens from 87 renal transplant patients. All transplantations were from living donors. Of the 112 biopsy specimens, 71 were from protocol biopsies and 41 were from episode biopsies. Calcineurin inhibitors and corticosteroid were used in all patients (tacrolimus 32 and cyclosporin 55). In addition, azathioprine was used in 43 patients, mizoribine was used in 24 patients, and mycophenolate mofetil was used in 20 patients. BKN was diagnosed by light microscopic examination and a positive immunohistochemical staining of anti‐SV40 antibody in a biopsy specimen. In order to investigate the outcome and potential risk factors of patients with different histological staging, we divided the patients into groups A (mild histological change) and B (moderate or severe histological change).

Results:  Of the 87 patients, six were diagnosed with BKN. There were no significant differences between BKN patients and non‐BKN patients, except for the number of patients with graft loss (p < 0.001). Of the six BKN patients, three were in group A, and three were in group B. We recognized a significant difference between group A and group B in terms of anti‐rejection treatment including glucocorticoid, tacrolimus trough levels of over 8 ng/mL, episode of acute rejection within 1‐month post‐transplantation, and the time period between transplantation and BKN diagnosis.

Conclusions:  This is the first report of BKN in Japanese renal allograft recipients. In our hospital, the prevalence, risk factors, and outcome were similar to those previously for non‐Japanese recipients.
Organ donation: a population‐based study
Authors: Barcellos Franklin C. , Araujo Cora Luiza , Da Costa Juvenal Dias
Published: January 2005

Abstract:  Objective:  Through a population‐based study, it was identified the prevalence of people's willingness to donate their own organs and from their relatives, evaluating associated factors in an adult population. It was also identified their understanding of cerebral death.

Methodology:  Cross‐sectional study, with people aged 20 yr or older in the urban area of Pelotas, State of Rio Grande do Sul, Brazil. The instrument used was a structured questionnaire, filled out in individual interviews. Chi‐squared and linear trend test were used in the bivariated analysis. Multivariated analysis was conducted according to a hierarchical classification model using Poisson regression. It was considered meaningful the value for p ≤ 0.05 two‐sided.

Results:  Amid 3159 participants, the prevalence to donate organs was 52%, amongst which 58% had expressed such willingness to a relative. Most respondents (80.1%) would authorize the donation of relative's organs who had previously declared their willingness to do so. When the subject had not been discussed, only a third of the total number of people interviewed would authorize the donation of a relative's organ. After adjustment to confusing factors, higher willingness was characterized among the youngest, the higher educated and those belonging to families with income over 10 minimum wages. The Evangelical and Jehovah's Witnesses practitioners showed to be less prone to donate.

Conclusion:  According to the study, when the peoples had not enough information regarding family member's donation wishes the rate of willingness to donate organs is lower. Sociodemographic characteristics influence the rate of public willingness to donate organs and campaigns educacional should be directed to improve rates of donation the organs.
To The Raider Goes The Surplus? A Reexaminationof the Free‐Rider Problem
Authors: Holmström Bengt , Nalebuff Barry
Published: January 2005

This paper reexamines Grossman and Hart's (1980) insight into how the free‐rider problem excludes an external raider from capturing the increase in value it brings to R firm The inability of the raider to capture any of the surplus depends critically on the assumption of equal and indivisible shareholdings–the one‐share‐per‐shareholder model In contrast, we show that once shareholdings are large and potentially unequal, a raider may capture a significant part of the increase in value Specifically, the free‐rider problem does not prevent the takeover process when shareholdings are divisible.
Pricing To Signal Product Line Quality
Authors: Bagwell Kyle
Published: January 2005

This paper offers a general characterization of the optimal product line prices for a monopolist whose quality of products is initially unknown to consumers. In the focal equilibrium, a monopolist signals a high‐quality product line by pricing as if quality were known to be high, but costs of production were higher than they truly are. In a rich set of environments, this characterization implies that the prices of all products are initially distorted upward, with the price distortion being largest for products with the most inelastic demands and/or quality‐sensitive production costs. These implications yield predictions for the time path of prices flint are broadly consistent with evidence from the marketing literature. The multidimensional signaling problem is made tractable by the satisfaction of a very simple and powerful single crossing property.
Job Securityand Product Market Competition
Authors: Gal‐Or Esther
Published: January 2005

