Market power,price discrimination,and allocative efficiency in intermediate‐goods markets

We consider a monopolistic supplier's optimal choice of two‐part tariff contracts when downstream firms are asymmetric. We find that the optimal discriminatory contracts amplify differences in downstream firms' competitiveness. Firms that are larger—either because they are more efficient or because they sell a superior product—obtain a lower wholesale price than their rivals. This increases allocative efficiency by favoring the more productive firms. In contrast, we show that a ban on price discrimination reduces allocative efficiency and can lead to higher wholesale prices for all firms. As a result, consumer surplus, industry profits, and welfare are lower.     

Credit cycles and macro fundamentals

We use an intensity-based framework to study the relation between macroeconomic fundamentals and cycles in defaults and rating activity. Using Standard and Poor's U.S. corporate rating transition and default data over the period 1980–2005, we directly estimate the default and rating cycle from micro data. We relate this cycle to the business cycle, bank lending conditions, and financial market variables. In line with earlier studies, the macro variables appear to explain part of the default cycle. However, we strongly reject the correct dynamic specification of these models. The problem is solved by adding an unobserved dynamic component to the model, which can be interpreted as an omitted systematic credit risk factor. By accounting for this latent factor, many of the observed macro variables loose their significance. There are a few exceptions, but the economic impact of the observed macro variables for credit risk remains low. We also show that systematic credit risk factors differ over transition types, with risk factors for downgrades being noticeably different from those for upgrades. We conclude that portfolio credit risk models based only on observable systematic risk factors omit one of the strongest determinants of credit risk at the portfolio level. This has obvious consequences for current modeling and risk management practices.     

Status and the demand for visible goods: experimental evidence on conspicuous consumption

Some economists argue that consumption of publicly visible goods is driven by social status. Making a causal inference about this claim is difficult with observational data. We conduct an experiment in which we vary both whether a purchase of a physical product is publicly visible or kept private and whether the income used for purchase is linked to social status or randomly assigned. Making consumption choices visible leads to a large increase in demand when income is linked to status, but not otherwise. We investigate the characteristics that mediate this effect and estimate its impact on welfare.     

Globally correlated nominal fluctuations

Fluctuations in nominal variables—aggregate price levels and nominal interest rates—are documented to be substantially more synchronized across countries at business cycle frequencies than fluctuations in real output. A transparent mechanism accounting for this striking feature of the nominal environment is described and quantitatively evaluated. It is based on the interaction between (small) cross-country spillovers of shocks, Taylor rules, and domestic no-arbitrage conditions. The mechanism is robust to various parameterizations and extensions aligning the model with other important aspects of domestic and international fluctuations. Furthermore, its key features are consistent with cross-country forecasts from Consensus survey.     

Disparities in the financial performance of agricultural entities according to the legal form: the case of Slovakia

Financial management in agricultural enterprises is affected by a range of factors that are not present in other sectors. One of the factors that affect the performance of enterprises is the legal or organizational form of the business. In Slovakia, the specific structure of farms is different from that of almost any other member state of the European Union. The aim of this paper is to evaluate the disparities in the financial performance of agricultural enterprises according to the legal form. We analysed and compared two groups of agricultural entities, agricultural cooperatives and business companies, for the period from 2005 to 2014. Based on an analysis of the differences using mathematical and statistical methods, we can conclude that the legal forms are distinguished in all monitored parameters and our hypothesis on the differences in economic performance of agricultural entities according to legal form was confirmed.     

Selection of a Representative Value Function for Robust Ordinal Regression in Group Decision Making

In this paper, we introduce the concept of a representative value function in a group decision context. We extend recently proposed methods UTA^GMS-GROUP and UTADIS^GMS-GROUP with selection of a compromise and collective preference model which aggregates preferences of several decision makers (DMs) and represents all instances of preference models compatible with preference information elicited from DMs. The representative value function is built on results of robust ordinal regression, so its representativeness can be interpreted in terms of robustness concern. We propose a few procedures designed for multiple criteria ranking, choice, and sorting problems. The use of these procedures is conditioned by both satisfying different degrees of consistency of the preference information provided by all DMs, as well as by some properties of particular decision making situations. The representative value function is intended to help the DMs to understand the robust results, and to provide them with a compromise result in case of conflict between the DMs.     

The virtual is reality! On physical and virtual space in software firms’ knowledge formation

ABSTRACT

To understand how knowledge is created and exchanged, it is necessary to unwrap the role played by the physical and virtual spaces. The extant research offers interesting findings when it comes to the relationships among regional, institutional and organizational characteristics, innovation and firms’ abilities to link up to global knowledge sources. A focus on the role of informal and low-cost mechanisms, both regional and global, has extended our understanding of their role in knowledge formation. However, the physical space has dominated this literature to the detriment of the virtual space. The inclusion of the virtual space, both as an interaction space and as a different and complementary dimension, makes it possible to gain new insights into knowledge formation in a digitalizing world. Based on in-depth interviews with small- and medium-sized software companies in two urban agglomerations in Norway and Sweden, this paper explores the use of physical and virtual spaces. The findings show that these spaces interact and mutually influence each other. The world is not ‘flattening’ due to ongoing digitalization; moreover, urban agglomerations are still important places in which these spaces are optimized and unified.     

Resource Allocation in Higher Education in The Context of New Public Management

Abstract

The public administration framework New Public Management (NPM) has been applied to higher education systems in many western countries. The literature on these reforms reports on some positive effects but many critical voices can also be found. Even though NPM as a narrative unifies principles and measures under one roof, a detailed analysis shows that NPM principles fit differently for different tasks. Using a contingency approach, we show that, within the NPM narrative, two different higher education funding approaches exist, namely high-tech versus high-touch. Our study confirms the theoretical proposition that high-touch approaches match better with higher education domains. The use of contingency theory to classify NPM measures thus might be a promising way to further advance NPM theory and its practical application to topics as controversial as academic funding.     

Risikomanagement im After Sales Business

Zusammenfassung  Das After Sales Business ist in vielen Unternehmen sehr profitabel. Wer mit intelligenten Service- und Instandhaltungsangeboten Kunden binden kann, steigert Umsatz und Gewinn auch dann, wenn das eigentliche Produktgesch?ft schw?chelt. Dass im After Sales auch Risiken liegen, wird dabei h?ufig untersch?tzt oder nicht wahrgenommen. Systematisches Risikomanagement und gezielte Innovation schaffen Transparenz und geben neue Impulse. Dipl. Ing. ETH Cornelius Niemeyer Wissenschaftlicher Mitarbeiter am Lehrstuhl für Technologie- und Innovationsmanagement der ETH Zürich Prof. Dr. Roman Boutellier Professor für Technologie- und Innovationsmanagement am Departement für Management, Technologie und ?konomie (D-MTEC) der ETH Zürich     

Öffentliches und Geheimes

In the second half of 2009, the entire media agenda in Germany was dominated by the swine flu, next to the German Federal Parliament elections. Criticism was voiced in the media against the pharmaceutical industry for lobbying the nationwide swine flu vaccination, which was widely considered nothing but a product of the industry’s lobbying power. In order to avoid the usual interviews with lobbyists, we attempted to apply a new methodological framework approach in analysing lobbying processes and key stakeholders in the public sphere—and outside. Crucial to the diversified approach, which involves quantitative content analysis of media coverage and press releases, are interviews with journalists, lobbyists’ network analysis and internet research on biographies. Although a conspiracy could not be conclusively proven, the results do indicate associations that validate the criticism of the industry’s lobbying activities.