The Context-Specific Nature of Competence and Corporate Development

Based on an analysis of knowledge-intensive innovations, this paper argues that much of the knowledge that provides distinctive competence for sustained competitive advantage is context specific. The development of this competence is a path-dependent process of numerous learning events in particular situations and practices. Because competence is embedded in the specific context in which it was created, it is very difficult to imitate and can become the basis for sustained competitive advantage. This represents an important opportunity for firms who have grown up in a developing country and learned how to compete successfully there. Firms from developing countries who run in packs to build and expand on their context-specific competencies can be more successful in expanding into other developing countries with similar national political institutional contexts than firms from developed countries who have not acquired this tacit knowledge of local practices.     

Anne Clendinning. Demons of Domesticity: Women and the English Gas Industry, 1889-1939. Burlington, Vt.: Ashgate, 2004. xvii + 352 pp. ISBN 0-7546-0692-9, $109.95 (cloth).

This book examines the role of women, both as employees andas consumers, in the English gas industry in the fifty yearsbetween the 1880s and the eve of the Second World War. By thelate nineteenth century, the gas industry was well establishedthroughout England, using coal as its main raw material andwith the provision of lighting as its main market. The historicalliterature on the     

COULD DEFLATION BE IDEAL?

Slight systematic deflation is ideal in a growing economy. However, adopting negative inflation targeting would not be stable. Instead, we should use trend deflation under price-level targeting.     

The effects of potential land development on agricultural land prices

We conduct a national-scale analysis of the determinants of agricultural land values. The theoretical basis for the study is a spatial city model with stochastic returns to future land development. The empirical model of agricultural land prices is estimated with a cross-section on approximately three thousand counties in the contiguous US. The results provide evidence that option values associated with irreversible and uncertain land development are capitalized into current farmland values. For each county, we decompose the current agricultural land value into components measuring rents from agricultural production and rents from future land development.     

Transitions from home to marriage of young Americans

The paper examines the impact of income on the transitions between home, living independently and first marriage of young Americans. A matching model is outlined, similar to that used in theories of job search, to explain the probability of marriage and living alone. A multiple‐state, multiple‐transition model which allows for correlated heterogeneity on the first and subsequent transitions is estimated. The results show that income has a strong and significant effect. The impact of unobserved heterogeneity is examined in detail. The impact of the young person's earnings on the transitions is explored through simulation. Copyright © 2002 John Wiley & Sons, Ltd.     

Exporters versus importers: LDCs,agricultural trade,and the Uruguay Round

The agricultural trade issue in the Uruguay Round highlights the trend towards fragmentation among LDCs: the fundamental underlying differences between the interests of agricultural exporters and food importers are hard to reconcile. These differences are analysed in the following article.     

A Laboratory Investigation of Multiperson Rationality and Presentation Effects

This paper reports the results of laboratory experiments in which subjects were presented with different two-person decision problems in both their extensive and normal forms. All games generated the same equilibrium outcomes. Our results indicate that the presentation of the decision problem significantly affects the strategy chosen. Surprisingly, these presentation effects were most prominent in the simplest games where differences in presentation would seem most transparent. It appears that subjects are much more likely to use (and fear) incredible threats when the problem is presented as a one-stage rather than as a multistage game. Journal of Economic Literature Classification Numbers: 026,215.     

WHEN IS THE SHORT RATE MARKOVIAN?

We answer this question in the very general context of the n-factor Heath, Jarrow, and Morton model for the evolution of the term structure of interest rates, with nonrandom volatility. the answer is that a constraint is imposed on the behavior of the volatility structure. We explain the importance of this result for the design of efficient numerical algorithms for the valuation of options on the term structure.     

Alpha- and beta-characteristic functions in cooperative non-sidepayment games: An experimental test

This article investigates theories of payoff allocation in cooperative non-sidepayment games, that is, games where players can form coalitions and coordinate strategies but cannot redistribute payoffs via sidepayments. A labotatory experiment was conducted with 4-person, 3-strategy non-sidepayment games. The goal of this experiment was to ascertain which characteristic function, V_α(S) or V_β(S), provides the more accurate basis for payoff predictions from solution concepts. Predictions from each of three solution concepts (core, stable set, imputation set) were computed on the basis of both V_α(S) and V_β(S), making a total of six theories under test. The results showed two basic findings. First, for each of the three solutions, the prediction computed on the basis of V_α(S) was more accurate than the prediction computed from V_α(S). Second, the β-core was the most accurate of the six theories tested. Overall, these results support the view that V_β(S) is superior to V_α(S) as a basis for payoff predictions in cooperative non-sidepayment games.