In the present paper, we relate the extent of job security offered to incumbent managers to the extent of competition among firms in the product market, where the extent of job security is measured by the probability that an incumbent manager continues to be employed by his current firm and the extent of competition is measured by the degree of differentiation between competing brands. We demonstrate that when competition between firms intensifies and “on‐the‐job training” is relatively more conducive to reducing the variable costs of production, firms tend to offer reduced (increased) job security to incumbent managers, provided that the degree of differentiation between competing products is sufficiently large (small), respectively. If “on‐the‐job training” is relatively more conducive to reducing the fixed costs of production, however, the previous result is reversed.
RESTORING THE PRINCIPLE OF MINIMUM DIFFERENTIATION IN PRODUCT POSITIONING
Authors: Rhee Byong‐Duk , de Palma André , Fornell Claes , Thisse Jacques‐François
Published: January 2005

Most research on product positioning supports the idea of differentiation. Product standardization (i.e., minimum differentiation) occurs only under very limiting assumptions. Yet, similar products are often observed in the marketplace. We attempt to restore the case for standardization by using more realistic assumptions than in previous work. We assume that consumers consider not only observable attributes in brand choice, but also attributes that are unobservable by the firms. We find that standardization is an equilibrium when consumers exhibit sufficient heterogeneity along the unobservable attributes under both positioning with exogenously given prices and price competition, We also show that, under insufficient heterogeneity along the unobservable attribute, our results coincide with past research that argues in favor of differentiation.
ECONOMIC ANALYSIS AND MANAGEMENT STRATEGY: A SURVEY
Authors: Spulber Daniel F.
Published: January 2005

The survey classifies economic theories of the firm into four categories based on the level of aggregation in economic models: (1) neoclassical, (2) industrial organization, (3) contractual, and (4) organizational incentive. Economic theories of the firm are evaluated on the basis of their potential application to problems of management decision making. The survey suggests that a management perspective can be useful in developing an integrated theoretical analysis of the firm that addresses both competitive strategy and organizational design.
A Modelof Competitive Limit Pricing
Authors: Bagwell Kyle
Published: January 2005

This paper offers a new theory of limit pricing. Incumbents from different markets or regions “compete” against one another, with each attempting to price in a manner that deflects entry into the others' markets. An entrant is imperfectly informed as to the incumbents' respective investments in cost reduction and seeks to enter markets in which incumbents have high costs. In a focal equilibrium, the entrant uses a simple “comparison strategy,” in which it enters only the highest‐priced markets, and incumbents engage in limit‐pricing behavior. The influence on pricing of the number of markets and the scope of entry is also reported. Throughout, the central feature of the analysis is that an incumbent's price affects its investment incentives, with lower prices being complementary to greater investment.
SystematicPriceDifferencesBetweenSuccessiveAuctionsare noAnomaly
Authors: Black Jane , de Meza David
Published: January 2005

Identical cases of wine are often auctioned one immediately after another. Ashenfelter (1989) reports that on average, the later lots fetch less. Such a systematic price difference seems anomalous, the more so because it is shown here that rational expectations imply not equal, but rising, prices. Risk aversion is an obvious way of reconciling the evidence with rational behavior. There is an alternative explanation. The auctions observed by Ashenfelter involved a buyer's option, whereby the first‐round winner could purchase further cases at the same price. It is shown that this feature may both account for the observed price trajectory and raise seller revenue.
Integration, Complementary Products, and Variety
Authors: Church Jeffrey , Gandal Neil
Published: January 2005

