Spatial agglomeration and endogenous growth

This paper constructs a dynamic general equilibrium model with spatial interactions in which a human capital externality is the centripetal force towards agglomeration. The resource cost of transportation is, on the other hand, the main centrifugal force, preventing a city from growing unboundedly. A central feature of our analysis is the dynamic interaction between (perpetual) economic growth and (bounded) city growth. We examine the socially optimal and the decentralized growth rates as well as city sizes. In the decentralized environment, individuals under-invest, whereas cities are under-populated. We show how public policies may enable a decentralized city to attain the socially optimal allocation.     

Regulation, Corporate Social Responsibility and Activism

This paper analyzes the interplay between firms' self-regulation (often denoted as corporate social responsibility) as opposed to the formal regulation of a negative externality. Firms respond to increasing activism in the market (conscious consumers that take into account the external effects of their purchase) by providing more socially responsible goods. However, because regulation is the outcome of a political process, an increase in activism might imply an inefficiently high externality level. This may happen when a majority of non-activist consumers collectively free-ride on conscious consumers. By determining a softer than optimal regulation, they benefit from the behavior of firms, yet they have access to cheaper (although less efficient) goods .     

Strategic Corporate Social Responsibility Activities and Corporate Governance in Imperfectly Competitive Markets

We investigate the incentives of firms' owners to commit voluntarily to corporate social responsibility (CSR) activities in an oligopolistic market. The socially responsible attributes attached to products are considered as credence goods, with consumers forming expectations about their existence and level. We show that hiring an ‘individually’ socially responsible CEO and delegating to him the CSR effort and market decisions acts as a commitment device for the firm's owners and credibly signals to consumers that the firm will undertake the ‘missioned’ CSR activities. We also find that CSR activities are welfare enhancing for consumers and firms and thus, they should be encouraged. Copyright © 2013 John Wiley & Sons, Ltd.     

Portfolio diversification and systemic risk in interbank networks

This paper contributes to a growing literature on the ambiguous effects of risk diversification. In our model, banks hold claims on each other’s liabilities that are marked-to-market on the individual financial leverage of the obligor. The probability of systemic default is determined using a passage-problem approach in a network context and banks are able to internalize the network externalities of contagion through their holdings. Banks do not internalize the social costs to the real economy of a systemic default of the banking system. We investigate the optimal diversification strategy of banks in the face of opposite and persistent economic trends that are ex-ante unknown to banks. We find that the optimal level of risk diversification may be interior or extremal depending on banks exposure the external assets and that a tension arises whereby individual incentives favor a banking system that is over-diversified with respect to the level of diversification that is desirable in the social optimum.     

Payer Competition and Cost Shifting in Health Care

This paper studies a model in which two payers contract with one hospital. True costs per patient are not a possible basis for payment, and contracts can only be written on the basis of allocated cost. Payers choose a contract that is fully prospective or fully based on cost allocation, or a payment scheme that would give some weight to each of these two. We characterize the payers'equilibrium contracts arid show how in equilibrium hospital input decisions are distorted by the payers' incentives to engage in cost shifting. Two cost-shifting incentives work in opposite directions, and equilibrium can be characterized by too little or too much care relative to the socially efficient level.     

Social influence on software piracy

In this paper, we extend the basic principles of Michel's model to a dynamical setting that allows us to study the effect of social influence on software piracy. We consider that social dynamics affect the decision-making process in two different ways: producing a positive network externality on individual consumers' preferences for the product but at the same time providing the knowledge and ability to pirate. We obtain that, on one hand, permeability of society accepting piracy culture has no significant effects on sales. On the other, scenarios with a positive ‘optimal’ value of piracy exist when there is a slight quality differential between originals and pirate copies. This can explain some interesting cases present in the real-world software industry.     

Excessive Investment in Hospital Capacities

In the present study I identify an inherent characteristic of health care markets that may lead to excessive investment by hospitals even when compensated according to a prospective reimbursement rule. It is demonstrated that the stochastic nature of the demand for medical services combined with the lumpiness of investment decisions may give rise to excessive investment when multiple hospitals select independently their levels of capacities. The source for the excessive incentives to invest is the difficulty of one hospital to internalize properly the externality generated by its investment decisions. Such an externality arises because when one hospital expands its capacity, it is more likely to be able to serve not only patients residing in its region but patients residing in neighboring regions as well.     

