R&D and market structure: The impact of measurement and aggregation problems

Estimates on the relationship between concentration and R&D effort are shown to be sensitive to problems of aggregation and of adequate measurement of R&D in small firms. While estimates from the official R&D survey of the Netherlands show a highly significant linear relationship between concentration and R&D, comparable estimates from our R&D data base prove it to be insignificant. However, at a finer level of disaggregation and when our sample is split into sectors with low and high technological opportunities, we discover evidence of a quadratic relationship in the latter and evidence of a weak linear relationship in the former.     

Alternative algorithms for the macRae OLCV strategy

Using dynamic programming MacRae obtained a linear feedback law for her open loop constrained variance (OLCV) strategy. To compute the control law requires solving a two point boundary value problem. The dynamic programming formulation does not admit gradient related algorithms. This paper presents an alternative augmented Lagrangian formulation which can be solved as a deterministic constrained optimization problem. The new approach is superior because it admits gradient related algorithms plus all the algorithms which could be employed using the original approach. Three examples demonstrate the superiority of the new approach.     

Book reviews

Ohne Zusammenfassung     

Informational society

The coming technology of automation, communications, and information processing, contributing to a new “social nervous system”, is discussed. The basic assumptions are that in the future, organisations will have no physical location and that man's primary activities will not be traditional work. The article suggests what this would mean for communities, economic organisations, government and the individual, and proposes a utopian institutional structure based on the stated technological assumptions.     

Explicit instrument versus targeting rules in the backward-looking model

In the backward-looking model, an explicit instrument rule is almost as efficient as a target rule. An explicit instrument rule leads to a more stable real rate of interest and hence an output stabilization bias compared to the target rule.     

Escalating penalties: a supergame approach

The paper provides an economic rationale for punishing repeat offenders with increasing sanctions. We analyze the optimal intertemporal punishment scheme within a supergame framework, in which the legal authority is assumed to minimize the social costs of punishment under the constraint of keeping delinquency at an exogenously given maximal tolerable level.