A note on the factor-price frontier

Conclusions For an economist the possibility of an upward sloping factorprice frontier is extremely surprising. It has been shown that although such a factor-price frontier is theoretically possible, it is not very likely that it can occur under given economic and technical conditions since it would imply that capitalists are a class of borrowers (from nature) whereas we can be fairly sure that they are a class of lenders.I am indebted to Prof. E. Streissler for helpful comments.     

A note on the pricing of IPOs

This paper studies the pricing of IPOs in a tractable model in which an investment bank faces some investors with superior information. We show how this can lead to underpricing and we make a number of empirical predictions.     

A note on the monotonicity of Vn

We give an example of a repeated game with incomplete information, lack of information on one side, and non-standard information, in which the value V₃, of the three-fold repeated game, is greater than V₂.     

A note on the allocation of time

A multi-commodity model in which time as well as nominal income is necessary in the process of consumption is analyzed. Duality theory is used to provide a counter example to the ‘Linder Theorem’ that a rise in real wages will decrease consumption of some good if it is more time intensive than the weighted average of the time intensity of all other commodities.     

A note on the diffusion of innovation

The paper deals with the process of substitution between technologies in a framework of increasing returns to scale. The approach stresses the interaction between capacity expansion and market demand as explanations of the diffusion of technologies into their niches. The demand and supply sides of the diffusion process are therefore brought together to determine simultaneously patterns of output and prices.It analyzes the dynamics of the substitution path, where a logistic diffusion process for the new technology is assumed, and determines the substitution curve between the old technology and the new one.     

A note on the wise girls puzzle

Summary. This article analyzes the two wise girls puzzle, which is a simpler variant of the so-called three wise men puzzle, with some proof-theoretic tools. We formulate the puzzle in an epistemic logic. Our chief assumption is that the reasoning ability of each player of the puzzle is equivalent to what is described by the epistemic logic. We will interpret the behaviors of the players in the puzzle in terms of unprovability of certain statements. The proof-theoretic tools we employ are consequences of a meta-theorem, known as the cut elimination theorem. Received: August 1, 2000; revised version: May 15, 2001     

A note on the Tobit likelihood function

The likelihood functions for several econometric models are unbounded over certain sequences in parameter space. Examples are the disequilibrium model, the conditional logit model and a certain type of switching regression model. We show how a similar difficulty may arise in the Tobit model but that the presence of this anomaly becomes less likely as sample size increases.     

A note on the hidden risk of inflation

The continued expansionary policy of the Federal Reserve gives rise to speculation whether the Fed will be able to maintain price stability in the coming decades. Most of the scientific work relating money to prices relies on broad monetary aggregates (i.e. M₂ for the United States). In our paper, we argue that this view falls short. The historically unique monetary expansion has not yet fully reached M₂. Using a cointegration approach, we aim to show the hidden risks for the future development of M₂ and correspondingly prices. In a simulation analysis we show that even if the multiplier remains substantially below its pre-crisis level, M₂ will exceed its current growth path with a probability of 95%.     

A note on the validation of cost push

Using a standard macroeconomic model, the question of the government's response to wage push is considered. It is shown that a decision to maintain public expenditure in money rather than real terms has two consequences. One is that the budget may move in a perverse direction and possibly destabilise the economy. The second is that, if the budget behaves normally, output and employment will fall more and prices rise less than would otherwise by the case.     

A note on the inefficiency of non-linear estimators

An upper bound on the inefficiency of non-optimally weighted method of moments estimators is reported, along with a necessary and sufficient condition for the equivalence of non-optimally and optimally weighted estimators. An example is considered in which a precise expression for the inefficiency bound is attainable.     

A note on the theory of demand-led growth

This paper presents a demand-led growth model where an exogenousinvestment function drives capital accumulation through a Bernoullidifferential equation. In such a framework investment generatessavings through changes in capacity utilisation and/or incomedistribution, making economic growth totally demand-led. Takinga Structuralist perspective the model is constructed to be consistentwith different Keynesian closures for the investment function,as well as with different assumptions about savings' adjustmentto investment.     

A note on endogenous transfers

In a competitive and Walrasian stable world with two goods transfer paradoxes are very robust to endogenization (relating the size of the transfer to either the donor's or the recipient's GNP). Donor enrichment and/or recipient impoverishment occur in very general formulations of endogenization if and only if they occur in the model in which transfers are exogenous (as is usually assumed). Endogenization in practice will probably cause a dampening effect (smaller price and welfare changes than in the case of pure exogenous transfers).An earlier version of this paper was presented at the Econometric Society European Meeting in Munich, 1989, and EADI (European Association of Development Research and Training Institutes) in Oslo, 1990. We are grateful to an anonymous referee, Willem Buiter, Peter van Bergeijk, Richard Gigengack, Jan Pen, Georg Tillmann, Edward Towrr, and Casper de Vries for helpful comments.     

A note on Stackelberg competition

This note investigates a Stackelberg–Nash competition model. We determine the conditions under which the leaders may achieve better profits than the followers when all firms compete on quantity in a two stage game. We focus on the properties of the followers’ best response functions. It is shown that the Stackelberg equilibrium may coincide with the Cournot equilibrium. In addition, the followers may achieve higher profits than the leaders. Such results put forward the working and the consequences of strategic complementarities. These results are illustrated with three examples.     

A note on nurse self-scheduling

Self-scheduling began in the 1960s and many hospitals have been using it with success. Benefits include saving management time, improved morale and professionalism, and cost reduction on matters related to personnel turnover. For nursing units experiencing scheduling challenges, self-scheduling may be a solution.     

A note on linear utility

This note shows how a spectrum of specific axiomatizations for linear utility for decision-making under risk can be integrated under a generalized axiom scheme in which one of the two binary relations used in the axioms parameterizes specific applications.