Competitiveness and Subsidy or Tax Policy for New Technology Adoption in Duopoly

We consider a problem of subsidy or tax policy for new technology adoption by duopolistic firms. The technology is developed in and transferred by a foreign country to the domestic country. It is free but each firm must expend some fixed set-up cost for education of its staff to adopt and use it. Assuming that each firm maximizes the weighted average of absolute and relative profits, we examine the relationship between competitiveness and subsidy or tax policies for technology adoption, and show that when firm behavior is not competitive (the weight on the relative profit is small), the optimal policy of the government may be taxation; when firm behavior is competitive (the weight on the relative profit is large), the optimal policy is subsidization or inaction and not taxation. However, if firm behavior is extremely competitive (close to perfect competition), taxation case re-emerges.     

Implementation of HACCP in the risk management of medical waste generated from endoscopy

Medical waste poses health hazards, increases the environmental load and is costly to dispose of. To solve the above problems, we applied the hazard analysis and critical control point system (HACCP) to the management of wastes generated from endoscopy. First, the wastes in three hospitals were quantified. The number and weight of waste per case differed significantly among the three hospitals. Second, HACCP was applied to the endoscopy unit of Hospital X for a year. Wastes were segregated into five types and weighed. We found that 25.8% of ‘infectious waste’ was in fact ‘non‐infectious waste’ and ‘non‐infectious plastic waste’. The numbers of needles and needle caps did not correspond in two occasions (needle‐loss rate: 0.42%). Bacterial counts of the waste container were determined to investigate infection hazard. The counts were 0 cfu/cm² in all examinations except one occasion. The waste control manifests were reviewed, and all entries were consistent with the waste sent for disposal. In Hospital X where implementation of HACCP was attempted, reduction of environmental load and cutting of disposal cost are anticipated by changing the categories of waste segregation. The results suggest that hospital wastes should be managed more safely by HACCP.     

A direct solution method for pricing options involving the maximum process

One often encounters options involving not only the stock price, but also its running maximum. We provide, in a fairly general setting, explicit solutions for optimal stopping problems concerned with a diffusion process and its running maximum. Our approach is to use excursion theory for Markov processes and rewrite the original two-dimensional problem as an infinite number of one-dimensional ones. Our method is rather direct without presupposing the existence of an optimal threshold or imposing a smooth-fit condition. We present a systematic solution method by illustrating it through classical and new examples.