Regulating Multiple Polluters: Deterrence and Liability Allocation

We consider regulation of multiple polluters when individual emissions are unobservable. The tension between pollution deterrence and funding of remediation is examined under two constraints: that penalty revenues fully fund remediation costs and that the regulator cannot make positive transfers to firms. To isolate the effect of increasing the number of polluters, we compare an industry consisting of a single large firm with one in which many small firms in aggregate mimic the large firm. Contrary to previous findings, both the number of firms and the ability to monitor individual firms affect the welfare of a large class of regulators.     

Detection Avoidance and Deterrence: Some Paradoxical Arithmetic

This paper extends Malik's analysis to the case where criminals' avoidance efforts and public expenditures in the detection of criminals are strategic complements in the aggregate technology of control of illegal behaviors. In this set up, we show that whenever criminals' avoidance efforts are more sensitive to the frequency than to the severity of sanctions, it is always socially efficient to set the fine at the maximal possible level. However, several paradoxical consequences occur: there may exist overdeterrence at optimum; more repressive policies lead to fewer arrests of offenders while more crimes may be committed; at the same time, the society may be closer to the first best number of crimes.     

Deterrence and cooperation: A classification of two-person games

In two-person games in normal, bilateral threats succeed in self-enforcing any imputation. We discriminate among imputations by looking at various features of deterring threats. As a result we obtain a classification of two-person games. Finally a duopoly example is analysed.     

Moore's law and price trends of digital products: the case of smartphones

ABSTRACT

Since the introduction of the iPhone by Apple in 2007 and Google's Android platform in 2009, the two systems have accounted for a total of 90% of the U.S. smartphone market. Apple, however, reaps most of the profit in the industry. In the second quarter of 2016, for example, Apple's iPhone gets 104% of the sector's profit. This suggests that the smartphone market resembles a Stackelberg leadership model. Despite Apple's strong market power, we investigate if the market leader is under pressure to be price competitive. We calculate a quality-adjusted price index for smartphones from 2007 to 2016. Our results show that the average price declines at an average rate of over 27% per year. The price trend is similar to other digit products such as computers, cameras, and portable music players. We observe that the large price decline reflects the effect of Moore's law, which predicts that the capacity of integrated circuits undergoes an exponential growth. The effect of Moore's law is incorporated into the Stackelberg model. We also observe that price trends of other digital products also follow a similar pattern. This suggest that the long-run price trends of digital consumer goods are somewhat independent of the market structures.     

The emergence of technology systems: knowledge production and distribution in the case of the Emilian plastics district

The emergence of technology systems is the result of interdependentdynamics of the generation and diffusion of complementary bitsof localised technological knowledge. Technological communicationis the crucial element assessing the collective conditions underwhich technological knowledge is accumulated and diffused. Thecase study of the emerging Emilian technological system in theplastics sector shows that the synchronic and diachronic localisedinteractions among industrial dynamics, institutional R&Defforts and technological interrelatedness are the determinantsof the systematic production, accumulation and distributionof localised technological knowledge, in turn explaining theorigin and development of the technology system itself.     

Entry Deterrence and the Efficient Component Pricing Rule

This note comments on the article 'Entry and Entry Deterrence under the New Access Code' by Amiti and Maddock, published in the Australian Economic Review, 3rd quarter 1996. It is found that Amiti and Maddock do not show that efficient component pricing by an incumbent vertically-integrated monopolist will deter socially efficient entry of a new competitor.     

On the dynamics of generation and utilisation of knowledge: The local character of knowledge

In this paper a theoretical framework for the analysis of knowledge suitable to study processes of knowledge generation and utilisation in advanced post-industrial societies is presented. This framework is based on two fundamental properties of knowledge, that of being a co-relational structure and that of being a retrieval/interpretative structure. The paper shows that a third property, the local character of knowledge, can be derived from the two fundamental ones. Furthermore, it is shown that the production of knowledge can be analysed by means of concepts currently used in economics, such as the division of labour, coordination, specialization, competition and so on. Finally, the paper shows that the framework proposed here is compatible with a number of epistemological concepts and theories and applicable to the empirical analysis of processes of knowledge generation and utilization in firms.     

Lifetime Employment Contract and Strategic Entry Deterrence: Cournot and Bertrand

This paper is based on a two-stage model of an incumbent firm and a potential entrant, and studies both quantity-setting competition and price-setting competition. We consider a lifetime-employment-contract policy as a strategic commitment that generates kinks in the reaction curve. Furthermore, demand functions are classified into two cases in terms of the strategic relevance between both firms. Therefore, we examine the following four cases: 'quantity-setting competition with strategic substitutes', 'quantity-setting competition with strategic complements', 'price-setting competition with strategic substitutes' and 'price-setting competition with strategic complements'. The purpose of this paper is to analyse entry deterrence in the four cases and to show the effectiveness of the lifetime-employment-contract policy as a result of its analyses.     

Two tales on human capital and knowledge spillovers: the case of the US and Brazil

This article uses a quasi-Mincerian approach to verify whether the concentration of college-educated individuals employed in the business support services sector and in the own sector contributes to increased productivity in other sectors of the economy. We estimate the returns to education using data from the 2008 US Current Population Survey (March supplement) and from the 2008 Brazilian household survey. This article finds evidence of a positive and significant human capital sectorial spillover effect, which is consistent with Acemoglu’s (1996) conjecture. The sectorial concentration of highly educated workers contributes to increase wages for all workers. This study also finds evidence of increasing returns to education in Brazil and diminishing returns to education in the United States. This finding may be explained by differences in supply of skilled workers in both economies. In addition, the short supply of highly skilled workers in Brazil likely explains the importance of the spillover effect from the business supporting sector.     

