Athlete Pay and Competitive Balance in College Athletics

In this paper we analyze the argument—which has been used by both the National Labor Relations Board and the National Collegiate Athletic Association—that unionization and/or player pay will hurt competitive balance in college sports. We present a theoretical analysis of universities that recruit athletes and examine the assumptions that are needed for player compensation to decrease competitive balance. We also empirically illustrate the differences in balance between professional and college sports. Given the theoretical and empirical analysis, we argue that unionization and/or player pay is unlikely to hurt competitive balance.     

Local Energy Markets*

In current power markets, the bulk of electricity is sold wholesale and transported to consumers via long-distance transmission lines. Recently, decentralized local energy markets have evolved, often as isolated networks based on solar generation. We analyze strategic pricing, investment, and welfare in local energy markets. We show that local energy markets yield competitive equilibrium prices and provide efficient investment incentives. Yet, we find that strategic behavior leads to allocative inefficiency. We propose a clearing mechanism that induces truth-telling behavior and restores first-best welfare.     

规模报酬递增的第二种机制:为什么重复建设与规模效率的提高可以并存

本文探讨了政府竞争格局下行业规模报酬递增的机制。我们发现,经典的规模报酬递增机制会导致垄断竞争条件下的厂商均衡数目减少,因而规模效率的提高与重复建设不可能同时出现。但是地方政府降低厂商固定成本的竞争却可以在重复建设的同时带来规模效率的提高,这就是本文所发现的政府竞争格局下行业规模报酬递增的第二种机制。我们通过DEA-VRS模型和DEA-Malmquist指数法初步证实了此过程。实证研究发现,在控制了干中学和货币外部性之后,地区行政垄断指数与规模效率的动态变动呈现显著的倒U形关系。     

Context-bridging and context-embedded experience: Growth drivers of emerging economy business groups

This study examines emerging economy business groups’ growth directions during institutional change. Building on Penrose’s Theory of Growth of the Firm, we explore managerial resources as foundations for growth. Specifically, we argue that their growth directions are critically shaped by the nature of managerial experience of business groups. Experience that is context-embedded supports growth within the existing strategic paradigm, whereas context-bridging experience enables international growth. We test hypotheses derived from this theoretical argument for business groups in Taiwan, and find empirical support for our arguments.

     

Agricultural technology adoption and household welfare: Measurement and evidence

Previous studies on the adoption and impacts of improved crop varieties have relied on self-reported adoption status of the surveyed households. However, in the presence of weak variety maintenance and poorly functioning seed certification system, measurement errors in self-reported adoption status can be considerable. This paper investigates how such measurement errors can lead to biased welfare estimates. Using DNA-fingerprinting based varietal identification as a benchmark, we find that misclassification in self-reported adoption status is considerable, with significant false negative and positive response rates. We empirically show that such measurement errors lead to welfare estimates that are biased towards zero and substantially understate the poverty reduction effects of adoption. While the empirical evidence suggests attenuation bias, our theoretical exposition and simulations demonstrate that upward bias and sign reversal effects are also possible. The results point to the need for improved monitoring of the diffusion process of improved varieties through innovative adoption data collection approaches to generate robust evidence for prioritizing and justifying investments in agricultural research and extension.     

Looking at the Cost Side of “Monopoly”

Welfare loss under oligopoly is defined as that part of consumer surplus which is lost and not regained by higher profits. In a model with asymmetric firms, this implies that the total welfare loss consists of the deadweight loss triangle plus a cost side inefficiency effect, due to the fact that in imperfect markets not all firms utilize the lowest cost technique. Using a flexible CV-model we calculate these effects empirically for two relatively homogeneous industries (pulp/paper and cement). The deadweight loss triangles are shown to be smaller than the cost difference effect (“the staircase”) for these industries.     

最低质量标准政府规制研究

本文认为在信息不对称和产品差异化的前提下,存在政府最低质量标准规制的必要性和必然性,而最低质量标准“阈值”的设置会对社会福利产生关键性影响。在此基础上构建了国内最低质量标准对贸易的促进和国外最低质量标准对我出口影响的模型。实证检验发现：GB18401国内最低质量标准政府规制对出口纺织服装产生正向影响;国外（以日本《肯定列表制度》为例）政府最低质量标准规制对我国出口产生负向影响。     

Output flexibility—A competitive advantage for small firms

We explore three theoretical perspectives that look at output flexibility as a competitive advantage for small firms as was initially described by Stigler (1939). First, small firms are more willing to fluctuate their output. As a result: second, small firms can trade cost inefficiency with volume flexibility to increase their profits; third, output flexibility is a more viable source of competitive advantage in volatile and capital-intensive industries, and less viable in profitable industries. Indeed, the empirical analysis of over 3000 companies representing 83 industries during the 1979-87 time period supports our theoretical perspectives. Future research directions that combine firm flexibility and other strategic dimensions are discussed in the context of providing a general strategic framework for small firms competing against large ones.     

