Environmental Valuation with Imperfect Information The Case of the Random Utility Model

This paper considers welfare analysis with therandom utility model (RUM) when perceptions ofenvironmental quality differ from objectivemeasures of environmental quality. Environmental quality is assumed to be anexperience good, so that while perceptions ofquality determine choices, ex postutility is determined by objective quality. Given this assumption, I derive a measure ofthe welfare impact of changes in environmentalquality, and I show how this new welfaremeasure differs from the traditional welfaremeasure developed by Hanemann (1982). This newwelfare measure provides an approach tomeasuring the value of information aboutenvironmental quality within the framework ofthe random utility model.     

The concept of maturity and the transformation of economic systems

In economics, ‘maturity’ essentially means that an economic system (or part of a system) is ripe to be transformed into something else or heading towards decline. In Josef Steindl's economic thinking the concept of maturity, by which he means a stage of development where the economy becomes unable to fully realize its output potential, occupies a central place. Whereas for Steindl the main causes of such maturity are endogenous, other economists such as Schumpeter, Sombart, Hilferding, Keynes, and Hansen consider stagnation to be caused primarily by exogenous factors. Various concepts and causes of maturity are compared. Contrary to expectations based on these concepts, economic development after the Great Depression has not been characterized by stagnation or transition to planned economy. Instead, the dynamics of innovation were strong enough to prevent the economy from becoming ‘mature’. It appears that the actual course of events can be better explained within Steindl's concept of maturity.     

Pass-through in dollarized countries: should Ecuador abandon the US dollar?

In this article, we examine the convenience of dollarization for Ecuador today. As Ecuador is strongly integrated financially and commercially with the United States, the exchange rate pass-through should be zero. However, we sustain that rising rates of imports from trade partners other than the United States and subsequent real effective exchange rate depreciations are causing the pass-through to move away from zero. Here, in the framework of the Vector Error Correction Model, we analyse the impulse response function and variance decomposition of the inflation variable. We show that the developing economy of Ecuador is importing inflation from its main trading partners, most of them emerging countries with appreciated currencies. We argue that if Ecuador recovered both its monetary and exchange rate instruments, it would be able to fight against inflation. We believe such an analysis could be extended to other countries with pegged exchange rate regimes.     

Momentum crash,credit risk and optionality effects in bear markets and crisis periods: evidence from the US stock market

This study explores whether the credit risk anomaly exhibits option-like behaviour similar to the momentum anomaly. It finds that the inverted credit risk spread indeed displays option-like behaviour in bear market states. Unlike a momentum portfolio, which is effectively a short call option on the market, an inverted credit risk portfolio appears to be a long call option on the market.     

A forecasting model for the market of competitive products

The classic way of performing a market forecast for industrial products implies an econometric analysis of the historical data of consumption and their projections into the future. The present work illustrates a fresh approach to the problem; the demand for the product under study is evaluated in a mathematical model which takes into consideration the technological and commercial characteristics of this product and correlates it with competitive and substitutive products. Competitiveness is measured by assigning merit scores to the characteristics of the different products, and calculating the relevant “weights of importance” on the basis of the historical consumptions. Forecasts of consumption are made by estimating the future scores of the characteristics and extrapolating the weights of importance. An example of complete application of the model to the textile market in Italy is included.     

A structured approach to conflict prediction in information systems strategy implementation

Organizational power and politics are the central issues of this paper. By developing a model of organizational power it is possible to determine whether an organizational change initiative is likely to be politically feasible. The formal model described has been derived largely from research reported in the social sciences. The modelling process involved using formal methods, in logic and entity relationship analysis, to discover an effective and consistent means of representing key organizational power concepts. The result is an advisory expert system called MP/L1 that can be employed by change agents to predict likely sources of potential resistance to major change initiatives and to suggest tactics that might be effective in combating anticipated resistance. Industrial experience with MP/L1 to date indicates that it has significant potential as a change management tool within the IS strategy-implementation domain. © 1998 John Wiley & Sons, Ltd.     

Organizational forms in the knowledge economy: a comparative institutional analysis

This paper provides a framework with which to analyze organizational forms in the knowledge economy. We focus on an important trade-off facing modern firms: firms can acquire the property of all the innovations developed by their employees and can greatly increase their profits, yet this type of private intellectual property rights regime can discourage the innovative effort of the very same workers. Allowing workers to carry their knowledge outside the firm eliminates this disincentive. Hence, strategic complementarities may exist between innovative partners and a disclosure driven intellectual property rights regime, and passive employees and a private intellectual property rights regime. An evolutionary game theoretic model demonstrates these strategic complementarities and shows when economies tend towards disclosure driven or private intellectual property rights regimes.     

Quality Uncertainty as Resolution of the Bertrand Paradox

It is well‐known that product differentiation eliminates the Bertrand paradox (i.e. marginal cost pricing under duopoly). While differentiation is often justified with reference to the consumer's ‘preference for variety’, the conditions under which such a preference is likely to arise are rarely considered. We investigate this question in a setting in which uncertainty about product quality can endogenously generate either convex or non‐convex preferences. We show that even when two goods are ex ante homogeneous, quality uncertainty can eliminate the Bertrand paradox.     

Assessing Cumulative Evidence within ‘Macro’ Research: Why Meta‐Analysis Should be Preferred Over Vote Counting

Understanding the conclusions a body of evidence offers involves accumulating findings. Two recent articles used vote counting to assess the evidence related to important macro theories: transaction cost theory and resource‐based theory. Each concluded that its focal theory is not well supported. In contrast, recent meta‐analyses of the same theories concluded that both are strongly supported. We explain why macro researchers should trust the findings of meta‐analyses but not those of vote counts. A direct implication is that researchers interested in advancing transaction cost and resource‐based theories need to build upon the meta‐analytic evidence. A broader implication is that, as the preferred method for accumulating evidence, meta‐analysis can be a catalyst for the re‐evaluation of established theories and the development of new theory.