Kyle v. Kyle (’85 v. ’89)

We characterize equilibrium outcomes in a Kyle demand-submission market model of speculative trade. This market design mirrors that used at open on most exchanges, as well as the auction format used for many IPOs. We contrast equilibrium outcomes with those that obtain in the corresponding competitive market maker structure. We prove that the two market structures yield identical total speculator profits only if their signals are independently distributed. If the signals of speculators are correlated in any way, market design matters: the demand-submission market design increases competition, drives down speculator profit, and leads to more informative prices. We argue that these facts explain the prevalence of the demand-submission market design. We thank Pete Kyle for helpful comments. Both authors gratefully acknowledge financial support from the National Science Foundation grant SES-0317700. See, e.g., Admati and Pfleiderer (1988), and dynamic multi-speculator extensions such as Foster and Viswanathan (1994), (1996), Back, Cao and Willard (2000), Huddart, Hughes and Levine (2001), Baruch (2002), and Bernhardt and Miao (2004).     

Product strategy and formal structure

This article presents the findings of clinically based research which investigated the relationship between strategy and formal structure at the product level in five diversified consumer packaged goods firms. The findings establish that this relationship is severely constrained. The article also suggests how firms ‘accommodate’ when unable to match organizational structure with product strategy.     

An evolutionary model of long term cyclical variations of catching up and falling behind

We generalize a single-country model of endogenous growth to the case of a multi-country world economy in which technology transfer and behavioral imitation are the possible means of interaction between countries. The model is evolutionary in the sense that the economies are disaggregated by behaviourally heterogeneous firms, market selection occurs, and the innovation process is uncertain and stochastic. We demonstrate that this structure leads to a complex process of convergence and divergence over time that can be characterized as 1/f noise. Spectral analysis of measures of convergence for six core OECD countries in the period 1870–1989 reveals a similar pattern in the empirical data.     

Peer reporting of unethical behavior: The influence of justice evaluations and social context factors

This field survey in a fast food restaurant setting tested the hypothesized influences of two social context variables (role responsibility and interests of group members) and justice evaluations (distributive, procedural, and retributive) on respondents' inclination to report theft and their theft reporting behavior. The results provided mixed support for the hypotheses. Inclination to report a peer for theft was associated with role responsibility, the interests of group members, and procedural justice perceptions. Actual reporting behavior was associated with the inclination to report and with retributive justice evaluations. Implications for future research and for management are discussed.Bart Victor is Associate Professor of Management in the Kenan Flagler School of Business at the University of North Carolina at Chapel Hill. He earned his Ph.D. in management. His research interests have focused on culture and climates in organizations and problems in organizational design.Linda Klebe Trevino is Assistant Professor of Organizational Behavior at the Mary Jean and Frank B. Smeal College of Business Administration, The Pennsylvania State University. She received her Ph.D. in management. Her research focuses on the management of ethical-unethical behavior in organizations and justice in disciplinary situations.Debra L. Shapiro is Associate Professor of Business Administration in the Kenan Flagler School of Business at the University of North Carolina at Chapel Hill. Her research regards managing conflict in organizations, via procedural justice, interactional justice, negotiation tactics, and grievance procedures.     

The Scope for Increasing Total Hours Worked

Dutch women who work long hours mostly prefer to work shorter hours whereas women who work short hours mostly prefer to work longer hours. This paper shows that the point where preferred and actual working hours are on average equal depends on individual characteristics. This heterogeneity is of interest to policy makers who are aiming to increase the total number of hours worked by women. The tool this paper develops is informative in two ways. First, it shows in what hours range we find individuals of a certain type who want to work longer or shorter hours. Second, it calculates the relative sizes of these groups to examine the scope for policy.     

A Recursive Scheme for Perpetuities with Random Positive Interest Rates. II: The Impenetrable Wall

In some former contributions, the authors investigated actuarial quantities with stochastic interest rates. In a first model, the randomness is modelled by means of an ordinary Wiener process, and as a consequence negative interest rates are possible. A second model provides a tool to avoid these negative interest rates, which can be necessary in particular situations. This paper wants to present an alternative solution to the problem of negative interest rates. This new model will be implemented to the case of an annuity certain and of a perpetuity.     

The tradeoff between social insurance and aggregate fluctuations

Government programs that insure individuals against idiosyncratic risks, such as unemployment insurance, attempt to offset shocks that are obscured by behavioral variables. The resultant moral hazard reduces the efficiency of the insurance. When this feature is examined in a dynamic setting, the variance and duration of aggregate income fluctuations may be intensified by insurance.     

Transaction Costs and standardisation in professional services to small business

In the market of business services the easier segment of large business is being saturated. Therefore, suppliers of business services must seek to cater to the growing but more difficult segment of small business, if their growth is to be maintained. With appropriate extensions, Transaction Cost Economics can facilitate understanding of the nature of the difficulty involved. Due to effects of scale in transaction costs it is relatively more expensive to provide services tailored to the individual smaller firm. Standardisation of services may be required to make access to this market viable. The question arises whether such standardised methods should be stimulated by the government. To see how this issue is perceived by suppliers of various business services, a survey was conducted on a sample of 1,000 firms, with a response of 30%. The issue of economies of scale in transaction costs did emerge, but was not universally perceived as a problem. Many respondents confirmed the need for standardised modules. Opinions were sharply divided on the issue whether the government should step in to promote standardisation across suppliers.Cluster analysis shows that respondents fall neatly into a number of classes that conceptually and statistically are highly distinct. Just over half of the respondents were clearly against government intervention, and about one third of these (radical market proponents) were of that opinion even though they granted that the scale issue constituted a problem of access to the small business market. Just under half of the respondents clearly favoured government intervention, and about half of those (radical interventionists) were of that opinion even though they saw no great problem of access due to problems of scale, or were hesitant about that problem. Accountancy firms tended to be in favour of intervention, and business consultants tended to be against. The government might explore the matter further with accountants, while leaving the business consultants alone.     

MARKET POWER AND PRICE MOVEMENTS OVER THE BUSINESS CYCLE*

This paper develops and tests implications of an oligopoly‐pricing model. The model predicts that during a demand expansion, the short run competitive price is a pure strategy Nash equilibrium but in a recession, firms set prices above the competitive price. Thus, price markups over the competitive price are countercyclical. Prices set during a recession are more variable than prices set in expansions because firms employ mixed strategy pricing in recessions. The empirical analysis utilizes Hamilton's time series switching regime filter to test the predictions of the model. Fourteen out of fifteen industries have fluctuations consistent with this oligopoly‐pricing model.     

Changing port-city relations at Amsterdam: A new phase at the interface?

In this paper, we investigate whether a new phase in port-city development is emerging. We have done this by analysing the scientific literature on present and future spatial developments of the port of Amsterdam in the Netherlands in terms of the spatial and environmental policies and the viewpoints of port firms. It appears that in the Port of Amsterdam, but also in other ports, the expansion pace of the port area is slowing down, while at the same time the city is expanding in the direction of the port at an increasing speed. In the beginning, this conflict was rather passive, in the sense that the conflict was about how the redevelopment should take place. However, the conflict has evolved further to questioning whether any redevelopment should take place. This implies that a new phase in the development of the port-city interface has emerged.