Nursing Turnover and Hospital Efficiency: An Organization-Level Analysis

This study tests the competing arguments that organization-level turnover is positively associated with organizational inefficiency or, alternatively, positively related to organizational inefficiency only in those organizations experiencing very high or very low turnover. Findings from multivariate analyses support the former argument: in a national sample of 333 hospitals, turnover among registered nurses was found to be associated in a positive linear fashion with both nonpersonnel operating and personnel costs per adjusted inpatient day.     

Does it pay to be really good? addressing the shape of the relationship between social and financial performance

Building on the theoretical argument that a firm's ability to profit from social responsibility depends upon its stakeholder influence capacity (SIC), we bring together contrasting literatures on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) to hypothesize that the CSP‐CFP relationship is U‐shaped. Our results support this hypothesis. We find that firms with low CSP have higher CFP than firms with moderate CSP, but firms with high CSP have the highest CFP. This supports the theoretical argument that SIC underlies the ability to transform social responsibility into profit. Copyright © 2012 John Wiley & Sons, Ltd.     

A DEA estimation of a lower bound for firms’ allocative efficiency without information on price data

In this paper, we estimate a lower bound for the sum of firms’ allocative efficiencies in the absence of information on prices. For this purpose, we only estimate technical efficiency at both the firm and the industry level using a directional distance function and choosing a relevant direction. Our result relies on the decomposition of overall inefficiency into technical and allocative inefficiency at both the firm and the industry level. The convexity of a technology induces a transfer from both total technical inefficiency and part of allocative inefficiency at the firm level to technical inefficiency solely at the industry level. The remaining firms’ allocative inefficiency could be counted at the industry level. Hence, the difference between technical inefficiencies at both levels can be interpreted as a lower bound for the sum of allocative inefficiency in the industry. We show how to implement this bound in a DEA framework.     

Immigrant–Native Differences in Welfare Participation: The Role of Entry and Exit Rates

We analyze differences in welfare transitions between natives and immigrants in Sweden using a large representative panel data set. The data contain administrative information on welfare use and detailed demographic information. The empirical results suggest that the main reason for the large immigrant–native welfare gap observed is the differences in welfare entry rates. Thus, policies aimed to reduce these transitions may be particularly successful in reducing welfare use in general and particularly the immigrant–native welfare gap.     

Risk aversion and auction design: Theoretical and empirical evidence

Auctions are inherently risky: bidders face uncertainty about their prospects of winning and payments, while sellers are unsure about revenue and chances of a successful sale. Auction rules influence the allocation of risk among agents and the behavior of risk-averse bidders, leading to a breakdown of payoff and revenue equivalence and a heightened significance of auction design decisions by sellers. In this paper, we review the literature on risk aversion in auctions, with an emphasis on what can be learned about auction design from theoretical modeling and empirical studies. We survey theoretical results relating to the behavior of risk-averse agents in auctions, the comparison of standard auction formats in the presence of risk aversion and implications for auction design. We discuss standard and more recent approaches to identifying risk preferences in empirical studies and evidence for the significance of risk aversion in auction applications. Finally, we identify areas where existing evidence is relatively scant and ask what questions empirical research might ask given the theory and where further theoretical research may be beneficial given existing empirical results.     

Works Councils and Labour Productivity: Looking beyond the Mean

After more than 25 years of empirical investigation, the analysis of works council effects on establishment productivity is still an active field of economic research. I present first evidence for works council regression coefficients along the unconditional log labour productivity distribution in Germany. The highest (lowest) coefficients were found at the bottom (top) of the distribution, which suggests that works councils have the most beneficial effects at low levels of productivity. Importantly, coefficients are positive at each productivity level. The results shed light on a classical theoretical argument concerning moderating factors for the productivity effect of employee participation.     

