Strategic Choice of Quantity Stickiness and Stackelberg Leadership

This paper re‐examines endogenous Stackelberg leader–follower relations by modelling an explicitly dynamic market. We analyze a twice‐repeated duopoly where, in the beginning, each firm chooses either a quantity‐sticky production mode or a quantity‐flexible production mode. The size of the market becomes observable after the first period. In the second period, a firm can adjust its quantity if and only if it has adopted the flexible mode. Hence, if one firm chooses the sticky mode whilst the other chooses the flexible mode, then they respectively play the roles of a Stackelberg leader and a Stackelberg follower in the second marketing period. Somewhat intriguing is the finding that such a Stackelberg‐like equilibrium can arise only when the relative weight of the pre‐Stackelberg first marketing period is sufficiently high, with time preferences being sufficiently strong.     

PRECAUTIONARY DEMAND FOR LABOUR AND FIRM SIZE

This paper studies firms' job creation decisions in a labour market with search frictions. A simple labour market search model is developed in which a firm can search for a second employee while producing with a first worker, and this creates the equilibrium size distribution of firms. A firm expands employment even if the instantaneous payoff to a large firm is less than that of staying small – a firm has a precautionary motive to expand its size. In addition, this motive is enhanced by a greater market tightness. Because of this effect, firms’ decisions become interdependent – a firm creates a vacancy if it expects other firms to do the same, creating strategic complementarity among firms and thereby self‐fulfilling multiple equilibria. An increase in productivity can cause a qualitative change in labour market tightness and the rate of unemployment.     

Strategic Quality Decisions by Heterogeneously Informed Suppliers — The Role of "Noise Consumers"—

In a differentiated oligopoly market, it is often the case that consumers' ex post preferences over different product qualities depend upon the state of nature which is not yet observable to the consumers at the time of purchase. One of the most typical examples is a market for durable goods or long-term service contracts, where the state is indeed a future state which has not yet realised when the transaction is made. To analyse such situations, this paper models a two-stage game, in which multiple suppliers move first to choose the quality of their products based upon their idiosyncratic information about the state. Consumers then observe these products, update their beliefs about the state, and decide which products to purchase. Counterintuitively, suppliers' incentives to reveal their private information are higher when there is a fraction of consumers whose prior about the state is moderately inaccurate, than when every consumer has better prior information. Hence the presence of such "noise consumers" can make all consumers better off, even including noise consumers themselves.     

How Did the Dollar Peg Fail in Asia?

In this paper, we have constructed a theoretical model in which the Asian firm maximizes its profit, competing with the Japanese and the U.S. firms in their markets. The duopoly model is used to determine export prices and volumes in response to the exchange rate fluctuations vis-à-vis the Japanese yen and the U.S. dollar. Then, the optimal basket weight that would minimize the fluctuation of the growth rate of trade balance was derived. These are the novel features of our model. The export price equation and export volume equation are estimated for several Asian countries for the sample period from 1981 to 1996. Results are generally reasonable. The optimal currency weights for the yen and the U.S. dollar are derived and compared with actual weights that had been adopted before the currency crisis of 1997. For all countries in the sample, it is shown that the optimal weight of the yen is significantly higher than the actual weight.J. Japan. Int. Econ.,Dec. 1998,12(4), pp. 256–304. Institute of Economic Research, Hitotsubashi University, Kunitachi, Tokyo 186, Japan; Department of Commerce, Hitotsubashi University, Kunitachi, Tokyo 186, Japan; Department of Commerce, Takachiho University, Suginami, Tokyo 168, Japan.Copyright 1998 Academic Press.Journal of Economic LiteratureClassification Numbers F31, F33, O11.     

Measuring Search Frictions Using Japanese Microdata

This paper estimates individual‐level matching functions to measure search frictions in the Japanese labour market and presents the determinants of search duration. We employ administrative microdata that track the job search process of job seekers who left or lost their job in August 2005 and subsequently registered at their local public employment service. Our finding is that the matching function exhibits decreasing rather than constant returns‐to‐scale for job seekers and vacancies. We also find that after controlling for the benefits period, job seekers who lost their job involuntarily were more likely than those quitting voluntarily to exit from unemployment.     

CONSISTENCY BETWEEN MACRO- AND MICRO-DATA SETS IN THE JAPANESE HOUSEHOLD SECTOR

This paper makes a comparative analysis of the micro-data, the Family Income and Expenditure Survey (FIES) and the National Survey of Family Income and Expenditure (NSFIE) data, with the macro-data, the System of National Accounts (SNA), figures for the Japanese household sector. The overall FIES/SNA ratio is about 80 percent. In comparing the results to those of other countries, the figure seems to be not bad. However, the treatment of categories such as Gross Rent, Fuel and Power, and Medical Care and Health Expenses, require further consideration. In this regard we consider imputed rent for owner-occupied dwellings for the SNA and a sampling scheme for the FIES.     

Transportation system change and urban structure in two-transport mode setting

This paper analyzes the impacts of a transportation system change on urban spatial structure in the case where there are two competitive transport modes. Furthermore the effect of improvement of the transportation system on users' welfare is examined and compared between two modes.     

An empirical analysis of linear aggregation problems: The case of investment behavior in Japanese firms

Some economists have analysed empirically linear aggregation problems from various view-points and get results which seem to justify the use of aggregated data. However, some were based on only one experiment. Using more experiments we shall analyse empirically two important aggregation problems for the case of the investment behavior of firms. In contrast to earlier studies, our results indicate that the aggregation biases of macroparameters are rather large and the explanatory power of the macroequations is not necessarily higher than that of a sum of microequations.     

Regional difference in total factor productivity and spatial features : Empirical Analysis on the Basis of a Sectoral Translog Production Function

This paper applies a sectoral production function of translog type to Japanese regional data, introducing the variables of spatial attributes as the determinants of the technological level in the region, and thereby analyses the regional difference in total factor productivity.