A RE-EXAMINATION OF PRODUCTION FUNCTIONS AND EFFICIENCY ESTIMATES FOR THE NATIONAL BASKETBALL ASSOCIATION

This paper seeks to re‐examine the issue of estimating team efficiency for sports teams via an application of data from the National Basketball Association. This paper argues that the inputs the coaches allocate are the players the team employs. Therefore, this paper employs a measure of playing talent in modeling team production. Unlike previous studies, which only employed one measure of playing talent, we employ measures of guards, small forwards and big men in a study of basketball. This paper also argues that the time‐varying stochastic frontier models with the identical temporal pattern assumption such as Lee and Schmidt and Battese and Coelli cannot be used in the analysis of team efficiency in sports. The evidence we present shows by hypothesis test that this argument holds.     

ENTRY AND QUALITY SIGNALLING WHEN ONLY SOME CONSUMERS ARE INFORMED OF THE ENTRANT'S QUALITY

This paper focuses on competition between an incumbent and an entrant when only the entrant's quality is unknown to (some) consumers. The incumbent may or may not know the entrant's quality. The model reveals a separating equilibrium where the entrant's high price signals its high quality when the proportion of informed consumers is at some intermediate value. The case in which the incumbent knows the entrant's quality generates two additional equilibria. When the proportion of informed consumers is large enough, firms choose their prices as in the complete information case. The entrant's high price in combination with the incumbent's low price signals the entrant's high quality. When the proportion of informed consumers is at some intermediate value, the incumbent's high price signals the entrant's low quality, while its low price signals the entrant's high quality. Interestingly, we find that entry may be facilitated with informational product differentiation.     

QUALITY DIFFERENTIATION,WELFARE, AND THE MODE OF COMPETITION IN A VERTICALLY DIFFERENTIATED PRODUCT MARKET: A NOTE*

We analyse the implications of quality differences in a vertically differentiated product market for social welfare by employing an endogenous quality choice model. We find that in of Bertrand and Cournot duopolies, the degree of quality differentiation at equilibrium in an unregulated market is larger or smaller, respectively, than that of the socially second‐best optimum. This implies that a reduction in quality difference, respectively, increases or decreases social welfare in the case of Bertrand or Cournot duopolies.     

A NOTE ON ENDOGENOUS TIMING WITH STRATEGIC DELEGATION: UNILATERAL EXTERNALITY CASE

We investigate the endogenous choice of roles by managerial firms in the presence of unilateral externality. The choice over timing can be taken either by managers or by owners. It is shown that: (i) the choice of the timing by managers entails the same profit that owners would have achieved by specifying the timing in the delegation contract; and (ii) firms move simultaneously if the degree of unilateral externality is small, while sequentially if the degree of unilateral externality is large, with the firm generating unilateral externality as a follower; the owner of the follower firm delegates to restrict output, while his/her counterpart does not delegate it.     

A NOTE ON THE PROPERTY RIGHTS THEORY AND THE EX ANTE VALUE OF INFORMATION

This paper examines the ex ante value of information in the property rights model where the possibility exists that an investing agent can be provided with relevant information before investments are undertaken. When contracts are incomplete, from an ex ante perspective, informing the investing agent does not necessarily increase the expected surplus resulting from a relationship between two economic agents. The paper highlights the fact that the second‐best nature of the problem that arises from contractual incompleteness can ensure this.     

PRICE AND QUANTITY COMPETITION WITH ASYMMETRIC COSTS IN A MIXED DUOPOLY: A TECHNICAL NOTE

We consider a mixed duopoly in which private and public firms can choose to strategically set prices or quantities when the public firm is less efficient than the private firm. Thus, even with cost asymmetry, we obtain exactly the same result (i.e., Bertrand competition) of Matsumura and Ogawa (2012) if Singh and Vives’ (1984) assumption of positive primary outputs holds. However, compared to endogenous determination of the type of contract without cost asymmetry, our main finding is that in the wider range of cost asymmetry, different type(s) of equilibrium related to or not related to the limit‐pricing strategy of the private firm can be sustained. Thus, when considering an implication on privatization, we may overestimate the welfare gain of privatization because Cournot competition takes place after privatization even though cost asymmetry exists between firms. While the result of Matsumura and Ogawa (2012) holds true if the goods are complements, we find the novel results in the case of substitutes.     

THE IMPACT OF GREATER AUTONOMY ON EFFICIENCY OF WORK AND QUALITY OF SERVICES IN PUBLIC SERVICE PROVIDERS: A CASE OF VOCATIONAL EDUCATION INSTITUTIONS

ABSTRACT: The paper analyses impact of greater autonomy on efficiency of work and quality of services in public service institutions. Autonomy is one of the key principles of New Public Management that, according to the theory, increases performance in public service providers. However this assumption has been scarcely researched in practice. To narrow this gap, the experimental reform that implemented greater managerial and financial autonomy in 13 Lithuanian state vocational schools was chosen for research. In order to analyse the impact of autonomy after the reform, maximally similar institutions (those that underwent the reform and that did not) are compared using quantitative (incl. counterfactual analysis) and qualitative methods. The results indicate that institutions that have been reformed tend to have better efficiency and quality of services, even though this relationship is not causal. Moreover, the research challenges the notion that such results came from greater autonomy. Finally, the logic of the NPM of as to why more autonomous institutions perform better is also challenged.