'Successes' and 'Failures' in the Markets for Technology

Market-mediated contracts for technology trade are bound byseveral transaction costs. This paper argues that as these transactioncosts become less severe, markets for technology can help improvethree market failures: (i) R&D duplications; (ii) externalitiesin potentially public R&D outcomes; and (iii) deviationsfrom marginal cost pricing in the downstream product markets.In addition, with larger markets of potential users, the technologysuppliers will have incentives to produce more ‘general’technologies which span a wider number of firms or industries.Markets for technology also produce new failures. In particular,they induce deviation from marginal cost pricing in the saleof the technology, and they generate externalities associatedwith complementary R&D and other investments made by theindependent buyers and suppliers that operate in them. The paperconcludes by discussing policy implications.     

Existence and uniqueness of marginal cost pricing equilibrium

This paper considers a regulated monopoly that is subject to a marginal cost pricing policy. A marginal cost pricing equilibrium is a price-subsidy combination for which price equals marginal production cost and any losses are offset by the lump-sum subsidy. Employing basic degree theoretic results, conditions are established under which a marginal cost pricing equilibrium exists and is unique.     

Featherbedding—An easy second best problem

Conclusions The difficulties of second best, as propounded by Lipsey and Lancaster and reasserted by Allingham and Archibald, derive from the allegation that associated with second best optima are necessary conditions that require the violation of necessary first best conditions and which cannot be satisfied by known market forms or decentralized management rules. Specifically, it is alleged that for second best no “solutions” analogous to perfect competition and marginal cost pricing exist. In this paper it has been demonstrated that second best difficulties are not quite as universal as Allingham and Archibald suppose. We have seen that featherbedding contracts give rise to genuine second best situations but that the associated problems are easily solved. If a production unit grants a featherbedding contract but otherwise acts as a price taking profit maximizer, in terms of Paretian criteria (assuming no difficulties at the second order level) no policy action is called for unless society is willing to outlaw the featherbedding contract. Otherwise, the appropriate management rule is simply “behave as a price taking profit maximizer” where this behavior is clearly specified in (28) above and analogous to marginal cost pricing in the first best case.     

Intertemporal production and asset pricing: a duality approach

This paper analyzes a firm's intertemporal optimization problemunder uncertainty and presents a new asset pricing model fromthe vantage point of the production side of the economy usingthe duality principle. The intertemporal profit-maximizationproblem is formulated using the familiar cost function, andthe production Euler equation that encapsulates the joint behaviorof production and asset returns is derived. An asset's riskis measured by its covariance with the stochastic discount factorrepresented by the ratio of discounted marginal costs. The riskpremium is determined by the conditional covariances of assetreturns with output growth scaled by the degree of scale economiesand with input price changes weighted by the cost share of aninput. The proposed model has the standard structure of a multibetapricing model and suggests four economic risk factors–outputgrowth, the return on human capital, the return on physicalcapital, and technology shocks–for use in empirical analysis.     

Die kostenfunktion einer Cobb-Douglas-produktionsfunktion

Summary The Cost Function of a Cobb-Douglas Production Function. — It has been shown that the analytical expression of the cost function derived from a Cobb-Douglas production function is dependent on the degree of homogeneity. If the degree of homogeneity is the unity (constant returns to scale) then the cost function is linear and the marginal costs remain constant merging in the average costs. For increasing (decreasing) marginal returns to scale the cost function is non-linear and increases at a decreasing (increasing) rate; the marginal and average costs decrease (increase). On condition that factor prices are not equal, it follows that a given output can be produced at different costs according to the different values of the two partial elasticities of production m and n.

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Résumé La fonction de co?t de la fonction de production Cobb-Douglas. — Nous avons montré que l’expression analytique de la fonction de co?t derivée de la fonction Cobb-Douglas dépend du degré d’homogénéité. Si le degré d’homogénéité est égal à l’unité (constant returns to scale) la fonction de co?t est linéaire et le co?i Aiarginal est constant et identique au co?t moyen. Pour un degré d’hom Biéité plus grand (plus petit) que l’unité, la fonction de co?t est non-linéaire et sa croissance est dégressive (progressive); le co?t marginal et moyen descendent (montent). De plus nous avons montre que, sous la condition des prix de facteurs de production inégaux, un ?output? donné peut être produit avec un co?t différent selon les valeurs différentes des deux élasticités partielles de production m et n.

