Technical Note: Formulas for Perpetual Gradients

Virtually all engineering economy texts include the formula to find the present worth of a perpetual annuity, but only two seem to include the similar formula for a perpetual arithmetic gradient. This note adds a new formula for the present worth of a perpetual geometric gradient. Though no cash flow stream really lasts forever, there are many infrastructure projects whose lives are long enough to be economically “forever.” In addition, many endowment problems would be more realistic if they assumed a perpetual geometric gradient. Moreover, the simplicity of the formula may help practitioners and students develop a feel for the economics of long-lived gradients.     

Production Theory: Accounting for Firm Heterogeneity and Technical Change

The paper presents a new framework to assess firm level heterogeneity and to study the rate and direction of technical change. Building on the analysis of revealed short‐run production functions by Hildenbrand ( 1981 ), we propose the (normalized) volume of the zonotope composed by vectors‐firms as indicator of inter‐firm heterogeneity. Moreover, the angles that the zonotope's main diagonal form with the axes provide a measure of the rates and directions of productivity change. The proposed framework also accounts for n‐inputs and m‐outputs and, crucially, the measures of heterogeneity and technical change do not require many of the standard assumptions from production theory.     

有界灰数空间的完备性可分性与局部紧性

本文首先指出有界灰数对于四则运算不具备封闭性。证明了有界灰数所构成的空间(G(?),D)是可分的,局部紧的完备度量空间。     

A Causal Model of the Impact of Skills, Synergy, and Design Sensitivity on New Product Performance

Notwithstanding the best efforts of outstanding managers, project team members, researchers, and consultants, no product development plan can guarantee success. Every new products organization will experience its fair share of failures, but a firm can take steps to ensure that its failures do not outweigh its successes. By benchmarking the competition, a firm can gain insight into best practices–the factors that lead most directly to new product success. To help identify these best practices, X. Michael Song, William E. Souder, and Barbara Dyer develop and test a causal model of the relationships among the key variables leading to new product performance. The proposed model identifies five factors that lead to marketing and technical proficiency: process skills, project management skills, alignment of skills with needs, team skills, and design sensitivity. According to the model, marketing and technical proficiency directly determine product quality, and ultimately lead to new product success or failure. The causal model was tested using information on 65 completed projects–34 successes and 31 failures–from 17 large, multi-divisional Japanese firms. The study participants develop, manufacture, and market high-technology consumer and industrial products. These firms judged the success or failure of the projects in this study by using seven criteria: return on investment, profit, market share, sales, opportunities for technical leadership, market dominance, and customer satisfaction. These firms generally assigned the greatest importance to customer satisfaction, opportunity creation, and long-term growth. For the most part, the responses from these firms support the relationships presented in the causal model. According to the respondents, marketing proficiency and product quality have a strong, positive influence on their new product performance, as do process skills, project management skills, and alignment of skills and needs. The responses highlight the importance to these firms of responsiveness to customer wants and needs, as well as ensuring a close fit between project needs and the firm's skills in marketing, R&D, engineering, and manufacturing. Somewhat surprisingly, the responses do not support the model's suggested relationships between skills/needs alignment and technical proficiency or between technical proficiency and product quality.     

A combinatorial auction to sell TV broadcasting rights in league sports

The centralized sale of TV broadcasting rights in league sports constitutes a cartel which in many European countries is allowed only if it complies with certain conditions set by competition authorities. Two of the most important conditions are: i) partial unbundling, i.e. the rights must be unbundled into several separate packages; and ii) the no-single-buyer rule, i.e. the packages must be sold to different broadcasters. This article shows how a combinatorial auction can be employed to sell broadcasting rights allocating them endogenously based on the broadcasters’ bids and, thus, without requiring the seller to pre-determine the packages of such rights. This feature can address various competition policy issues, including facilitating market entry and preventing coordination among bidders. Also, a combinatorial auction has the potential to achieve higher levels of allocative efficiency and higher revenue levels compared to auctions with pre-determined packages of broadcasting rights.     

Energy use in convenience foods : Tracing inputs from primary through final product

Ready-to-heat or ready-to-eat foods do not necessarily take more energy than similar foods prepared at home. Less waste and more efficient ovens can give the processor an energy advantage. Tracing these foods from fishing or agriculture through home use shows that a major energy saving could be made by substituting vegetable proteins for animal or fish proteins. Reduced use of conventional home ovens and freezers would also make a contribution to energy conservation. Metal packages, grocery shopping and energy to make processing machinery add significantly to the total energy input only in certain circumstances.     