Labor supply flexibility and portfolio choice in a life cycle model

This paper examines the effect of the labor-leisure choice on portfolio and consumption decisions over an individual's life cycle. The model incorporates the fact that individuals may have considerable flexibility in varying their work effort (including their choice of when to retire). Given this flexibility, the individual simultaneously determines optimal levels of current consumption, labor effort, and an optimal financial investment strategy at each point in his life cycle. We show that labor and investment choices are intimately related. The ability to vary labor supply ex post induces the individual to assume greater risks in his investment portfolio ex ante.     

An Examination of Corporate Social Responsibility Implementation and Stakeholder Engagement: A Case Study in the Australian Mining Industry

This case study explores the experience of a company in a controversial industry sector and its efforts to act in a socially responsible manner when establishing a presence in a regional market. We examine the management of stakeholder relationships and communication, and identify the challenges associated with implementing corporate social responsibility (CSR) initiatives. Our findings highlight the importance of ongoing and broad stakeholder identification, prioritization and management. This case study demonstrates the key role of commitment from senior management and front‐line employees and the importance of a CSR champion. Commitment must be demonstrated at a local level to facilitate community engagement, feedback and monitoring. Finally, the findings highlight the externality of stakeholder networks and their non‐centric relationship with the company. Thus, a company is not the centre of the stakeholder network; the network has a life of its own, regardless of a company's involvement or non‐involvement. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Incenting managers toward the triple bottom line: An agency and social norm perspective

Research to date has identified CEO pay structure as an important factor in the environmental and social performance of the organization but has not considered how pay may influence these sustainability efforts at the middle‐management level. We address this void with an experimental manipulation of direct and indirect pay incentives for an environmental sustainability project and production cost savings project. Counter to our predictions, investment in sustainability versus cost savings is significantly lower when incentives for both projects are equivalent, and investment is only comparable when incentives for the sustainability project are superior. Further investigation using qualitative data attributes this to differences in the salient social norms that individuals hold and an apparent undervaluing of the indirect incentive derived through sustainability's contribution to cost savings. The results shed light on primary ways in which human resource management practices may be used to embed support for sustainability initiatives throughout the organization.     

Regulation of road accident externalities when insurance companies have market power

Accident externalities that individual drivers impose on one another via their presence on the road are among the most important external costs of road transport. We study the regulation of these externalities when insurance companies have market power. Some of the results we derive have close resemblance to the earlier literature on externality regulation with market power in aviation and private roads, but there are important differences, too. Using analytical models, we compare the first-best public welfare-maximizing outcome with a private profit-maximizing monopoly, and oligopoly. We find that insurance companies will internalize some of the externalities, depending on their degree of market power. We derive optimal insurance premiums, and regular parametric taxes as well as “manipulable” ones that make the companies set socially optimal premiums. The latter take into account that the firm tries to exploit knowledge of the tax rule applied by the government. Finally, we also study the taxation of road users rather than that of firms.     

Spatial externalities and agglomeration in a competitive industry

We introduce spatial spillovers as an externality in the production function of competitive firms operating within a finite spatial domain under adjustment costs. Spillovers may attenuate with distance and the overall externality could contain positive and negative components with the overall effect being positive. We show that when the spatial externality is not internalized by firms, spatial agglomerations may emerge endogenously in a competitive equilibrium. The result does not require increasing returns at the private or the social level, increasing marginal productivity of private capital with respect to the externality, or location advantages. In fact agglomerations may emerge with decreasing returns to scale, declining marginal productivity of private capital with respect to the externality, and no location advantage. The result depends on the interactions between the structures of production technology and spatial effects as shown in the paper. No agglomerations emerge at the social optimum when spillovers are internalized and diminishing returns both from the private and the social point of view prevail. Numerical experiments with Cobb–Douglas and CES technologies and an isoelastic demand confirm our theoretical predictions.     

允许缺货条件下时滞变质物品库存控制策略

研究了时滞变质物品在允许缺货情况下,零售商应如何制定最优订货策略的问题。以允许缺货,备货时间很短的经典库存模型为基础,构建了时滞变质物品在非变质期内需求不变,变质期内需求线性时变的需求函数,得到在允许缺货且短缺量部分拖后情况下．缺货时刻和订货周期在三种情形下的费用函数解析式,通过二元函数求极值方法,求得最优订货周期和最优订货量。最后给出数值算例对模型进行阐释。     

Social capital in the workplace: Evidence on its formation and consequences

The existence of social ties between co-workers affect many aspects of firm and worker behavior, such as how workers respond to a given set of incentives, the optimal compensation structures for workers at different tiers of the firm hierarchy, and the optimal organizational design for the firm. This paper presents evidence on the social capital in one particular firm, as embodied in the friendship ties among its workers. We describe the structure of the friendship network as a whole and present evidence on the determinants of social ties. Finally, we review evidence from a field experiment we conducted in the firm to highlight one particular mechanism through which social capital significantly affects worker performance.     

