Time preference and international trade

We first consider a closed model, where households' time discount depends on externality in consumption. We can prove that there is a unique steady state, which is a saddle point. Then we extend the model to a two‐country world, and derive the condition on the effects of consumption externality under which there is a unique free trade steady state with saddle‐point stability.     

A dynamic two country Heckscher–Ohlin model with non-homothetic preferences

We examine the properties of a two-country dynamic Heckscher–Ohlin model that allows for preferences to be non-homothetic. We show that the model has a continuum of steady state equilibria under free trade, with the initial conditions determining which equilibrium will be attained. We establish conditions under which a static Heckscher–Ohlin theorem will hold in the steady state, and also conditions for a dynamic Heckscher–Ohlin theorem to hold. If both goods are normal, each country will have a unique autarkic steady state, and all steady state equilibria are saddle points. We also consider the case in which one good is inferior, and show that this can lead to multiple autarkic steady states, violations of the static Heckscher–Ohlin theorem in the steady state. Furthermore, there may exist steady state equilibria that Pareto dominate other steady states. These steady states will be unstable if discount factors are the same in each country, although they may exhibit dynamic indeterminacy if discount factors differ.     

Tourists and traditional divers in a common fishing ground

We study socio-ecological models for a fishing ground open to tourists. On Jeju Island, Korea, women traditional divers called “Haenyeo” harvest resources in a common fishing ground. To investigate the impact of introducing tourists on the benefit to the fishing association and the resource level, we examine two models that differ in the way the number of tourists is controlled. In the first model, the fishing association charges an entrance fee to tourists and the level of the fee is chosen to regulate tourist number. In the second, only a part of the fishing ground is made open to tourists, and the fraction of the ground open is chosen to control the tourist number. In both models, the fishing association seeks to maximize its total benefit. Analysis shows that the way the number of tourists increases with the availability of resources strongly influences the distribution of benefits among the fishing ground stakeholders. Finally, we discuss policy implications of our results and how local government can reduce the risk of introducing tourism.     

Foreign and domestic R&D investment

A considerable share of R&D investment is due to multinational firms that simultaneously operate R&D bases at home and abroad. We develop a simple model of foreign and domestic R&D investment and test the model's predictions on a sample of 146 Japanese multinational firms’ R&D investments in Japan and the United States in 1996. The empirical results confirm that the foreign to domestic R&D ratio depends on relative technological opportunities and relative demand conditions, with foreign research expenditures responding to technological opportunity and foreign development expenditures responding to demand.     

Competing Industrial Standards and the Impact of Trade Liberalization

The main purpose of this study is to illustrate, with simple trade theory, the relationship between competing industrial standards and trade liberalization. We assume that there are two competing industrial standards in an international context, each of which applies to a group of differentiated products. A product can be used only in combination with other products based on the same industrial standard. We examine the impact of trade liberalization (i.e., a decline in trade costs) on consumers’ choice of a standard. It will be shown that the degree of indirect network effects, captured with substitution between differentiated products, plays an important role as a determinant of the impact of trade liberalization.     

The numbing effect of mortality salience in consumer settings

Nationwide Insurance and Johnnie Walker Scotch aired advertisements that encouraged people to contemplate death. What are the immediate emotional and perceptual outcomes of such advertisements? With five studies, thinking about death was found to attenuate emotional reactions and perceptions, a novel finding in the literature. This attenuation was observed with neural and self‐report measures along with retrospective and prospective assessments of emotion and is an outcome not yet investigated in mortality salience research. Contemplating death dampened people's expectations of emotion in a future consumption experience and diminished the attractiveness of the experience. Similarly, contemplating death affected backward‐looking assessments of emotion, for example, when nostalgic memories are brought to mind. Importantly, this dampening effect of mortality salience was replicated with advertisements that portrayed death‐related concepts and attenuated emotional reactions to subsequent advertisements.     

Indirect network effects and the impact of trade liberalization: A note

In this note, we examine how trade liberalization affects production structure in the presence of indirect network effects (hardware/software systems). For these purposes we construct a simple two-country model of trade with two incompatible hardware technologies. It is shown that, given that both types of hardware exist before trade liberalization, liberalization and increased intra-industry trade in software products may reduce the variety of hardware technology via intensified network effects. It is also shown that, contrary to the findings of previous studies on intra-industry trade, some consumers may become worse off as the result of trade.     

Software Provision and the Impact of Market Integration

Both deeper market integration and advances in digital technology have driven particularly large decreases in the costs of intermarket software provision. This study first explains the mechanism of how trade costs influence the software provision decisions of software firms. Then the transformation of production/trade patterns is investigated given gradually decreasing trade costs for software products. It is shown that if two incompatible types of hardware exist, deeper market integration may reduce the variety of hardware technologies. It is also shown that, if the variety of hardware technologies is reduced by deeper integration, some consumers are made worse off.     

A simple model of service trade with time zone differences

This note proposes a two-country model of service trade that captures the role of time zone differences as a determinant of trade patterns. It is shown that the utilization of communication networks induces dramatic change in industrial structure due to firms taking advantage of time zone differences.     

Interregional trade, industrial location and import infrastructure

The purpose of this study is to illustrate, with a simple two-region, two-good, two-factor model, how an improvement in one region’s import infrastructure can affect firms’ location decisions and the nature of the trading equilibrium. It is shown that, through improvements in import infrastructure, one region might divert high-tech industries to another region. This effect reduces the incentive to improve import infrastructure.