Pricing the razor: A note on two-part tariffs

The “razor-and-blades” pricing strategy involves setting a low price for a durable basic product (razors) and a high price for a complementary consumable (blades). In a timeless model, Oi (1971) showed that if consumers' demand curves differ and do not cross and unit costs are constant, a monopolist should always price blades above cost. This note studies the optimal razor price. With a uniform distribution of parallel linear demand curves it is never optimal to sell the razor below cost, while with two types of consumers and non-crossing linear demands it is optimal to do so for some parameter values.     

A Simple Method for Calculating the imin Rate for an Investment Project

The i_min rate of an investment project is the smallest rate such that all the intermediate balances of the project have the same sign or ore null. This rate is mainly used to determine whether an investment project is a pure or a mixed investment project. In this technical note we point out that as i_min is the greatest internal rate of return among the ones of pure truncated projects and since no eventual mixed truncated project can have a root with a value greater or equal to i_min , we then can easily obtain i_min by appropriate use of standard internal rate of return computing routines.     

Obtaining global market access for GMPCS

Demand for wireless telephony is huge and the potential for GMPCS, in particular, is widely recognized. However, the most serious problems to the introduction of GMPCS are not technical, nor financial, but are rather the political and regulatory barriers—notably fear of bypass and security concerns. Inmarsat does not believe that there should be any a priori limit to the number of GMPCS operators offering satellite capacity to national service providers. The market can best determine which will be successful. However, before countries open their markets, they will need to be convinced that it is in their interest to do so.     

Bias in Appraisal-Based Returns

This note quantifies and extends Giliberto's [AREUEA Journal 16(1)] analysis of bias in appraisal-based returns. An important clarification and distinction is made, defining two different perspectives from which one may view appraisal return bias. The Giliberto analysis addressed bias in the holding period return only. Here, after reviewing and extending Giliberto's analysis in this regard, bias is considered from another perspective, that of the arithmetic mean of a time-series of appraisal-based returns. The two types of bias are likely to be of opposite sign, thereby possibly offsetting one another, so that we may often observe very little bias in the means of empirical appraisal-based returns time-series.     

Succession planning vs. agency theory: a test of Harris and Helfat's interpretation of plurality announcement market returns

In this note we respond to Harris and Helfat's (1998) reinterpretation of the results in Worrell, Nemec, and Davidson (1997) . Harris and Helfat argued that the negative stock market response associated with plurality announcements could be the result of inadequate corporate succession planning rather than with the agency cost explanation. Our results, here, show that duality and plurality announcements do not hurt shareholder wealth as long as there is an heir apparent and, therefore, are more consistent with the succession planning explanation than with agency theory. Copyright © 2001 John Wiley & Sons, Ltd.     

The extent of single firm dominance in U.S. manufacturing industries: Reply

Myupper bound leading firm share estimates are not affected by Daskin's criticisms. In particular, my central conclusion that dominant firms are rare in U.S. manufacturing industries is unchanged. However, his criticisms of mylower bound estimates are generally correct; better ways can be found to compute these. In addition, I made a computational error which prevented him from replicating my previously reported lower bound results. Fortunately, the results are relatively insensitive to the computational algorithm. As demonstrated above, there is little quantitative impact and less qualitative impact.⁵ His assertion that his criticisms raiseserious questions about validity of my empirical work is incorrect.     

The Economics of Retailing Formats: Competition Versus Bargaining

We set up a merger game between retailing stores to study the incentives of independent stores to form a big store when some consumers have preferences for one‐stop shopping. Such one‐stop shopping creates complementarity between products, leading in turn to lower prices after a big store is formed but may also lead to an improvement in the bargaining position vis‐à‐vis producers through the creation of an inside option that small stores do not have. We find that big stores will not be formed when the stores' ex ante bargaining power vis‐à‐vis producers is high. Otherwise, an asymmetric situation occurs with only one big store created when one‐stop shoppers are abundant.     