This paper examines the incentives for integration when the market for consumer durables (hardware) is oligopolistic and the market for complementary services (software) is monopolistically competitive. We find that the equilibrium industry structure will depend on the magnitude of the fixed costs of software development. If the software development costs are relatively large, the equilibrium industry structure is unintegrated, that is, neither hardware firm integrates; if the software development costs are relatively small, the equilibrium industry structure is integrated, that is, both hardware firms integrate. Under the integrated industry structure, hardware profits are lower, less varieties are provided, and hardware prices are lower than under the unintegrated industry structure. The game has a prisoners' dilemma structure when the software development costs are relatively small because of a foreclosure effect. Strategically increasing the number of software varieties provides an avenue for an integrated hardware firm to increase its market share and profits by reducing the number of software varieties available for an unintegrated rival technology. Although consumer surplus is higher under an integrated industry structure, the total surplus associated with the unintegrated industry structure exceeds that of the integrated industry structure.
UpstreamPricingandAdvertisingSignalDownstreamDemand
Authors: Albaek Svend , Overgaard Per Baltzer
Published: January 2005

This paper considers price and advertising decisions by a monopolist manufacturer who is privately informed about the strength of consumer demand. Consumers respond to advertising and to the retail price chosen by an uninformed retailer on the basis of his beliefs about demand. This signaling game has a unique intuitive equilibrium outcome in which a high‐demand manufacturer chooses his full‐information pair of wholesale price and advertising. When demand is low, the wholesale price is distorted downward from its full information level, whereas demand‐enhancing advertising may be distorted in either direction. Dissipative advertising is not distorted because it is never used.
Diversificationas a Strategic Preemptive Weapon
Authors: Aron Debra J.
Published: January 2005

This article examines the role that multimarket operations play in a firm's ability to preempt entry into new markets when presence in a market does not commit the firm to remain there. Success in one market affects a firm's incentives and, in turn, strategic power, to fight a rival fur survival in a related market. This is modeled as a way of attrition, and the risk‐dominant equilibrium is derived. The model supports brand proliferation as a credible preemptive strategy for an established firm and also has implications regarding the strategic role of economies of scope and “deep pockets.”
Paying For Joint Costs in Health Care
Authors: Albert Ma Ching‐to , McGuire Thomas G.
Published: January 2005

The paper analyzes a regulatory game between a public and a private payer to finance hospital joint costs (mainly capital and technology expenses). The public payer (inspired by the federal Medicare program) may both directly reimburse for joint costs (“pass‐through” payments) and add a margin over variable costs paid per discharge, while the private payer can only use a margin policy. The hospital chooses joint costs in response to payers' overall payment incentives. Without pass‐through payments, under provision of joint costs results front free‐riding behavior of payers and the first‐mover advantage of the public payer. Using pass‐through policy in its self‐interest, the public payer actually may moderate the under provision of joint costs; under some conditions, the equilibrium allocation may be socially efficient. Our results bear directly on directly Medicare policy, which is phasing out pass‐through payments.
Intermediation in Search Markets
Authors: Gehrig Thomas
Published: January 2005

In markets, in which exchange requires costly search for trading partners, intermediaries can help to reduce the trading frictions. This intuition is modeled in a framework with heterogeneous agents, who have the choice between intermediated exchange and search accompanied by some bargaining procedure. The equilibria of such a game are characterized. In the case of a monopolistic intermediary, the tradeoff between the bid‐ask spread and the costs of delay during private search determine the intermediary's clientele. In equilibrium the monopolist charges a positive spread. Traders with large gains from trade prefer to deal with him, whereas traders with relatively low gains from trade engage in search. In case of competition among intermediaries, the classical Bertrand result obtains, and bid and ask prices converge to the (unique) Walrasian equilibrium price. Thus, in the confines of the model, the Walrasian auctioneer of the market under consideration can be replaced by competing intermediaries. In addition a multiplicity of subgame perfect Nash equilibria emphasizes the coordination problems inherent in models of intermediation.
Dynamic R&D Competition, Research Line Diversity, and Intellectual Property Rights
Authors: Choi Jay Pil
Published: January 2005

