Price and quality competition with quality positions

In this study, we investigate price and quality decisions in a duopoly in the presence of firms’ quality positions , which are determined by the quality levels of their existing core products. Into a standard model of vertical differentiation, we incorporate a “repositioning cost” that is proportional to the quality differences between firms’ current and new products. By varying the levels of quality positions, we analyze the impact of this cost on the equilibrium outcomes. Our results show that the presence of repositioning costs restricts firms’ abilities to improve profitability and differentiate themselves vertically. As a result, a high‐positioned firm does not necessarily have a competitive advantage over a low‐positioned firm, even if the former offers a superior new product in equilibrium. In addition, if a low‐positioned firm is significantly cost‐efficient compared with its rival with regard to repositioning, then that firm can earn higher profits than those of a high‐positioned firm by strategically offering its low‐end product. These results contrast sharply with those based on the standard vertical differentiation model.     

Proposing effective strategies for meeting an environmental regulation with attainable technology improvement targets

The Japanese government will adopt the CAFE standard after 2020. By using a “modified” slacks-based measure (SBM) model, this study analyzed the technical efficiency of 113 gasoline vehicle models (GVs) and 54 hybrid vehicle models (HVs) sold by Japanese manufacturers in 2016. We also estimated attainable fuel efficiency of specific vehicle models that can be further improved referring to the nearest point on the best practice frontier. The improved CAFE values and standards of the nine automobile manufacturers were calculated. The technology gap from the vehicle technology frontier was more noticeable among gasoline vehicles than among hybrids. Moreover, most automobile manufacturers can achieve the CAFE standard through an effective achievement strategy based on best practice technologies, whereas the others will not achieve the CAFE standard even given a rapid technology innovation beyond the best practice frontiers for GVs and HVs.     

Dynamic analysis of a disequilibrium macroeconomic model with dual labor markets

We extend the general disequilibrium model of Malinvaud (1980) by using dual labor market theory. By considering two tiers of workers, we find that while the duality of the labor market expands an equilibrium regime in the short term, it does not always keep an equilibrium in the medium term. In the medium term, the business cycle converges toward a disequilibrium regime unless the goods market is potentially in equilibrium. Employment and wages at the steady state are affected by the size of the government expenditure, and the stability of wage bargaining is only a sufficient condition of the local stability of our dynamic system. Therefore, involuntary unemployment can be remedied only when goods demand is sufficiently large.     

Effects of Monitoring Costs on Employment Adjustment and Wage Profiles

I consider the effects of monitoring costs on the wage profile and employment adjustment of older white-collar workers under asymmetric information on workers' efforts towards skill acquisition. A firm has two options to encourage employees to acquire skills: delayed compensation (an upward-sloping wage profile), and monitoring. I show that the high monitoring costs common in white-collar jobs result in a more upward-sloping wage profile and fewer dismissals under a larger "hostage repayment", which is the difference between the wage payment and productivity of older employees.
JEL Classification Numbers: J31, J41.     

Adventure tourist destination choice in Tanzania

It is said an adventure is an experience and experience is a part of expectations. Yet as adventure tourists expect unique experiences, certain ingredients of services (degree of satisfaction) affect their deeper needs to become attached to a place. Are such needs developed over time at a new destination? This paper suggests tourist behaviours and preferences towards destination choice change over time. The proposed model suggests that tourists’ expectations and motivation at early stages of planning affect satisfaction and level of perceived constraints, and these further predict place identity and dependence at the end of travel. As much as satisfaction arises from concrete services such as food and transportation services, constrained activities are expected to have a negativeconsequence on expectations and motivations. Since this paper is based on international adventure tourists, typically willing to take on calculated risks during their visits to Tanzania, we expect many of these hypothesised gaps to diminish as tourists become mature and aware of services offered at the destination. To test awareness and familiarity, we add different proxies for maturity (i.e. late stage of stay, repeat visitors and loyalty intentions) and awareness (i.e. tourists with escape motives) of services provided at the specific destination.     

Trainers' dilemma of choosing between training and promotion

In the work environment, older employees play a significant role in training younger employees. Why do older employees provide this training when they are rivals competing for promotion? Is it because the more training they provide to trainees, the less likely those trainers will be promoted? We show that the fostering of generalists rather than specialists can soften the trainers' dilemma of choosing between training and promotion because the amount of training provided by a trainer decreases that trainer's promotion probability to a greater extent when training specialists than when training generalists. Hence, even if the productivity of the generalist is lower than that of the specialist, the generalist scheme can still lead to a higher level of training and improve a firm's profit and social welfare.