Declining prices and optimality when costs follow an experience curve

There is a widely held notion that as production costs decline with experience, prices should follow more or less in parallel. Although this notion has been an important factor in estimating experience curves and in formulating corporate strategies, we show that it is generally inconsistent with published multiperiod optimal pricing models. The paper then goes on to demonstrate that this apparent conflict can be reconciled by allowing the demand process to exhibit increasing price elasticity over time. Since this demand characteristic is very plausible for innovative products, we suggest it be incorporated into optimal pricing models.     

Quasi-equilibrium in abstract economies without ordered preferences

A definition and an existence proof for quasi-equilibrium in abstract economies is presented When applied to a standard economy this definition coincides with the regular notion of a quasi-equilibrium given by Debreu.     

The New Role of the Constitutive Rule

A BSTRACT . Searle used to analyze institutional facts in terms of the constitutive rule. In his more elaborate account in The Construction of Social Reality he introduces the notion of a status function. The "counts as" locution is central to both the constitutive rule and the status function. The main question I ask is what role is left for the constitutive rule after the introduction of the status function. In order to answer this question, I start by analyzing the notion of a status function. An examination of the relation between status functions and the function of representation reveals that the former is a species of the latter. An exploration of the relation between status functions and collective acceptance reveals that Searle does not provide an argument as to why collective acceptance is required for institutional facts. Searle's new account goes beyond his old analysis of institutional facts in terms of the constitutive rule. Rather than declaring the notion to be redundant, Searle assigns the constitutive rule a new role: it is to account for the fact that there can be counterfeit instances of a subclass of institutions, including, for example, that of money. This subclass consists of institutions that are codified.     

Constrained suboptimality when prices are non-competitive

The paper addresses the following question: how efficient is the market system in allocating resources if trade takes place at prices that are not competitive? Even though there are many partial answers to this question, an answer that stands comparison to the rigor by which the first and second welfare theorems are derived is lacking. We first prove a “Folk Theorem” on the generic suboptimality of equilibria at non-competitive prices. The more interesting problem is whether equilibria are constrained optimal, i.e. efficient relative to all allocations that are consistent with prices at which trade takes place. We discuss an optimality notion due to Bénassy, and argue that this notion admits no general conclusions. We then turn to the notion of p-optimality and give a necessary condition, called the separating property, for constrained optimality: each constrained household should be constrained in each constrained market. If the number of commodities is less than or equal to two, the case usually treated in the textbook, then this necessary condition is also sufficient. In that case equilibria are constrained optimal. When there are three or more commodities, two or more constrained households, and two or more constrained markets, this necessary condition is typically not sufficient and equilibria are generically constrained suboptimal.     

The Political Uses of Some Economic Ideas: The Trade‐Off Between Efficiency and Equality

The notion of a trade‐off between efficiency and equality is pervasive in many disciplines across the social sciences. Moreover, an imprecise notion of this well‐known dilemma is an integral part of the discourse of politicians and policy‐makers. The scientific status of the idea of a trade‐off between efficiency and equality is, however, a matter of contention. Philosophical dissections of the idea have already deflated the analytical cogency of most of its versions, while the economic literature trying to assess the empirical relation between growth and equality has shown contradicting results. This article, by focusing on the role this idea plays both in the discourse and strategy of social‐democratic parties, and in the social science explanations of their trajectories, argues that the pervasiveness of the notion of the trade‐off between efficiency and equality is best explained in terms of the political functions it can fulfill.     

Towards a functional framework for measuring national innovation efficacy

In an increasingly globalised economy, the ability to draw in innovations and ideas from elsewhere and build on them to create value at home has become a powerful facility for economic growth. Since some places are better at adopting and adapting borrowed ideas than others, the function of ‘innovation through adoption’ deserves more attention at both scholarly and policymaking levels. Based on such beliefs, this paper elaborates the notion of ‘innovation through adoption’ and develops it further to advance the notion of ‘innovation efficacy’. The latter is interpreted here as the efficiency and effectiveness of innovation systems in terms of accessing, anchoring, diffusing, creating and exploiting innovations. This notion is further illustrated in a measurement tool based on a composite index, which we name the ‘Innovation Efficacy Index’.The ultimate contribution of the paper lies in its aim to shift the traditional focus of attention from a fixation with developing and exploiting new knowledge locally to the prospect of value creation through accessing, anchoring or diffusing knowledge acquired from elsewhere.     

Conditional comonotonicity

Abstract In this paper we propose a generalization of the notion of comonotonicity by introducing and exploring the concept of conditional comonotonicity. We characterize this notion and we show by examples that conditional comonotonicity is the natural extension of the concept of comonotonicity to dynamic settings. Mathematics Subject Classification (2000): 90A05, 60Gxx Journal of Economic Literature Classification: D910, C610, G120     

How to model multivariate extremes if one must?

