A two-period model of the competitive socialist labor-managed firm

This paper investigates the role of price expectations in the short-run supply response of the competitive socialist labor-managed firm. The insights gained from the analysis of the two-period model presented in this paper are used to clarify the role of price expectations in the literature on labor-managed firms. It is found that the type of price expectation assumption, made implicitly or explicitly, affects the slope of the firm's short-run supply curve.     

Product differentiation and welfare: Comment

In general it may be argued that the monopolistically competitive industry is not consistent as viewed from the game-theoretic point of view, and it ignores the strategic aspects of competition. This comment points out specifically how the welfare implications derived from a Nash equilibrium model in which the goods are imperfectly substitutes used by Spence in many articles are incorrect. The total quantities offered by firms at Nash equilibria within this model and those of the market demand curve at the same price levels are not equal. All emanate from the misspecification of the price equation with substitutable goods by Spence which is not appropriate for the Nash equilibria model with many firms. Moreover, some other very important papers of Spence which follow are critisized for the same mathematical contradiction.     

THE 'THICK MARKET' EFFECT AND AGGLOMERATION IN HIGH-GROWTH INDUSTRIES

Abstract. This paper considers a simple model of geographical concentration of new high‐technology industries that lack stable design standards. In the model, agglomerative effects result from positive feedback between competitive forces in the upstream and downstream segments of a high‐technology industry, rather than as a result of traditional scale economies in the manufacturing of standardized products. The model assumes that firms in the upstream service supply industry have ex ante uncertain costs and compete in Bertrand fashion for the independent demands of downstream firms. This framework explains the mechanism of spatial clustering in industries with a high rate of innovation.     

Irrationality and monopolistic competition: An evolutionary approach

This paper shows that a monopolistically competitive equilibrium can evolve without purposive profit maximization. Specifically, this paper formulates a precise evolutionary dynamic model of an industry where there is continuous entry of firms that randomly select their output levels on entry and fix their output levels thereafter. Firms exit the industry if they fail to pass the survival test of making nonnegative wealth. This paper shows that the industry converges in probability to the monopolistically competitive equilibrium as the size of each firm becomes infinitesimally small relative to the market, as the entry cost becomes sufficiently small, and as time gets sufficiently large. Consequently, in the limit, the only surviving firms are those producing at the tangency of the demand curve to the average cost curve and no potential entrant can make a positive profit by entry.     

Technological Discontinuities and the Nature of Competition

We revisit the Schumpeterian model of competition driven by the perennial gale of creative destruction. Not every innovation must necessarily lead to the destruction of incumbent firms. In many high-technology industries we observe a symbiotic coexistence between new entrant and incumbent firms. This phenomenon warrants more attention. We build upon the innovation and strategic alliance literature to develop the notion of 'complementary innovation.' We advance propositions with respect to the following questions: What impact will a complementary innovation have on firm entry, interfirm cooperation, and the nature of competition? Based on the propositions advanced, we develop a cyclical model of industry dynamics initiated by a complementary innovation. The propositions and the cyclical model of industry dynamics are illustrated in a case study of the biopharmaceutical industry.     

Explaining cross-supplies

Cross-supplies describe the phenomenon that two or more firms in the same industry supply each other with their final products. A prominent example is the cooperation in the European flat-glass industry, which was recently criticized by the European Commission. In a simple model we attempt to explain what incentives firms may have to use cross-supplies (instead of producing the goods themselves) and what welfare effects cross-supplies have if they are used. Contrary to the ruling of the European Commission we find that cross-supplies improve welfare whenever they are employed. Furthermore, for a large range of parameters, they even benefit consumers.     

Sectoral Changes in Employment: An eclectic perspective on ‘good’ jobs and ‘poor’ jobs

The linkage Keynes established between the volume of employment that business firms require to make a particular number of jobs available provides an operational perspective about the way in which labor markets work. The aggregate supply or Z function is, in fact, a job offer curve. The most significant insight to derive from this curve is that job offers are inseparable from the economy's aggregate expenditure (or demand) level. This interdependency of aggregate supply and aggregate demand is necessary to understand the functioning of labor markets in the real world. This paper argues that a disaggregated model which encapsulates the economy's price-taking and price-making sectors offers a promising analytical tool to gain perspective about ‘good jobs’ and ‘poor jobs’ in post-Fordist economies. It is maintained that the sectoral deployment of workers reflects whether employing firms, as price-makers, can capture the increasing returns inherent in modern technology.     

