Policy globalization and the “information society”: a view from Canada

The Canadian example suggests that recent shifts in communication policy frameworks should be understood as a transformation in how technology is organized politically, and not simply as a policy reaction to technological innovation. The process is tracked chronologically in three sections: institutional renewal (1993–1994); accelerated vertical slippage between national, regional and global policy levels (1995–1996); and horizontal dispersal of communication policy into new other sectors (1997). Across these stages, a series of convergences characterized by increased fluidity between territorial as well as sectoral jurisdictions are discussed; implications for the understanding of communication policy frameworks within the context of the “information society” project are identified.     

A business and ICT architecture for a logistics city

The city of Melbourne, Australia, stands to benefit from achieving the logistics city status. The planning theme of a logistics city is designed around achieving efficiencies and long term sustainability out of the legacy of dispersed groups of intensive “logistics activity areas”. This is not to re-invent solutions particularly in Melbourne, where the existence of a legacy logistics infrastructure and ad hoc growth has resulted in the business architecture that is constantly in the “catch-up” mode. This is seen as a unique opportunity for developing business models to meet the future challenges of the growth of trade, freight movement and maintaining economic, environmental and urban sustainability. Enterprise architecture will enable attention to be focused on the development of a collaborative business model, which will help to achieve efficiencies in view of the complex set of economic, social and environmental parameters. The logistics city business architecture responds to the shift to a services economy, which is generating different patterns of workforce travel to ensure good access to skilled workers, to other services, to business clients and to national and international markets.     

Markov Perfect Equilibrium in the US digital camera market

This paper examines the model launch and withdrawal decisions of the major digital camera makers for the period 1996–1999. These manufacturers produce differentiated products and some have the experience of participating in a similar market—the film camera market. This paper investigates to what extent the following four factors affect firms' decisions to launch a new model of digital camera: the effects of competition with “within-brand” models; the effects of competition with “cross-brand” models; the level of experience in the film camera market; and market conditions. The empirical findings suggest that good market conditions can accommodate more products, which has a positive effect on product launches. On the other hand, existing cross-brand models have a negative effect on product launches, while within-brand models and experience in similar markets have an ambiguous effect on product launches.     

Why is This Show so Dumb? Advertising Revenue and Program Content of Network Television

Economists have long debated how advertising should be treated in a rational-choice framework. Using unique data from the broadcast networks’ 1995 Fall Network Season, we find that sitcoms attract premia from advertisers, while news and police programs get discounted. We interpret our findings according to two important theoretical treatments of advertising. Because the broadcast networks forgo advertising-unfriendly program content, the cable channel HBO responds with a deliberate counter-programming niche strategy, explicitly airing programming with “darker” and “more difficult” advertising-unfriendly content.“The networks have essentially by given up on viewers with functional IQ’s.” – Dean Valentine, President of UPNThe views in this paper are my own and do not represent the views of the Federal Communications Commission, its Commissioners, or its staff.     

Bidding asymmetries in multi-unit auctions: Implications of bid function equilibria in the British spot market for electricity

This paper introduces and tests Bid Function Equilibria (BFE) in the British spot market for electricity. BFE extend von der Fehr and Harbord's (1993) multi-unit auction model of wholesale electricity markets by allowing firms to have heterogeneous costs for different generating units. Pure-strategy equilibria in BFE predict asymmetric bidding by producers: a single firm (the “price-setter") bids strategically while other firms (“non-price-setters") bid their costs. We test for asymmetries in firms' bid functions in the British spot market between 1993 and 1995 and find strong empirical support for the theory. We conclude that BFE have important implications for the design and governance of electricity markets.     

Implications of regulation for entry and investment in the local loop

A number of countries around the world are trying to promote competition at the local loop as demand for higher bandwidth to the home increases. Different technologies (xDSL, cable modems, and wireless local loop) offer alternative solutions and the issue for regulators is to design a framework that promotes competition and investment. Regulators can promote competition in a number of ways, but two “pure” strategies are services and infrastructure competition. This paper models the regulator and incumbent–entrant interactions explicitly in order to understand how the structure of the voice services might evolve under different regulatory frameworks. Our analysis suggests that a “mix” of infrastructure and service competition like the one promoted in Netherlands, stimulates investment by incumbents and entrants alike and offers better consumer benefits. The message for policy makers is that the introduction of “sunset clauses” provides new entrants with strong incentives to invest while allowing them to enter in service competition and to acquire important knowledge about their new market.     

