Cooperation in a Stochastic Transboundary Fishery: The Effects of Implementation Uncertainty Versus Recruitment Uncertainty

This paper examines how non-binding cooperative agreements on fisheries management can be sustained when the management plans in participating countries are implemented imperfectly, and compares the effects of implementation uncertainty and of recruitment uncertainty on the potential for cooperation. The model developed assumes two countries that share a fish stock. Reproduction depends on how much fish each country leaves behind after harvesting and hence on random variation in each country’s achieved abandonment level. A self-enforcing agreement is proposed that accounts for the random variation. The agreement is illustrated with a numerical example. A self-enforcing cooperative solution can only be sustained when uncertainty is not pronounced and when the two countries control close to equal shares of the fishery. Even when a cooperative agreement can be achieved, frequent phases of reversion to non-cooperative harvest levels are needed to support the agreement. A comparison of the effects of recruitment and implementation uncertainty on implicit cooperation indicates that implementation uncertainty is more likely to hamper cooperation.     

Growing Silicon Valley on a landscape: an agent-based approach to high-tech industrial clusters

We propose a Nelson-Winter model with an explicitly defined landscape to study the formation of high-tech industrial clusters such as those in Silicon Valley. The existing literature treats clusters as the result of location choices and focuses on how firms may benefit from locating in a cluster. We deviate from this tradition by emphasizing that high-tech industrial clusters are characterized by concentrated entrepreneurship. We argue that the emergence of clusters can be explained by the social effect through which the appearance of one or a few entrepreneurs inspire many followers locally. Agent-based simulation is employed to show the dynamics of the model. Data from the simulation and the properties of the model are discussed in light of empirical regularities. Variations of the model are simulated to study policies that are favorable to the high-tech economy.JEL Classification: L11, R12This paper has been presented at the 9th International Schumpeter Society Conference in Gainesville, Florida, the Western Economic Associations 77th Annual Conference in Seattle, Washington, the 24th Annual Research Conference of the Association for Public Policy Analysis and Management in Dallas, Texas, and the Workshop on Industry and Labor Dynamics: The Agent-Based Computational Economics Approach in Turin, Italy. I would like to thank Rob Axtell, Giovanni Dosi, Olav Sorenson, and an anonymous referee for their comments, suggestions, and encouragement. I am grateful to Nikesh Patel for his superb assistance.     

Entrepreneurship and regional growth: an evolutionary interpretation

While the neoclassical growth theory considered economic growth as a process of mere accumulation of production capital, the endogenous growth theory shifted the lens to the importance of knowledge in the production process and its potential to create spillovers. We argue in this paper that there is a gap between knowledge and exploitable knowledge or economic knowledge. Economic knowledge emerges from a selection process across the generally available body of knowledge, actively driven by economic agents. This paper suggests that entrepreneurship is an important mechanism in driving that selection process hence in creating diversity of knowledge, which in turn serves as a mechanism facilitating the spillover of knowledge. We provide empirical evidence that regions with higher levels of entrepreneurship indeed exhibit stronger growth in labor productivity.JEL Classification: M13, O32, O47 Correspondence to: David B. AudretschWe are grateful to the ZEW in Mannheim for research support and to the German Science Foundation (DFG) for financial support under research grant number STA 169/10-2. We are indebted to two anonymous referees and the editor of the special issue for their helpful comments.     

Cross-country catch-up in the manufacturing sector: Impacts of heterogeneity on convergence and technology adoption

We analyze how technology transfer from a leading economy affects followers productivity growth in manufacturing sectors and Gross Domestic Product. Allowing for heterogeneous technology levels we explore how this impacts rates of catch-up in labor productivity across manufacturing sectors and GDP for 16 OECD nations. Our results indicate that aggregate studies bias downward the estimated rates of catch-up. These rates of catch-up, as well as efficiency levels, also differ across countries. We find that institutional factors such as bureaucratic efficiency are important determinants of the estimated catch-up rates.First version received:October 2001/Final version received:September 2003Earlier versions of this paper have been presented under the titles of Cross-Country Catch-up in Manufacturing and Heterogeneous Rates of Catch-up in Manufacturing Industries. The authors would like to thank participants of the North American Productivity Conference, June 2000, at Union College, N, Y., and the Associate Editor for helpful comments and criticisms.     

“Buy Domestic” Campaigns and Optimal Tariffs

This paper attempts to analyze the strategic use of optimal tariffs and to examine the effects of national bias on the optimal trade policy and social welfare in a two-country, two-good, price competition model derived from Neven et al. (1991). The major findings are as follows. (1) If all consumers prefer the domestic good, then buy domestic campaigns will decrease the prohibitive tariff rate and increase local welfare. (2) If at least some consumers prefer the foreign good, but not to a great extent, then buy domestic campaigns will not change the optimal tariff rate, but may improve local welfare. (3) When all consumers greatly prefer the foreign good, then promotion of buy domestic decreases the optimal tariff rate, but it cannot improve social welfare. With this framework, we also prove that buy domestic campaigns serve as a substitute for tariffs with respect to a strategic trade policy.     

Asymmetric Regulation of Access and Price Discrimination in Telecommunications*

Suppose that a strong and a weak operator compete in a telecommunications market. To terminate a call operators need access to the competitor’s network if the call is off-net. Operators set two-part tariffs and price-discriminate according to termination of a call. Suppose as a benchmark that access prices are regulated at costs. I show that the weak operator’s profit and consumer welfare increase if the regulator sets a higher price to access the weak operator’s network. However, total surplus decreases even locally. *I received helpful comments from Mark Armstrong, Toker Doganoglu, Tommaso Valletti, Julian Wright, and, in particular, two referees and the editor Michael Crew. I gratefully acknowledge financial support from the Deutsche Forschungsgemeinschaft (Heisenberg Fellowship).     

The Ramaswami Argument in a Multi-commodity Setting

This paper considers the optimum taxes and tariffs in a multi-commodity setting. Using the argument in Ramawami (1968), I show that when all goods and factors are tradable, the home country should buy out all the foreign factors. Conditions for the optimal terms of trade are also analyzed. In a single consumption good model, the foreign factors should be bought out at the foreign autarky prices. This result is only partially true in the more general setting. While factor mobility should be prohibited before the buy-out, non-prohibitive tariffs have to be imposed on trade in goods to attain the optimum terms of trade.     

Network Externality and the Coordination Problem

We show that Rohlfss (1974) model is a special case of a spatial monopoly model á la Hotelling (1929) with uniform consumer distribution and quadratic transportation costs, where location is exogenous and the good yields no intrinsic utility. By relaxing these assumptions, we prove that the coordination problem typically thought to affect markets for network goods may not arise in general. Endogenizing location makes it easier for the monopolist to extract consumer surplus but also to cover the entire market. We also show that the main conclusions remain qualitatively unmodified if consumer distribution is triangular.revised version received September 16, 2003