The impact of technical consultants on the quality of their clients' products: Evidence from the Bordeaux wine industry

Research summary : Recent research rooted in the resource‐based view of the firm suggests that resources are more likely to create value if they are effectively managed. An underlying assumption of the literature is that firms manage their resources on their own. However, many firms hire consultants to help them do so. In this study, I develop and test hypotheses regarding the impact of technical consultants on the quality of their clients' products. Using data from the Bordeaux wine industry, I find evidence that the use of technical consultants has a positive impact on relative product quality and a negative impact on the extremeness of relative product quality. Moreover, the positive impact of technical consultants on relative product quality is stronger at lower levels of relative resource quality. Managerial summary : Findings from a study in the Bordeaux wine industry indicate that the decision to hire consultants should depend on a firm's strategy. If a firm wants to improve its performance, it should hire consultants. Indeed, the “best practices” of technical consultants are generally more valuable than internally generated knowledge. If a firm wants to achieve outstanding performance, hiring consultants may not be the right decision. Because the “best practices” of technical consultants have more certain performance implications than internally generated knowledge, they decrease the likelihood of extremely low performance. However, their lack of uniqueness also decreases the likelihood of extremely high performance. Finally, the decision to hire consultants should depend on the quality of a firm's resources. Firms with low‐quality resources tend to benefit more from the “best practices” of technical consultants. Copyright © 2016 John Wiley & Sons, Ltd.     

零碳建筑技术路线研究

为实现零碳建筑的零碳排放和超低能耗目标,提出了零碳建筑的技术路线。利用负荷能耗指标作为技术评价标准,以保定市某幼儿园实际工程为例,通过DeST软件模拟,分析了本项目全年负荷变化,冷热负荷指标以及负荷能耗指标,然后通过正交试验与极差分析得出不同影响因素对建筑热负荷的影响程度。结果表明,零碳幼儿园全年累计热负荷指标为61.60 kW·h/m~2,全年累计冷负荷指标为75.99 kW·h/m~2,采暖季热负荷指标为18.36 W/m~2,空调季冷负荷指标为25.76 W/m~2;不同影响因素对建筑热负荷的影响程度从大到小依次为外墙传热系数>人员密度>设备功率>屋顶传热系数,对建筑冷负荷影响程度从大到小依次为人员密度>设备功率>外墙传热系数>屋顶传热系数。零碳建筑技术路线的运用对于降低建筑能耗、实现建筑零碳目标具有重要意义。     

区域工业企业R&D投入产出绩效的DEA评价及分析

为解释不同区域工业企业RD活动投入规模、结构和绩效之间的关系,找出区域工业企业RD活动的差异和特点,利用数据包络分析方法(DEA)的C2 R模型和BC2模型,构建了由2个投入指标和3个产出指标构成的区域工业企业RD投入产出绩效评价指标体系,运用详实的统计数据对2014年和2010年中国部分省市区工业企业的RD投入产出绩效进行了DEA测度及分析。结果表明,中国区域工业企业RD投入产出绩效的技术效率小于规模效率,各省市区工业企业RD投入产出绩效的技术有效性与规模有效性呈现很强的正相关关系。各省市区要根据自身的经济、技术基础,因地制宜地制定提高其工业企业RD投入产出绩效的有效对策。     

Indicators of technical intensity and international competitiveness: a case for supplementing quantitative data with qualitative studies in research*

The author provides evidence, derived from his own published research, to justify his claim that all the commonly used indicators of technical intensity of innovation suffer from severe limitations. The paper consists of a critique, as indicators of innovativeness, of increase of value-to-weight ratios of finished products, R&D expenditure, the number of QSEs employed, patent and licensing activity and the rate and direction of the flow of technology. He shows that technical change can increase value added-to-weight of a product but that differences in the ratio do not necessarily reflect different technical performance; that in-house formal R&D is not the only way in which technical change is brought about in a firm; that one must know not only how many QSEs are employed by a firm but also how they are distributed over the firm's operations; that patent and licensing information need very skilled interpretation to produce valid conclusions and that outward flow of technology, though perhaps a necessary criterion of innovativeness is not a sufficient one. The paper concludes with some suggestions for an alternative approach, the key to which is to combine quantitative data derived from the above indicators with qualitative in-depth studies of how innovation actually occurs in the economic sector under study.     

ICT policy for the “socialist new countryside”—A case study of rural informatization in Guangdong,China

Providing Information and Communication Technologies (ICT) to rural areas often involves a complex interplay among economic development, bureaucratic systems, technical training and support. Nowhere are these dynamics more pronounced than in China, where a wide range of economic and institutional factors characterize the highly uneven state of informatization² throughout the country.     

Wanted — wise policy not restrictive regulation

This article begins by restating some familiar tenets of information processing and telecommunications theory: that our emerging post-industrial economy is becoming increasingly service-oriented with a corresponding emphasis being placed upon information-intensive activities;¹ that technical improvements in telecommunications systems are forthcoming at an almost exponential rate of increase;² that a wide array of developed or developing telecommunications systems (including computer-based word processing, cable/satellite TV, interactive video, videotext, etc) are being considered for possible application in varied settings (ranging from the home to the office to the delivery of governmental services).