Seemingly Competitive Food Retail Regulations: Who Do They Really Help?

The food distribution and retail sectors in Quebec are highly concentrated and integrated as large food distributors are also involved in food retailing. As such, they are competing with small grocery and convenience stores they sell inputs to. A review of the industry suggests that there are important economies of size in distribution, but that smaller stores offering convenience face a more inelastic demand. Concerns over the survival of smaller stores in Quebec have motivated two types of regulations. The first type aims at reducing the cost advantage of dominant retailers by restricting the number of employees that they are allowed to use during specific time periods. The second type restricts retail prices. We develop a simple model capturing the main features of the industry to ascertain the impact of these regulations on retail and wholesale prices. Our results suggest that these regulations reduce welfare and may induce both tighter margins and lower surplus for small retailers. Au Québec, les secteurs du commerce de détail et de la distribution des aliments sont fortement concentrés et intégrés puisque les grands distributeurs d’aliments sont aussi engagés dans le commerce de détail. À ce titre, ils font concurrence aux petites épiceries et aux dépanneurs qu’ils approvisionnent. Un examen de l’industrie autorise à penser qu’il existe d’importantes économies de taille dans le secteur de la distribution, mais que les petites épiceries de dépannage sont confrontées à une demande plus inélastique. Les inquiétudes entourant la survie des petites épiceries au Québec ont motivé deux types de règlements. Le premier vise à diminuer l’avantage de coût des détaillants dominants en limitant le nombre d’employés pendant certaines périodes spécifiques. Le deuxième vise à limiter les prix de détail. Nous avons élaboré un modèle simple qui renferme les principales caractéristiques de l’industrie pour évaluer les répercussions de ces règlements sur les prix de détail et de gros. Nos résultats portent à croire que ces règlements diminuent le bien‐être et peuvent entraîner un resserrement des marges et une diminution des surplus des petits détaillants.     

Relevance and irrelevance of the Barro irrelevance theorem

I would like to express my gratitude towards Prof. Dr. H. W. Sinn. His comments have been extremely stimulating for this research.     

Imposing curvature conditions on flexible functional forms for GNP functions

This paper empirically investigates the implications of the choice of dates when imposing local restrictions to maintain convexity in output prices and concavity in factor endowments in the the estimation of a GNP function approximated by a translog (TL) function. Using macroeconomic data for Switzerland, we compare the TL to a symmetric normalized quadratic (SNQ) function on which global curvature restrictions can be imposed. When both functions are unrestricted for curvature, convexity in prices is violated more often than concavity in factor endowments. The number of points for which both curvature conditions hold is sensitive to the date at which local restrictions are imposed on the TL, but estimated TL elasticities are robust. Through searching for an appropriate date, the TL matched the SNQ’s ability to impose curvature conditions at all points. However, many TL and SNQ elasticities differ in sign and magnitude. The likelihood dominance criterion and in-sample forecasts comparisons favored the TL. Thus, choosing a functional form solely based on the possibility of imposing global curvature conditions is not advised.     

Sequential decisions with several agents

Summary. We consider k agents who have different subjective probabilities and are utility maximizers. A planner, who knows the beliefs of the agents, maximizes the social expected utility, which is increasing and symmetric in the utilities of the agents. She does that by optimally stopping the flow of information released to the agents. The explicit form of the optimal stopping time is given. Received: October 23, 1995; revised version: June 25, 1997     

III. Weltwirtschaft und Wirtschaft einzlner Länderund und Gebiete

Ohne Zusammenfassung     

The Organisational and Productive Impact of the Economic System. The Case of SMEs

The paper explains how the economic system determines the role and features of SMEs in a competitive environment. The economic system is defined as the co-ordinated set of institutions and structures that are economically relevant. As such, the economic system defines the way in which economic actors react to economic variables by adapting and acting and the way in which they interact.In particular, the fundamental features of the economic system contribute to determine what actors can and find profitable to do, i.e. determine the level and configuration of non purely material costs and the features of markets. The economic system also determines incentives to economic actors by defining property rights and their enforcement and the nature of contracts. This in turn influences investment and consumption decisions, the supply of resources, and the production and utilisation of information and knowledge. Finally, the economic system determines the type and features of actors, what actors do and how they do by defining the possibility and profitability of specific human and organisational investment.Based on these functions and given material technology, the economic system defines advantages and disadvantages of different organisational forms. Given capabilities and features of individuals and organisations, that cannot be easily changed in the short run, advantages and disadvantages determine the organisational form that is most efficient in any given context. Finally and considering network externalities and strategic complementarities, such an organisational form determines the organisational configuration as a stable configuration including features, weight and role of particular economic actors, the relation among actors of similar or different size and with governments. In the paper I consider the case of small and medium-size enterprises.