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Resumen La función de costes en una función de producción Cobb-Douglas.— En el presente artículo se demuestra que en el caso de funciones de producción del tipo Cobb-Douglas la expresión analítica de la función de costes, así como la forma de la curva de costes, depende del grado de homogeneidad de la funcion de produccion. Con un grado de homogeneidad unitario (rendimientos a escala de produccion constantes), la funcion de costes es lineal, es decir, los costes marginales permanecen constantes y son iguales a los costes medios. Si el grado de homogeneidad es superior a la unidad (rendimientos a escala crecientes), los costes totales aumentan, pero de manera decreciente, por lo que los costes marginales y medios descienden. En el caso de que el grado de homogeneidad es positivo, pero inferior a la unidad (rendimientos a escala decrecientes), la función de costes totales aumentaría exponencialmente, de manera que los costes marginales y medios incrementarían de forma permanente. Además se saca a relucir, que de diferir el nivel de los precios de los factores de producción, un volumen de producción dado puede producirse a costes muy diferentes, según sea el valor de las elasticidades parciales de la produccion respecto a trabajo y capital.

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Riassunto La funzione dei costi di una funzione produttiva Cobb-Douglas. — Nel presente articolo viene monstrato che, in funzioni produttive Cobb-Douglas, l’espressione analitica della funzione dei costi e quindi il decorso della curva dei costi dipendono dal grado di omogeneità della funzione produttiva. Al grado di omogeneità uno (proventi di scala costanti) c’è una funzione dei costi del tutto lineare, cioè i costi marginali rimangono costanti e sono identici ai costi medi. è il grado di omogeneità maggiore di uno (proventi di scala crescenti), allora la funzione dei costi totali sale in misura sempre minore. I costi marginali e medi diminuiscono. Quando, però, il grado di omogeneità è minore di uno e maggiore di zero (proventi di scala decrescenti), allora la funzione dei costi totali sale in modo esponenziale. Conforme a ciò, salgono anche costantemente i costi marginali e quelli medi. Inoltre si è mostrato che in altezze disuguali di entrambi i prezzi dei fattori, una supposta quantità ?output? può essere prodotta con costi assai diversi secondo quale valore assumano le due parziali elasticità di produzione ?m? e ?n?.

     

Economic consequences of VIE when consumers are constrained

This paper, using a Bertrand model of duopoly competition, shows that voluntary import expansion (VIE) forced on consumers, instead of on a producer, is also significantly anticompetitive. VIE causes a higher price as well as higher average cost of supply. When firms can use non-linear pricing, VIE forces marginal cost pricing by the disadvantaged firm, so that it loses incentive for cost-reduction.     

Platform pricing redux

Platforms such as Airbnb, Amazon, Apple iOS, eBay, Microsoft Windows, and Uber are ubiquitous. The two-sided nature of platform markets, however, requires a reconsideration of the conditions for profit maximization and understanding of how platforms operate. Profit-maximization in two-sided markets is characterized as an intuitive extension of the inverse elasticity pricing rule (Lerner index). This is further expressed in terms of the participants' primitives: users' reservation values and the platform's marginal cost. Differences between one- and two-sided markets are demonstrated and discussed.     

A Puzzle or a Choice: Uniform Pricing for Motion Pictures at the Box

Consumer differentiated preferences over movies make the uniform pricing regime at the box office a puzzle in the motion picture business. This paper explores the nature of price rigidity at the current uniform price. It concludes that the high profit mark-up from concession sales helps to retain uniform pricing as the optimal choice for exhibitors, without distributors’ condemned intervention. Unless many successful event movies are expected, tiered pricing over regular and event movies will not benefit either exhibitors or distributors. The criteria for exhibitors to favor tiered pricing and the distributors’ choices to eliminate the agency problem are also developed.