Reducing the level of switching costs in mobile communications: The case of Mobile Number Portability

Switching costs are one of the most important economic forces that affect market competition in mobile communications. Both theoretical and empirical studies have shown that switching costs reduce market competition leading to higher prices, lower product and service quality, and lower customer welfare. Given their negative consequences, national regulatory authorities have designed policies aimed at reducing switching costs and fostering competition. One of the most important of these, in the mobile communications industry, is mobile number portability (MNP). The aim of this paper is to investigate the effect of MNP on switching costs in mobile phone services. First, a hierarchical Bayes model is proposed to measure switching costs at the customer level and to investigate the impact of MNP on them. Second, this study examines the drivers of MNP adoption by customers using a binary logit specification. The results reveal that this regulatory policy has significantly reduced the cost of switching and that MNP adoption partially depends on customer-related variables.     

Rationalizing the International Coffee Agreement virtually

From 1963 to 1989, the International Coffee Agreement controlled world trade in coffee. Like an export cartel, the organization included coffee exporters and importers as members. This paper seeks to understand the behavior of the ICA by treating it as an optimizing entity, which from social choice theory we know to be inherently troublesome. A social choice rule is specified for the ICA that is virtually implementable in Nash equilibrium. The empirical results provide arationalizing argument for the ICA, in the sense that if it sought to maximize the specified criterion function, we would expect it to behave precisely as it did behave.     

府际关系、关系产权与经济效率——一个解释我国全要素生产率演进的新视角

本文引入关系产权中介变量,从理论层面分析了府际关系演变对经济效率的影响,并利用1978—2008年间省际面板数据和随机前沿函数模型,对理论推演的假说进行了实证检验。本文主要结论:①改革开放以来,随着府际关系不断演进和市场化程度逐步提高,企业关系产权的广度在缩小,宏观经济效率在提高。②随着纵向府际关系从分灶吃饭过渡到分税制、区域统筹,横向府际关系从地方保护主义盛行走向招商引资竞争、产业协作,因企业关系产权随之一同演变,在剔除产业结构、投入因素的影响之后,GDP分别提高了9.7%和12.7%。实施分税制改革和统筹区域发展政策,确实有助于提升经济发展效率。③我国地区之间的TFP差距在时序上并非均衡演进。20世纪90年代中期之后,伴随着企业关系产权广度缩小、资源配置市场化程度加大,东部与中西部之间的TFP差距逐渐形成并扩大,由此导致的GDP差距约占GDP总额的3—4成。     

Market failures and the additionality effects of public support to private R&D: Theory and empirical implications

We extend the theoretical basis of the empirical literature on the effects of R&D subsidies by providing an estimable model of strategic interaction among subsidy applicants, and public and private sector R&D financiers. Our model incorporates fixed R&D cost and a cost of external finance. We derive the optimal support rule. At the intensive (extensive) margin the costs of external funding reduce (increase) the optimal subsidy rate. We also establish necessary and sufficient conditions for the existence of additionality. It turns out that additionality at the intensive margin is less likely with higher spillovers. Our results suggest that the relationship between additionality and welfare may not be straightforward.     

Producing biodiesel from soybeans in Zambia: An economic analysis

Facing a huge fiscal burden due to imports of its entire petroleum demand in the face of ample supply of agricultural land to produce biofuels, Zambia has recently introduced a biofuel mandate. However, a number of questions, particularly those related to the economics of biofuels, have not been fully investigated yet. Using an empirical model, this study analyzes the economics of meeting the biodiesel mandate using soybean oil. The study finds that meeting the biodiesel mandate would reduce social welfare, mainly because of the welfare loss to fuel consumers and net reduction in foreign exchange earnings due to soybean oil imports. However, if Zambia increases its domestic soybean supply, as well as oil yield, soybean-based biodiesel is likely to be welfare-beneficial. The country’s welfare is found to be the highest under expanded soybean production and its domestic processing but with no biodiesel mandate.     

Evolutionary perspectives on strategy

We advocate studying strategic management from an evolutionary perspective: using dynamic, path-dependent models that allow for possibly random variation and selection within and among organizations. We argue that this perspective directs our attention to some of the most interesting problems in strategic management. The papers in this special issue are summarized, along with some of their implications for the advancement of an evolutionary perspective on strategy. Collectively, the papers draw on various theoretical rationales, illustrating how an evolutionary perspective can help to integrate the diverse and otherwise separate theoretical traditions that meet within the field of strategic management.