The impact of technology and trade upon the returns to education and occupation

This paper considers how technological change and globalization has influenced the return to education and occupation in Great Britain over the period 1973 to 1994. A number of papers in the literature have documented increasing demand for individuals who possess higher skill endowments than their peers. Both education and occupation can be interpreted as an individual's observable skills and how technology and trade have actually influenced returns to different educational and occupational levels is something that has not been investigated in Great Britain. For the empirical analysis estimates are based upon pooled cross sections over time and also pseudo panel techniques to control for unobservable heterogeneity.     

Dynamic duopoly with learning through market experimentation

Summary This paper analyzes how learning behaviors can substantially modify the outcome of competition in an oligopolistic industry facing demand uncertainty. We consider the case of a symmetric duopoly game where firms have imperfect information about market demand and learn through observing the volume of their sales. The main body of the paper consists in showing how market experimentation can explain the existence ofprice-dispersion in an oligopolistic industry. We study this phenomenon and its dynamic evolution in the context of an Hotelling duopoly model; we then extend the analysis to general demand functions and toN-firm oligopolies. We discuss some implications of the public good aspect of information about market demand. We then conclude with a few comments on what happens when the value of information in the oligopolistic industry is negative.We are very grateful to Patrick Bolton for his helpful advice. We also wish to thank Richard Caves, Anthony Creane, Jean-Jacques Laffont, Andreu Mas-Colell, Eric Maskin, Jean-Charles Rochet, Margaret Slade, John Sutton, Jean Tirole, Mike Whinston and an anonymous referee.     

Unionization in Australia: Evidence from the AWIRS*

This article uses workplace level data from the recent Australian Workplace Industrial Relations Survey to test a simple demand and supply model explaining the level of union membership within Australia The findings suggest that previous research using individual-level data has understated the importance of the supply-side in influencing union membership. In particular, unionization levels were found to be highly sensitive to firm size, to the number of unions represented in the workplace and to management attitudes     

The Logic of Membership of Sectoral Business Associations

This paper assesses the logic of membership of sectoral business associations in Britain using evidence from a proportionate stratified random sample of associations. The British system gives no statuatory status to business associations. As a result the size and fragmentation of associations is similar to the US, membership of associations is interpreted in terms of the logic of specific business service demand and the logic of collective activities. Expectations from models of collective action, associability and involvement are used to interpret association membership. The paper argues that the normal distinction between associations as trade, professional or "peak" bodies is too simplistic in not properly differentiating the types of member. The paper employs instead a set of six categories dependent on the type of members: companies, owner-managers, the self-employed, and individuals, as well as bodies with mixed membership, and federations (which are associations of associations). Survey evidence demonstrates that member motives for joining, lapsing and constraining service development differ significantly between association types and tend most strongly to emphasise the logic of individual services as complements to the logic collective activity. Analysis of the rates of joining and lapsing membership show evidence of reluctance to join and high rates of lapsing.     

Coordination in disaster: Nonprice learning and the allocation of resources after natural disasters

Most economists agree that the price system offers the best method for allocating scarce resources among competing ends. Yet, churches, nonprofits, governments, and corporations in disaster-stricken communities, often under voluntary or mandated price freezes, must often rely on nonprice responses to meet short-term, localized shifts in demand. Evidence suggests that the private sector outperforms the public sector at this task. This paper explores how private sector organizations, both nonprofit and for-profit, learn about and respond to community needs in the aftermath of disasters. We explain and demonstrate how organizations observe credible signals of shifts in demand without the aid of prices. Our findings expand our understanding of why public sector disaster recovery efforts tend to be less effective than private sector efforts. We also find that price gouging laws have additional negative consequences beyond the standard economic account.     

Social Learning from Private Experiences: The Dynamics of the Selection Problem

I analyse social interactions that stem from the successive endeavours of new cohorts of heterogeneous decision makers to learn from the experiences of past cohorts. A dynamic process of information accumulation and decision making occurs as the members of each cohort observe the experiences of earlier ones, and then make choices that yield experiences observable by future cohorts. Decision makers face the selection problem as they seek to learn from observation of past actions and outcomes, while not observing the counterfactual outcomes that would have occurred had other actions been chosen. Assuming that all cohorts face the same outcome distributions, I show that social learning is a process of sequential reduction in ambiguity. The specific nature of this process, and its terminal state, depend critically on how decision makers make choices under ambiguity. I use the problem of learning about innovations to illustrate.     

What motivates membership in non-renewable resource cartels?: The case of OPEC

In this paper, we analyze the question of membership in a non-renewable resource cartel, with specific application to OPEC. One would expect the benefits of cartel membership to be positively related to the size of remaining reserves, while domestic petroleum consumption should be negatively related to membership if countries care about consumer interests. Our econometric analysis indicates that larger reserves and lower consumption are positively associated with OPEC membership. On the other hand, membership does not appear to be systematically related to countries’ religious makeup. Our regressions correctly predict membership for the vast majority of oil-producing countries.     