Environmental Policy with Endogenous Technology from a Game Theoretic Perspective: The Case of the US Pulp and Paper Industry

The merits of different types of regulatory tools in eliminating pollution and at the same time inducing innovation have long been an interest of researchers in both environmental economics and industrial organization. Although there is a substantial theoretical literature investigating the potential for various environmental policies to attain these dual goals, this is a challenging empirical problem because every industry has its own inherent characteristics that play an important role in determining the performance of different regulatory tools. The majority of the work to date focuses on pollution abatement while leaving pollution prevention understudied. In most of the literature firms are also assumed to be symmetric. Asymmetries among firms add another degree and level of complexity to their strategic interactions, and affect the performance of different regulatory tools. This paper investigates the performance of two alternative regulatory tools, an emissions performance standard and an emissions tax, in reducing pollution and inducing pollution prevention and abatement R&D in the US pulp and paper industry. We construct a model representing the industry in an asymmetric Cournot duopoly framework, calibrate the model to disaggregated industry data, and run scenarios to replicate the behavior of the firms in an imperfectly competitive output market. Our results suggest that pollution prevention R&D can respond quite differently than abatement R&D to different policy instruments. The results indicate that R&D spillovers among firms play crucial role in technology development and strategies of the firms. Our results also suggest that strategic interactions between firms in an imperfectly competitive industry can have significant impacts of the levels of both types of R&D.      

Non-renewable resource Stackelberg games

The market structure for many mineral industries can be described as oligopoly with potential for Stackelberg leadership. This paper derives and analyzes dynamically consistent extraction equilibria in a two-period discrete-time “Truly” Stackelberg (TS) model of non-renewable resource extraction, where firms move sequentially within each period and where both the leader and follower have market power. We show how the leader may be able to manipulate extraction patterns by exploiting resource constraints. Whether the leader wants to speed up its own production relative to the Cournot–Nash (CN) equilibrium depends on the shape of its iso-profit curve, which is affected by the two firms’ relative stock endowments and relative production costs. If the leader extracts faster, then the follower extracts slower, but in aggregate the industry extracts faster. Unlike static Stackelberg games, the follower does not necessarily have a second mover disadvantage.     

Specific taxation,asymmetric costs,and endogenous quality

This paper shows how a specific tax—in contrast to an ad valorem tax—alters industry structure and firm-level performance in a monopolistic competition framework, where firms chose product quality endogenously and differ exogenously in productivity (i.e., marginal production efficiency). Industry equilibrium mechanisms and selection based on productivity play a significant role: A specific tax shifts market shares and profits toward firms with costs and prices above the industry average at the expense of low-cost firms. This reallocation of market shares releases a novel scale effect such that low-cost firms may quality downgrade, while high-cost firms always quality upgrade. There exists a parameter subspace, where this combines to a decrease on average quality for the industry. In comparison: An ad valorem tax only reduces the number of firms/varieties in the industry due to demand absorption, but affects neither firm-level performance nor industry structure.     

Industrial leadership in science-based industries: A co-evolution model

In this paper, we seek to analyse the role of national university systems in combination with technological and market factors as sources of industrial leadership and industry growth in science-based industries. We propose a model in which national university systems and their respective national firms and industries are considered as co-evolving. National firms compete on a worldwide level and they rely on the progress of science and the availability of scientists to innovate. As the global industry develops, firms try to mold their national university systems, but they achieve different degrees of success. Apart from highlighting the role of institutional responsiveness as a source of competitive advantage, our model points to the access to essential inputs for production, the technological and strategic characteristics of firms, the international diffusion of knowledge, and the initial distribution of market demand as key sources of leadership and industry growth. The international mobility of scientists seems to foster the emergence of industrial leadership shifts.     

Towards a More Complete Efficiency Wage Theory

The efficiency wage is an important topic in the theory of employment. In a traditional efficiency wage model, only the representative firm is optimizing against an assumed S‐shaped effort supply function. This S‐shaped supply curve is critical for the model and the absence of a derivation of the curve in the literature means that it is an incomplete theory. In the present paper, we extend the model by specifying a worker's representative utility function so that the corresponding argmax function will be the S‐shaped effort supply curve. This will make the worker's decision process endogenous and will produce a more complete model. The importance of this extension is clear. The characterization of the utility function will make explicit the necessary conditions and crucial assumptions of the traditional model. More importantly, the extension will allow researchers to introduce employment compensation factors into the worker's utility function for analysis. This has important bearings on future development in employment theory. For example, a worker's satisfaction from shirking (net of dismissal risks), or his or her willingness to search for jobs (net of search cost), can now be included in his or her utility function to form an optimal work or search strategy. Incorporating the worker's optimization behaviour into the model will also enable researchers to study policy directed not just towards firms but also towards the worker's decision process. Furthermore, this approach provides a framework for researchers to generate comparative statics. These comparative statics can lead to interesting topics for econometric models or to further research within this field.     

FIRMS’ CHARACTERISTIC AND EQUILIBRIUM WITH TRADEABLE PERMITS MARKET*

We study, in a simple model, the partial equilibrium of an industry with n firms endowed by different Cobb‐Douglas technologies which have different pollution effects. The price of input (labour) and the demand curve to the industry are given. Pollution is restricted by a tradeable market of permits in the industry. Each firm is characterised by a parameter combining production efficiency and pollution effect, its e‐characteristic. The equilibrium depends mainly on these e‐characteristics which are linked to the performance of the technologies. In the long run performances are defined per unit of capital. Last, we analyse the consequences of permits’ allocations on the profitability of the firms.     

