A new formula on a particular type of «Gambler's ruin» problem withN players

The «gambler's ruin» problem both in the fair game and in the unfair game with two players is a classical one. Some results are known also for a fair ruin game among more than two players. In this note an unfair ruin game among more than two players is tackled and a new formula is derived.

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Riassunto Il problema della rovina in un gioco (equo o non) tra due giocatori è classico. Alcuni risultati sono noti per un gioco equo di rovina tra più di due giocatori.In questa nota un gioco non equo di rovina tra più di due giocatori è preso in considerazione, ricavando per esso una nuova formula.

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Work performed under the auspices of GNAFA, Italian C.N.R.     

Beyond profitability: effects of acquisitions on technical efficiency in the Italian pasta industry

Unlike traditional studies on the impact of ownership changes—which use either profitability measures or stock prices—this paper investigates the impact of acquisitions on acquired firms' technical efficiency. Using a panel of Italian firms in the pasta industry for the 1981–1997 period, I estimate a stochastic production frontier with exogenous factors affecting efficiency in a translog specification with non‐neutral technical progress. The main result is that acquired firms experience, within the 6 years period following the acquisition, an increase in technical efficiency of the order of 10%. This result is statistically significant and proves to be robust with respect to the inclusion of size and calendar year effects as explanatory variables of firms' inefficiency. These findings contribute to the debate on the welfare gains of ownership changes by providing evidence that mergers and acquisitions lead to cost savings, due to the reduction of acquired firms' X‐inefficiency. Copyright © 2002 John Wiley & Sons, Ltd.     

Evolutionary selection of ‘chivalrous’ conventions in coordination games without common expectations

We study an evolutionary game-theoretic model where players have to choose within a predetermined set of mixed strategies in a coordination game. Players are of two different kinds, male and female. No common expectations assumption is made; players tend therefore to adopt the strategy that yields larger than average expected payoffs for their kind. In this framework, every stable stationary point of the population dynamics can be interpreted as the emergence of a particular convention. A classification of the possible conventions is provided; conditions for their emergence are determined.     

The Interaction between the Central Bank and a Single Monopoly Union Revisited: Does Greater Monetary Policy Uncertainty Reduce Nominal Wages?

Previous papers modelling the interaction between the central bank and a single monopoly union demonstrated that greater monetary policy uncertainty reduces the union's nominal wage. This paper shows that this result does not hold in general, since it depends on peculiar specifications of the union's objective function. In particular, I show that greater monetary policy uncertainty raises the nominal wage whenever union members tend to be more sensitive to the risk of getting low real wages than to the risk of remaining unemployed. This conclusion appears consistent with the evidence showing that greater monetary authority's transparency reduces average inflation .     

Evolution of preferences and cross-country differences in time devoted to market work

I model the hypothesis that preferences evolve and permanent differences in individual attitudes towards work emerge between two countries characterized initially by identical preferences as a result of a period in which only one of the two countries is subject to regulations constraining labor supply, or as a by-product of different tax rates on labor income. Hence, the elimination of these regulations may not allow the economy thus deregulated to converge to the same hours of market work per person of the other economy, and the long-run differential in market work between economies subject to different tax rates is amplified.     

Some new mathematical methods in dynamic programming over infinite horizon

Two properties of the potentialsU(x, y) are studied. They are the acyclicity and the strong convexity. By mean of them, information on the dynamic behavior of the optimal choice functions is obtained. The previous results are then applied,via Dynamic Programming, to the models of optimization over an infinite horizon (discounted Ramsey models). Qualitative information on the dynamics in such models is derived and some new stability results are given.

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Riassunto Nel presente lavoro vengono proposte due proprietà dei potenzialiU(x, y): l'aciclicità e la convessità forte. Entrambe permettono di ottenere informazioni sul comportamento dinamico delle funzioni di scelta ottimale .La precedente teoria viene poi applicata, utilizzando la programmazione dinamica, al problema di dedurre informazioni qualitative sulle dinamiche nei modelli di ottimizzazione ad orizzonte infinito (modelli di Ramsey con utilità scontate). Si ottengono in questo modo alcuni nuovi risultati di stabilità delle soluzioni in questo modello.

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The research of the author was partially supported by a grant from the «Ministero della Pubblica Istruzione». A first version of this paper was delivered at the «VIII Convegno A.M.A. S.E.S., Modena 26–29 September 1984». In am grateful to E. Castagnoli and P. Mazzoleni for helpful suggestions. For any remaining errors, I am entirely responsible.     

Wirtschaftswissenschaft und Wirtschaftswissenschafter von heute

Ohne ZusammenfassungAus dem Italienischen übersetzt von Dr. Hans Emmer, Wien     

In Search of New Foundations

In this paper I argue that corporate finance theory, empirical research, practical applications, and policy recommendations are deeply rooted in an underlying theory of the firm. I also argue that although the existing theories have delivered very important and useful insights, they seem to be quite ineffective in helping us cope with the new type of firms that is emerging. I outline the characteristics that a new theory of the firm should satisfy and how such a theory could change the way we do corporate finance, both theoretically and empirically.     

European Telecommunications Infrastructures

Since the liberalization of European telecommunications markets,regulators at European and national level have been relativelysuccessful in forcing down the price of access to the historicmonopolists' fixed network. This has led, however, to the developmentprimarily of ‘service competition’ in most of Europe,while infrastructure competition has been limited. As a consequence,investment levels are significantly lower than in the UnitedStates, particularly for the provision of broadband. Mobiletelephony has, however, diffused quickly in Europe comparedwith the United States, partly as a result of the successfulsecond-generation Global System for Mobile Communications (GSM)standard adopted, and partly as a result of the charging systemsemployed. These developments have, however, been imperilledby the cost and delays associated with third-generation mobiletechnology. A new regime for regulating communications is currentlybeing developed in Europe. If properly applied, it will reduceregulatory intervention and promote investment and innovationin both fixed and mobile services, but there is a risk thatnational regulators may thwart this outcome.