Product design rivalry: multiple‐attributes approach to differentiation

This paper studies product design competition between potentially symmetric firms. We specifically employ the multiple‐attributes approach as the method of product design. While various product‐specific attributes contribute to firms' differentiation, they may cause confusion resulting in consumer dissatisfaction. We show that in the presence of these opposite effects and any setup costs for attributes, the differentiation by multiple attributes is beneficial for firms if, and only if they are moderately competitive. We furthermore show that the socially efficient number of attributes can only be sustained when there are not very many firms and the setup cost is low. Copyright © 2008 John Wiley & Sons, Ltd.     

The Impact of Regional Factors on the Start‐Up Ratio in Japan*

We analyze regional factors of the start‐up ratio in Japan using two datasets with different regional aggregation levels. The explanatory variables represent demand, cost, human resource, financial, industry agglomeration and industrial structure, and other factors. The empirical results demonstrate that even though all these factors significantly affect the start‐up ratio at the municipality level, some of these factors are not significant at a larger economic area level. In particular, we obtained evidence that human resource factors, together with the average wage and average size of establishments, are important determinants of the regional start‐up ratio in both the samples.     

The possible shapes of the production possibility curve under Cobb-Douglas production function

It is well-known that if returns to scale differ in different output ranges of the same commodity, the production possibility curve may change its shape from concave to convex to the origin. But what is less obvious may be that if they do not differ in different output ranges, the PPC may not be either concave, or convex but may well be both concave and convex. Under Cobb Douglas production functions the PPC changes its curvature at most twice. We draw some examples where the PPC changes its curvature once and twice.     

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.     

Sequential product positioning in the presence of an asymmetric network externality intensity

In this study, we analyze the sequential decisions on product positioning of two firms in the presence of network externalities. One commonly accepted phenomena in a market where a network externality arises is the first‐mover advantage, in which the first entrant into a market can earn a higher profit than later entrants. However, in some recent online services markets, we see that the second mover earns a higher profit than the first mover. This occurs because the second mover strengthens its variety of available functions and services markedly, thereby facilitating consumers' work and communication with its main product, which we call network externality intensity. Based on this observation, we analyze sequential positioning in Hotelling's framework by incorporating an asymmetric network externality intensity between firms. We show that unlike the results of previous related studies, both first‐ and second‐mover advantages can appear in the equilibrium depending on the relationship of the network externality intensity between firms; further, they do not change monotonically with the level of network externality intensity.     

The strategic effect of retailers' in‐store advertising services under product variety competition

We study a retailer service model of in‐store advertising, in which a neutral retailer provides product information to consumers for free but charges manufacturers. Our results show that the retailer's optimal pricing induces the manufacturers to decrease the number of items they offer. Nevertheless, this relaxes the competition between the manufacturers so that they benefit from using the in‐store service, unless the cost of communicating with consumers about the between‐firm products is lower. Furthermore, the service can be made socially beneficial by reducing the inefficiency resulting from an excessive number of items when manufacturers are not well differentiated.     

Competition Between Online and Physical Stores: The Implications of Providing Product Information by Pure‐Play E‐tailer

This paper studies the competition between a single pure‐play e‐tailer and a bricks‐and‐mortar retailer, which are originally spatially differentiated. By utilizing information and communication technology, a pure‐play e‐tailer can strategically control consumers' disutility for online purchase. However, such an action may also raise consumers' motivation to visit the physical store, which causes free‐riding by the bricks‐and‐mortar retailer. We show that in the presence of a high free‐riding effect, the e‐tailer should be willing to provide information only about ‘niche’ products, which also results in improving the welfare of all members in the market. Copyright © 2011 John Wiley & Sons, Ltd.     

Complementarity,fiscal decentralization and economic growth

Theories of the voluntary provision of public goods and development economics have clarified that complementarity in the production process is a crucial ingredient to understanding how alternative economic environments affect economic performance. This paper examines how the structures of intra- and inter-regional complementarity affect the relationship between economic growth and fiscal decentralization. We provide a theory that describes how fiscal decentralization affects economic growth under various structures of regional complementarity. Our empirical analysis, based on a panel data set of the fifty states of the United States over the period of 1992–1997, supports our theoretical specification of the production function. Also, we observe a hump-shaped relationship between fiscal decentralization and economic growth that is consistent with our theoretical result. Our analysis also shows that the optimal degree of fiscal decentralization conducive to economic growth is higher than the average of the data in some cases, and hence further decentralization is recommended for economic growth. The previous version of the paper was presented at the 59th Congress of the International Institute of Public Finance (University of Economics in Prague, Prague), the 2003 Fall Meeting of the Japanese Economic Association (Meiji University, Tokyo), the 60th Annual Meeting of the Japanese Institute of Public Finance (Kansai University, Osaka), and in seminars at Yokohama National University and the University of California, Irvine. The authors acknowledge the comments and discussions by people including Timothy Goodspeed, Kiyoshi Mitsui, Motohiro Sato, Etsuro Shioji, Tsunao Okumura, and Craig Parsons. We are also grateful for the comments by the Editor (Amihai Glazer) and two anonymous referees. The usual disclaimer applies. Nishimura acknowledges the financial support from JSPS (Japan Society for the Promotion of Science) Postdoctoral Fellowships for Research Abroad.     

Endogenous choice on tax instruments in a tax competition model: unit tax versus ad valorem tax

This paper analyzes an endogenous choice problem with regard to tax instruments in a capital tax competition model. Using a symmetric and two-region model of tax competition, where each region is allowed to choose either a unit or an ad valorem tax, we show that selecting a unit tax as a policy instrument is the dominant strategy.     

洛阳“一五”时期苏式住宅街坊考察与改造探索

以洛阳"一五"时期建造的苏式住宅为研究对象,阐述了其建造的历史,分析了整体的建筑风格特色,并对其现状进行调查研究,探讨了典型街坊改造更新的措施和方法,力求平衡历史街区的保护与社会经济发展,使历史遗产得以永续保存。