This paper develops a simple model of sequential innovations with a diversity of research lines. Competitive strategies of firms for R&D are analyzed at each stage in a sequence of innovations. We compare two alternative regimes of enforcing patent law, as a mechanism to provide adequate incentives for R&D at each stage. The regime that protects the research line gives monopoly rights to an entire line of research, hence limiting the utilization of the previous knowledge and retarding subsequent innovations. The other regime protects the product, which facilitates the use of previous knowledge at the expense of providing inadequate protection to the ideas embodied in the product, and results in underinvestment in the first stage.
Task Assignmentand Agency Structures
Authors: Hirao Yukiko
Published: January 2005

This paper considers an agency model in which a principal delegates an agent authority to choose investment projects. The performance of the project depends stochastically on the agent's evaluation and operating efforts. The paper examines the conditions under which the principal prefers to assign production to a second agent. It is shown that the tasks will be assigned to two agents of the agent chooses an unobservable operating effort. The tasks will be assigned to one agent if the agent's evaluation and operating efforts are both unobservable and if disutilities of efforts are large relative to the profit from the risky project.
Introduction: Auditors' Legal Liability in the United States
Authors: Balachandran Bala V.
Published: January 2005

The Directors of … Companies … being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in private copartnery frequently watch over their own.

—Adam Smith, 1776, Wealth of Nations
Audit Services and Fees of Large Accounting Firms
Authors: Balachandran Bala V. , Simon Daniel
Published: January 2005

In the audit literature, it was postulated that audit firms are differentiated due to their quality and, thus, the fees charged are a function of quality. We hypothesize that this may lead to audit firm specialization in different amounts of auditing, leading to a differential audit fee structure. This hypothesis is empirically tested by using a very large sample of audit fees paid to then Big Eight auditors. The results are consistent with the hypothesis in that three Big Eight auditors are observed to charge significantly different fees when compared with the other firms.
Managerial Reaction to Takeover Bids: A Theory of Strategic Resistance
Authors: De Sankar , Knez Peter J.
Published: January 2005

This paper develops a theory to explain the frequently observed resistance offered by the management of target firms to high‐premium takeover bids. Contrary to the popular perception of managerial entrenchment at the expense of the shareholders' interests, such resistance may be strategically designed to increase shareholder wealth by threatening to initiate an informal auction process fur the target involving other potential bidders. Remarkably, this strategy can be effective even when it is common knowledge that the other bidders do not have a higher reservation price for the target. The analysis also offers insights into division of takeover gains and several other takeover‐related issues.
Health Care Payment Systems: Cost and Quality Incentives
Authors: Ma Ching‐to Albert
Published: January 2005

This paper compares the cost and quality incentive effects of cost reimbursement and prospective payment systems in the health industry. When a provider cannot refuse patients who require high treatment costs or discriminate patients by qualities, optimally designed prospective payments can implement the efficient quality and cost reduction efforts, but cost reimbursement cannot induce any cost incentive. When the provider can refuse expensive patients, implementation of the first best requires a piecewise linear reimbursement rule that can be interpreted as a mixture of pure prospective payment and pure cost reimbursement, Under appropriate conditions, prospective payment can implement the first best even when the provider can use qualities to discriminate patients.
The Consequences of Appointment Methods and Party Control for Telecommunications Pricing
Authors: Smart Susan R.
Published: January 2005

While the economic approach to the politics of regulation emphasizes the importance of organized economic interests in shaping policies, political institutions in which regulatory agencies are embedded may also have significant effects. By including both economic influences and characteristics of political institutions in a model of price setting by state regulators, this paper demonstrates that both shape regulatory behavior in the telecommunications industry. Whether commissioners are elected or appointed, whether they face confirmation by a legislature, and whether a single party controls both executive and legislative branches of state governments influence the level of prices charged for basic services.
Costs, Institutional Mobility Barriers, and Market Structure: Advertising Agencies as Multiproduct Firms
Authors: Silk Alvin J. , Berndt Ernst R.
Published: January 2005

What accounts for the diversity and limited concentration that has long characterized the organization of the advertising agency industry? This question is addressed by treating an advertising agency as a multiproduct firm. The firm's product line or service mix is defined in terms of the set of different media categories where an agency places the advertising messages that it creates on behalf of its clients. Evidence is presented indicating that the structure of demand and costs in the advertising agency industry conforms to the conditions that MacDonald and Slivinski showed were required for an industry to sustain an equilibrium with diversified firms.