Explaining the aggregate price level with Keynes's principle of effective demand

The mainstream view of Keynes's principle of effective demand is that it states something about quantities—and about quantities only. The principle is held to determine the levels of output and employment in a world not governed by Say's law. This paper argues that the principle of effective demand goes beyond this to explain not only ‘real’ activity levels but also the aggregate price level. A variant of the post-Keynesian D/Z-model is brought together with Marxian reproduction schemes to derive this result.     

Comparing alleged incommensurables: Institutional and Austrian economics as rivals and possible complements? ∗

The purpose of this article is to explore the changing relationship between Austrian and Institutional economics and the common ground that they appear increasingly to share. It is maintained that both parties have something to learn from each other - there are gains to be made from intellectual trade and inter-research tradition discourse. Neither Austrian economics nor institutional economics presently provides a sufficiently robust or sophisticated approach to individual and group problem-solving activity within institutional-knowledge constraints and historical time dynamics, yet they are both beginning to seriously grapple with such issues. The gulf between the Austrian and Institutional research traditions is narrowing given that there is some convergence toward a middle ground where it is recognized that individuals do not exist in a vacuum and that institutions both constrain and enable purposeful behaviour. Through increased interaction Austrians may learn to take ‘institutional’ frameworks even more seriously whilst Institutionalists may learn to be even more earnest in their treatment of ‘individual’ action within a historical time continuum.     

混沌消费者环境下的中国企业营销

进入21世纪,消费者的消费需求、购买特征、行为方式都表现出一定的复杂性与混沌性,消费者既是现实产品的消费者、也是虚拟世界的消费者。混沌的消费者环境不仅改变了企业的营销模式,也改变了企业的竞争方式。企业要应对混沌消费者环境下的竞争．需要采用新的营销模式．需要将水平营销、纵向营销聚合起来。     

Learning through experimentation in an oligopoly market with asymmetric information

Unlike previous literature, in which firms compete in the market with the same information, this article analyses a two‐period duopoly game in which only one firm is completely informed about the market conditions, whereas the other firm is unaware of one parameter of the demand curve. In this setting, we describe how the informed firm uses its price set in period 1 in order to reveal or to hide its private information and how the uninformed firm uses its own price in period 1 in order to learn the market conditions when they are not revealed by its rival. Specifically, we obtained the conditions under which the informed firm sets a higher price than its optimum in the first period to hide its private information in certain cases and to reveal that information in others. Likewise, this paper describes the conditions under which the uninformed firm sets a lower price than its optimum in period 1 in order to learn the unknown parameter. We found that the informed firm's cost of revealing its private information to its rival is lower than the uninformed firm's cost of learning the market conditions.     

Poor Women Survey Poor Women: Feminist Perspectives in Survey Research

This essay examines how applying feminist principles in scientific inquiry changes both the process and the results of research. Overall, I find that including feminist perspectives improves research. Involving a women's community in the research process and allowing poor women to interview poor women may reduce interviewer bias, improve response rates and facilitate trust in answering questions that are often quite sensitive. Including poor women in the interviewing process also enables these women to learn about scientific inquiry and to participate in the research process.     

Reallocation and learning over the business cycle

This paper shows how cyclical aggregate shocks can stimulate structural reallocation activities, which in turn amplify the effect of the shock. It analyses the informational aspects of restructuring activities and their interplay with aggregate shocks. A model is developed in which production units are uncertain about the value of staying in the market and learn about it over time in a Bayesian fashion. In addition to their own private assessment, they can also learn from observing other units’ decisions. Given that adjusting is costly, each unit has an incentive to delay action and wait for other players to act in order to make a better informed decision. If delay is more costly in a downturn, a negative aggregate shock can break the inertia and induce the most pessimistic agents to exit. The information released by such actions will induce more action, thus generating a burst in restructuring activities that reinforces the initial effect of the aggregate shock. This process of information accumulation and revelation offers both a powerful amplification mechanism of relatively modest aggregate shocks and a potential explanation of why restructuring tends to be concentrated in recessions.     

Approaches to learn about employer learning

The empirical literature on employer learning assumes that employers learn about unobserved ability differences across workers as they spend time in the labour market. This article describes testable implications that arise from this basic hypothesis and how they have been used to quantify the contribution of job market signalling and human capital in measured returns to education. While the empirical basis is still thin, the results suggest that signalling contributes at most about 25% to the observed returns to education.     