中国、美国在巴西市场的竞争性与互补性分析

近年来,巴西市场摆脱对发达国家市场的高度依赖,实施出口多元化战略具有越来越重要的意义。本文分析中、美对巴出口商品结构,利用显示性比较优势（RCA）、区域显示性比较优势（RRCA）和出口产品相似度等指数,实证研究中美在巴西市场的竞争性与互补性。结果表明,中美两国的比较优势具有一定相似性,在巴西出口产品的相似度也较高,在巴西市场中处于竞争关系。最后,从各类商品层面提出具体策略建议。     

Food safety and product liability

This paper focuses on the U.S. product liability system for food poisoning cases and makes six key points. First, current legal incentives to produce safer food are weak, though slightly stronger in outbreak situations and in markets where foodborne illness can be more easily traced to individual firms. Far less than 0.01% of cases are litigated and even fewer are paid compensation. Second, even if potential plaintiffs can overcome the high information and transaction costs necessary to file lawsuits, monetary compensation provides only weak incentives to pursue litigation. Firms paid compensation in 56% of the 294 cases examined in this study and the median compensation was only $2,000 before legal fees. Third, indirect incentives for firms may be important and deserve more research. For example, firms may be influenced by costly settlements and decisions against other firms in the same industry. Fourth, confidential settlements, health insurance, and product liability insurance distort legal incentives to produce safer food. Fifth, the ambiguity about whether microbial contamination is “natural” or an “adulterant” hinders the legal system from effectively dealing with food safety issues. Sixth, a brief comparison of the incentives from U.S. and English legal systems suggests that more research is needed to understand the strengths, weaknesses, and relative impact of each country's legal system on the incentives to produce safer food.     

Expropriation and control rights: A dynamic model of foreign direct investment

This paper studies the strategic interaction between a foreign direct investor and a host country. We analyze how the investor can use his control rights to protect his investment if he faces the risk of “creeping expropriation” once his investment is sunk. It is shown that this hold-up problem may cause underinvestment if the outside option of the investor is too weak, and overinvestment if it is too strong. We also analyze the impact of spillover effects, we give a rationale for “tax holidays” and we examine how stochastic returns affect the strategic interaction of investor and host country.     

Is allowing trading enough? Making secondary markets in spectrum work

The debate on spectrum reforms has mostly focused on the choice between a property rights and a commons regime. This article argues that moving to a property right system requires careful attention to details in order to avoid that “micro” rather than “macro” factors may prevent efficient trades from taking place. It provides a framework to conduct this assessment, identifies a number of possible concerns and puts forward some solutions.     

Globalizing the emerging high-technology company

Two traditional models of global expansion were evaluated in an exploratory effort to explain the globalization patterns of emerging high-technology companies. In-depth field interviews were conducted with 19 Massachusetts-based companies that supply software or peripheral products for desktop computing to explore: their timing and aggressiveness in entering markets outside of North America; their structures and patterns for expansion; and their success. Sampled companies report nondomestic revenues ranging from 6% to 58% of their totals. Statistical analyses of “globalization success,”, defined here as how quickly a company achieves substantial percentage of revenues from nondomestic markets, support an integrated model of globalization that combines a cluster of other influences with elements of Vernon's specific product cycle model and aspects of the more generic internationalization process models. In accordance with Vernon, high-tech products are developed primarily for the home market but are soon transferred overseas, more slowly to “lagging markets.” In contrast with Vernon, many different selling arrangements are employed, and overseas production does not follow for most high-tech firms. In accordance with the general internationalization theory, when high-tech companies perceive foreign markets as risky they proceed cautiously, often using outside specialists to facilitate market entry and increase their involvement over time as their familiarity increases. But in contrast with this, many high-tech firms, especially the most successful, do not even perceive such riskiness and do not exhibit such caution. Unrelated to either of those two models, and building upon the work of Ragman et al.[1], globalization success is most strongly linked to how aggressively senior management allocates internal resources to developing an overseas business model that approximates the company's u.S. model of selling/distributing. External environmental forces, too, such as the varied adoption rates of the underlying desktop computing platforms themselves as well as regulatory factors, also affect globalization of high-tech products and companies.     

Response to Vuori and Vuori's commentary on “Heuristics in the strategy context”

We recently introduced a research program on how firms can effectively capture fleeting opportunities using heuristics. Heuristics, we advocate, are the essence of strategy, especially in unpredictable markets where opportunities are often numerous, fast moving, and uncertain. Our emphasis on heuristics invites comparison with prominent research programs in cognitive psychology. We address this opportunity by comparing our “simple rules” heuristics approach with “heuristics‐and‐biases” and “fast‐and‐frugal” heuristics research. Collectively, the three approaches offer a rich understanding of heuristics. Copyright © 2014 John Wiley & Sons, Ltd.     

How “Local” are Local Office Markets?

This paper describes empirical investigations of the geographical extent of office markets in the United States during the 1980s. A mixed temporal autoregressive model was estimated for pooled downtown office markets and pooled suburban markets. Results indicate that while the temporal autoregressive effect is stronger for office market vacancies than is the effect of the national trend, their linkages to national trends are significant. However, a mixed spatial autoregression analysis of the data pooled over time indicates that the regional office vacancy effect is stronger than the national office vacancy effect in both downtown and suburban office markets.     

