Estimating cellphone providers' customer equity

This paper provides insights about how customer equity estimates can help businesses monitor the competition as well as aid managers in making their marketing investment decisions, and how companies can employ their marketing investments to maximize current and future yield/returns. The article concerns itself with the current offer of cellphone providers and their main products. The research includes survey data through interviews with 302 cellphone users of Sao Paulo, Brazil. The study uses this data combined with a number of economic assumptions and a financial marketing model to create an insight in customer equity values of cellphone providers in the region. The scenario dated October 2005 is that the estimated customer equity of the service provider Vivo is, respectively, 93 and 91% larger than those of competing providers Claro and TIM. The research underlines that on average the customer equity flowing from the post-paid segment is 3.5 times larger than that of the pre-paid. In addition to these results the study provides the customer lifetime value (CLV) estimates for Claro's, TIM's and Vivo's pre- and post-paid customers and analyzes the retention and loss figures of CLV. Also a discussion follows of the implications that these values will likely have for the companies' marketing strategy.     

Did US safeguards resuscitate Harley-Davidson in the 1980s?

This paper examines US safeguards applied to the motorcycle market in the 1980s. After receiving temporary protection by means of a maximum tariff of over 45%, Harley-Davidson sales recovered dramatically. Simulations, based on structural demand and supply estimates, indicate that while safeguard tariffs did benefit Harley-Davidson, they only account for a fraction of its increased sales. This is primarily because consumers perceived that Harley-Davidson and Japanese large motorcycles were poorly matched substitutes for each other. Our results provide little evidence that safeguard provisions triggered restructuring in Harley-Davidson.     

Sources of Productivity Growth Dynamics: Is Japan Suffering From Baumol's Growth Disease?

This study examines the sources of labor productivity growth dynamics in Japan (1970–2010) and investigates the extent to which Japanese economic performance has been affected by Baumol's growth disease (BGD). We find that BGD silently undermines Japanese economic growth. However, the magnitude is miniscule, and consequently the aggregate labor productivity growth rate has not been decreasing monotonically. We also explore how BGD is arising and why it is small in the Japanese economy. BGD is weak because (1) the positive Baumol growth effect is also working in certain services sectors and (2) BGD is not a durable phenomenon: even if a sector begins to suffer from BGD, it is likely to recover quickly.     

A limit characterization of belief-free equilibrium payoffs in repeated games

The present paper studies repeated games with private monitoring, and characterizes the set of belief-free equilibrium payoffs in the limit as the discount factor approaches one and the noise on private information vanishes. Contrary to the conjecture by Ely et al. [J.C. Ely, J. Hörner, W. Olszewski, Belief-free equilibria in repeated games, Econometrica 73 (2005) 377-415], the equilibrium payoff set is computed by the same formula, no matter how many players there are. As an application of this result, a version of the folk theorem is established for N-player prisoner's dilemma games.     

Characterizing belief-free review-strategy equilibrium payoffs under conditional independence

This paper proposes and studies a tractable subset of Nash equilibria, belief-free review-strategy equilibria, in repeated games with private monitoring. The payoff set of this class of equilibria is characterized in the limit as the discount factor converges to one for games where players observe statistically independent signals. As an application, we develop a simple sufficient condition for the existence of asymptotically efficient equilibria, and establish a folk theorem for N-player prisoner?s dilemma. All these results are robust to a perturbation of the signal distribution, and hence remain true even under almost-independent monitoring.     

On the test of the correction mechanism for mis-pricing between assets using a statistical yield spread model

This paper investigates the existence of a correction mechanism for mis-pricing between Japanese stock and bond. By this correction mechanism we mean that when deviations occur from the equilibrium levels of the expected return differentials between stock and bond — the risk premium differentials, the market will tend to correct the mis-pricing and bring the expected return differentials back to the equilibrium levels. We assume that the yield spread between the predicted earnings price ratio of stock and the yield to maturity of bond reflects the risk premium between stock and bond, and estimate the equilibrium risk premium differentials and mis-prices between stock and bond by modelling their behaviors with a statistical yield spread model (SYS). Empirical results strongly indicate the existence of the mis-pricing correction mechanism, suggesting the inefficiency of securities markets.     

Geography and Demography: New Economic Geography With Endogenous Fertility

To explain the links between demographics and economic integration, we construct a new economic geography model with endogenous fertility. Labour mobility across regions results in more people flowing into highly populated regions, but lowers fertility rates there. Finally, regions are divided into one very large region with a higher real wage and another small region with a lower real wage, a higher fertility rate and a supply of workers to the large region. The population growth path resembles a logistic curve in the early phase, but population decreases in the last phase. Economic integration leads to population concentration and decreases population size.