外汇储备管理的多层次需求分析框架——挪威、新加坡的经验及其对中国的借鉴

现代货币理论中个人持有货币余额的需求动机理论可以引入到政府持有外汇储备的需求动机的分析中,这种需求动机可以分为交易性、预防性和盈利性三大类。结合发展中国家以及产业结构相对单一的发达国家的经济实践,外汇储备需求动机还应包括发展性需求。挪威和新加坡分别以其全球配置的组合管理和专业化的公司管理实现了多层次需求外汇储备管理,在明确外汇储备需求动机、外汇储备组合管理、确立专业化运作主体、建立严格的管理体系等方面为中国的外汇储备管理运作提供了参考。     

Firm's objective function and product and process R&D

Firms undertake different kinds of R&D activities. They do product R&D (R&D aimed at improving the quality of existing products, and creating new products). They also do process R&D (R&D aimed at lowering the cost of making existing and new products). Moreover, firms often do both product and process R&D simultaneously. As far as the objective of firms is concerned, this need not be limited to profit-maximization only. Rather, firms may have a broader objective, where they care about profits as well as consumer surplus. This paper studies effects of a firm having a general objective function (that takes into consideration both profits and consumer surplus) on its product and process R&D choices, and corresponding implications.I consider product and process R&D choices of firms in an infinite horizon set-up with discrete time. Firms in my framework can simultaneously do both product and process R&D in every period, face a discrete-choice model of consumer demand with vertical product differentiation, and maximize a discounted, weighted sum of their profits and consumer surplus over the infinite time horizon.I show how process and product R&D differ from each other in my framework, and the role of a firm's objective function in this regard. I compare process and product R&D choices across firms that differ in their objective function, and illustrate effects of providing general R&D subsidies (subsidies given for any R&D, regardless of whether it is product or process R&D) to firms. I also characterize how in my framework, the choice of process R&D in total R&D — R&D composition — by an individual firm varies over time, and how process and product R&D choices, process and product R&D productivity, and the choice of R&D composition vary across firms that differ in size but are otherwise similar.     

Effective demand and the terms of trade in a dual economy: a Kaldorian perspective

Along the line suggested by Nicholas Kaldor, the paper incorporatesinto the analysis of a dual economy effective demand as a problemof generation of agricultural surplus and its realisation intopurchasing power for industrial goods. Through this approach,it is shown how one obtains empirical predictions about unevensectoral growth rates, as well as an effect of the movementin the terms of trade on long-term industrial growth which iscontrary to that suggested by Lewis. The paper also specifiesthe process of dynamic adjustment of industrial growth in aself-reinforcing circular flow under conditions of sufficientlyhigh agricultural growth, extending the effective demand argumentin a dual economy.     

John R. Commons’s Foundations for Policy Analysis

Psychological insights have been present in institutional economics since its beginning. Recently, cognitive aspects of institutional economics have been highlighted. The proposal of this paper is to offer other psychological insights related to institutional economics, which are complementary to a cognitive approach. The goal is to emphasize elements of Psychological Social Learning Theory as a possible foundation of Institutional Economics. This paper argues that people vicariously learn by the observation and interpretation of exemplary behaviors. Vicarious learning relies on the comprehension of people about who/what models are. Vicariously, people are motivated to behave as a model; when they succeed, models are reinforced. As something socially and cumulatively acceptable and/or desirable, exemplary behaviors can take place repetitively and become a habit. Institutions arise as outgrowths of those habits. In this logic, a working definition of institution is a cognitive inertia about the typifications of foreseeable regularities in behaviors of people in a society.     

How serious is the aggregation problem? An empirical illustration

Heterogeneity in consumer behaviour may create problems with aggregation across consumers. If so, we may not be able to make correct inferences about behaviour based on aggregated data. However, using micro estimates to predict aggregate demand responses to policy changes may also create a bias if not aggregated properly. This may sound like a Catch 22 situation, but it is not, as it is possible to calculate both micro and aggregate demand responses based on microdata. The size of the aggregation bias is an empirical question. In this article, we show how to calculate theoretically consistent aggregate demand responses. We use both micro and macro data for Norwegian household electricity consumption to illustrate the magnitude and direction of different aggregation biases. We find considerable aggregation biases, in particular, when estimating with macro data.     

Consumption,preferences, and the evolutionary agenda

The purpose of this paper is to provide a preliminary evolutionary account of preferences, consumption and demand. This is particularly relevant for the study of innovation which offers consumers the opportunity to develop new behaviours. The paper approaches this question in two stages. First it recognises the importance of time as well as income constraints on consumer behaviour. Secondly, it develops a behavioural approach to consumption routines in terms of Herrnstein's concept of meloriation. In this account the focus is upon activities for which commodities and time are inputs and, with innovation, time is rescheduled on many fronts. Consumer learning is related to a replicator dynamic process. It is shown how changes in wages, prices and the time required to consume influence the demand for activities.