Book Review

This paper discusses partial approaches to trade liberalization, such as the Asia Pacific Economic Cooperation (APEC) group's Early Voluntary Sector Liberalization (EVSL) proposal and the "zero-for-zero" approach. Distortions to resource allocation and global markets that might result from partial liberalizations are discussed, and parallels drawn to the possible trade diversion impacts and welfare losses of regional liberalization and tariff escalation. A global Computable General Equilibrium (CGE) model is used to provide some numerical illustrations of the issues with respect to international trade in grains, oilseeds, and related processed products.     

CREDIBILITY AND STRATEGIC LEARNING IN NETWORKS

We analyze a model of diffusion in a fixed, finite connected network. There is an interested party that knows the quality of the product being propagated and chooses an implant in the network to influence other agents to buy. Agents are either “innovators,” who adopt immediately, or rational. Rational consumers buy if buying instead of waiting maximizes expected utility. We consider the conditions on the network under which optimal diffusion of the good product with probability 1 is a perfect Bayes equilibrium.     

Drivers of Shareholder Returns in Tech Industries (or How to Make Sense of Amazon's Market Value)

Earnings according to GAAP do a notoriously poor job of explaining the current values of the most successful high‐tech companies, which in recent years have experienced remarkable growth in revenues and market capitalizations. But if GAAP earnings fail to account for the values of such companies, are there other measures that do better? The authors address this question in two main ways. They begin by summarizing the findings of their recent study of both the operating and the stock‐market performance of 169 publicly traded tech companies (with market caps of at least $1 billion). The aim of the study was to identify which of the many indicators of corporate operating performance—including growth in revenues, EBITDA margins, and returns on equity—have had the strongest correlation with shareholder returns over a relatively long period of time. The study's main conclusion is that investors appear to be looking for signs of neither growth nor efficiency in using capital alone, but for an optimal mix or balancing of those goals. And that mix, as the study also suggests, is captured in a cash‐flow‐based variant of “residual income” the authors call “residual cash earnings,” or RCE. In the second part of their article, the authors show how and why RCE does a much better job than reported net income or EPS of explaining the current market value of Amazon.com , one of the best‐performing tech companies in the world. Mainly by treating R&D spending as an investment of capital rather than an expense, RCE reveals the value of a company that is distinguished by both the amount and the productivity of its ongoing investment—both of which have been obscured by GAAP.     

Two-level search design for main-effect plus two plan

One important class of screening designs is the search design first proposed by Srivastava (1975). A new class of two-level factorial search designs which are capable of estimating all main-effect plus two interactions is provided. We first give a necessary and sufficient condition for the main-effect plus two plan and then show that the proposed search design always satisfies such a condition. Received October 2000     

Bilateral Delegation in Duopoly Wage and Employment Bargaining

We study bilateral delegation in wage and employment bargaining between firms and unions in a Cournot duopoly. Incentive delegation creates frictions for each party between its objectives of within‐firm rent extraction and market/job stealing from the rival firm. The net effect is restraint in production, resulting in a larger bargaining pie. But each player's payoff will be inversely related to his bargaining power. We also show that if players are given a choice to delegate, they will not resort to delegation when their bargaining power is sufficiently high. This is in contrast to the scenarios commonly assumed in many models. Copyright © 2016 John Wiley & Sons, Ltd.     

Unification of some multivariate process capability indices for asymmetric specification region

In manufacturing industries, it is often seen that the bilateral specification limits corresponding to a particular quality characteristic are not symmetric with respect to the stipulated target. A unified superstructure of univariate process capability indices was specially designed for processes with asymmetric specification limits. However, as in most of the practical situations a process consists of a number of inter‐related quality characteristics, subsequently, a multivariate analogue of , which is called C_M(u,v), was developed. In the present paper, we study some properties of C_M(u,v) like threshold value and compatibility with the asymmetry in loss function. We also discuss estimation procedures for plug‐in estimators of some of the member indices of C_M(u,v). Finally, the superstructure is applied to a numerical example to supplement the theory developed in this article.     

Cobranding arrangements and partner selection: a conceptual framework and managerial guidelines

Cobranding, the strategy of marketing brands in combination, has received increasing attention from academics and practitioners alike. This study examines two cobranding decisions facing a firm: the cobranding structure and the selection of a partner. Propositions rooted in the theories of attribution and categorization posit (a) how the levels of cobranding integration, exclusivity, and duration influence brand evaluation and consideration and (b) how consistency with the partner brand in hedonic attributes, complementarity in functional attributes, and brand breadth moderate the effect of partnership structure. Higher integration or longer duration likely has a greater impact on evaluation and consideration; an exclusive arrangement has a greater effect on evaluation but lowers consideration. For managers, these propositions are directly applicable; the outcomes of brand evaluation and consideration map onto the strategic goals of brand development and market development, respectively.     

An examination of determinants influencing the desire for and frequency of part-day and whole-day homeworking

This paper presents findings and analysis based upon the third wave of a national longitudinal survey in the UK which is examining part-day homeworking and comparing it with whole-day homeworking. Survey results confirm earlier findings that there is a higher incidence, amongst full-time paid employees, of part-day homeworking than whole-day homeworking. The paper then separately examines determinants of the desire to part-day homework and whole-day homework and determinants of the reported frequency of part-day homeworking and whole-day homeworking. The determinants considered are socio-demographic characteristics of the respondents and belief statements relating to homeworking. Four statements are found to be relevant to desire to part-day and to whole-day homework: avoiding interruptions at work; avoiding wasted time in traffic; other household members appreciating the employee homeworking; and working longer hours. A similar comparison concerning actual frequency of homeworking finds that employer support is relevant for both homeworking practices, with part-day homeworking being associated with avoiding interruptions at work and whole-day homeworking frequency also being associated with commute struggle. For both forms of working practice, the belief statements are better able to explain desire to homework (more) than to explain frequency of homeworking. This is perhaps not surprising given the variability of work patterns at the level of the individual that can occur from week-to-week. The better performance of desire models for whole-day homeworking compared to those for part-day homeworking suggest that other factors are at play that remain to be identified in future examination of part-day homeworking.