It's power that counts: reflections on recent consumer market-place research

The consumer protection literature relies for much of its theoretical support upon concepts such as ‘market power’ and ‘inequalities of bargaining power’. This article seeks to fill a perceived gap in the literature by providing examples of market place application of ‘power, will and skill’—concepts drawn from the literature of management strategy. These examples have arisen as side benefits from research into the workings of Fair Trading Act 1973 based codes of practice, the Consumer Credit Act 1974, and the Scottish used car market. The authors seek to demonstrate, for the benefit of those involved in the regulation of the consumer market place, how the effectiveness of regulation in a variety of forms and situations is determined, significantly, by economic muscle and by an associated will on the part of powerful enforcers to exercise meaningful sanctions on trader organizations.     

ON TECHNOLOGY LICENSING IN A STACKELBERG DUOPOLY

This paper finds that in a linear Stackelberg duopoly model, the follower is more likely to license a cost-reducing innovation to the leader than the leader is to the follower, regardless of whether licensing is in the form of a fixed fee or royalty per unit of output. Under fixed-fee licensing, the follower gains more from small innovations while the leader gains more from large non-drastic innovations. Under royalty licensing, the follower always gains more than the leader from an innovation.     

Interwar Inflation,Unexpected Inflation,and Output Growth

Interwar macroeconomic history is a natural place to look for evidence on the correlation between output growth and inflation or unexpected inflation. We apply time‐series methods to measure unexpected inflation for more than 20 countries using both retail and wholesale prices. There is a significant, positive correlation between output growth and inflation for the entire period. There is little evidence that this correlation is caused by an underlying role for unexpected inflation. For wholesale price inflation in particular, the output declines associated with deflations were larger than the output increases associated with inflations of the same scale.     

The London Business School with Gower Publishing

Immediately after the year-long coal strike the prospects for the industry appeared remarkably bright. Normal production was resumed more quickly than expected. The fall in the exchange rate, especially against the dollar, had greatly lessened the threat from cheap imported coal. The number of miners employed in deep mines was quickly reduced from 180,000 to 140,000, and the closure of uneconomic pits enabled production in the new super-pits to be stepped up. The resulting sharp rise in productivity meant that the underlying position of the industry was close to break-even, and at the coal prices prevailing last year could even have made a modest profit.
The fall in the price of oil has plunged the industry into a new crisis. To preserve coal's market share, its price must follow oil prices downwards, which will drastically reduce the amount of coal that can be profitably produced in this country. with obvious implications for employment. In this Forecast Release we present some calculations (using the approach we adopted in earlier articles published in October and December 1984) which show the scale of the required reductions, and consider the policy implications. We conclude that there 13 no case for constraining coal prices to remain above true market-clearing levels, since this amounts to a concealed tax on coal- (and hence electricity-) users which would hamper the employment-creating growth of manufacturing industry. There is however a strong case for allowing the coal industry to increase its borrowing to cover the deficits that result from keeping higher-cost pits in production in order to reduce future dependence on imported oil.     

Book Reviews

Books reviewed:
James C. McCann, Maize and Grace: Africa's Encounter with a New World Crop 1500–2000 .
T. Lang and M. Heasman, Food Wars: The Global Battle for Mouths, Minds and Markets .
Richard A. Walker, The Conquest of Bread: 150 Years of Agribusiness in California .
Paul Nugent, Africa Since Independence: A Comparative History .