Supply oriented macroeconomics: The MACE model of Canada

This paper describes MACE, a two sector annual nacroeconometric model of the Canadian economy. The sectoral breakdown highlights the role of energy in a small open economy. In addition, the model emphasizes the supply side, which includes both the evolution of normal output and the determination of the level of current output as the consequence of an explicit operating rate decision by firms. The bulk of the paper outlines the approach used to model supply side considerations, since this is where most of the model's innovative features lie.     

Free Entry under Uncertainty

When focusing on firm’s risk-aversion in industry equilibrium, the number of firms may be either larger or smaller when comparing market equilibrium with and without price uncertainty. In this paper, we introduce risk-averse firms under cost uncertainty in a model of spatial differentiation and show that the impact of uncertainty will increase the number of firms in an industry. With increased uncertainty, the risk premium of the marginal buyer increases by more than the risk premium of the average buyer, so that the price increases by more than the risk premium. When turning to the free entry game, we find that the market generates too many firms.     

Collusion in mixed oligopolies and the coordinated effects of privatization

We study the sustainability of collusion in mixed oligopolies where private and public firms only differ in their objective: private firms maximize profits, while public firms maximize total surplus. If marginal costs are increasing, public firms do not supply the entire market, leaving room for private firms to produce and possibly cooperate by restricting output. The presence of public firms makes collusion among private firms harder to sustain, and maybe even unprofitable. As the number of private firms increases, collusion may become easier or harder to sustain. Privatization makes collusion easier to sustain, and is socially detrimental whenever firms are able to collude after privatization (which is always the case if they are sufficiently patient). Coordinated effects thus reverse the traditional result according to which privatization is socially desirable if there are many firms in the industry.     

Emission Taxes and Product Differentiation in the Presence of Foreign Firms

Industries characterized by differentiated products are important contributors of greenhouse gases and currently subject to market‐based policies such as emission taxes. In the context of developing countries, fears about foreign investment leaving the country are often used as an argument not to address industry emissions through emission taxes. This paper develops a Cournot model with product differentiation in the presence of abatement efforts where host and foreign firms are subject to an emission tax. The analysis indicates that abatement efforts and differences in pollution intensity coefficients across firms may play a significant role in the characterization of optimal policy. The analysis also suggests that the government may opt to encourage foreign, less pollution‐intensive firms via higher taxation. Additionally, this paper examines how an optimal emission tax may be adjusted as products become more differentiated; industry emissions may fall/rise as a result of more differentiated products. One important contribution of this paper is that it emphasizes the role of abatement efforts, product differentiation, and differences in pollution intensity coefficients across firms in the characterization of the optimal emission tax.     

DYNAMIC ENTRY WITH DEMAND AND SUPPLY SIDE SPILLOVERS

Supply side spillovers have been used to explain firms' entry behavior in the pharmaceutical industry. In contrast, demand side spillovers have received less attention. This paper identifies supply and demand spillovers using a dynamic model of strategic interaction. The results indicate that demand side spillovers are more significant than the supply side spillovers to generic drug firms, and the demand side spillovers increase a firm's market share by 3%–4% on average in subsequent market entry. In addition, with supply side spillovers alone, lowering entry barriers can increase future entry rates, while in the case of demand side spillovers, lowering entry barriers will have the opposite effect. (JEL L110, L130, D220)     

Learning to believe in nonrational expectations that support pareto-superior outcomes

I consider the prototype New Keynesian macroeconomic model with subjective demand expectations of firms. In this model the firms' objective demand is log-linear in their relative price. Firms believe that their demand curve is linear or log-linear in their absolute price. They estimate the parameters of this curve by least squares from past observations on prices and quantities. The wage rate either clears the labor market given firms' demand perceptions or is given in the short run and changes according to a linear Phillips curve. In either setup of the model the interplay between learning and price setting confirms the subjective model. Among the long-run equilibria are solutions at which the representative household attains a higher level of utility as compared to the rational-expectations outcome. If the supply of labor depends upon the real wage, money is not neutral.     

供应链企业间地理距离与组织距离对合作创新绩效的影响

显性地理距离与隐性组织距离作为影响供应链企业间合作创新绩效的关键因素日益引起学者们关注。采用实证研究法，深入探讨供应链企业间地理距离与组织距离对合作创新绩效的影响及中介机制，并分析地理距离对组织距离影响的调节效应。结果显示：地理距离、组织距离对合作创新绩效、新产品开发速度、新产品创新性具有显著负向影响；新产品创新性、新产品开发速度对合作创新绩效具有显著负向影响；新产品开发速度在地理距离、组织距离对合作创新绩效的影响过程中发挥中介作用，而新产品创新性不具中介作用；地理距离对组织距离与新产品开发速度间关系的影响不显著，但会强化组织距离对新产品创新性的负向影响。