Cost sharing: efficiency and implementation

We study environments where a production process is jointly shared by a finite group of agents. The social decision involves the determination of input contribution and output distribution. We define a competitive solution when there is decreasing-returns-to-scale which leads to a Pareto optimal outcome. Since there is a finite number of agents, the competitive solution is prone to manipulation. We construct a mechanism for which the set of Nash equilibria coincides with the set of competitive solution outcomes. We define a marginal-cost-pricing equilibrium (MCPE) solution for environments with increasing returns to scale. These solutions are Pareto optimal under certain conditions. We construct another mechanism that realizes the MCPE.     

Equilibria in a large production economy with an infinite dimensional commodity space and price dependent preferences

We prove the existence of a competitive equilibrium in a production economy with infinitely many commodities and a measure space of agents whose preferences are price dependent. We employ a saturated measure space for the set of agents and apply recent results for an infinite dimensional separable Banach space such as Lyapunov’s convexity theorem and an exact Fatou’s lemma to obtain the result.     

A core equivalence theorem with an arbitrary communication structure

We formalize the concept of a communication structure by identifying it with a partition of the set of agents. Thus, a coalition can form if and only if it belongs to the given partition. Within this framework we are able to show that for every integer J≧2, if we put the uniform distribution on the space of partitions that contain exactly (or, no more than) J coalitions, the probability that such a partition will contain a blocking coalition for any Pareto optimal allocation which is bounded away from being competitive, is arbitrarily close to 1, as the number of individuals increases.     

The Resource-Based View of Competitive Advantage in Two-Sided Markets

abstract    Using two-sided markets as a specific market context, we show that cross-group network effects can turn the participants of a two-sided network into critical resources. In two-sided markets such as payment cards and personal computer operating systems, two groups of agents interact with each other via a common network platform; the value of joining the network for agents in one group depends on the number of participants in the other group. In these markets, resource heterogeneity is represented by different sizes of existing networks; resource accumulation possesses all five characteristics of asset-stock accumulation summarized by Dierickx and Cool. The unique resource accumulation process provides an isolating mechanism for large networks to sustain their resource and competitive advantages. Using two dynamic systems models, we show that resource heterogeneity (i.e. varying initial network sizes) is a source of sustained competitive advantage for two-sided networks and has significant impact on long-term competition dynamics. The findings illustrate the importance of incorporating market context in the research of the resource-based view of competitive advantage.     

Envy and Compassion in Tournaments

Many experiments and field studies indicate that most individuals are not purely motivated by material self-interest but also care about the well being of others. In this paper, we examine tournaments among inequity averse agents, who dislike disadvantageous inequity (envy) and advantageous inequity (compassion). It turns out that inequity averse agents exert higher efforts than purely self-interested agents for a given prize structure. Contrary to standard tournament theory, first-best efforts cannot be implemented when prizes are endogenous. Furthermore, the choice between vertical and lateral promotions is examined and it is shown that inequity costs have to be traded off against losses in human capital .     

Adverse Selection,Gresham's Law and State Regulation

Regulation is often justified as a response to adverse selection caused by poorly informed buyers and as a means of preventing a ‘race to the bottom’ in competitive markets. This paper argues that competitive markets respond with a variety of institutional mechanisms to problems of adverse selection and that these are often subverted by regulation. Far from Gresham's Law being associated with competitive market processes, it is actually more correctly viewed as the outcome of regulatory intervention that weakens the quality‐protecting incentives that economic agents would otherwise face.     

Profit sharing with a contest among agents

We consider how an internal competition in the form of a contest among agents can be combined with profit sharing in team production. The principal can choose to share between the principal and the agents as well as the sharing rule with a competitive contest among the agents. We show that under some conditions, a pure strategy equilibrium of profit sharing exists. In equilibrium, internal sharing involves a contest that is more competitive than proportional sharing, and the principal can get higher profit compared to proportional sharing.     

Lernstrategien und Lernpfade in Unternehmensnetzwerken

In the inter-organizational learning literature two flaws can be identified: on the one hand it is assumed, explicitly or implicitly, that there is only one adequate learning strategy oscillating between the extremes of purely cooperative and purely competitive learning. Instead, we propose a typology of three basic learning strategies, the combination of which also allows to represent hybrid forms of learning. On the other hand it is asserted that learning strategies will be retained once they are established. Our paper explains why it is required to adjust the inter-organizational learning strategy to the current situation and specifies basic options for a reorientation of the learning strategy.     

Gap-minimizing prices and quadratic core convergence

We study the decentralization of core allocations by price vectors chosen, essentially, to minimize the competitive gap. In the setting of Debreu (1975) and Grodal (1975), the competitive gap with respect to these gap-minimizing prices goes to zero as the inverse of the square of the number of agents; in Debreu's setting, the convergence is uniform over agents while in Grodal's setting, we show convergence on average.     

Farsighted house allocation

In this note we study von Neumann–Morgenstern farsightedly stable sets for Shapley and Scarf (1974) housing markets. Kawasaki (2010) shows that the set of competitive allocations coincides with the unique von Neumann–Morgenstern stable set based on a farsighted version of antisymmetric weak dominance (cf., Wako, 1999). We demonstrate that the set of competitive allocations also coincides with the unique von Neumann–Morgenstern stable set based on a farsighted version of strong dominance (cf., Roth and Postlewaite, 1977) if no individual is indifferent between his endowment and the endowment of someone else.     