In this paper we discuss some approaches to modeling extremely large values in multivariate time series. In particular, we discuss the notion of multivariate regular variation as a key to modeling multivariate heavy-tailed phenomena. The latter notion has found a variety of applications in queuing theory, stochastic networks, telecommunications, insurance, finance and other areas. We contrast this approach with modeling multivariate extremes by using the multivariate student distribution and copulas.     

Typical lots for detached houses in residential blocks and lot shape analysis

The notion of shape distance between lots is the basis for further development of the economics of dealing with lot shapes in real estate. The distance between two lots is defined as the relative area of the set difference of two lots. Using this notion, a method for identifying typical lots in a residential block based on the shape distance matrix among all the lots in the block is proposed. The method is applied to 20 blocks in the Setagaya ward in Tokyo. Typical lots tend to be rectangular-type lots even in irregularly shaped blocks. This suggests that consumers prefer rectangular shapes when choosing residential lots. Moreover, rectangular blocks tend to contain typical rectangular lots that have a depth about half as long as the shorter edge of the block and two variations of width. This suggests that some lots were previously subdivided in half.     

Talent management and dynamic view of talent in small and medium enterprises

Talent Management (TM) has become one of the key strategic issues for leaders in global organizations and the majority of research on TM focuses on the large multinational enterprise (MNE) context. Despite the importance of small and medium-sized enterprises (SMEs), research in the area of talent management in this context is scarce, particularly conceptual research. This paper tries to address this gap by a) providing a theoretical rationale for the difference between large and SME firms in their talent management and human resource practices; b) exploring the applicability of the notion of talent management conceptualised in large firms to the SME context. c) Proposing a framework that helps identify the characteristics of talent in SMEs. We are critical of the best practices approach and we argue that the notion of talent management is likely to be different in SMEs compared with large firms mainly due to distinct institutional and structural factors.     

INFORMATION THEORETIC APPROACHES IN ECONOMICS

Economics has seen a recent rise in interest in information theory as an alternative framework to the conventional notion of equilibrium as a fixed state, such as Walrasian market‐clearing general equilibrium. The information theoretic approach is predicated on the notion of statistical equilibrium (SE) that takes a distribution over all possible states as an equilibrium, and therefore predicts the endogenous fluctuations of the system along with its central tendency simultaneously. For this reason, SE approaches can explain the observed data without relying on arbitrary assumptions about random noise and provide useful insights for many interesting economic problems that conventional methods have not been able to satisfactorily deal with. In this paper, we review the key elements of information theory focusing on the notions and applications of entropy and SE in economics, particularly paying attention to how entropy concepts open up a new frontline of economic research.     

Wavelet thresholding for some classes of non–Gaussian noise

Wavelet shrinkage and thresholding methods constitute a powerful way to carry out signal denoising, especially when the underlying signal has a sparse wavelet representation. They are computationally fast, and automatically adapt to the smoothness of the signal to be estimated. Nearly minimax properties for simple threshold estimators over a large class of function spaces and for a wide range of loss functions were established in a series of papers by Donoho and Johnstone. The notion behind these wavelet methods is that the unknown function is well approximated by a function with a relatively small proportion of nonzero wavelet coefficients. In this paper, we propose a framework in which this notion of sparseness can be naturally expressed by a Bayesian model for the wavelet coefficients of the underlying signal. Our Bayesian formulation is grounded on the empirical observation that the wavelet coefficients can be summarized adequately by exponential power prior distributions and allows us to establish close connections between wavelet thresholding techniques and Maximum A Posteriori estimation for two classes of noise distributions including heavy–tailed noises. We prove that a great variety of thresholding rules are derived from these MAP criteria. Simulation examples are presented to substantiate the proposed approach.     

Is the division of labour limited by the extent of the market? Evidence from French cities

This paper provides supportive evidence to the notion that the division of labour is limited by the extent of the (local) market. We first propose a theoretical model. Its main prediction is that scarce specialists occupations are over-represented in large cities. Using census data for French cities, we find strong empirical support for this prediction.     

Yet another breakdown point notion: EFSBP

The breakdown point in its different variants is one of the central notions to quantify the global robustness of a procedure. We propose a simple supplementary variant which is useful in situations where we have no obvious or only partial equivariance: Extending the Donoho and Huber (The notion of breakdown point, Wadsworth, Belmont, 1983) Finite Sample Breakdown Point?, we propose the Expected Finite Sample Breakdown Point to produce less configuration-dependent values while still preserving the finite sample aspect of the former definition. We apply this notion for joint estimation of scale and shape (with only scale-equivariance available), exemplified for generalized Pareto, generalized extreme value, Weibull, and Gamma distributions. In these settings, we are interested in highly-robust, easy-to-compute initial estimators; to this end we study Pickands-type and Location-Dispersion-type estimators and compute their respective breakdown points.     

