One Monopoly Is Better Than Two: Antitrust Policy and Microsoft

The Department of Justice recent case against Microsoft is that it should not be allowed to aggressively maintain control over the internet browser market with the objective of preventing the internet from becoming the platform that could ultimately destroy Microsoft's operating system market. The aim of this paper is not to attack the Department of Justice case. Rather, it is to argue that for consumers one monopoly dominating both the operating system and applications is better than two separate monopolies. In our model we integrate Cournot's theory of two goods that are jointly used in the production of a third composite good with the fixed-proportion model. Utilizing our model we develop a possible explanation for Microsoft's actions – protection of its monopoly profits in the operating systems package market. Additionally we show that the price of the final product is lower if one firm monopolizes all markets. Consequently, the ordered split-up of Microsoft by Judge Thomas P. Jackson, aiming at creating two separate companies, one that will produce the windows and the other the operating systems, will harm consumers.     

Analysis of business failures in France

In the present economic situation, business failures are a matter of major concern to government and business alike. The current period of slow growth in France, and the rigidity of its productive system make it more important than ever to act to insure the survival of its industrial fabric. This necessity has found recognition in the fact that the French Parliament is now discussing a Government bill designed to head off business failures by means of a series of early-warning signals. Under this bill, the company auditors' obligation is widened to include the duty to report to the company any factor liable to compromise the continued operation of that firm. The context within which the Banque de France's ‘Centrale de Bilans’¹ is currently pursuing its work favors the development of a discriminant function capable of detecting symptoms of business failure at the earliest possible opportunity. This work has been facilitated, and usefully guided, by Altman's pioneering research in this field since 1968, as well as by the work of Blum, Deakin, Edmister and Taffler, to rite just a few names from the Anglo-Saxon world. In France, the most recent research has been initiated by the CESA [Altman et al. (1974)] and pursued by Collongues, Sulzer, Conan and Holder, as well as by certain banks. But in this last case applications have remained strictly limited.     

Heterogeneous determinants of local unemployment in Poland

We identify determinants of large disparities in local unemployment rates across Poland. Using an extensive panel data-set on the NUTS-4 level (i.e. the poviats level, or districts or counties level) we examine a wide range of determinants of local unemployment. Our research examines two groups of the determinants: one related to equilibrium theory and the other related to disequilibrium theory of local unemployment. We find that demographics, education and sectoral employment composition exert a stronger impact over rates of local unemployment than various demand factors. The impact of the determinants, while robust for outliers, is not homogeneous across Polish regions. In particular, in the most depressed local labour markets, skill improvement programmes do not appear to work and unemployment rates are relatively less responsive to investment. Our research suggests that there is no easy cure for local unemployment in Poland, but a few policies have the potential to slightly reduce existing disparities.     

The Effectiveness of Fiscal Policy Over the Business Cycle: A CEE Perspective

In this article we analyze the effectiveness of fiscal policy—for a group of four Central and Eastern European countries. The recent literature shows that fiscal multipliers in the developed economies are higher during recession than expansion. So far, similar empirical analyses have been lacking for CEE countries. The results presented in this article show that fiscal multipliers in CEE countries differ with respect to the phase of the business cycle. Based on the SVAR methodology in which we allow for deterministic regime switching, we show that the government spending multipliers are significantly higher when the output gap is negative.     

Das Direktanspruchsstatut nach dem EuGH-Urteil „Odenbreit“

This Article deals with the impact of the ECJ’s decision in the case “Odenbreit” in which it allowed the injured person—in the concrete case injured in a car accident—to sue the liability insurer of the tortfeaser, both domiciled in another Member State, by means of the direct action, in the Member State of his or her own domicile. As a consequence, the court situated at the domicile of the injured person has to apply foreign law, which brings about some disadvantages to the injured person. The application of the lex fori, however, enjoys several advantages. The analysis shows to what extent the application of the lex fori would be possible de lege lata and de lege ferenda.     

Perceptions of older consumers regarding food packaging as a prerequisite for its improvement: A case study of Polish market

In many societies, the scale of demographic change associated with increased longevity has the potential to influence the market for consumer goods. As a result, continuous improvement in packaging design that takes into account the needs of older people should become an important challenge for both packaging producers and product manufacturers. Due to the fact that there is limited research concerning the design of food packaging for older people, the aim of the study was to identify the expectations of this group of consumers in this respect. Milk packaging was selected as a model subject of study. Factors influencing older consumers and their buying patterns when purchasing milk have been thoroughly examined. The research was conducted among people over the age of 60 with the use of three methods: a questionnaire (600 subjects), an in‐depth interview (60 subjects) and eye tracking (30 subjects). The results of the study show that older consumers have specific preferences regarding packaging type and design. When considering milk packaging, for example, they prefer glass bottles, simple graphics and font and subdued colours. They most frequently look for information concerning the product's expiration date, its producer's name and its composition. Eye tracking revealed that the older the consumers are, the more problems with finding expiration date they have. The time required to find such information, however, strongly depends on where exactly the expiration date is printed on the packaging. The preferred place in this case is the top of the bottle. Older consumers identify product's brand with the name of the producer. Moreover, the absence of the term ‘ingredients’: on the milk packaging oftentimes causes confusion among older people, who are concerned about potential food additive content.     

Does unemployment lead to a less healthy lifestyle?

In this article, we use 22 years of data from the German Socio-Economic Panel and information on plant closures to investigate the effects of unemployment on four indicators of unhealthy lifestyles: diet, alcohol consumption, smoking and (a lack of) physical activity. In contrast to much of the existing literature, which unlike our analysis is unable to assess causality, our results provide little evidence that unemployment gives rise to unhealthy lifestyles.     

The Aggregate Relation between Profits and Concentration is Consistent with Cournot Behavior

An important and controversial stylized fact inindustrial organization is the positive correlationbetween industry profit and concentration. Oneinterpretation of this finding is based on thetheories of Chamberlin and Stigler, which imply thatconcentrated industries facilitate collusion. Butnon-cooperative profit maximizing behavior can alsogenerate a positive correlation. This paperpresents an equilibrium model of oligopoly whichnests the behavioral assumptions of Bertrand,Cournot, and Chamberlin. Simulations of the modelunder the Cournot assumption yield regressioncoefficients for the profits-concentration relationthat are very close to the estimated coefficients inthe literature.     

Forward rate models with linear volatilities

The existence of solutions to the Heath?CJarrow?CMorton equation of the bond market with linear volatility and general Lévy random factor is studied. Conditions for the existence and non-existence of solutions in the class of bounded fields are presented. For the existence of solutions, the Lévy process should necessarily be without a Gaussian part and without negative jumps. If this is the case, then necessary and sufficient conditions for the existence are formulated either in terms of the behavior of the Lévy measure of the noise near the origin or the behavior of the Laplace exponent of the noise at infinity.