Competition Between Exclusive Religions: The Counter‐Reformation As Entry Deterrence

This article sets forth a theory of competition between exclusive religions as an entry deterrence game, in which the incumbent may find it profitable not to accommodate but to deter the competitor's entry by precommitting to sufficient capacity expansion in the event of entry. If entry costs are high enough, deterrence is optimal and the incumbent remains a monopolist, although the entry threat distorts its effort upward. The model is then applied to the Catholic Church's reaction to the Protestant Reformation. It is argued that the model provides a better fit to the historical data of the Counter‐Reformation than the price‐cutting model proposed by economists Ekelund, Hébert and Tollison ( 2004 , 2006 ).     

Crime, Punishment and Deterrence in Australia: An Empirical Investigation*

This paper provides empirical estimates of the determinants of crime rates in Australia. It differs from most modern criminological analysis by being aggregative rather than offender-based and by deriving from the economic approach to criminal behaviour. Its major finding is that court committals and imprisonments have operated as major deterrent factors in explaining variations in recorded crime rates. These deterrence results seem especially strong and robust. Improved measurement, however, could alter the findings for some other influences examined. The paper considers the relationship of these research findings to criminal justice policy.     

National innovation systems and international knowledge flows: an exploratory investigation with the case of the Netherlands

Since the late 1980s, the literature on innovation systems has flourished, often tying these systems to nation-states. Technology, however, often flows across the borders of nations. In this paper, four cases are studied where foreign technology is imported and appropriated from abroad into Dutch companies. By doing so, the questions what a national system of innovation consists of and what such a system means for firms are explored. The cases studied provide a picture of international-sectoral systems, adding up to a loosely interacting innovation system at the national level.     

The impact of knowledge accumulation and geographical spillovers on productivity and efficiency: The case of U. S. shipbuilding during WWII

This paper examines the productivity and efficiency experience of World War II Liberty ship builders using two complementary paradigms which can be viewed as alternative specifications of the endogenous growth model introduced by Romer (1986) and the stochastic frontier production model introduced by Aigner, Lovell, and Schmidt (1977). We develop modifications in the endogenous growth model to allow for learning as well as spatial spillovers by relating productivity growth to cumulative productive experience (the ‘learning curve’) and to worker experience as it is transferred and utilized across different geographical regions. We also consider the relative impact of both proximal and distant simultaneous production on productivity growth. We then utilize a framework in which the efficiency component of productivity growth is explicitly considered using a stochastic frontier model wherein contributions to productivity growth introduced in the endogenous growth model are formally modeled as determinants of efficiency change.     

The process of technology evolution : Multitechnology innovations as the driving force

Technological innovations are the substance of technology and the drivers of its evolution. This process was studied by analyzing the US patent data base, getting information on types of innovation and on their trends.It was found that the evolution of a technology depends upon its annexing multitechnology innovations. Ascending technologies utilize wide-range innovations, while mature technologies utilize narrow-range innovations. The findings are summed up in a model that shows the life cycle of a technology, from emergence to maturity.The model can be applied at a laboratory level, at a firm strategy level, as well as at the national level. Some examples are presented to illustrate applications.     

The sound of silence: Political accountability and libel law

This paper explores the role played by press regulation in selecting the information mass media deliver to voters. The focus is on whether press regulation can reduce political corruption and increase voters' welfare. By endogenizing the response of the voters to information from the media, we clarify under which circumstances regulation reduces or increases corruption. We show that punitive laws can reduce political corruption only if the moral hazard problem dominates adverse selection and the punishment is large enough to deter the publication of some well-founded scandals.     

The Verdoorn law revisited: A note

In his Fattori che regolano lo sviluppo della produttività del lavoro Verdoorn (1949) presented empirical evidence on the constancy of the ratio of productivity growth to output growth. As a theoretical underpinning he used a neoclassical growth model. The main purpose of this paper is to emphasize that in this model the ratio is constant only in the steady state. If Verdoorn's underpinning of his law is to be correct, the steady-state assumption should be empirically tested. Some available evidence for Verdoorn's sample appears to throw doubt upon this assumption.     

The NOME law: implications for the French electricity market

In December 2010, France approved the law “Nouvelle Organisation du Marché de l’Electricité” (or NOME law) to promote competition in the retail electricity market. In practice, the law allows retailers to buy nuclear production from the incumbent, at a regulated access price. This mechanism works up to a ceiling of 100 terawatt hours, which represents one quarter of the incumbent’s production from nuclear plants. Each retailer is assigned a share of that amount proportionally to its portfolio of clients. We contribute to the debate raised by the NOME law regarding the evolution of retail market prices. We show that a price decrease results if the ceiling is sufficiently high compared to the market share of the retailers competing with the incumbent. This pro-competitive effect is stronger when the incumbent’s rivals take into account the impact of their market strategy on the redistribution rule. Finally, we find that, if the regulated price of the NOME electricity is set above the nuclear cost, the incumbent realizes a gain that may result in strategic withholding, weakening the pro-competitive effects of the law.