Dual materiality and knowing in petroleum production

This paper explores the relationship between materiality and knowing through the notion of dual materiality. Dual materiality highlights how digital technology becomes important, as its materiality plays an integral part in creating, not simply representing, the materiality of the physical world. We elaborate upon this insight through a theory on sociomaterial knowing grounded in ethnographic fieldwork within a petroleum company. The main theoretical proposition of this theory is that knowing arises from the emerging patterns of interaction between material phenomena, the material arrangements for knowing about these phenomena, and knowledge practices. We elaborate upon this through three predominant modes of knowing in petroleum production: instrumentation, interpretation, and learning. This paper contributes to the broader discourse on sociomateriality by refining ideas of materiality through the notion of dual materiality. We conclude by encouraging further exploration of different materialities in contemporary work and organizing.     

Reason rules...: the utility of rationality and the rationality of utility

Almost every theory of human behavior is based upon some assumption of rationalty. Such an assumption is commonly believed to be necessary in order to distinguish rational behavior, which is, from non-rational behavior, which is not amenable to scientific investigation. This article presents a thorough re-examination of this assumption, an inquiry which turns out to raise all the central issues of both the methodology and the theory of behavioral inquiry generally. It leads to the somewhat surprising conclusion that the notion of rationality does not have any meaningful role to play in behavioral inquiry, and that there is no sense in distinguishing rational from non-rational or irrational behavior. It also shows that the generalization of the utility notion in terms of information makes it into a much more powerful and subtle tool of analysis than it commonly appears to be taken for.     

Economies of scope and economies of agglomeration

Agglomeration economies are economies external to the firm, and plant, but internal to a particular location. In this paper the notion of agglomeration economies is formally investigated. The implications of the concept for urban structure and industrial organization are then traced. Under specified considerations, weak economies of agglomeration, as defined in this paper, are shown to be necessary for the existence of an urban area.     

Research and theory on high‐performance work systems: progressing the high‐involvement stream

The notion of a high‐performance work system (HPWS) constitutes a claim that there exists a system of work practices for core workers in an organisation that leads in some way to superior performance. In this article, we dissect this fuzzy notion and examine its companion terminology: high‐involvement work systems and high‐commitment management. We argue that a focus on the high‐involvement stream usefully grounds HPWS studies in an important area of workplace change in the current context and takes us away from eclectic and contentious selections of ‘best practices’. We review research models and findings in this stream. The path to better research lies in examining the underpinning processes experienced by workers when management seeks to pursue high‐involvement systems, and charting their links to employee and operational outcomes.     

Kaizen, Ethics, and Care of the Operations: Management After Empowerment

The notion of empowerment has been increasingly used within management discourses during the 1990s. Empowerment is depicted by its proponents as the common denominator for recent managerial techniques and activities that acknowledge the individual employee as an intelligent, accountable, creative being, and therefore a productive resource for the company. Rather than thinking of management techniques as being, or not being, used to empower employees, this paper suggests that the notion of ethics , and more specifically what Foucault calls technologies of the self , provides possibilities for analysing how employees constitute themselves as ethical, productive, and legitimate members of society through the use of management techniques. This paper presents a study of how the management technique of kaizen , continuous improvements, is used in three Swedish companies. Thinking of work as ethically embedded rather than determined by the degree of distribution of the empowering resources in organizations paves the way for opportunities to conduct more sensitive analyses of how managerial techniques operate in practice.     

HRM and Performance: A Plea for Reflexivity in HRM Studies

abstract    In this Counterpoint, we build on Paauwe's suggestions to take the field of HRM and Performance further. Rather than aiming for a synthesis or proposing a radical alternative, we argue that R(econstructive)-reflexivity is needed for theorizing HRM. In particular, we bring in insights from critical studies on the notion of HRM, on the notion of performance, and on the theoretical relationship between them as a way to open up new research avenues and lines of interpretation. For each of these three aspects, we indicate how studying the employment relationship can be reframed. In particular, we emphasize practice-oriented research as one possible research path for the field of HRM as it allows for an examination of HRM as a set of practices, embedded in a global economical, political and socio-cultural context. We end our counterpoint by reflecting on reflexivity, proposing three practices that can guide HRM scholars in becoming reflexive in the ways they study HRM.