Minimum quality standard regulation under imperfect quality observability

Minimum quality standards (MQS) constitute an important regulatory tool that can be used to raise product qualities, to benefit consumers and to increase market participation. One of the main assumptions in the existing literature is that firms must comply with standards. Nevertheless, in many industries, and in particular the service industry, quality observability and enforceability are not perfect. Some low quality firms do not comply with standards. What are the welfare implications of an MQS regulation in such an environment? We develop a price competition model of vertical differentiation that accounts for these empirical observations. Contrary to well-established results in the literature, MQS can increase quality disparity between firms and raise hedonic prices. Some consumers get hurt and market participation decreases.     

The Effect of Cooperatives on Quality‐Enhancing Innovation

This paper develops game‐theoretic models of heterogeneous consumers to analyse the effect of cooperatives on quality‐enhancing product innovation activity, the pricing of food products and the welfare of the groups involved, in the context of a mixed duopoly where an open‐membership consumer co‐op competes with an investor‐owned firm in markets for horizontally differentiated products. Analytical results show that the involvement of the member welfare‐maximising co‐op in innovation activity can change the nature of product differentiation and the structure of the market, and be quality and welfare enhancing by increasing innovation activity and reducing the prices of food products. The effects of co‐operative involvement are shown to depend on the degree of consumer heterogeneity and the size of innovation costs.     

Inserting GM Products into the Food Chain: The Market and Welfare Effects of Different Labeling and Regulatory Regimes

The purpose of this article is to examine the system-wide effects of the introduction of genetically modified (GM) products with and without labeling and to compare these two regimes to a third regime where GM products are not present either because they have not yet been developed or because they have been banned. For each regime, the decisions and welfare of consumers, producers, and life science companies are examined. The article explicitly incorporates the consumer response to the introduction of GM technology and considers different market structures of the life science sector.     

Modeling beef supply response and price volatility under CAP reforms: The case of Greece

This study examines the supply response of the Greek beef market and the possible effect of the European Union’s Common Agricultural Policy (CAP) on the Greek beef sector during the period 1993–2005. A Generalized Autoregressive Conditional Heteroskedasticity (GARCH) process is used to estimate expected price, and price volatility, while several different symmetric, asymmetric and non-linear GARCH models are estimated. The empirical results show that price volatility and feed price are important risk factors in the supply response function, while the negative asymmetric price volatility that was detected implies that producers have a weak market position. Furthermore, the empirical findings confirm that the annual premium paid by the EU to beef producers had a positive impact on the production level and also, the change of the EU price support regime, after 2006, is having negative effects on beef production level in Greece.     

Location Decisions of Competing Networks

Early entrants in markets with network effects usually occupy a “central location” and serve agents with “intermediate tastes,” whereas later entrants are niche players. Why would the first entrant choose to become a “general” network, given that later entrants will not have enough room for differentiation, resulting in a more intense competition for market share? In a Hotelling model with two rival networks, we show that for intermediate values of the network externality parameter the location equilibrium is indeed asymmetric: the first entrant locates at the center whereas the second entrant chooses an extreme (niche) location.     

Price volatility and rational expectations in a sectoral framework commodity model: a multivariate GARCH approach

This article explores supply response models in a rational expectations framework with endogenous risk by using a multivariate generalized autoregressive conditional heteroskedasticity model with Cholesky decomposition. This approach allows the incorporation of price volatility as a risk factor into the supply response of a primary commodity sector that is composed of several markets of homogenous products. The model is applied to the Greek meat sector, which is composed of four major meat categories, that is, beef, lamb, pork, and broiler, and thus the model for the entire market includes supply and demand equations for all the four meat markets, which are estimated simultaneously. The empirical results confirm that price volatility is a significant risk factor in Greek meat production and also provide useful implications about the cost factors of production. Furthermore, the empirical findings show that the last reform of the Common Agricultural Policy seems to have had a negative effect on beef and lamb production in Greece.     

Market and Welfare Effects of Second-Generation, Consumer-Oriented GM Products

We examine the economic effects of the introduction of consumer-oriented genetically modified (GM) products into the food system by developing a model of heterogeneous consumers and producers that allows for vertical and horizontal differentiation between the products available to consumers. The model facilitates the estimation of consumer and producer surpluses in the product/utility and product/net returns spaces. Results show that the introduction of consumer-oriented GM products can change the relationship between GM and conventional and organic products from one of vertical to one of horizontal product differentiation and can enhance both economic welfare and the market acceptance and growth of agricultural biotechnology.     

The Peripheral Halo Effect: Do Academic Spinoffs Influence Universities' Research Income?

Extant literature has drawn attention to the ‘halo effect’ of the good reputation of a core organizational activity on the outcome of a peripheral activity. We contribute to the literature on organizational reputation by illustrating a halo effect in the opposite direction – from the periphery to the core. We show that developing a reputation for a peripheral activity (in our context, universities' social impact via spinoffs) may have positive spillovers for core organizational activities (in our context, university research), a phenomenon we term the ‘peripheral halo effect'. We also show that this effect is more prominent for high‐status than for low‐status organizations. Our research also contributes to the academic‐entrepreneurship literature by revealing that spinoff portfolios can generate income for universities not only directly via equity positions but also indirectly via reputational benefits.     

The role of structure and agency in management accounting control change of a family owned firm: A Greek case study

This study seeks to understand the changes in management accounting controls in a large Greek company (pseudonym: FA), with a focus on understanding the role of structure and agency in this change. In order to do this, we have employed a critical realist philosophy, pioneered by Roy Bhaskar (Bhaskar, 1979; 1997). We believe that the empirics of the case, the time span under consideration, and our theoretical approach provide us with a unique opportunity to explore the role of structure and agency in changing management accounting controls within the case firm. Our analysis revealed that changes in management control practices in FA were a function of different interacting structural conditions as mediated through human agency. This paper contributes to the debate about how to conceptualise agency and structure in management accounting control change (Kilfoyle and Richardson, 2011). Our analysis also demonstrates that the ‘dualism’ approach to agency and structure will result in a better analysis of management accounting control changes within firms.     

LABOR MARKET EFFECTS OF UNEMPLOYMENT INSURANCE DESIGN

With the emergence of the Great Recession unemployment insurance (UI) is once again at the heart of the policy debate. In this paper, we review the recent theoretical and empirical evidence on the labor market effects of UI design. We also discuss policy issues related to UI design, including the structure of benefits, the role of liquidity constraints and the pros and cons of a UI system in which the generosity of UI benefits is varying over the business cycle. Finally, we identify potential areas of future research.