Empirical Evidence on the Success of R&;D Cooperation—Happy Together?

In this paper we analyse the effect of past R&D cooperation on current firms’ innovation performance. Success measures are: sales of innovative products, distinguishing between products new to the firm and new to the market, and cost reductions due to innovative processes. Particular attention is paid to the impact of different cooperation partners. The analysis rests on firm-level data of the annual German innovation survey. We find that R&D cooperation with competitors leads to greater cost reductions that are attributable to innovative processes. R&D cooperation with research institutes has a positive influence on a firm’s economic success with market novelties.      

Profit maximization mitigates competition?

Summary. We consider oligopolistic markets in which the notion of shareholders’utility is well-defined and compare the Bertrand-Nash equilibria in case of utility maximization with those under the usual profit maximization hypothesis. Our main result states that profit maximization leads to less price competition than utility maximization. Since profit maximization tends to raise prices, it may be regarded as beneficial for the owners as a whole. Moreover, if profit maximization is a good proxy for utility maximization, then there is no need for a general equilibrium analysis that takes the distribution of profits among consumers fully into account and partial equilibrium analysis suffices.     

Coherent hedging in incomplete markets

In incomplete financial markets, not every contingent claim can be perfectly replicated by a self-financing strategy. In this paper, we minimize the risk that the value of the hedging portfolio falls below the payoff of the claim at time T. We use a coherent risk measure, introduced by Artzner et al., to measure the risk of the shortfall. The dynamic optimization problem of finding a self-financing strategy that minimizes the coherent risk of the shortfall can be split into a static optimization problem and a representation problem. We will deduce necessary and sufficient optimality conditions for the static problem using convex duality methods. The solution of the static optimization problem turns out to be a randomized test with a typical 0–1 structure. Our results improve those obtained by Nakano. The optimal hedging strategy consists of superhedging a modified claim that is the product of the original payoff and the solution to the static problem.     

Democracies cooperate more: even where it threatens to bite?

Estimating two-step selection models, we find that more democratic governments are more likely to conclude preferential trade agreements (PTAs) and to agree to stricter investment provisions related to pre-establishment national treatment and investor–state dispute settlement in PTAs. This is surprising when considering the potentially high costs of litigation.     

Discursive methods in environmental decision making

Sustainable practices can be initiated or encouraged by governmental regulation and economic incentives. A major element to promote sustainability will be, however, the exploration and organization of discursive processes between and among different actors. Many analysts agree that sustainability will remain a highly desirable, but unrealistic option for development, if people do not feel a degree of ownership and identity with the goal of sustainability for their own life and a preference for its policy implications. Inviting the public to be part of the decision-making process from the beginning improves the likelihood that the resulting decision will be accepted. Participatory processes are needed that combine technical expertise, rational decision making, and public values and preferences. To accomplish such an integration, negotiation, mediation, and arbitration are potential solutions. Many different procedures and forms of mediation have been proposed and some tested. One major attempt of the authors has been the organization of round-table discourses among a wide variety of stakeholders to develop environmental policy goals or to design local and regional waste management plans. These discourses are based on the assumption that each participant can contribute to the common good if the setting of the discourse encourages the generation of shared values and discourages strategic reasoning. The emphasis of the paper will be on the model of cooperative discourse and first applications in Germany, Switzerland and the United States. © 1997 John Wiley & Sons, Ltd and ERP Environment.