Estimating network economies in retail chains: a revealed preference approach

We measure the effects of chain economies, business stealing, and heterogeneous firms’ comparative advantages in the discount retail industry. Traditional entry models are ill suited for this high‐dimensional problem of strategic interaction. Building upon recently developed profit inequality techniques, our model admits any number of potential rivals and stores per location, an endogenous distribution network, and unobserved (to the econometrician) location attributes that may cause firms to cluster their stores. In an application, we find that Wal‐Mart benefits most from local chain economies, whereas Target shows a greater ability to respond to rival competition. Kmart exhibits neither of these strengths. We explore these results with counterfactual simulations highlighting these offsetting effects and find that local chain economies play an important role in securing Wal‐Mart's industry leader status.     

The employer's case for health management

Employers' past solutions to rising health benefit costs--adopting managed care strategies, cost shifting to employees and reducing benefits-are no longer effectively controlling costs and are depressing the value of health benefits for employee recruitment and retention. An alternative strategy is to implement health management approaches that improve the health status of employees. These programs reduce medical costs and have a documented positive impact on workers' compensation, disability costs, absenteeism and productivity. Further, this approach is complementary to health care consumerism as a strategy for health improvement and benefit cost reduction and results in improved employee health, outlook and satisfaction.     

An analysis of intra-industry differences in the effect of regulation: The case of deposit rate ceilings

This study examines the impact of deposit rate ceiling changes on the market value of commercial banks and stock savings and loan associations. Statistically significant increases in market value are found on announcement of the removal of ceilings on large denomination certificates of deposit. In contrast, retail commercial banks and savings and loans experienced declines in value on announcement of the elimination or relaxation of deposit rate ceilings on small denomination consumer accounts. In addition, for all events analyzed, significant differences were found in the effect of ceiling changes on the market value of wholesale and retail commercial banks.     

Educating technical entrepreneurs and innovators for the 1980's

This paper examines the need for Canadian universities to supply students in science and engineering with the education necessary to understand the process involved in bringing scientific or technical ideas to commercialization. The results of a questionnaire on the subject of entrepreneurial education for Canadian students is analyzed and presented as part of the paper along with the author's solutions for handling the problems the questionnaire identified.     

Public trust and government betrayal

This study presents a simple model of government reputation (in which government type cannot be directly observed by households) with the variation that government type, rather than being permanent, follows an exogenous Markov process. This formulation captures three characteristics of bad policy outcomes: governments which betray public trust do so erratically, public trust is regained only gradually after a betrayal, and governments with recent betrayals betray with higher probability than other governments.