Technical Improvements and Welfare under International Duopoly

It is now common wisdom that a free-trading country with perfectly competitive markets might be hurt by its own technical improvement of that country's export industry, and that an improvement in the import-competing industry never impoverishes the country if no commodity is inferior for that country. This paper examines the welfare effects of technical progress in a perfectly competitive industry and in an internationally duopolistic market in a two-country, two-good, one-factor trading model. It will be shown that the above propositions are severely qualified in our setting with duopolistic industry.     

Search theory,competitive equilibrium,and the Nash bargaining solution

We investigate a canonical search-theoretic model without entry. Two agents are randomly matched with a long side being rationed. The matched agents face a pair of randomly drawn non-transferable payoffs, and then choose whether or not to form a partnership subject to a small probability of exogenous break down. As this probability and friction vanish, the Nash bargaining solution emerges as the unique undominated strategy equilibrium outcome if the mass of each party is the same. If the size of one party is larger than the other, the short side extracts the entire surplus, a sharp contrast to Rubinstein and Wolinsky (1985) [16].     

The relationship between pollution abatement costs and environmental regulation: Evidence from the Chinese industrial sector

Since the 2000s, China has been trying to strengthen emission controls in response to increasing pollution problems. However, strict implementation of emission controls generates pollution abatement costs. Using regional data for 29 provinces in the Chinese industrial sector from 1995 to 2010, this study estimated the pollution abatement costs for each province through the measurement of environmental efficiency, by applying a directional distance function approach. Moreover, using panel data analysis, this study clarified whether there is a nonlinear relationship between pollution abatement costs and environmental regulations. The empirical results are as follows. The study confirmed that the burden of abatement costs tended not only to occur in the central and western regions but also to increase in the eastern region. Moreover, the nonlinear relationship is inverted U‐shaped; thus, pollution abatement costs increase, as a negative effect of environmental regulations, until a certain inflection point, after which they decrease.     

Effects of wholesaler concentration on retailers by format: evidence from Japanese brand-level price data

Using unique brand-level wholesale price data, this article examines how purchase prices of commodities for retailers are influenced by wholesale concentration. Compared with studies focusing on retail prices, little empirical work has measured the impact of wholesale concentration on wholesale prices. Economic theory suggests that the sensitivity of purchase price in response to degree of wholesale concentration is smaller for large retail formats than for small retail formats in the presence of intra-format retail competition. To test the validity of the theoretical implication, I measure the impact of the concentration on purchasing prices for retailers by format. Empirical findings support the hypothesis that the large retail format tends to draw advantageous purchase prices when wholesalers become increasingly oligopolistic.     

ANALYSIS OF HOUSEHOLD LEISURE AND SHOPPING BEHAVIOR IN IBARAKI PREFECTURE, JAPAN

Understanding household leisure and shopping behavior is an important component of market research, shop location decisions, travel behavior, and consumer behavior studies. This paper estimates a gravity model of travel behaviors related to leisure and shopping trips in the Ibaraki Prefecture, Japan, based on a 1998 survey data set by Poisson regression. The overall results indicate that GDP per capita of cities of origin and of destination, population, train stations, and store area of the destination city affect trip flow positively. Intercity distance, store areas in the city of origin, and higher density in the city of origin negatively affect trip flow. Different variables distinctly affect the shopping behavior for different commodities.     

NATIONAL AND REGIONAL WAGE CURVES IN JAPAN 1981–2001

There is evidence in many countries of an inverse relationship between the real wages paid to workers and the unemployment rate in their local labor market, a so-called wage curve. However, the evidence to date for Japan has been rather limited. In this paper, we estimate wage curves for Japan using pooled cross-section time-series data from 1981 until 2001. The presence of a wage curve is confirmed. The wage curve has become slightly more elastic after the bubble economy of the 1980s than it was in the pre-bubble and mid-bubble period. The unemployment elasticity of pay is greater for males than for females. We also estimate regional wage curves using time-series data. The male wage curve elasticity is larger in the northern regions of Hokkaido and Tohoku and the western region of Shikoku, while it is smaller in the central regions of Hokuriku, Tokai and Kinki.     

A Theoretical Analysis of Liner Shipping Conferences and Strategic Alliances

We analyze the economic impacts of industrial organizational struggles on the international liner shipping market. Operating ratios of different markets are discussed by incorporating rate, service level, and other variables into a standard microeconomic model. If two different carriers agree on a shipping conference price and/or share a strategic alliance service level, and maximize consolidated profit, a member carrier finds it easier to make its operation profitable than the individual profit optimization case; other carriers are worse off in becoming profitable. If the carriers face inelastic demand, the price continues rising until demand becomes elastic enough for the equilibrium to be relevant. The conference is expected to play a coordination role so that the market does not become unsustainable in the adjustment process to reach equilibrium.     

Strategic Transfer Pricing and Social Welfare under Product Differentiation

In this paper, we investigate the social impacts of strategic transfer pricing by oligopoly firms, aiming to derive regulatory implications for transfer prices. A notable finding from our model is that the negative effects on social welfare of transfer prices being set above marginal cost are pronounced when either (1) the number of competing firms is large and the product is relatively highly differentiated or (2) the number of firms is small and the product is not very differentiated. This result indicates that even when the number of firms in the industry is significant and the market is thus apparently competitive, the authorities should not overlook the possibility that setting transfer prices above marginal cost might seriously damage social welfare if the product is highly differentiated.     

Firm heterogeneity and international trade in services

This study, using panel data on Japanese firms, analyses the relationship between services trade and firm heterogeneity. It finds that the number of firms engaged in services trade is far less than that engaged in goods trade. Further, the productivity of services traders is higher than that of domestic firms and goods trading firms, whereas the productivity of firms that export services beyond the boundary of their firm groups is higher than that of those that export services only to their affiliate firms. These results suggest that only productive firms can engage in services trade by incurring the relatively large fixed costs.     

Disability and Economy: A Game Theoretic Approach

This paper takes a game theoretic approach to disability‐related issues by constructing a model that studies the case of hereditary deafness on Martha's Vineyard Island, USA from the seventeenth century to the early years of twentieth, where the island community adjusted itself to the hereditary deafness so that it was not treated as a disability. The model of the present paper has two stages. First of all, there are two types of continua of agents, the deaf and the non‐deaf. In the first stage, the non‐deaf agents become either bilinguals or monolinguals. In the second stage, agents are classified into deaf people, bilinguals and monolinguals. They are then randomly matched to form a trio to play a three‐person bargaining game with infinite horizon, random proposers and language constraints. Two bargaining games are considered. The first one is a majority bargaining game where only two out of three can agree to implement a bargaining outcome. The second one is a unanimity bargaining game where all three agents are required to reach an agreement. The majority game exhibits strategic complementarity, while the unanimity game exhibits strategic substitutability. This paper also takes an inductive approach to examine how prejudice against people with disability may emerge.