Cognitive sophistication and deliberation times

Experimental Economics - Differences in cognitive sophistication and effort are at the root of behavioral heterogeneity in economics. To explain this heterogeneity, behavioral models assume that...     

Technology Commercialization in Road Infrastructure: How Government Affects the Variation and Appropriability of Technology

Successful technology commercialization is important for business profitability, and government policies can help or hinder firms' success. As a regulator, government affects standard setting and the nature and scope of property rights. As a sponsor, government can empower technology commercialization by its financial support of new technology. As a first user, government can significantly enhance the chances of successful technology commercialization. And as a buyer, government accounts for a substantial part of the world economy. Previous research on government's roles in technology commercialization mainly addressed the effects of specific roles. However, there is little understanding about the combined impact of these roles on technology commercialization. This article develops a conceptual model to analyze the combined effect of these roles on technology development projects. This model is based on a review of the literature on large technical systems, technological regimes, and technology policy that enabled this study on government's diverse roles in technology commercialization. To refine the conceptual model, an in‐depth analysis of three technology development projects was conducted. The empirical findings are drawn from road infrastructure. In that sector, government is the dominant customer and first user of most new technologies. Therefore, government has to create a market for those technologies and strongly affects their viability. This research has produced several major results. First, the developed model is the first to conceptualize the relevant relationships between the various roles of government in technology commercialization. Second, this study has shown that government's behavior as a regulator and sponsor conflicts with its preferences as a buyer and user. Consequently, the support of and demand for new technology is inconsistent and uncoordinated, leaving firms with significant uncertainties in assessing market opportunities. Third, the dominant position of government as a buyer in road infrastructure weakens the effectiveness of intellectual property rights. Fourth, existing studies on technology for partially public goods are mainly historical accounts, and only a few are empirical studies on innovation processes. This study provides an in‐depth analysis of the development and commercialization of technology for partially public goods. This article concludes with policy implications and suggestions for future research. An important policy implication is that government could improve technology commercialization by either stimulating the commercialization of various competing technologies or developing various competing products based on the same technology. A central issue for future research is how firms can involve government in its diverse roles in technology commercialization. Most of the existing research on customer involvement deals with consumer and business‐to‐business markets. A better understanding of government involvement could help firms to overcome the impediments they face in dealing with government.     

Influence of partner diversity on collaborative public R&D project outcomes: A study of application and commercialization of nanotechnologies in the Netherlands

Several studies have indicated the importance of public R&D in the transfer and commercialization of nanotechnology. So far, few have focused on university–industry interaction and collaboration performance. In this study, we investigate the impact of technological diversity and value chain complementarity of partners on public nanotechnology R&D projects' performance. We enriched a database on the commercial outcomes of technology research projects from the Dutch Technology Foundation STW. To test our hypotheses, we selected 169 nanotechnology research projects from the database, which started in a five-year period from 1998 until 2003. Project performance was measured five years after completion of the project. Technological diversity has a U-shaped effect on the projects' commercial performance. Findings show a strong positive impact of value chain complementarity of partners on both application development and commercial performance of the projects.. The framework introduced in this study allows an evaluation of the effects of technological diversity and value chain complementarity on application development and the commercial performance of public R&D projects.     

What Drives Corporate Tax Rates Down? A Reassessment of Globalization,Tax Competition,and Dynamic Adjustment to Shocks*

We reassess the driving forces behind the recent decline of corporate tax rates in Europe. Using data for up to 32 countries from 1983 to 2006, we analyze the roles of economic and financial openness as well as tax competition, while allowing for dynamic adjustment to shocks and period‐specific and country‐specific effects. While there is no evidence that countries that have become more open have reduced their tax rates more, our findings suggest that countries strongly compete over statutory tax rates. A simulation of tax rates in a scenario with no cross‐sectional dependence in tax setting suggests that, in the absence of tax competition, the mean statutory tax rate of Western European countries in 2006 would have been about 12.5 percentage points above its actual level. We conclude that the recent downward trend in corporate taxes is mainly a result of tax competition.     

Using Social Desirability Scales in Research among the Elderly

A consistent finding is that elderly people obtain higher scores on social desirability (SD) scales than younger ones. It is usually assumed that elderly people are more eager to present themselves in a favourable way. Hence, especially in survey-research among the elderly, it is common practice to include SD-scales to correct for spurious relationships. In this article it is argued that the assumptions underlying such practice are doubtful, because SD-scores may be affected by a variety of factors but the tendency to present oneself favourably. Two such factors related to the question-answering process are discussed in more detail. Empirical support is provided that these factors may explain the relationship between the score on a SD-scale and age. It is argued that using SD-scales to correct for relationships between variables, may lead to erroneous results.     

Credibility of European economic convergence

Credibility of European Economic Convergence. — The authors analyze economic convergence and its relation to European real interest rate differentials using a clustering method on seven macroeconomic key variables for 1979–1995. The results indicate that monetary convergence has progressed considerably but that there is hardly any real convergence in the EU. They also perform pooled nominal and real interest rate regressions with the individual cluster indicators as explanatory variables. The authors find significant positive effects of external (current account) and internal (unemployment ratios, government finance) imbalances on real interest rates. They also group countries according to economic reputation and find that real indicators remain significant for the high-reputation countries.     

Value-at-Risk computation by Fourier inversion with explicit error bounds

The Value-at-Risk of a delta–gamma approximated derivatives portfolio can be computed by numerical integration of the characteristic function. However, while the choice of parameters in any numerical integration scheme is paramount, in practice it often relies on ad hoc procedures of trial and error. For normal and multivariate t-distributed risk factors, we show how to calculate the necessary parameters for one particular integration scheme as a function of the data (the distribution of risk factors, and delta and gamma) in order to satisfy a given error tolerance. This allows for implementation in a fully automated risk management system. We also demonstrate in simulations that the method is significantly faster than the Monte Carlo method, for a given error tolerance.     

Trade,Technology and the Labour Market: The Case of South Africa*

This study advances previous work on the effects of trade and technological change on labour markets within the framework of Heckscher–Ohlin trade theory. We provide evidence for an unskilled labour abundant developing country by employing dynamic heterogeneous panel estimation techniques. For South African manufacturing, trade‐mandated increases in earnings are positive for labour and negative for capital whilst technology‐mandated increases are negative for both factors. We also find it important to take account of endogeneity issues in analysing the impact of technology and price changes on factor returns and in isolating factor‐ and sector‐bias of technological changes.     

Financial models with defaultable numéraires

Financial models are studied where each asset may potentially lose value relative to any other. Conditioning on nondevaluation, each asset can serve as proper numéraire and classical valuation rules can be formulated. It is shown when and how these local valuation rules can be aggregated to obtain global arbitrage‐free valuation formulas.