Retaining telecommunication services when universal service is defined by functionality: Japanese consumers' willingness-to-pay

This study uses contingent valuation to measure Japanese customers' willingness-to-pay to maintain combinations of five telecommunication services that are considered substitutes if universal service is defined on the basis of functionality. The analysis revealed the following results. First, consumers are more willing to pay to retain voice communication services than data transmission services. Second, customers accept Internet Protocol telephony as a substitute for plain old telephone service (POTS) as a universal service, and they are willing to pay much more than Japan's current Universal Service Fund charge. Third, even when mobile phone service (MOB) is available, consumers will pay to retain fixed-line voice services. Finally, consumers have an equal desire to keep fiber-to-the-home (FTTH) and fixed-line voice services, but it is less than the demand for MOB. Thus, under the present definition of POTS as a universal service, FTTH could be considered as a basic telecommunication service.     

A credit market in early stages of economic development

Even if the relatively rich and the poor are initially caught in a poverty trap, the relatively rich can escape poverty by receiving payments from the poor. Further accumulation of wealth by the rich allows the poor to escape poverty.     

Adoption and policy implications of Japan’s new corporate governance practices after the reform

In this paper we explain the process and policy implications of Japanese firms’ adoption of recently reformed corporate governance practices. We use a selective adaptation framework in doing so. We present some qualitative predictions about the possible outcome of their adoption process. One advantage of our approach is that we can describe various aspects of the evolutionary process of Japan’s corporate governance reform as a system in a consistent manner, rather than as independent pieces. Our predictions provide policy implications and are empirically testable. Japan’s post-bubble corporate governance reform has been extensive and involves the enactment and revisions of many relevant laws and affected institutions. Japan’s aim has been to install US-like practices (the de facto global standard), with these practices replacing the now tarnished bank-centered practices, and to facilitate Japanese industry in regaining global competitiveness. However, we show that Japanese businesses’ adoption of US practices has been selective and efficiency and other policy implications of such behavior are potentially dysfunctional.     

Price dynamics, retail chains and inflation measurement

We use a large scanner price dataset to study grocery price dynamics. Previous analyses based on store scanner data emphasize differences in price dynamics across products. However, we also document large differences in price movements across different grocery store chains. A variance decomposition indicates that characteristics at the level of the chains (as opposed to individual stores) explain a large fraction of the total variation in price dynamics. Thus, retailer characteristics are found to be crucial determinants of heterogeneity in pricing dynamics, in addition to product characteristics. We empirically explore how the price dynamics we document affect price index measures.     

Price versus quantity in a duopoly with network externalities under active and passive expectations

This study examines the endogenous choice of strategic contracts in a duopoly composed of firms that produce goods with network externalities with some sort of compatibility. We adopt two types of expectations—active and passive—as consumers' expectations for each firm's equilibrium market share. In addition, we take into account the managerial case and entrepreneurial case with and without separation between ownership and management, as firms' internal structures. We derive the properties in the Cournot competition and the Bertrand competition as the equilibrium market structures under both passive and active expectations under imperfectly compatibility of networks.     

An Axiomatic Foundation of the Multiplicative Human Development Index

The aggregation formula in the Human Development Index (HDI) was changed to a geometric mean in 2010. In this paper, we search for a theoretical justification for employing this new HDI formula. First, we find a maximal class of index functions, what we call quasi‐geometric means, that satisfy symmetry for the characteristics, normalization, and separability. Second, we show that power means are the only quasi‐geometric means satisfying homogeneity. Finally, the new HDI is the only power mean satisfying minimal lower boundedness, which is a local complementability axiom proposed by Herrero et al. (2010).     

Retail power market competition with endogenous entry decision—An auction data analysis

Deregulation in the electric power industry has been aimed at promoting competition and thereby enhancing the industry’s efficiency. We use the auction data of public power procurements to study the impact of the reform on the retail power market in Japan. We quantify this impact by measuring a decline in power charges, controlling for the endogeneity bias caused by the entrants’ bid-submission decisions. Our results suggest that power charges would decline by about 0.48 yen/kW h on average when two or more providers bid at an auction.     

Financial crises,bank risk exposure and government financial policy

A macroeconomic model with financial intermediation is developed in which the intermediaries (banks) can issue outside equity as well as short term debt. This makes bank risk exposure an endogenous choice. The goal is to have a model that can not only capture a crisis when banks are highly vulnerable to risk, but can also account for why banks adopt such a risky balance sheet in the first place. We use the model to assess quantitatively how perceptions of fundamental risk and of government credit policy in a crisis affect the vulnerability of the financial system ex ante. We also study the effects of macro-prudential policies designed to offset the incentives for risk-taking.     

A contingent claim analysis of closed-end fund premia

We estimate contingent claims that replicate monthly net asset value (NAV) payoffs from closed-end funds. A claim's theoretical value is obtained by martingale pricing methods. The resulting net present value (NPVS) sequence is the theoretical premia sequence that is compared to the actual market premia sequence. The theoretical premia, like actual premia, are uncorrelated with NAV returns and are positively autocorrelated due to autocorrelation in the pricing information. However, there is poor correspondence between the theoretical and actual premia that seems due to the market's systematic errors in estimating a fund's management value. Risky arbitrage may be available to insiders.