Market power in Austrian food retailing: the case of milk products

An increasing market concentration in food retailing has generated concerns about the market power of retailers towards consumers and input suppliers. This is especially true for countries such as Austria, which has a CR-3 in food retailing greater than 75%. Based on a New Empirical Industrial Organization model we estimate the market power of food retailers towards consumers and input suppliers with respect to three groups of dairy products (drinking milk, cheese, butter including others). Our empirical results suggest that market power of retailing exists towards consumers (in particular in the case of drinking milk) and towards input suppliers (in particular in the case of butter and other milk products). Market power is more significant (in statistical terms) downstream than upstream. However, the impact of oligopsony power on input prices is stronger than the impact of oligopoly power on consumer prices.     

Domestic entry, optimum-welfare and maximum-revenue tariffs

In this paper, we examine the ranking of the maximum-revenue tariff and the optimum-welfare tariff under a linear Cournot oligopoly model without and with free entry of domestic firms. We demonstrate that in a regulated entry oligopoly with asymmetric costs, when the marginal cost of the domestic firms exceeds a critical value, the maximum-revenue tariff is higher than the optimum-welfare tariff. We then show that under free entry of domestic firms with asymmetric costs, when the fixed cost gets larger and the domestic firms become fewer, the difference between the optimum-welfare tariff and the maximum-revenue tariff becomes larger.     

The impact of government debt on the long-run natural real interest rate – a quantitative evaluation

Persistently low natural real interest rates are a problem for monetary policy and financial stability. I analyse to what extent a permanent increase in government debt that is financed by higher taxes could raise the long-run natural real interest rate. As a measurement tool, I use an incomplete markets model with capital and government bonds. Increasing the public debt/GDP ratio by one percentage point raises the real interest rate by between 0.4 and 1.5 basis points, depending on the degree of inequality generated by the model and the tax instrument used to balance the government’s budget constraint. I also show that the interest rate effect of a change in public debt/GDP predicted by the model is significantly smaller than its empirical counterpart for the US, due to the fact that the model understates the empirical fraction of households that are constrained in their consumption decision.     

Which factors improve the performance of the internationalization process? Focus on family firms

This study aimed to analyse the impact that the financial features and characteristics of the ownership structures of international companies exert on the performance of their internationalization process, as perceived by managers, and attempted to detect differences between family firms (FF) and nonfamily firms (non-FF). In addition, the impact of these characteristics and others related to FF, such as family ownership and generation, on the perceived performance of their internationalization is analysed. Based on a sample of Spanish companies with direct investment in China, the results indicated that, from the managers’ perspective, being an FF and having lower financial leverage exerted a positive effect on the performance of the internationalization process. Moreover, the study proved that this performance was strongly and positively related to the financial results of the company, and this positive effect was even stronger in the case of FF. Finally, the findings also showed that FF with a higher involvement of the family in their ownership recognized a better performance of their internationalization process. These results will be useful for companies that are considering the value of internationalization as a strategy to improve or maintain their financial results, and they also highlight certain differences between FF and non-FF.     

An Evaluation of Institutional Matrices Theory Which Was Designed to Illustrate Differences Between Russian and Western Political Economies

This article is devoted to the evaluation of the institutional matrices theory (IMT), which was designed to illustrate the differences between Russian and Western political economic systems. IMT has no matrix, and it is an ideological declaration rather than a theory. It is a set of assertions and assumptions that are adopted without evidence, and then hypostatized to be Russian and Western socioeconomic systems. IMT literature claims to utilize the reciprocity, redistribution, and exchange model of Karl Polanyi (1944 Polanyi, Karl. The Great Transformation. New York, NY: Rinehart &; Company, 1944. [Google Scholar], 1957 Polanyi, Karl. “The Economy as Instituted Process.” In Trade and Market in the Early Empires: Economies in History and Theory, edited by Karl Polanyi, Conrad M. Arensberg and Harry W. Pearson, pp. 239-270. New York, NY: Free Press, 1957. [Google Scholar]). However, IMT suffers from a number of assumptive and methodological problems in its application, the first of which consists of the complete exclusion of reciprocity from consideration. The first section of the article is an explanation of problems with IMT, and the second section demonstrates some particulars of the IMT problems with a real-world social fabric matrix from a Western nation.     

Capital in the Twenty-First Century: Reinterpreting the fundamental contradiction of capitalism

At a theoretical level this article discusses Piketty’s hypothesis that the distribution of income and wealth tends to become more concentrated over time when the rate of return on capital is greater than the growth rate of real output. We develop a post Keynesian model of growth and distribution showing that once capital is differentiated from wealth, the increase in income and wealth concentration actually occurs when the rate of valorization of financial and real estate assets is greater than the growth rate of real output, and that this situation may be triggered by financial liberalization.     

Attitudes Toward Catastrophe

In light of climate change and other global threats, policy commentators sometimes urge that society should be more concerned about catastrophes. This paper reflects on what society’s attitude toward low-probability, high-impact events is, or should be. We first argue that catastrophe risk can be conceived of as a spread in the distribution of losses. Based on this conception, we review studies from decision sciences, psychology, and behavioral economics that explore people’s attitudes toward various social risks. Contray to popular belief, we find more evidence against than in favor of catastrophe aversion—the preference for a mean-preserving contraction of the loss distribution—and discuss a number of possible behavioral explanations. Next, we turn to social choice theory and examine how various social welfare functions handle catastrophe risk. We explain why catastrophe aversion may be in conflict with equity concerns and other-regarding preferences. Finally, we discuss current approaches to evaluate and regulate catastrophe risk.     

On-duty and Off-duty: Employee Right to Privacy and Employer’s Right to Control in the Private Sector

The changing legal landscape of the right of the employer to control and monitor employee behavior is examined. Two distinct areas are defined: behavioral monitoring and behavioral restrictions. Relevant statutory laws and the developing common law are discussed. We also examine potential employee reactions to such policies by evaluating the reactions of graduate students to six employer policies including weight restrictions, grooming requirements, use of GPS locators, drug testing, ban on off-duty smoking, and email and internet monitoring. Students responded to these policies by determining the reasonable interest of the employer in the behaviors being monitored or controlled and the manner in which policies were implemented. Their comments suggest that employees may accept some level of monitoring or behavioral restrictions if the employer can make a convincing social account of the need for a policy. Additionally, the policy must be clearly communicated and properly implemented. However, restrictions on off-duty behavior were typically poorly received with the exception of illegal drug use.     

Pseudo empirical likelihood method in the presence of missing data

In this paper, we propose an estimator for the population mean when some observations on the study and auxiliary variables are missing from the sample. The proposed estimator is valid for any unequal probability sampling design, and is based upon the pseudo empirical likelihood method. The proposed estimator is compared with other estimators in a simulation study.