Networks and clubs

We formulate a club model where players’ have identical single-peaked preferences over club sizes as a network formation game. For situations with “many” clubs, we provide necessary and sufficient for non-emptiness of the farsighted core and the direct (or myopic) core. With “too few” clubs, if players are farsighted then the farsighted core is empty. In this same case, if players are myopic then the direct core is always nonempty and, for any club network in the direct core, clubs are of nearly equal size (i.e., clubs differ in size by at most one member).     

The reverse tragedy of the commons: an exploratory account of incentives for under-exploitation in an open innovation environment*

This paper presents an empirical account of a phenomenon that we refer to as the ‘reverse tragedy of the commons’ in open innovation. The name signifies the ‘under-exploitation’ of intellectual property (IP) under weak appropriability. The name is this graphic because the tragedy is costly, and can also render IP effectively worthless and block innovation in the short to medium term. We propose that the tragedy is borne out of the interaction between enterprise characteristics, a competitive setting and the framework that is set by the policy intervention. This finding is pertinent to policy-makers with regard to the design of research, development and innovation instruments, as well as managers who must determine how to implement open practices in innovation.     

OLD WINE IN A NEW BOTTLE: TRADE OPENNESS AND FDI FLOWS—ARE THE EMERGING ECONOMIES CONVERGING?

This study uses the club convergence methodology of Phillips and Sul (2007) for emerging economies spanning the period 1960–2013 to explore whether such convergence exists and whether the increase of international trade and foreign direct investment (FDI) flows has been a global or club phenomenon. We find the absence of a homogeneous convergence club. The results for FDI outflows also reach similar conclusions, suggesting the formation of convergence clubs by stage of development. These results suggest that policies that promote convergence in trade openness and FDI flows would permit countries to benefit from mutual interactions and by greater consistency and efficiency in trade regimes, thus permitting these countries to benefit from openness leading to a race to the top rather than bottom. (JEL F41, C33)     

Convergence,divergence, or multiple steady states? New evidence on the institutional development within the European Union

Convergence in institutions and in per capita income across the European Union (EU) Member States are key goals of the European integrations process. Especially in the course of the various EU enlargement waves starting in 2004, it was intensively discussed whether institutional and structural homogeneity are necessary preconditions for real convergence and the smooth functioning of the EU or whether a (further) catching up in the institutional and economic development will endogenously occur after the EU accession. Our paper is dedicated to the analysis of these institutional dynamics within the EU. In particular, we analyze the formation of institutional convergence clusters using Phillips and Sul's (2007, 2009) log t-test over the period 2002 to 2018. Our results indicate the existence of multiple institutional clubs with various countries being stuck in a poor institutional trap. Moreover, we find that institutional convergence clubs are formed mainly on the basis of geographic region; in particular, we identify a northwest-southeast divide. When analyzing per capita income clubs, a rather similar picture emerges, suggesting that the underlying institutional clusters might drive the formation of income clubs. We also study the factors that determine institutional club membership by using an ordered probit model. Most importantly, we find that the initial levels of human capital and institutional quality are decisive for determining whether a country is on a high or low institutional growth path.     

Club convergence analysis of regional ecological efficiency in China

This paper adopts a network data envelopment analysis (DEA) model combined with a window analysis approach to evaluate the ecological efficiency (eco‐efficiency) of 30 regions in China over 2000–2015. We also investigate the existence of eco‐efficiency convergence clubs among these regions and analyse the important factors that drive eco‐efficiency club formation. Our results reveal that, overall, Chinese regional eco‐efficiency deteriorated from 2000 to 2015. We find that there is a significant regional disparity in eco‐efficiency. Our convergence analysis indicates that Chinese regions converge into three eco‐efficiency clubs, suggesting that common economic and environment policies might have a limited impact on promoting regional eco‐efficiency and regionally‐tailored policies need to be designed. Finally, we find that forest coverage, R&D expenditure and pollution punishment are important determinants of convergence club membership.     

Income convergence clubs for Brazilian Municipalities: a non-parametric analysis

This article analyses the evolution of relative per capita income distribution of Brazilian municipalities over the period 1970–1996. Analyses are based on non-parametric methodologies and do not assume probability distributions or functional forms for the data. Two convergence tests have been carried out – a test for sigma convergence based on the bootstrap principle and a beta convergence test using smoothing splines for the growth regressions. The results obtained demonstrate the need to model the dynamics of income for Brazilian municipalities as a process of convergence clubs, using the methodology of transition matrices and stochastic kernels. The results show the formation of two convergence clubs, a low income club formed by the municipalities of the North and Northeast regions, and another high income club formed by the municipalities of the Center-West, Southeast and South regions. The formation of convergence clubs is confirmed by a bootstrap test for multimodality.     

