Collective rent seeking and division of labor

The article analyzes division of labor within multiple groups engaged in collective rent seeking through time. Each agent seeks membership in one of two subgroups within each group, conveniently labelled a leader-subgroup and a follower-subgroup. The within-group generated payoffs are used as input in the between-group competition for the other groups' payoffs and an external rent. Within-group egalitarian allocation, but not relative-effort allocation, alleviates leadership struggle if the rent is large or the group is moderately more decisive than the other groups. The group employing a more egalitarian sharing rule than the other groups alleviates its leadership struggle more successfully. The Folk theorem is used to show the conditions under which leadership struggle gets intensified or alleviated.     

Cross-border rent shifting in international telecommunications

While scholars have questioned the merits of strategic trade policy, such policies have played a major role in international telecommunications. Countries have traditionally linked bilaterally their termination prices for international telephone calls. I show that this linkage can be rationalized as a mutually beneficial constraint on rent seeking. Linkage becomes more challenging to maintain with telecommunications liberalization, competition, and the growth of alternatives for terminating traffic. I consider possible policy approaches to such developments. Overall, this case study suggests that constraining cross-border rent shifting will present a major transitional challenge in international efforts to liberalize services.     

Competition to international satellite communications services

Rapid construction of transoceanic fiber optic cables and the successful establishment of private satellite companies with inter-regional or global coverage have fundamentally altered the environment in which international telecommunications capacity is provided. This article presents industry data and discusses market developments which document substantial competition that has emerged in international facilities-based telecommunications. Intelsat, historically the largest provider of international telecommunications capacity, has seen its market position decline rapidly for all services and all major geographic market areas worldwide.     

Information, flexibility, and value added

Information technologies used in production activities facilitate the acquisition of more detailed and more timely information concerning the state of the production environment. While the effects of distribution shifts on decisions under uncertainty have been much studied, less is known about the effects of information acquisition on revenue generation and choice. In this article we consider the firm level impacts of information acquisition on revenue, on input use, and on profitability. A choice made under uncertainty depends upon the distribution of a random parameter but not upon its realization, while the choice depends only on the realization when this realization is known. Impacts are determined by interactions between second and third cross derivatives of the primal revenue function.     

Eurowinners and Eurolosers: The distribution of seigniorage wealth in EMU

The European Monetary Union (EMU) will involve socialization of the existing seigniorage wealth of the national central banks. This socialization will create windfall gains for countries with relatively low monetary bases such as France and the UK and it will be disadvantageous for countries like Germany, Austria, Spain or the Netherlands which will suffer per capita wealth losses of between 406 and 182 ecus. The paper quantifies the gains and losses in seigniorage wealth under alternative membership and bank regulation scenarios.     

A comparison and critical assessment of Porat and Rubin's information economy and Wallis and North's transaction sector

This paper compares two approaches to the measurement of the resources devoted to the organisational task in the economy, i.e. Porat and Rubin's `information economy' and Wallis and North's `transaction sector'. While there have been a number of studies using the information economy approach, it seems to have made way to a narrower focus on the information technology economy in recent years. The quantitative measurement of the transaction sector, on the other hand, again focuses on the wider issues involved in information activities, e.g. organisational and institutional questions. However, it is only in its infancy. Being based on a well-known theory, i.e. transaction cost economics, it might attract attention from a larger number of economists than does the information economy approach. The paper points out similarities and shortcomings of both approaches and indicates areas for further research. ©1997 Elsevier Science B.V.