THE IMPORTANCE OF NATIONAL WAGE AGREEMENTS*

It is a commonplace of the literature on labour economics and industrial relations that the post-war period has seen the emergence of a substantial gap between minimum or standard wage rates agreed in official industry-wide negotiations and actual earnings in the workplace throughout many leading sectors of the economy.     

THE QUALITY OF INFORMATION AND INCENTIVES FOR EFFORT*

We study the relationship between the precision of information about the performance of an agent in a market, and the incentives this agent has for exerting effort to produce high quality. We show that this relationship can be nonmonotonic. There exists an efficient plausible equilibrium that induces a threshold beyond which any further improvement in the precision of information weakens the agent's incentive to produce high quality. Accordingly, both very accurate and very inaccurate signals about the agent's performance may destroy its incentive to exert effort. A few applications of this result are discussed.     

NATIONAL TELEVISION AND THE MARKET FOR LOCAL PRODUCTS: THE CASE OF BEER*

Information technology lowers the cost of distributing information to dispersed consumers. Because national firms reap larger benefits from new media than firms serving only local consumers, media innovations may reduce the market for local products. This paper considers the effect of television on the market for local beer. Using market‐level data on television penetration, local breweries and brewery production from 1945–1960, results show that increases in television penetration are associated with fewer local breweries and less local beer production. The results indicate that the industrial organization of media markets can affect the structure of markets for local products.     

PRODUCT VARIETY AND COMPETITION IN THE RETAIL MARKET FOR EYEGLASSES*

I use original data on eyewear retailers in a cross‐section of U.S. markets to study how firms' product range choices vary with the degree of local competition. Market level regressions show average per firm variety declining in the number of rivals. In regressions at the firm level, taking account of spatial differentiation within each market, a non‐monotonic relationship between product ranges and competition is apparent. As the number of nearby rivals increases, per firm variety may first rise before eventually declining. Explanations for this pattern are offered, in terms of a tradeoff between business stealing and clustering effects.     

INVESTMENT OPTIONS AND BARGAINING POWER: THE EURASIAN SUPPLY CHAIN FOR NATURAL GAS*

We use cooperative game theory to analyze the power structure in the pipeline network for Russian gas. If the assessment is narrowly focused on the abilities to obstruct flows in the existing system, the main transit countries, Belarus and Ukraine, appear to be strong. Once investment options are accounted for, Russia achieves clear dominance. Competition between transit countries is of little strategic relevance compared to Russia's direct access to its customers. Comparing our theoretical results with empirical evidence, we find that the Shapley value explains the power of major transit countries better than the core and the nucleolus.