Price taking equilibrium in economies with multiple memberships in clubs and unbounded club sizes

We model an economy with clubs (or jurisdictions) where individuals may belong to multiple clubs and where clubs sizes are arbitrary—clubs may be restricted to consist of only one or two persons, or as large as the entire economy, or anything in-between. Notions of price-taking equilibrium and the core, both with communication costs, are introduced. These notions take into account that there is a small communication cost of deviating from a given outcome. We demonstrate that, given communication costs, for all sufficiently large economies the core is nonempty and the set of price-taking equilibrium outcomes is equivalent to the core.     

A Theoretical Analysis of the Influence of Money Injections on Risk Taking in Football Clubs

This paper analyzes the adverse incentive effects produced by money injections of benefactors [sugar daddies (SD)]. We show that the existence of a SD induces the club to choose a riskier investment strategy and the more the SD commits to bailout the club, the more the clubs’ optimal level of riskiness increases. Moreover, a private SD bails out the club less often than a public SD. Our model further shows that a ‘too‐big‐to‐fail’ phenomenon exists because it is optimal to always bailout a club if its market size is sufficiently large.     

Convergence patterns in financial development: evidence from club convergence

This article analyzes the degree of convergence of financial development for a panel of 50 countries. We apply the methodology of Phillips and Sul (Econometrica 75:1771?C1855, 2007) to various indicators of financial development to assess the existence of convergence clubs. We consider ten alternative indicators of financial development that various researchers use to proxy for the degree of financial development in countries. Overall, the results do not support the hypothesis that all countries converge to a single equilibrium state in financial development. Nevertheless, strong evidence exists of club convergence. Countries demonstrate a high degree of convergence in the sense that in the majority of financial indexes they form only two or three convergence clubs, depending on the measure of financial development used. We also apply the Phillips and Sul method to two real variables, per capita output and fixed capital investment to GDP, and find strong evidence of five and four distinct convergence clubs, respectively. Finally, we compare the various convergence clubs associated with financial development indicators to those clubs for per capita output and fixed capital investment to GDP. We conclude that strong evidence supports the correspondence between the convergence clubs for financial development and those two real variables.     

Regional convergence clubs in Europe: Identification and conditioning factors

The aim of this paper is to empirically identify convergence clubs in per capita incomes of European regions and to investigate whether initial conditions − as suggested by the club convergence hypothesis − are responsible for club formation. To tackle this issue, we propose a two-step procedure in which we first endogenously identify groups of regions that converge to the same steady state level, and in a second step we investigate the role of starting conditions and structural characteristics for a region's club membership. Our sample comprises 206 European NUTS2 regions between 1990 and 2002. The results strongly support the existence of convergence clubs, indicating that European regions form six separate groups converging to their own steady state paths. Moreover, estimates from an ordered logit model reveal that the level of initial conditions such as human capital and per capita income plays a crucial role in determining the formation of convergence clubs among European regions.     

EFFICIENT MIXED CLUBS: NONLINEAR-PRICING EQUILIBRIA WITH ENTREPRENEURIAL MANAGERS

Scotchmer and Wooders show that efficient clubs are homogeneous when consumers are divisible in Berglas's anonymous crowding model. However, if consumers are not divisible or if clubs have multiple facilities with economies of scope, mixed clubs are efficient. In such a model, we consider clubs with multiple membership policies for different types of consumers, and show the existence and efficiency of equilibrium with nonlinear policies. We employ entrepreneurial equilibrium, all equilibrium concept with profit-seeking entrepreneurs. Our theorem can be regarded as showing the existence of a core allocation that satisfies envy-free property in the absence of non-anonymous crowding effects.     

OVERINVESTMENT IN TEAM SPORTS LEAGUES: A CONTEST THEORY MODEL

This paper applies contest theory to provide an integrated framework of a team sports league and analyzes the competitive interaction between clubs. We show that dissipation of the league revenue arises from 'overinvestment' in playing talent as a direct consequence of the ruinous competitive interaction between clubs. This overinvestment problem increases if the discriminatory power of the contest function increases, revenue-sharing decreases, and the size of an additional exogenous prize increases. We further show that clubs invest more when they play in an open league compared with a closed league. Moreover, the overinvestment problem within open leagues increases with the revenue differential between leagues.     

And if the ball does not cross the line? A comprehensive analysis of football clubs’ performance

The football club market is changing fast in the social media era. In this global market, clubs must maintain or improve fans’ attendance at the stadium; simultaneously, they need, more than ever, to take care of social media. The aim of this article is to test and discuss a comprehensive approach to analysing the performance of football clubs regarding their multiplicity of objectives. We analyse the efficiency of English Premier League (EPL) clubs during three seasons (2012/13–2014/15). The methodologies employed are data envelopment analysis (DEA) and a bootstrapped DEA model. The input is the market value of the squad, and the outputs are sports results, total revenue, the ratio of stadium utilization during the season and an index of social media impact. The results are robust to alternative estimation methods and indicate that EPL clubs still have a margin for improving their overall efficiency, mainly the medium clubs. The analysis of football clubs’ performance with the proposed comprehensive approach provides a useful tool to help managers with evaluation and feedback considering the actual context of the market. The approach brings closer the opportunity to design appropriate strategies to improve clubs’ efficiency as well as competition policies.     