Building on this framework, we formulate a set of three hypotheses relating to the realization of product‐specific scale and scope economies. The first two hypotheses posit that given low fixed costs and minimal entry barriers, both media‐specific scale and scope economies are available and can be exploited by relatively small‐size agencies. The third hypothesis suggests that large agencies may experience diseconomies of scope as a consequence of excessive diversification induced by two pervasive industry institutional phenomena: (1) “bundling” of agency services to match client demand for a mix of media advertising, and (2) “conflict policy,” which prohibits an agency from serving competing accounts and operates as a mobility constraint.

Utilizing a multiproduct cost function, we estimate media‐specific scale and scope economies for a cross section of 401 U.S. agencies in 1987. The results obtained support the set of three hypotheses outlined above. The paper concludes with a discussion of the implications of these findings for the restructuring currently underway in this industry.
Racing To Invest? The Dynamics of Competition in Ethical Drug Discovery
Authors: Cockburn Iain , Henderson Rebecca
Published: January 2005

Recent advances in the theoretical literature have greatly expanded our understanding of the forces that shape the competitive dynamics of research and development, but a paucity of sufficiently detailed empirical data has left these insights relatively untested. We draw on unusually detailed qualitative and quantitative infernal data provided at the research program level by 10 major pharmaceutical firms to explore the usefulness of the modern literature as a source of insight into the dynamics of competition in ethical drug discovery.

Our analysis focuses on one particularly compelling aspect of the literature: the suggestion that in “winner take all situations,” competition in R&D becomes a Prisoner's Dilemma, leading to overinvestment in research. Without adequate measures of the social return to innovation, we can say nothing about whether there is “too much” or “too little” research undertaken by the industry, but our results do not support the suggestion that R&D investment in drug discovery is driven by the “tit‐for‐tat” or simple reaction function models hinted at by the institutional literature. First, R&D investment is only weakly correlated across firms once common responses to exogenous shocks are accounted far, and second, rivals' R&D results are positively correlated with own research productivity, which we interpret as evidence for extensive R&D spillovers rather than the depletion externality implied by “winner take all” models.

These results are not, of themselves, sufficient to reject the hypothesis that investment behavior in the industry is driven by strategic considerations since there is theoretical support for a wide variety of observable behavior as equilibrium outcomes of strategic interaction. Nonetheless, they suggest that the more extreme forms of rent dissipation identified in the literature are probably poor characterizations of the reality of competition in pharmaceuticals. Our results point both to the need to develop theories that incorporate richer models of possible payoff structures, adjustment costs, and firm heterogeneity and to the need to collect empirical data that is comprehensive enough to enable one to test them.
When Is Advertising a Signal of Product Quality?
Authors: Horstmann Ignatius J. , MacDonald Glenn M.
Published: January 2005

A model of advertising is presented in which consumption experience is an imperfect indicator of product quality. In equilibrium, neither price nor advertising signal the quality of newly introduced goods. Advertising of established products can be a signal of quality, but if it is, it must be an imperfect signal leaving residual uncertainty that influences consumers’ repurchase decision. A set of observable implications follow.
Why Are Royalty Rates Higher in Service‐type Franchises?
Authors: Rao Ram C. , Srinivasan Shubashri
Published: January 2005

Royalty payments from a franchisee to a franchisor serve as incentive for the franchisor to provide appropriate levels of quality and brand, name investment. However, since they also distort the service provided by the franchisee, we should expect relatively lower royalty rates in franchises that are primarily service‐oriented. Casual examination of royalty rates across product‐oriented and service‐oriented franchises shows that the opposite is true, with service‐type franchises enjoying higher royalty rates. We resolve this apparent puzzle. The basic argument we put forth is that in product‐type franchises, a franchisor can charge a wholesale price on goods transferred to the franchisee, thus using an alternative instrument that also serves as an incentive for the franchisor. Moreover, in general, a franchisor will use both wholesale price and royalty to minimize distortions in retail price and service at the retail level. We then test the predictions of our model on different industries and find confirmation for the same.
Money Out of Thin Air: The nationwide Narrowband pcs Auction
Authors: Cramton Peter C.
Published: January 2005

