Company–Nonprofit Partnerships,Negative Spillover,and Response Strategies

This study explored whether, in the context of a company–nonprofit partnership, there are negative spillover effects when a crisis strikes a partner organization and what effective response strategies to such a crisis would be for the principal organization. We conducted an online experiment (N = 445) with a 2 (duration of partnership: long-term vs. short-term) × 4 (response strategy: denial, ending partnership, continuing partnership, vs. no response) between-subject design, with two no-crisis control groups. The results confirmed the existence of negative spillover effects; when respondents were exposed to crisis information about a partner organization, their attitude toward the principal organization became less favorable. We found that, regardless of the partnership’s duration, announcing a decision about the partnership—either ending the partnership or continuing the partnership—was not effective in restoring the principal organization’s image. Denial strategies, however, significantly improved the image of the principal organization, up to its precrisis level. We discuss the practical and theoretical implications.     

Vertical differentiation with non-uniform consumers' distribution

This note explores a vertical differentiation model with a continuous non-uniform consumers' distribution. First, a result concerning the finiteness property obtained with uniform consumers' distribution is generalized. Second, we prove an existence result of price equilibrium when the distribution is concave. Finally, we exhibit a counter-example to the existence of price equilibrium to show that the concavity assumption is not superfluous.     

Is partial privatization of universities a solution for higher education?

This paper accounts simply for the link between higher education and the productive economy through educated workers. We study a model of vertical successive monopolies where students/workers acquire qualification from a University then “sell” skilled labor to a monopoly which itself sells its final product to consumers, linking through quality the education sector to the labor and output markets. We determine the optimal share the State should keep in the University to compensate for the market imperfections, while taking into account the inefficiencies of public management. The resulting partially privatized University fixes the tuition fees so as to maximize a weighted sum of profits and social welfare. We derive the optimal public share under the hypothesis that the State may subsidize the tuition fees/University losses, then under the constraint that the University should make a nonnegative profit. We prove that in both cases, the State should keep a substantial share (higher under the first hypothesis) in the University, unless public management is too inefficient in which case the University's management should be completely private.     

Dynamic programming for valuing American options under a variance-gamma process

Lévy processes provide a solution to overcome the shortcomings of the lognormal hypothesis. A growing literature proposes the use of pure-jump Lévy processes, such as the variance-gamma (VG) model. In this setting, explicit solutions for derivative prices are unavailable, for instance, for the valuation of American options. We propose a dynamic programming approach coupled with finite elements for valuing American-style options under an extended VG model. Our numerical experiments confirm the convergence and show the efficiency of the proposed methodology. We also conduct a numerical investigation that focuses on American options on S&P 500 futures contracts.     

Natural Oligopolies: A Vertical Differentiation Model

This article contains a more complete characterization of conditions under which vertically differentiated markets are or are not natural oligopolies than has been found previously in the literature. Specifically, previous results on markets in which firms have cost functions with constant returns are incomplete; these results are expanded. Moreover, results are provided for markets with firms having increasing or decreasing marginal cost functions.     

Differentiation,labor market and globalization

We consider two countries with initially one firm in each country and the possibility for each firm to invest in the other country or commercialize its products, and for workers to immigrate (Common Labor Market; CLM). Interestingly, when firms compete on the product market with no competition on the labor market (Goods’ Mobility; GM), they do not differentiate their qualities. However, when competition is introduced in both markets (Foreign Investment; FI) firms differentiate their products. We compare the globalization scenarii and prove that they improve the global social welfare relative to autarky and that a cooperative choice by countries of a globalization scenario would lead to GM.     

Oligopoly equilibria in exchange economies: a limit theorem

In a pure exchange economy, agents have the possibility of behaving strategically by putting only a part of their initial endowments on the market. An oligopoly equilibrium is defined to be a Nash equilibrium of the game in which agents choose simultaneously quantities to be put on the market. It is proved that under standard hypotheses, the oligopoly equilibrium leads to the competitive equilibrium when the economy is replicated an infinite number of times. Received: May 26, 1999; revised version: April 3, 2000     

Erratum to: Ethics,Diversity Management,and Financial Reporting Quality

This article proposes and empirically tests a theoretical framework incorporating Reidenbach and Robin’s (J Bus Ethics 10(4):273–284, 1991) conceptual model of corporate moral development. The framework is used to examine the relation between governance and business ethics, as proxied by diversity management (DM), and financial reporting quality, as proxied by the magnitude of earnings management (EM). The level of DM and governance quality are measured in accordance with the ratings of Jantzi Research (JR), a leading provider of social and governance research for institutional investors. This DM score is part of an index developed by JR that investment managers use to integrate DM criteria into their investment decisions. As expected, a negative relation between corporate DM development and financial reporting quality is found while controlling for other factors known in the literatures on governance and accounting choices to affect earnings quality. Despite some caveats presented in conclusion, this study contributes to the ethics, governance, and financial reporting literatures by studying the dynamics between governance and ethics in the prevention of EM.     

Natural oligopolies with exogenous sunk costs: A non-Suttonian result

In a spatial competition model with exogenous fixed costs and divisible goods, we obtain non-Suttonian results. When the economy is infinitely replicated, the number of firms does go to infinity but, as consumers’ income goes to infinity, the equilibrium number of firms tends toward a finite value. This occurs because the global demand to each firm becomes in the limit infinitely sensitive to price differentials since they give then rise to infinitely large differences in purchase expenditure.     

Democracy and competition: Vertical differentiation and labor in a general equilibrium model

We consider a general equilibrium model with vertical preferences and one or two firms, where workers and consumers are differentiated, respectively, by their sensitivity to effort and their preference for quality. The question in this paper is whether a decentralized choice through majority vote would lead to more or less competition. We compare the duopoly and the monopoly cases from the viewpoint of each individual, then we deduce the choice of the majority. We prove that, under concentrated ownership (where owners have a null density), duopoly is always preferred by the majority; while under egalitarian ownership (where firms are equally shared by all the population), the choice of the majority depends on the relative size of workers' and consumers' segments.