Interpretive structural modeling—A useful tool for technology assessment?

Interpretive Structural Modeling (ISM) is a computer based technique for helping small groups develop graphical representations of complex systems. In this paper, the rationale for the use of Interpretative Structural Modeling in activities such as technology assessment is developed and the basic concepts underlying the technique are explored. Several applications of ISM are described and from these experiences some observations are made about the nature and effectiveness of the ISM process and product. ISM was found to provide its users with a systematic and comprehensive method for integrating group judgments in the development of “first-cut‘ structural models. At the same time, however, the technique was found to be relatively inflexible and may, in some instances, inhibit group processes. Possible directions for the development of less rigid methods are suggested.     

Climate Change Taxes and Energy Efficiency in Japan

In 2003 Japan proposed a Climate Change Tax to reduce its CO₂ emissions to the level required by the Kyoto Protocol. If implemented, the tax would be levied on fossil fuel use and the revenue distributed to encourage the purchase of energy efficient equipment. Analysis using the MIT Emissions Prediction and Policy Analysis (EPPA) model shows that this policy is unlikely to bring Japan into compliance with its Kyoto target unless the subsidy encourages improvement in energy intensity well beyond Japan’s recent historical experience. Similar demand-management programs in the US, where there has been extensive experience, have not been nearly as effective as they would need to be to achieve energy efficiency goals of the proposal. The Tax proposal also calls for limits on international emission trading. We find that this limit substantially affects costs of compliance. The welfare loss with full emissions trading is 1/6 that when Japan meets its target though domestic actions only, the carbon price is lower, and there is a smaller loss of energy-intensive exports. Japan can achieve substantial savings from emissions trading even under cases where, for example, the full amount of the Russian allowance is not available in international markets.     

Price leadership in a duopoly with capacity constraints and product differentiation

This paper analyzes Stackelberg price leadership in a duopoly in which firms are capacity constrained and products are imperfect substitutes. Assuming symmetric substitutes, linear demand, and efficient rationing, we characterize the equilibria with an exogenously specified leader. Using the equilibrium profits derived from these games, we argue that over certain ranges of asymmetric capacities an endogenous price leader will emerge. When endogenous leadership does arise, it is the large capacity firm which is the leader. We thus provide a game theoretic model of dominant firm price leadership.Dave Furth's research has been undertaken as a part of the project Competition and Cooperation. Dan Kovenock has benefited from financial support from Erasmus University Rotterdam, the Krannert School of Management, and the Jay N. Ross Young Faculty Research Fellowship. We are grateful to Tom Faith for valuable research assistance. We have benefited from the comments of the editor, two anonymous referees, and participants at the European meetings of the Econometric Society in September 1989 and the North American Winter Meetings of the Econometric Society in December 1989.     

Some characteristics of adopters of a major innovation in the computer field and its potential use in marketing

The computer industry is changing dramatically thanks to new technologies that facilitate departure from the lock-in strategies pursued by the long-term industry leaders. New, highly competent competitors have entered the market with the resulting lower profit margins. Innovations in hardware and software are continuously introduced, and a rapid, successful introduction in the market is essential to gain a foothold before new contenders erode the opportunity. The selection of the most likely buyers is therefore important to direct the marketing efforts optimally. An international and a regional field study were carried out to identify the profile of organizations and individuals most likely to adopt an innovation in the computer field. These findings coupled with data base marketing techniques seem promising for a higher success rate in reaching the early adopters (lead users), making it possible to establish a first-mover advantage. The suggested approach can be used in other industries in rapid change.     

The new product development process for commercial financial services

The attention of senior executives in the financial services industry is increasingly being focused on how well the new product development process is working within their institutions. This focus on product development results from the combined pressures of increased competition, a rapidly changing marketplace, new technology, and new and pending legislative changes. All of these factors underscore the need to be able to design, develop, and launch, in a timely fashion, new products that are winners. A strong new product initiative is now considered an essential weapon in both offensive and defensive initiatives.To achieve their goals, executives are increasingly reexamining their organizations' approach to development and launch of new products to determine if the process can be redesigned for faster reaction time, better utilization of limited resources and improved success rates. This article examines the new product development process within the setting of corporate/commercial financial services. Its conclusions provide executives with some broad principles for their own new product processes to help them in their quest for competitive advantage through winning new products.     

Bargaining Strength and Property Class in Office Markets

This paper examines the influence of bargaining power and property class on the prices of heterogeneous goods. Specifically, it explores the impact of buyer and seller characteristics on the transaction prices of office properties. The empirical model is based on the work of Harding, Rosenthal, and Sirmans (2003), which developed a method to distinguish between the impact of buyer and seller attributes on bargaining power and the choice of otherwise unidentified price effects (i.e., property class) in the context of hedonic price models. The data set contains information on transaction prices of office properties in Cook, DuPage, and Lake Counties, Illinois from 1995 to 1997. The results reveal systematic differences in bargaining power and property class for certain groups of buyers and sellers contained within the sample.