Reevaluating the relationship between transferable property rights and command-and-control regulation

Economists generally assume that systems of transferable property rights are preferable to non-market systems. This paper suggests that the design of a market-based policy that dominates a command-andcontrol regime is more subtle than is commonly believed, even in theory. The subtlety arises because identical approaches to monitoring and enforcement will not generally yield the same results in different regulatory environments. The paper identifies conditions under which a kind of market dominance result obtains. The theory is then applied to the problem of trading rights to emit pollutants from motor vehicles.Mr. Hahn is a Resident Scholar at the American Enterprise Institute and an Adjunct Professor of Economics at Carnegie University. Mr. Axtell is a Research Associate at the Brookings Institution. We would like to thank Linda Cohen, Glenn Loury, Eric Stork, and participants in the Harvard environmental economics workshop and the Stanford environmental economics conference for constructive comments. Jeff Alson, Richard Wilcox, and Don Zinger helped identify useful data sources. This research was supported in part by a grant from the National Science Foundation.     

„Die Akzeptanz der IFRS als Grundlage der wertorientierten Unternehmenssteuerung basiert auf der Frage,ob die IFRS Regelungen wirtschaftlich nachvollziehbar sind“

Praxis / Artikel

„Die Akzeptanz der IFRS als Grundlage der wertorientierten Unternehmenssteuerung basiert auf der Frage, ob die IFRS Regelungen wirtschaftlich nachvollziehbar sind“ Interview mit Dr. Mark-Ken Erdmann, Leiter der Abteilung Projekte & Grundsatzfragen im Konzernberichtswesen der Bertelsmann AG     

Determinants of price elasticities for private labels and national brands of cheese

An Almost Ideal Demand System model is developed and used to estimate price elasticities for US cheese sold at retail. Growing consumption of cheese coupled with fierce competition between private labels and national brands serves as motivating factors for this study. Per capita consumption of cheese grew by 75% during 1980–2004 and private labels captured a rising share of this growth. Private labels today account for 35% of market share; national brands, for the remaining 65%. Kraft accounts for 45% of national brands, but price increases for Kraft brands led to a sizeable price gap between its brands and private labels. This gap helped to stimulate growth of private labels. Marketing managers seek to capitalize on both growing cheese sales and price gaps for brands. Relevant information for marketing managers is consumer sensitivity to price changes. This study uses 69 weeks of scanner data, with consumers segmented by income levels to derive price elasticities for both lower-and higher-income consumers. Results show lower-income consumers to be more price sensitive. If large price gaps are maintained, the results suggest continued growth of private labels. Yet, meta-analyses for this study suggest that Kraft could lower the price gap and regain market share.     

The global threat of deflation calls for swift interest rate cuts in Europe

Conclusions Given the serious crisis in Asia and evidence of its spreading to other developing and transition countries, the attempt by German economic policymakers to achieve faster economic growth and higher employment almost exclusively by means of successes on export markets appears likely to fail sooner than had been expected by the DIW⁵. The significance of domestic demand has been systematically underestimated in recent years. With the help of extremely low pay settlements, the D-Mark was devalued in real terms; this promoted exports, but at the same time led to growth losses in private consumption and investment that more than offset the gains in exports. On top of this German fiscal policy—as documented in the following report in this issue—has weakened domestic demand and investment activity. This strategy might have worked if a symmetrically oriented monetary policy had reacted to the deflationary trend inherent in pay settlements and the fiscal-policy stance by swiftly and significantly reducing interest rates. This did not happen. It was therefore inevitable that the crisis in sales markets made its full effects felt on economic growth. More seriously still, if cost deflation in Germany is not brought to an end in the coming year by a return to productivity-oriented wage settlements, it will pose a major threat to the European Monetary Union.⁶ If Germany pursues a beggar-thyneighbour policy in a Europe without exchange rates, this can only result in deflation and a downward economic spiral.⁷     

The Ethical Rational of Business for the Poor – Integrating the Concepts Bottom of the Pyramid,Sustainable Development,and Corporate Citizenship

The first United Nations Millennium Development Goal calls for a distinct reduction of worldwide poverty. It is now widely accepted that the private sector is a crucial partner in achieving this ambitious target. Building on this insight, the ‹Bottom of the Pyramid’ concept provides a framework that highlights the untapped opportunities with the ‹poorest of the poor’, while at the same time acknowledging the abilities and resources of private enterprises for poverty alleviation. This article connects the idea of business with the poor to sustainable development and especially to the notions of inter- and intragenerational justice. These principles of justice can be linked with the ‹Bottom of the Pyramid’ approach directly through the Rawlsian principles to foster holistic thinking. On this basis, the article offers a normative-ethical reasoning of corporations’ possible responsibilities for the poorest of the poor. Today’s state of worldwide inequalities is likely to generate future tensions between the privileged western world and the uncounted mass of poor (let alone the ethical dubiousness of this status). However, it is at the same time problematic if not even impossible to improve the situation of the poor by simply copying the resource intensive western way of living to the ‹Bottom of the Pyramid’ due to the limited carrying capacity of the earth. After highlighting possible moral dilemmas which may occur through such a potential trade off, this article concludes with an outlook on how the concepts ‹Bottom of the Pyramid’ and sustainable development could be combined.     

Korean Manufacturing in Transition: Patterns in the Past,Current Status,and Future Challenges

In recent years, Korea has emerged as one of the world's fastest growing industrial nations. Manufacturing industry has been the foundation of its economic success, and, in this paper, an in-depth analysis of the development process of the Korean manufacturing industry is presented. From an early stage, Korean manufacturers followed a general pattern in achieving their current success: they successfully combined high-quality, but inexpensive and plentiful, human resources with imported technologies and material to produce low-cost goods for a protected market. In this process, the Korean government played the role of planner, protector, and provider for the national economy and the entire manufacturing industry. In recent years, however, the private sector has assumed leadership in terms of planning and executing industrial development plans. With this change, Korean manufacturers are making a clear transition from a low-cost producer to a high value-added competitor with an increasing emphasis on quality and flexibility. This paper offers an empirical analysis of the performance improvements, future competitive priorities, and action programmes designed to achieve this strategic shift.     

Firm-based market structure analysis using competitive advertising responses

In past literature, consumer-based measures reflecting perceptions or behaviour of consumers have been used for market structure analysis. However, for developing competitive strategies, firms may need to identify market structures based on how their competitors perceive the market and how they behave. In this article, we develop a firm-based measure using advertising reaction data to drive market structure. We then test hypotheses regarding the situations where the firm-based competitive maps converge with those derived from a traditional consumer-based approach. To derive competitive maps, we collected time-series advertising and sales data for 27 SBUs in six consumer-product categories. Survey data were also collected from marketing managers to test the hypotheses. Our investigation suggests that the maps of two approaches are consistent when markets are stable and predictable.     

Coalitional Bayesian Nash implementation in differential information economies

Summary. A mechanism coalitionally implements a social choice set if any outcome of the social choice set can be achieved as a coalitional Bayesian Nash equilibrium of a mechanism and vice versa. We say that a social choice set is coalitionally implementable if there is a mechanism which coalitionally implements it. Our main theorem proves that a social choice set is coalitionally implementable if and only if it is interim individually rational, interim efficient, coalitional B ayesian incentive compatible, and satisfies a coalitional Bayesian monotonicity condition as well as a closure condition. As an application of our main result, we show that the private core and the private Shapley value of an economy with differential information are coalitionally implementable. Received: January 12, 1998; revised version: March 30, 2000