Slow Pass-through Around the World: A New Import for Developing Countries?

Developing countries traditionally experience pass-through of exchange rate changes that is greater and more rapid than high-income countries experience. This is true equally of the determination of prices of imported goods, prices of local competitors’ products, and the general CPI. But developing countries in the 1990s experienced a rapid downward trend in the degree of pass-through and speed of adjustment, more so than did high-income countries. As a consequence, slow and incomplete pass-through is no longer exclusively a luxury of industrial countries. Using a new data set—prices of eight narrowly defined brand commodities, observed in 76 countries—we find empirical support for some of the factors that have been hypothesized in the literature, but not for others. Significant determinants of the pass-through coefficient include per capita incomes, bilateral distance, tariffs, country size, wages, long-term inflation, and long-term exchange rate variability. Some of these factors changed during the 1990s. Part (and only part) of the downward trend in pass-through to imported goods prices, and in turn to competitors’ prices and the CPI, can be explained by changes in the monetary environment—including a fall in long-term inflation. Real wages work to reduce pass-through to competitors’ prices and the CPI, confirming the hypothesized role of distribution and retail costs in pricing to market. Rising distribution costs, due perhaps to the Balassa-Samuelson-Baumol effect, could contribute to the decline in the pass-through coefficient in some developing countries.     

Pollution,Factor Ownerships,and Emission Taxes

This paper employs Cournot’s (1838) model of complementary goods to analyze the optimal emission taxation under joint and independent ownership with pollution. When the marginal damage is small (large), an emission taxation is unnecessary (necessary), because the quantity (environmental) distortion is more serious than the environmental (quantity) distortion. This finding has never been presented in the literature. In contrast to Cournot (1838), a striking result is that independent ownership may be welfare superior to joint ownership when the marginal damage of externality is large in the absence of governmental intervention.     

电力现货市场机组成本补偿机制分析

节点边际电价定价模式下,机组在现货市场收益可能无法覆盖其成本,因此现货市场一般采用成本补偿机制,但现阶段国内现货市场机组成本补偿机制差异较大,而少有文献进行系统性研究.鉴于此,对PJM的上抬费用处理机制进行系统梳理,介绍了机组各类成本的内涵、上抬费用的产生机理、各类上抬费用的数学模型以及分摊机制.在此基础上,介绍广东现货市场机组成本补偿机制设计的实践历程,进一步将广东机组成本补偿机制与PJM进行对比分析,并对广东后续机组成本补偿机制的完善提出建议.最后通过算例直观说明两种模式下机组成本补偿费用计算的差异.各省可以综合考虑市场公平性和经济性设计现货市场机组成本补偿机制.     

Monetary Policy Analysis in a Small Open Credit-Based Economy

This paper describes a simple framework for monetary policy analysis in a small open economy where bank credit is the only source of external finance. At the heart of the model is the link between banks’ lending rates (which incorporate a premium over and above the marginal cost of borrowing) and firms’ net worth. In contrast to models in the Stiglitz-Weiss or Kiyotaki-Moore tradition, the supply of bank loans is perfectly elastic at the prevailing rate. The central bank sets the refinance rate and provides unlimited access to liquidity at that rate. The model is used to study the effects of changes in official interest rates, under both fixed and flexible exchange rates. Various extensions are also discussed, including income effects, the cost channel, the role of land as collateral, and dollarization.

Regulating the Anticommons: Insights from Public‐Expenditure Theory

This article offers a new interpretation of the traditional Cournot complements problem, or anticommons, by using the theory of public goods to gain a perspective on the problem. Specifically, I examine the pricing strategies and regulation of multiple monopolies that produce products which consumers view as perfect complements. I show that collusion by the firms increases total social welfare and that the collusion problem can be reinterpreted as a problem of provision of public goods from the point of view of the firms. I take this insight further and derive the familiar concepts of the Samuelson marginal condition and the ratio equilibrium for the firms. I compare these outcomes to the first best solution and then apply incentive‐compatible mechanisms to strategically implement the Pareto superior ratio‐equilibrium outcome and the optimal marginal‐cost pricing outcome. Finally, I show how this methodology can be applied to the more familiar Cournot model of oligopoly.     