The Federal Communications Commission held its first auction of radio spectrum at the Nationwide Narrowband PCS Auction in July 1994. The simultaneous multiple‐round auction, which lasted five days, was an ascending bid auction in which all licenses were offered simultaneously. This paper describes the auction rules and how bidders prepared for the auction. The full history of bidding is presented. Several questions for auction theory are discussed. In the end, the government collected $617 million for ten licenses. The auction was viewed by all as a huge success an excellent example of bringing economic theory to bear on practical problems of allocating scarce resources.
Auctioning the Airwaves: The Contest for Broadband pcs Spectrum
Authors: Chakravorti Bhaskar , Sharkey William W. , Spiegel Yossef , Wilkie Simon
Published: January 2005

The House and Senate of the United States Congress recently passed legislation that directs the FCC to establish a system for using auctions to allocate the use of radio spectrum for personal communications services. There is a unique and unprecedented set of issues that arise in this context, which are of interest to economists, industry analysts, regulators, and policymakers. We discuss these issues and evaluate their likely impact on the outcome of the spectrum auctions. In addition, we argue that there may be pitfalls in the auction procedure adopted by the FCC, and we discuss possible alternative procedures.
Better Late than Early: Vertical Differentiation in the Adoption of a New Technology
Authors: Dutta Prajit K. , Lach Saul , Rustichini Aldo
Published: January 2005

After the initial breakthrough in the research phase of R&D, a new product undergoes a process of change, improvement, and adaptation to market conditions. We model the strategic behavior of firms in this development phase. We emphasize that a key dimension to this competition is the innovation that leads to product differentiation and quality improvement. In a duopoly model with a single adoption choice, we derive endogenously the level and diversity of product innovations. We demonstrate the existence of equilibria in which one firm enters early with a low‐quality product while the other continues to develop the technology and eventually markets a high‐quality good. In such an equilibrium, no monopoly rent is dissipated and the later innovator makes more profits. Incumbent firms may well be the early innovators, contrary to the predictions of the “incumbency inertia” hypothesis.
Vertical Contracts as Strategic Commitments: How are They Enforced?
Authors: Alexander Cindy R. , Reiffen David
Published: January 2005

This paper addresses the strategic commitment value of various price and nonprice vertical contracts. Assuming contract offers are sufficiently public to have strategic importance, we focus on commitment as a necessary and separable condition to be met. The analysis has two components. First, considering the relationship between a monopolist manufacturer and his imperfectly competing retailers, enforcement conditions necessary for alternative vertical contracts to have commitment value are identified in the static (reputation‐free) context. It is shown that external help (i.e., enforcement by nonsignatories) is necessary for bilateral minimum resale price maintenance (price floors) and exclusive territory contracts to have commitment value, whereas maximum resale price maintenance (price ceilings) do not require such help (i.e., they are internally enforcing). Second, the paper provides an analysis of the U.S. case law and discusses the empirical validity of the “external enforcement” assumption that is shown to underlie recent proposals to make certain vertical restraints illegal.
Search and Trading in Intermediated Markets
Authors: Yavaş Abdullah
Published: January 2005

This paper examines the effect of a middleman on the search and trading behavior of the traders. It is shown that the buyer and seller types with middle valuations choose to search for each other, while the buyer and seller types with high or low valuations drop out of the search market and choose to trade directly with the middleman. The ask and bid prices of the middleman act as an outside option for the buyer and seller, and influence the outcome of the bargaining between the two. The model generalizes Gehrig (1993) by endogenizing the traders' search intensities, by allowing the traders to go to an intermediary even if thy have engaged in search, and by enabling the intermediary to provide the service of immediacy.