A comparison of Hausman's and Breslaw–Smith's methods in estimating consumer welfare loss because of fuel taxes

In this paper, we investigate the welfare effect of US gasoline consumption caused by fuel taxes. Using two different economics approaches – the Hausman method and the Breslaw and Smith method – in measuring consumer welfare loss, we calculate compensating variation (CV) and the corresponding dead weight loss (DWL) assuming there are changes in motor gasoline tax. Our analysis shows that tax revenue, CV and DWL increases as motor gasoline tax increases, but the social welfare loss measured in DWL increases far more rapidly than the other two.     

The effect of subsidy policies on the product quality improvement

This paper analyzes the effect of government subsidy policies on creating an incentive for domestic firms to improve their product quality before exporting to an outside market. The goal of the government is to minimize the time it takes to reach the appropriate product quality level at low costs. We simulate a dynamic profit maximization problem of the firm and derive the optimal path of the product quality development, then test the efficiency of the three types of subsidy methods: Constant Subsidy, Quality Matching Subsidy and Time-limited Subsidy methods. Our model yields a number of intriguing results: (i) not every subsidy methods guarantee product quality development, although the same amount is subsidized. (ii) the matching fund style subsidy is more efficient than providing constant amount of subsidy. (iii) Time-limited Subsidy improves product quality faster than the unlimited subsidy method. (iv) Time-limited Subsidy improves quality much faster than other methods with less subsidy cost. (v) there is an optimal combination between the subsidy and the time limits.     

Evolutionary optimization of a technological knowledge network

Knowledge networks have two contradicting demands, increasing flow and decreasing cost. Maximizing the sum of these demands will result in an optimized network. On the basis of the evolutionary optimization algorithm, we suggest a quantitative way to produce an optimized technological knowledge network where optimality is defined as the maximization of overall benefit. Applied to Korea’s ICT network, such a network results in a total knowledge flow increase of up to 75% in absolute measures and 150% with due regard to cost. Our result supports the notion that self-organizing networks can be far from optimal, and thus active intervention by policymakers or managers is necessary to take full advantage of the potential benefits. Finally, with clear-cut suggestions about where to add new links and remove old ones according to potential benefits, this study sheds light on future policies with regard to evolutionary technology networks.     

Upstream Market Power and Wasteful Retailers*

We provide a novel explanation for the wasteful product disposal by retailers. In our model, after purchasing a quantity of a product from the manufacturer, the retailer exerts a costly effort to sell the product to the final users. The manufacturer’s production cost and the outside opportunity associated with it is private information. We show that, when the manufacturer has the upstream market power, the retailer sells all units purchased from the manufacturer. However, when the retailer has the market power, it might deliberately purchase more than it sells to the final users (thus wasting the unsold amount).     

The United Nations and low politics: Environmental & human security in East Asia*

In a world order characterized by ideological conflicts, low politics’ usually goes by the wayside. Policymakers focus on ‘high politics’ such as issues on state security, diplomacy and warfare. The September 11^th attack was an epitome of terrorism that calls for not only the protection of territorial and political security of the state but also the safeguarding of the individual or group from all threats to human survival. This paper raises the issues on ‘environmental security’ and ‘human security,’ particularly in the context of East Asia and reviews the efforts of the United Nations to safeguard the global environment and human rights. Finally, this paper reflects on the future role of the United Nations in non‐traditional security arenas with special emphasis on its role in East Asia.     

FEE VERSUS ROYALTY POLICY IN LICENSING THROUGH BARGAINING: AN APPLICATION OF THE NASH BARGAINING SOLUTION

In this paper, we consider a Cournot duopoly market in which the patent‐holding firm negotiates with its rival firm about payments for licensing a cost‐reducing innovation. Applying the Nash bargaining solution, we compare two licensing policies, a fixed fee and a royalty. Our results are as follows. Royalty licensing is better than fixed fee licensing for both firms if the innovation is not drastic. So, royalty licensing is always carried out. Moreover, though there exists a case in which consumers prefer fixed fee licensing, royalty licensing is always superior to fixed fee licensing from the social point of view.     

Religiosity and consumers' use of product information source among Korean consumers: an exploratory research

In response to the lack of research on the impact of religion on consumer behaviour, this study investigates how consumers' use of various product information sources can differ depending on their levels of religiosity (high, low and none). Data were collected from Korean consumers in Korea. The findings from data analyses indicate that the usages of product information sources among Korean consumers generally vary based upon their levels of religiosity. Limitations and suggestions for future research to further understand the effects of religiosity on consumer behaviour were addressed.     

Liquidity and leverage

In a financial system in which balance sheets are continuously marked to market, asset price changes appear immediately as changes in net worth, and eliciting responses from financial intermediaries who adjust the size of their balance sheets. We document evidence that marked-to-market leverage is strongly procyclical. Such behavior has aggregate consequences. Changes in dealer repos – the primary margin of adjustment for the aggregate balance sheets of intermediaries – forecast changes in financial market risk as measured by the innovations in the Chicago Board Options Exchange Volatility Index VIX index. Aggregate liquidity can be seen as the rate of change of the aggregate balance sheet of the financial intermediaries.     

The Puzzling Increase in the Underpricing of Seasoned Equity Offerings

Using a sample of over 3,000 seasoned equity offerings (SEOs) from 1983 to 1998, we test the hypothesis that the U.S. Securities and Exchange Commission's Rule 10b‐21, which disallows the covering of short positions with newly issued SEOs, makes pre‐offer stock prices less informative, which, in turn, causes the new seasoned equity to be priced at a discount. Consistent with the hypothesis, we find that the year the rule went into effect coincides with the year from which we begin observing significant SEO discounts. Further, we find that ex ante uncertainty and SEO discounts are positively related. We also conduct tests specifically related to short selling, and we also consider an exhaustive set of alternative explanations for the discounts. Based on all of the evidence, we conclude that it is the rule that makes issue discounts larger in the 1990s.