Estimated Open Economy New Keynesian Phillips Curves for the G7

In this paper we develop an open economy model of firms’ pricing behaviour under imperfect competition. This allows us to introduce various terms of trade effects influencing the firm’s pricing decision, in addition to labour costs which dominate most closed-economy specifications of the New Keynesian Phillips curve (NKPC). Our analysis gives rise to a hybrid open economy NKPC which nests existing closed and open economy specifications adopted in empirical work. We estimate this specification for the G7 economies and find that the US, UK and Canada typically enjoy less inertia in price setting than the European G7 economies and Japan and that these estimates are both plausible and in line with survey evidence. We also find that the proportion of firms which use simple backward-looking rules of thumb in price setting is greater when the frequency of price change is smaller. Finally there is evidence of significant asymmetries in price setting amongst EMU members.

发电企业竞价上网的经济分析及风险控制

随着电力市场化的逐步推进，发电企业在新的竞争环境下生存和发展，是电力市场化改革中应该考虑的问题。文章通过对竞价上网运作模式的分析，从发电企业内部／外部运作进行经济性分析。考虑了发电企业的生产成本与竞价上网的收益所得，做出盈亏平衡分析，并以边际定价法进行企业利润最大化分析，以此来说明发电企业如何在竞价上网中做出有效的经济行为，由此引申出发电企业与电网公司在竞价上网的报价环节中的不确定性，应以博弈的思维做出决策以达到经济效益的优化；考虑了电力市场价格波动因素，发电企业在与大用电企业交易中的价格风险，引进电力期货市场的知识以规避风险，以使企业在竞价上网的运作过程中稳步发展。     

Alternative tariff and quota mechanisms in the face of a monopolistic exporter of a non-renewable resource

Zusammenfassung Alternative Zoll- und Quoten-Mechanismen gegenüber einem monopolistischen Exporteur nicht-reproduzierbarer Rohstoffe. — Ein Monopolist, der ein Rohstoffvorkommen ohne Produktionskosten abbauen kann, tut dies, indem er den Abbau so drosselt, daβ der marginale Erl?s um den nominalen Zinssatz ansteigt. Ein Wertzoll l?βt die Produktion und die Inlandspreise im Zeitablauf unver?ndert, w?hrend er den Wohlstandstransfer einschr?nkt, falls der Monopolist dies nicht als einen Bluff ansieht, dem es sich entgegen zu treten lohnt (?hnliche Gefahren bestehen bei jedem Zoll/Quoten-Programm). Spezifische Z?lle verringern den laufenden Abbau und verl?ngern dadurch die Zeit bis zur Ersch?pfung der Rohstoffquelle; ein nicht-proportionaler Wertzoll kann in jeder der beiden Richtungen manipuliert werden. Mengenm?βige und wertm?βige Quoten erh?hen den Preis st?rker als ?quivalente Z?lle. Die Maβnahmen eines einzelnen Landes k?nnen (günstige oder ungünstige) Nebenwirkungen für andere Importeure verursachen, je nachdem, in welcher Richtung das Land vom Durchschnitt abweicht.

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Résumé Les mécanismes alternatifs de tarif et de quota en cas d’un exportateur monopoliste d’une ressource non-renouveable. — Un monopoliste épuise une ressource sans co?t en réduisant le flux de produit de manière que le revenu marginal accro?t au niveau du taux d’intérêt nominal. Un tarif ad valorem ne change pas la production et le développement de prix dans le pays de provenance envers le temps réduisant la prosperité transférée si le monopoliste ne le regarde pas comme bluff que vaut être ?nommé? (il y a des dangers similaires avec chaque programme tarif/quota). Les tarifs spéciaux réduisent la production courante en augmentant le temps d’épuisement; un tarif ad valorem non-proportionel peut être manipulé d’une manière quelconque. Les quotes de valeur et de quantité augmentent le prix au-dessus des tarifs équivalents. Une action d’un pays singulier peut causer des externalités (bonnes ou mauvaises) pour des autres importateurs étant dependante de la position du pays vis-à-vis le moyenne.