Takings of development rights with asymmetric information and an endogenous probability of an externality

A game-theoretic model is used to analyze the interaction between the landowner and the government. In the benchmark model, efficiency can be reached when compensation is tied to the private value of developed land, which is contrary to much of the takings literature. Further, the level of compensation needed to create an efficient outcome with no over-development is derived. Next, two cases are considered: asymmetric information and an endogenous probability of an externality. First, the presence of the positive externality is revealed only to the landowner before the decision to develop early. In this case, if the landowner does not receive the full market compensation, then he or she has an incentive to eliminate the externality. In the second case, the model includes an endogenous probability of a positive externality occurring that depends on investment in conservation. For an efficient outcome to occur, the landowner should be compensated by the full amount of the positive externality. This compensation scheme aligns the incentives of the owner with society.     

Health insurance and savings over the life cycle—a semiparametric smooth coefficient estimation

Individuals save for future uncertain health care expenses. This is less efficient than pooling health risk through insurance. The provision of comprehensive health insurance may raise welfare by providing the missing market to smooth out consumption through the life cycle. We employ a semiparametric smooth coefficient model to examine the effects of the introduction of the National Health Insurance in Taiwan in 1995 on savings and consumption over the life cycle. The idea is to estimate the coefficients of health insurance which vary with age. Our results suggest that younger households are more sensitive to the risk reductions, and that they demonstrate a greater response in the reduction of their precautionary saving. Copyright © 2004 John Wiley & Sons, Ltd.     

Designing Contracts for University Spin-offs

We provide a theoretical model about how to design academic spin-off contracts between the university technology transfer office (TTO), the researcher, and the venture capitalist. The optimal contract entails the allocation of founder shares to the researcher to secure her participation in the venture. It may also require the researcher to be financially involved in the project to give her incentives to provide effort. We also show that when the TTO has better information than the other two participants concerning the likelihood of success of the spin-off, it will end up owning both founder and financial shares in the venture.     

Developing collaborative professionalism: an investigation of status differentiation in academic organizations in knowledge transfer partnerships

In recent years, there has been a significant growth in knowledge transfer partnerships to improve the quality and timeliness of health care. These activities require an increasing level of interdependence between academic and health care professionals, with important implications for human resource management. To understand these knowledge transfer partnerships, we conducted an in-depth longitudinal study based on 99 interviews and 5 focus group workshops across academic and health care professionals in nine university-based knowledge transfer partnerships in England. We explore how academic professionals of lower and higher status organizations develop a new form of professional work, based on the principles of collaborative professionalism, during their involvement in partnerships with health care professionals. We illuminate how the interdependent work between academic professionals and health care professionals in the development of a new academic specialization is shaped by the status of their organizations.     

Competition among Health Maintenance Organizations

We develop a model of competition among health maintenance organizations (HMOs) to analyze the effects of market power, scale economies, and asymmetric knowledge of health risk on market outcomes. We find that competition among HMOs may, but need not, ensure socially preferred outcomes. Market power or scale economies can sometimes admit socially preferred outcomes when they would otherwise not arise. Asymmetric knowledge of health risk may or may not be constraining. When it is constraining, a variety of patterns of incomplete health insurance can arise, along with excessive or insufficient treatment and preventive care for either high-risk or low-risk individuals.     

Robust results on the sharing of firm-specific information: Incentives and welfare effects

Contrary to much of the existing literature, we obtain robust and clear-cut results for the incentives and welfare effects of information sharing when information is firm-specific. We show that firms’ incentives to share this type of information are aligned with social welfare. Whenever revealing information is the dominant strategy (such as for Cournot firms revealing costs or Cournot and Bertrand firms revealing demand), it is socially beneficial. Only cost information in Bertrand competition will not be revealed but this is socially desirable, too. These findings are independent of distributional assumptions on random shocks and signals and hold for general asymmetric oligopoly with any mixture of substitute, complementary and independent goods.