从点优势到群优势——以沃尔玛的成功为例

在当今超强动态环境中,任何企业都不能单纯依靠一种或几种竞争优势而持久地生存与发展,而是要企业多年的潜心经营逐渐形成强大的竞争优势群系统,其中有主导优势和支撑优势。这些优势相互促进支撑着企业长期稳定发展。世界零售业巨子沃尔玛的成功就是点优势向群优势过渡的最好例子。     

Housing markets with indivisibilities

A model of a rental housing market in which houses are treated as indivisible commodities is presented. A recursive equation that determines a competitive equilibrium is provided, and it is argued that this competitive equilibrium is representative of the set of all competitive equilibria. Using this representative equilibrium, several propositions on comparative statics are considered that have to do with how the competitive rents change when certain parameters of the model change.     

A Theory of Fraud and Overtreatment in Experts Markets

Consumers often rely on an expert's diagnosis to assess their needs. If the expert is also the seller of services, he may use his informational advantage to induce overtreatment, which is a pervasive phenomenon in experts markets. We offer and discuss conditions leading to equilibrium overtreatment in an otherwise purely competitive model. This market failure results from consumers' ability to turn down an expert's recommendation: experts defraud consumers to keep them uninformed, as this deters them from seeking a better price elsewhere.     

Convergence to competitive equilibria and elimination of no-trade (in a strategic market game with limit prices)

The strategic market games literature contains many results that predict Walrasian equilibria in the competitive limit. However, they usually come at the expense of ad hoc assumptions that rule out “pathological” no trade equilibria. This paper studies a strategic market game with limit prices. The set of Nash equilibrium allocations of this game converges to the set containing all competitive equilibria and no-trade, when players are replicated. Moreover, two rounds of iterated deletion of weakly dominated strategies eliminate the no-trade equilibria. Hence, replication paired with two rounds of iterated dominance gives a clean prediction of competitive equilibrium.     

Testing for overconfidence statistically: A moment inequality approach

We propose a moment inequality approach to test for the presence of overconfidence using data from ranking experiments where subjects rank themselves relative to other experimental participants. Although a ranking experiment is a typical way to collect data for the analysis of overconfidence, recent studies show that the resulting data may apparently indicate overconfidence even if participants are purely rational Bayesian updaters, in which case a set of inequalities hold. We apply state-of-the-art tests of moment inequalities to test such a set of inequalities. We examine the data from a traditional ranking experiment as well as those from more sophisticated designs.     

Some approximate equilibria

It is by now well-known that there exists a system of prices at which decentralized, utility-maximizing behavior by a finite number of agents, each with convex preferences, leads to outcomes which ‘mesh’ in the aggregate. Technically, a competitive equilibrium is said to exist. The question arises as to what happens with non-convex preferences. Using Non-standard Analysis, we show that, provided the economy is ‘large’ enough, there exist various formulations of approximate competitive equilibria. We also relate our results to other work in this area.     

Data governance and the secondary use of data: The board influence

The business analytics and strategic management literatures suggest that organizations should seek to exploit data as a key mechanism for competitive advantage. However, the rules of engagement are evolving, the regulatory landscape is becoming increasingly complex, and examples of poor outcomes are increasingly common. The board – in its role of setting and monitoring risk appetite – needs to be able to govern the risk/reward trade-off of the data asset. Contemporary data governance approaches are inadequate: they are overly rigid and risk oriented, limited in scope to an organization's self-interest rather than considering the broad set of stakeholders, and do not provide a platform for the board to manage this critical risk. This paper uses a unique set of informants – 41 board directors – to demonstrate that differences in board perspectives influence how organizations explore the secondary use of data. Furthermore, this paper identifies a set of relevant individual, organizational and environmental factors and presents empirically based configurations of these factors that lead organizations to consider (or neglect) the secondary use of data as a critical enabler of competitive advantage.     

Arrow's theorem with restricted coalition algebras

Arrow's Theorem is shown to be valid for measurable spaces of economic agents even with only a Boolean algebra of measurable coalitions. Purely competitive social welfare functions which ignore negligible coalitions may be handled by passing to a Boolean quotient algebra with the ideal of negligible coalitions. Invisible dictators are ‘agents’ in the Stone space of the quotient algebra, in which context social welfare functions induce continuous preference profiles.     

The Distribution of Criminal Offenses in an Urban Environment: A Spatial Analysis of Criminal Spillovers and of Juvenile Offenders

A bstract . In order to derive a basis for an optimal allocation of police manpower among contiguous communities criminal spillovers among these communities must be explicitly taken into account. Under the assumptions established in the economic theory of choice a criminal spillovers model is derived. The hypothesized variables within this model which serve as motivating factors for criminal spillovers are economic gain and competitive criminal pressures. Those factors which deter criminal spillovers are costs of committing offenses and the relative risks in committing crimes in distant communities. The model is then tested using data on juvenile offenders supplied by the City of Los Angeles , for the crimes of robbery, burglary and larceny. The results suggest that on an aggregate basis juvenile criminal behavior is not purely opportunistic and that certain control and motivating factors are significant in the juvenile's judgments for the spatial selection of offense targets.     

数据挖掘在企业知识管理中的应用研究

在高度竞争的市场环境中,我国企业必须从过去单纯注重技术水平和网络建设转向注重知识管理水平的提高。数据挖掘是知识管理非常关键的部分,能够快速有效地挖掘出对管理和决策有效的信息与知识,提高企业知识管理的效率。因此,在企业知识管理中运用数据挖掘技术是非常必要的。