Creating a Public Good to Fight Monopolization: The Formation of Broadcast Music,Inc.

Entry by vertical integration to defeatmonopolization has played an important role in severalantitrust cases. Yet the source of financing for suchentry is unclear, given that the entrant represents apublic good to the vertically related firms. Whilethere are a number of theoretical and experimentalstudies on the private supply of a public good, thereis little empirical estimation on this topic. Thispaper examis business contributions to the creation ofBroadcast Music, Inc. (BMI) in 1940. BMI was createdby broadcasters specifically to fight monopolization,and represented investment in a pure public good. This study finds that several factors led tocontributions to create BMI. In particular, networkaffiliation increased the probability that a stationwould join BMI. There is also evidence stations inless competitive markets were more likely to join,indicating that the rents from the creation of BMIwere less likely to be competed away in suchmarkets.     

Markets,torts, and social inefficiency

We provide a model wherein oligopolists produce differentiated products that also have a safety attribute. Consumption of these products may lead to harm (to consumers and/or third parties), lawsuits, and compensation, either via settlement or trial. Firm‐level costs reflect both safety investment and production activities, as well as liability‐related costs. Compensation is incomplete, both because of inefficiencies in the bargaining process and (possibly) because of statutorily established limits on awards. We compare the market equilibrium safety effort and output levels to what a planner who is able to set safety standards, but takes the market equilibrium output as given, would choose.     

Brand Name Audit Pricing,Industry Specialization,and Leadership Premiums post‐Big 8 and Big 6 Mergers*

This paper investigates brand name, industry specialization, and leadership audit pricing in the wake of the mergers that created the Big 6 and the Big 5 accounting firms. For samples of Australian listed public companies in each of the postmerger years 1990, 1992, 1994, and 1998, we estimate national audit fee premiums for the Big 6/5 auditors and the industry specialists and leaders. We find limited support for the ability of the Big 6/5 to obtain fee premiums over non‐Big 6/5 for those industries not having specialist auditors. Nonspecialist Big 6/5 auditors are able to obtain fee premiums over nonspecialist non‐Big 6/5 auditors for those industries having specialist auditors. However, this result only holds among the smaller half of our sample. We do not find strong support for the presence of industry specialist premiums in the postmerger years, especially after 1990, using various definitions of industry specialist. We find, at best, limited support for the presence of industry leadership premiums. The evidence suggests that after the Big 8/6 audit firm mergers, some caution is required in generalizing the Craswell, Francis, and Taylor 1995 finding of national market industry specialist premiums. More generally, the study raises questions about the tenuous link between the concept of specialization and national market‐share statistics.     

Reviews

TECS AND SMALL FIRMS.

Curran, J. 1993: TECs and Small Firms: Can TECs Reach The Small Firms Other Strategies Have Failed To Reach? Kingston University.

URBAN PLANNING TODAY.

Rydin, Y. 1993: The British Planning System: An Introduction. London: MacMillan, £14.99, paper, 404pp.

COMMUNITY PARTNERSHIP.

Macfarlane, R. and Laville, J-L1993: Developing Community Partnerships in Europe. London: Directory of Social Change/Calouste Gulbenkian Foundation, £12.95.

LOCAL LABOUR.

Campbell, M. and Duffy, K. 1992: Local Labour Markets: Problems and Policies. Harlow: Longman, £22.00, paper.

MARGINAL REGIONS.

Flogenfeldt, T., Hansen, J.C., Nordgreen, R. and Rohr, J.M. (eds) 1993: Conditions for Development in Marginal Regions, Proceedings of the XI International Seminar on Marginal Regions August 1991, Oppland College, Norway, Price NKr. 300, paper.

MARGINAL REGIONS.

Flogenfeldt, T., Hansen, J.C., Nordgreen, R. and Rohr, J.M. (eds) 1993: Conditions for Development in Marginal Regions, Proceedings of the XI International Seminar on Marginal Regions August 1991, Oppland College, Norway, Price NKr. 300, paper.     

VOLUNTARY DISCLOSURE OF SEGMENT INFORMATION: FURTHER AUSTRALIAN EVIDENCE

This study provides further empirical evidence on incentives for Australian firms to voluntarily report segment information. Various economic reasons why firms may elect to present segment information have been hypothesised in previous research. Bradbury [1992] and McKinnon and Dalimunthe [1993] found firm size, minority interest and industry membership as significant identifiable characteristics motivating voluntary segmental disclosure. Variables found to be insignificant in Bradbury [1992] which were not examined by McKinnon and Dalimunthe [1993] are tested in this paper. Hypotheses relating to size, financial leverage, assets-in-place, earnings volatility, ownership diffusion, outside equity (minority) interest, overseas association as well as diverse and mining and oil classification hypotheses are empirically examined. Univariate tests and multivariate logit analysis suggest that for a extensive sample of diversified firms, voluntary segment disclosure is significantly related to size, leverage and involvement in mining or oil activities.     

The Impact of Employee Share Ownership Plans On Employee Participation and Industrial Democracy

This article examines employee participation in recently-formed employee share ownership plan organisations (ESOPS) in the UK. the various legal/institutional forms of ESOP are outlined prior to considering the nature and determinants of participative institutions and processes. It is suggested that there are three ‘constellations’ of ESOP in terms of employee participation:‘technical ESOPS’, ‘paternalist ESOPs’ and ‘representative ESOPs’. There are relatively few innovations in participation in the first of these, while in paternalist ESOPs, innovations centre on individualistic forms of participation and communication at the level of the workplace. In representative ESOPs employees gain more of a say in strategic decisions through such innovations as employee representation on company boards. It is argued that these differences in the nature of participation are due neither to differences in legal structure nor to variations in the extent of employee share ownership. Instead, participative systems are viewed as the outcome of the philosophies and objectives of those involved in the conversion to employee ownership.     

A financial planning model for presidential candidates

The necessity of entering a sequence of interrelated state primaries has forced presidential candidates to be much more deliberate in planning campaign finances. This paper presents a linear programming model for optimal allocation of time and money to each primary in order to maximize the number of delegates won. The model attempts to quantify and exploit the relationships between performance in early primaries and performance in later primaries, which has heretofore been labeled the “snowball effect.” Finally, the model, whose major use would be in overall strategic planning, is illustrated with an example.