A CLASS OF PERFORMANCE‐BASED SUBSIDY RULES*

We consider a benchmark static incentive scheme, i.e. a per unit subsidy, that induces a monopoly to produce a target output level. We show that the same output level can be achieved by a continuum of dynamic subsidy rules based on a performance indicator. The rules require only local information. The present value of the subsidies paid is smaller than the amount paid under the static subsidy. Each of the dynamic subsidy rules results at each moment in a lower per unit subsidy than the static subsidy. The subsidy rate depends on a state variable that reflects the monopolist's performance history.     

自然垄断的"三位一体"理论

传统自然垄断理论是建立在规模经济、范围经济和成本劣加性基础之上的，本文认为社会总价值或总效用和社会净收益的优加性是比成本劣加性更好地定义自然垄断的概念，并在对规模经济、范围经济和网络经济重新定义的基础上，从规模经济、范围经济、网络经济“三位一体”角度重新解释了自然垄断概念，提出了自然垄断的“三位一体”理论，为自然垄断产业规制及其改革奠定理论和实证基础。     

When is multidimensional screening a convex program?

A principal wishes to transact business with a multidimensional distribution of agents whose preferences are known only in the aggregate. Assuming a twist (= generalized Spence-Mirrlees single-crossing) hypothesis, quasi-linear utilities, and that agents can choose only pure strategies, we identify a structural condition on the value b(x,y) of product type y to agent type x — and on the principal?s costs c(y) — which is necessary and sufficient for reducing the profit maximization problem faced by the principal to a convex program. This is a key step toward making the principal?s problem theoretically and computationally tractable; in particular, it allows us to derive uniqueness and stability of the principal?s optimal strategy — and similarly of the strategy maximizing the expected welfare of the agents when the principal?s profitability is constrained. We call this condition non-negative cross-curvature: it is also (i) necessary and sufficient to guarantee convexity of the set of b-convex functions, (ii) invariant under reparametrization of agent and/or product types by diffeomorphisms, and (iii) a strengthening of Ma, Trudinger and Wang?s necessary and sufficient condition (A3w) for continuity of the correspondence between an exogenously prescribed distribution of agents and of products. We derive the persistence of economic effects such as the desirability for a monopoly to establish prices so high they effectively exclude a positive fraction of its potential customers, in nearly the full range of non-negatively cross-curved models.     

Efficiency in Crime Prevention: A Case Study of the Lisbon Precincts

This paper analyzes the technical efficiency of the Lisbon police precincts in order to investigate its performance. A stochastic cost frontier model is used to generate efficiency scores, assuming that efficiency is time varying. It investigates its efficiency and finds that the results are, at best, mixed since the efficient scores are low and not time varying. Therefore, an alteration of management procedures is proposed in order to enable efficiency to be increased based on a governance–environment framework.Financial support from Fundação para a Ciência e Tecnologia/MCT under FCT/POCTI partially funded by FEDER is gratefully appreciated. The authors also thank the participants at the International Atlantic Economic Conference in Lisbon, Portugal, March 10–13, 2004 for helpful comments. For our mistakes, the usual disclaimer applies.     

A dual measure of economies of scope

A derivative-based measure of economies of scope is obtained by exploiting the duality between the shadow cost function and the input distance function. This is a useful measure when the econometric estimation of a cost function is not viable.     

A sectoral taxonomy of educational intensity

This paper classifies 49 manufacturing and service industries according to their educational workforce composition. Statistical cluster techniques are applied to data for the USA, Germany, France, the UK and Austria. Industries are first classified separately for each country, providing an appropriate tool for the analysis of national micro-data. Later, the paper proposes a common consensus classification, enabling comparative international studies. Validation of the cluster solution reveals considerable robustness to variations over time and between countries. Finally, regression analyses and ANOVA decompositions on various measures of sector performance confirm a significant tendency towards “education-biased structural change” between industries.