Corruption clubs: empirical evidence from kernel density estimates

A common finding of many analytical models is the existence of multiple equilibria of corruption. Countries characterized by the same economic, social and cultural background do not necessarily experience the same levels of corruption. In this article, we use Kernel Density Estimation techniques to analyse the cross-country distribution of corruption. Particular emphasis will be given to the question whether the distribution of corruption shows more than one peak. We find that most of the estimated densities exhibit twin peaks. We also provide some evidence on the intra-distribution dynamics and the persistence of corruption. We find the group of countries classified within the two ‘clubs’ to be very stable. Corruption is a highly persistent phenomenon. Substantial changes in the economic, political and cultural environment of countries within the ‘corruption club’ are required before a significant decline of corruption is to be expected.     

Inequality and club formation

We study the relationship between social segmentation and income inequality by means of the economic theory of clubs with private provision of the club good. After having characterized the core partition of society in clubs and investigating its characteristics, we show how the clubs’ sizes depend on income distribution and compare segmentation profiles arising in societies characterized by different inequality patterns.     

How far from the Euro Area? Measuring convergence of inflation rates in Eastern Europe

We present a common factor framework of convergence which we implement using principal components analysis. We apply this technique to a dataset of monthly inflation rates of EMU and the Eastern European New Member Countries (NMC) over 1996–2007. In the earlier years, the NMC rates moved independently from an average of the three best performing countries over the past twelve months, while they moved somewhat closer in line with them in the later years. Looking at the sample of the EMU and NMC countries as a whole, there is evidence of a formation of convergence clubs across the two groups.     

Competition Among National Football Leagues. Does It Exist? Should We Regulate?

It is often supposed that the stakeholders of a national football league draw more satisfaction from their sport if the league is balanced, that is, if a large number of clubs have a reasonable chance of winning. This is the so‐called Competitive balance hypothesis. This hypothesis can be challenged, however, in the context of international competition like the European champions league. It could be that the utility of national leagues' stakeholders would be higher if the probability of victory for their nation's club at the international level were higher. If this were the case, a league's governing body intending to maximize the quality of the national league by making use of redistributive schemes would face a trade‐off between national competitive balance and international performance of the national representative club. We propose a simple microeconomic framework to model this trade‐off. If a non‐cooperative game exists among the national league governing bodies, whether it is a Nash or a Stackelberg one, this game would result in inefficient redistributive policies. We find ‘soft’ empirical evidence of such a competition among the big 5 football leagues in Europe. This result supports the idea of the creation of an international regulatory body. We derive the conditions under which the international regulatory body should ensure that the leagues' governing bodies implement redistributive schemes guaranteeing the respect of the national competitive balance. We also emphasize the risk of experiencing a drop in the quality of leagues if one of them becomes too big relatively to the others, what we call the tragedy of the wealthy.     

Passports for sale: The political economy of conflict and cooperation in a meta-club

Some of the member states of the European Union sell citizenship or residence to wealthy foreign investors. We analyze these “golden-passport” programs as a study in the political economy of conflict and cooperation in an international meta-club. Seen through the lens of club goods theory, the EU is a club of nations, each of which can be interpreted as itself a club. Each single nation reserves the right to govern the admission of new individual members into its own club, and new members automatically benefit from the EU wide meta-club good. We characterize the unique equilibrium when individual clubs that may differ in membership size are free to choose the terms on which they admit members, and evaluate it from the point of view of the wellbeing of the set of clubs as a whole. We identify club size and benefits as well as differences in cost externalities as the key determinants. We also consider how the set of clubs as a whole can respond to the economic inefficiency problems such a situation creates.     

从“产权”走向“公民权”——当前中国城市业主维权研究

作为一种新兴的社会现象,业主维权的兴起是中国城市化进程中住房商品化改革的结构性产物。在某种程度上,业主维权已经构成了当代中国城市居民生活中的一项重要内容,并引起了政府和学界的极大关注。本文首先从学理层面深入探讨了“业主维权”的概念内涵,然后对现有文献中有关业主维权研究的各种理论视角进行述评,最后根据笔者的研究经验提出业主维权研究的进一步议程或许可以纳入“公民的形成”、“中产阶级的形成”和“社会的形成”三个框架之中。     

Over the moon or sick as a parrot? The effects of football results on a club's share price

This article considers the impact of match results on the stock returns of English football clubs. We propose that the magnitude of the response to a given result depends on the importance of the game, which is measured in two ways. First, we consider the extent to which the clubs are close rivals vying for similar league positions, as winning such games is particularly significant. Second, we argue that each individual game becomes more important for those clubs likely to be promoted or relegated as the season draws to a close, since a given match will have increasing information content concerning the final league position of the club. Using a fairly large panel comprising data for 19 clubs, we find some support for the notion that stock prices are affected more by the results of important matches than matches of lesser importance. We also observe that the difference between the number of points the club secures from a given match, and the number it was expected to secure, affects its stock price, as does the number of goals that the club under question scores in the match, relative to its competitor.