The Marketization of Local Services and the Fragmentation of Labour Markets

This paper is a product of the ESRC's Local Governance research programme which considers the employment implications of the introduction of market forces into the provision of local government services in the United Kingdom. It discusses the fragmentation of labour markets as both a process and outcome of the commercialization of local service provision. In contrast to privatization scenarios, marketization suggests the blurring of the distinction between public and private employment deriving from the commercialization of municipal services and the transmission of local authority work organization and culture into the private sector. An assessment of employment change, workforce recomposition and bargaining capacity is offered which leads to the development of new models for institutional restructuring. ‘Sectoral de-differentiation’ is a concept developed to address the evolution of new labour market patterns and a ‘public capsule’ model is offered to explain the locality and service variations in marketization outcomes.     

R&D Investments, Information and Strategy

This paper argues that firms can best realize the value of their investments in R&D by exploiting the associated information asymmetries. Attention is directed away from the physical results of R&D and towards the firm's ability, more generally, to earn rents from the private information emanating from its R&D. Four strategies may be used to exploit the information asymmetries from R&D: (1) publish the details of the innovation in return for legal protection; (2) keep the information inside the firm; (3) make the information selectively, informally available to others; and (4) disseminate the information as widely and rapidly as possible. To implement these strategies, resources may be allocated both to the commercial development of new technologies, and/or to related market opportunities (investing in other companies, assets and technologies). Of critical importance are the innovator's own skills and resources in effectively gathering, understanding, and commercially exploiting R&D-generated information asymmetries, both internally and in relation to other firms. This study should yield new insights to managers in designing strategies (and counter-strategies) to position themselves not only at the technological edge, but more fundamentally, at the 'information edge'.     

Taxpayer Disclosure and Penalty Laws

The consequences of a penalty exemption available to U.S. taxpayers who disclose aggressive reporting positions is examined via a game theoretic model. Results indicate that (i) the tax agency's expected revenue collections (net of audit costs) decline under the disclosure exemption, and (ii) the impact of disclosure regulations depends on the taxpayer's type. Of particular interest, we find that taxpayers who are likely to prevail on an uncertain issue decrease their expected payments although they do not disclose in equilibrium. The impact on the amount of resources absorbed by the tax collection process is also examined.     

Consumer evaluation of brand alliance signals

A consistent finding in brand‐alliance research is that a well‐known, reputable brand ally improves consumers' evaluation of an unknown brand. The authors contribute to this research by examining the effects of a brand ally at different levels of cognitive elaboration and message argument strength. Results suggest that the brand ally serves as an endorser of the primary brand in two key ways. When cognitive elaboration is low and the ad contains strong arguments, the ally serves as an endorser. On the other hand, the presence of a reputable ally is an information cue when cognitive elaboration is high and the ad contains weak arguments. © 2006 Wiley Periodicals, Inc.     

WAGE AND EMPLOYMENT DETERMINATION THROUGH NON-COOPERATIVE BARGAINING

This paper investigates wage and employment determination by a group of workers or union and a firm, making use of the techniques of non-cooperative bargaining. Previous analyses have examined wage determination with an artificial restriction that employment is determined either before or after wage determination has occurred. Here, employment determination is made part of the bargaining process. With two variables being determined, there is bargaining with a variable pie and solutions correspond to equilibria without commitment. Two different notions of efficiency – exchange and pie efficiency – are relevant and serve to characterise equilibria. Multiple equilibria are shown to arise naturally once exchange inefficient proposals are possible. In all equilibria there is overemployment. Factors that restrict a firm's ability to alter the labour force during or after the wage-bargaining process are shown, paradoxically, to benefit the firm.     

Optimal Pricing and Entry Rules When a Regulated Dominant Firm Faces a Competitive Fringe

In this paper, we study optimal regulation of a dominant firm facing an unregulated competitive fringe. First, assuming the size of the fringe is fixed, we demonstrate that the usual Ramsey Rule for second-best efficient pricing remains applicable in this context. We also examine the suitability of the Laspeyres price cap and show that it retains its desirable properties. This implies that regulators should continue to apply Laspeyres price cap regulation to the dominant firm after competition has materialized. Then, assuming that price and entry control are regulatory instruments, we characterize the efficient pricing and entry rules. We demonstrate that the free entry equilibrium number of firms will be excessive relative to the efficient number of firms, thereby providing a new Excess Entry Theorem. Finally, we suggest a modification of the Laspeyres price cap that can incentivize the regulated dominant firm to support efficient entry into the fringe.     

Innovations in Retail Pricing and Promotions

Retailers confront a seemingly impossible dual competitive challenge: grow the top line while also preserving their bottom line. Innovations in pricing and promotion provide considerable opportunities to target customers effectively both offline and online. Retailers also have gained enhanced abilities to measure and improve the effectiveness of their promotions. This article synthesizes recent advances in pricing and promotions findings as they pertain to enhanced targeting, new price and promotion models, and improved effectiveness. It also highlights the role of new enabling technologies and suggests important avenues for further research.