Capacity decisions and supply price games under flexibility of backward integration

A key issue in supply chain design for manufacturing firms is how to make a trade-off between strategies of vertical integration and outsourcing. A two-echelon supply chain model with one supplier and one manufacturer is set up to study this issue. The manufacturer makes decisions on two types of capacities, one is core capacity that cannot be outsourced, the other is non-core capacity on which the manufacturer implements a strategy that includes three options—complete, partial or no outsourcing. Such a strategy is referred to as “flexibility of backward integration”. Optimal capacity decisions of the manufacturer are given and the supplier's pricing strategies are discussed. Managerial implications of partial outsourcing are investigated. The impact of the flexibility of backward integration is presented and finally, supply chain coordination is analyzed.     

Perspectives—From China Strategy to Global Strategy

This article argues that starting with substantial divergence, China strategy research and global strategy research are now converging. This scholarly transformation is largely driven by the recent rise of the Chinese economy, which has emerged from being a peripheral member of the global economy to a core contributor. I trace some of the early roots of China research in our field, outline the beginning of my own China research, and discuss my more recent research which has become more global incorporating substantial China and non-China elements. In addition, I use the emergence of the institution-based view of strategy, which has been largely propelled by China research, to shed light on how China research may make more global theoretical contributions beyond the immediate context of this research. Finally, to further push China research to the center stage of global strategy research, I recommend that scholars “act local, think global.”     

Agents’ incentives under buy-back contracts in a two-stage supply chain

This paper investigates how the behavior of individual decision makers can affect the performance of a supply chain. We study a two-stage supplier–retailer system, using a buy-back contract. Each firm's actions are executed by an agent. The retailer's purchasing agent and the supplier's sales agent are compensated based on certain performance measures, and they act accordingly. We study the impacts of their behavior in both the supplier-as-leader and retailer-as-leader settings. We find that, unless their incentives are carefully constructed, the agents can strongly distort the system's behavior. Specifically, “channel stuffing” (packing the distribution channel with excess inventory) can occur in both settings. Only when the agents are compensated based on net profit do they act in accord with their firms’ objectives. These results may help explain some recent scandals.     

The theory of access pricing and its linkage with investment incentives

The paper reviews how the question of access pricing has been fully investigated by the theoretical literature in a static context. On the other hand, there is no developed analysis of the linkage between access pricing and incentives to invest. This paper argues that some useful literature in related areas can be brought to bear on the issue of “races” to build infrastructures, on the relationship between infrastructure and service competition, and on two-way network competition.     

Variance amplification and the golden ratio in production and inventory control

A discrete linear control theory model of a generic model of a replenishment rule is presented. The replenishment rule, which we term a “Deziel Eilon—automatic pipeline, inventory and order-based production control system”, is guaranteed to be stable. From a z-transform model of the policy, an analytical expression for bullwhip is derived that is directly equivalent to the common statistical measure often used in simulation, statistical and empirical studies to quantify the bullwhip effect. This analytical expression clearly shows that we can reduce bullwhip by taking a fraction of the error between the target and actual inventory and pipeline (or work in progress (WIP) or “orders placed but not yet received”) positions. This is in contrast to the common situation where ordering policies account for all of the error every time an order is placed. Furthermore, increasing the average age of the forecast reduces bullwhip, as does reducing the production/distribution lead-time. We then derive an analytical expression for inventory variance using the same procedure to identify the closed form bullwhip expression.We assume that a suitable objective function is linearly related to the bullwhip and inventory variance amplification ratios and then optimise the PIC system for different weightings of order rate and inventory level variance. We highlight two forms of the objective function, one where “the golden ratio” can be used to determine the optimal gain in the inventory and WIP feedback loop and another that allows the complete range of possible solutions to be visualised. It is interesting that the golden ratio, which commonly describes the optimum behaviour in the natural world, also describes the optimal feedback gain in a production and inventory control system.     

Enterprise modeling and integration: A stochastic management approach

Recently, my book by Matsui has been published in Japanese, and the title is “Management of Manufacturing Enterprise: Profit Maximization and Factory Science.” Enterprise/Factory Science means the system science of the 3M & I, in which is the complex of huMan, Material/Machine, Money and Information, and would contribute to enterprise modeling and integration issues. This paper presents the problem of enterprise/factory science, and discusses a class of 3M & I system by a stochastic management approach. First, the 3M & I system is defined, and a variety vs. structure is introduced. Next, the two structures of management are distinguished, and the demand-to-supply and process-cycle management are discussed by structural modeling.     

Comment on “Heuristics in the strategy context” by Bingham and Eisenhardt (2011)

Bingham and Eisenhardt (2011) highlight the positive role of heuristics in the strategy context. They discuss four mechanisms through which heuristics have positive effects for strategy. The first mechanism—using a heuristic cue as a proxy for complex, correlated information—builds directly on Gigerenzer's research on positive heuristics. The second (capturing a window of opportunity) and third (providing some direction while allowing freedom to improvise) mechanisms, combine Gigerenzer's ideas with Eisenhardt's earlier work. The fourth one relates to coordination. In this commentary, we critically evaluate the applicability of these four mechanisms in the strategy context, which differs fundamentally from Gigerenzer's context. Our primary contribution is the explication of central limitations in the ways heuristics can function in the strategy context. Copyright © 2014 John Wiley & Sons, Ltd.