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Resumen Los mecanismos alternativos de tarifas y cuotas frente a un exportador monopolistico de un recurso no renovable. — Un monopolista agota sin costo un recurso reduciendo el ritmo de explotación de tal manera que el retorno marginal sube hasta alcanzar la tasa de interés nominal. Una tarifa ad-valorem no afecta la productión ni el desarrollo de los precios del país doméstico a traves del tiempo, reduciendo la transferencia de riqueza si el monopolista no considera esto como un bluff digno de mencionarse (peligros similares existen con cualquier programa de tarifa/cuota). Tarifas específicas reducen la productión habituai, extendiendo de esta manera el período de explotación; una tarifa ad-valorem no proporcional puede ser manipulada en cualquier directión. Cuotas cuantitativas y de valor elevan el precio más allá del equivalente en tarifas. Una actión de un país individual puede ocasionar externalidades (negativas o positivas) a otros importadores, dependiendo de la positión del país con respecto al promedio.

     

Financing minority economic development

Conclusions A close analysis of the capital-asset pricing model’s assumptions and implications for efficient allocation of resources to investment in capital assets can form the basis for changes in the way capital markets are regulated by the federal government and in taxing policy of the government. In particular, our analysis indicates that the value of currently marketed assets can be increased by the inclusion in portfolios of currently nonmarketed assets.Moreover, the value of nonmarketed assets emerges as a significant instrumental variable for policy makers.The government can increase the value of all currently marketed assets by increasing positive changes in the value of nonmarketed assets.This might be accomplished by requiring by legislation or rule, for example, that a certain proportion of the listed securities on any exchange be comprised of the securities of black firms and other firms whose securities are not now marketed.The government might want, by tax incentive, to promote investment in firms with nonmarketed assets.It might want to increase the funding level of institutions such as MESBIC’S supplying equality finance to small black firms.     

Factors Driving Quality Standard Compliance in the Polish Dairy Sector

We construct a model to identify determinants of the diffusion rate of quality standards in a food chain. We argue that adoption decisions in the food chain are determined by farmers’ and processors’ economic considerations. Factors such as pricing behaviour, compliance costs and market structure are identified and discussed in the paper. The findings are used to test an econometric model utilizing data on Polish milk processing firms gathered between 2000 and 2002. The results indicate that input and output prices have a significant influence on the diffusion rate of standards; the dominance of large-scale holdings in the relevant procurement market significantly increases diffusion as well. Compared to their competitors, small cooperatives were found to face more significant problems in procuring high quality raw materials.      

Third-Degree Price Discrimination: Apology Not Necessary

Applied work in price discrimination often treats demand curves among multiple market segments as algebraically additive. Yet the welfare effects of multi-market (third degree) price discrimination depend on how the demand segments are added. Treating demands as geometrically additive yields the well known result that discrimination absent an increase in production diminishes Marshallian surplus. But if demands are treated as algebraically additive then discrimination increases welfare over uniform pricing. Quantity is identical in the three cases, so the effect is not due to market opening. Nor is the effect due to scale economies since marginal cost is assumed constant. Profit is always greater under discrimination, so the effect is due to distributional changes in consumer surplus. The model is restricted to linear demands and constant marginal cost but can be generalized for future work and policy analysis.     

How Do Female Spouses’ Political Interests Affect Male Spouses’ Views About a Women’s Issue?

This paper explores how the degree of female spouses’ political interest affects male spouses’ views about women’s empowerment using individual level data in Japan. Controlling for unobserved area-specific fixed effects, results show that males are likely to consider women’s empowerment important if their spouses are interested in politics. This spouse effect is observed for conservative males but not for progressive-neutral males. Results were unchanged when the endogeneity bias caused by spouses’ political interests were controlled for. These findings suggest that female family members’ political interests and views play an important role in determining male views regarding women’s issues.