Transaction costs and crop marketing in the communal areas of Impendle and Swayimana,KwaZulu-Natal

High transaction costs are detrimental to the efficient operation or existence of markets for inputs and outputs. The cost of information and the costs associated with the search for trade partners, the distance to formal markets and contract enforcement are likely to influence the marketing of food crops. This study hypothesises that the level of income generated from food-crop sales by small-scale farmers in the Impendle and Swayimana districts of KwaZuluNatal is influenced by transaction costs and certain household and farm characteristics. Regression analysis shows that the depth of marketing methods is significantly influenced by transaction cost proxies, such as cooperation with large commercial farmers and ownership of means of transport. Results from a block-recursive regression analysis show that the level of crop income generated is determined by the depth of marketing methods, the size of allocated arable land and off-farm income. Households with lower transaction costs, sizeable allocated land and off-farm income can be expected to generate higher income from food crops. Investment in public goods such as roads, telecommunications and an efficient legal system (to uphold commercial contracts), as well as farmer support services (input supply, extension, marketing information and research), would probably raise farm and non-farm income by reducing transaction costs. This would increase the effective demand for locally produced goods and services, thus contributing to rural employment and livelihoods within rural communal areas.     

Understanding B2B and the Web: the acceleration of coordination and motivation

This paper explores business-to-business (B2B) marketing on the Internet, and how the confluence of the two may transform the B2B landscape. Specifically, it discusses the notion of linkage value to demonstrate why the B2B phenomenon on the Internet is so significant. It then considers the mechanisms and enablers that have made the Web such an important B2B marketing channel. It also explores how the Web can reduce transaction costs, thereby facilitating more efficient exchanges and markets. The concepts of links and nodes are then introduced and the processes of disintermediation, reintermediation, disaggregation and reaggregation are explored. Finally, Web B2B configurations are considered by way of a model that describes four archetypal configurations, and the factors that are antecedent to these modes and how the Web may influence them.     

Learning to trust strangers: an evolutionary perspective

What if living in a relatively trustworthy society was sufficient to blindly trust strangers? In this paper we interpret generalized trust as a learning process and analyse the trust game paradox in light of the replicator dynamics. Given that trust inevitably implies doubts about others, we assume incomplete information and study the dynamics of trust in buyer-supplier purchase transactions. Considering a world made of ??good?? and ??bad?? suppliers, we show that the trust game admits a unique evolutionarily stable strategy: buyers may trust strangers if it is not too risky to do so. Examining the situation where some players may play either as trustor or as trustee we show that this result is robust.     

Assessing the employment effects of the German welfare reform – an integrated CGE-microsimulation approach

The purpose of this article is to quantify the employment effects of the recent German welfare reform. The key element of this reform was to merge the coexisting transfer systems Social Assistance (SA) and Unemployment Assistance (UA) into one unified benefit (Arbeitslosengeld II – ALG II). We also consider a second reform scenario that is intended to further improve the labour supply incentives of low-skilled workers. Our methodological contribution is to use an integrated CGE-microsimulation model. In adopting such an approach, we are able to combine the advantages of microsimulation studies by accounting for the large amount of heterogeneity in terms of households’ preferences and budget constraints with the advantages of an applied general equilibrium model. The latter permits us to identify potential general equilibrium repercussions through changes in wages and unemployment. The simulations indicate that the introduction of ALG II results in a negligible increase in employment of only 45?000 individuals. In contrast, a cut in benefit levels combined with a decrease in transfer withdrawal is shown to produce somewhat larger employment effects of about 190?000 individuals.     

The Austrian roots of the economics of institutions

This paper presents an analysis of the way the Austrian theory of institutions evolved from Menger’s main works. It also tries to advance the idea that the economics of institutions, when it deals with the emergence and evolution of rules and norms from interacting individuals, is inspired by Menger’s work and more generally by the Austrian analysis of the emergence and evolution of institutions. Recent works in the economics of institutions build on this earlier Austrian work to make it more formalized and testable.

RESPONSES OF ECONOMIC SYSTEMS TO ENVIRONMENTAL CHANGE: PAST EXPERIENCES

Current discussions of climate change are overly focused on the science underpinning environmental impact, with little attention to socioeconomic consequences. The economics of environmental change in particular is insufficiently informed by the lessons that past experiences can yield. Drawing on case studies from Europe and Asia, this special issue underlines the importance of historical context, as well as markets, institutions, technology, and the role of international trade in understanding how economic systems have responded to environmental changes. Past economies have responded dynamically to environmental change rather than simply constrained deterministically by the climatic and ecological events that have engulfed them.     

The state of theory in three premier advertising journals: a research note

Despite its importance, little is known about the prevalence of theory in the literature on advertising research. Utilising a content analysis of the three premier advertising journals over an 11-year period, it is found that only 17% of articles have made explicit use of theory. Psychology is the discipline from which the greatest number of articles drew their theoretical frameworks, followed by sociology and economics – indeed, theories from marketing and advertising are in the minority. Limitations are noted and implications of the results are discussed.     

Forest management: Are double or mixed rotations preferable to clear cutting?

We study a particular uneven-aged forest stand management pattern, variations of which are often advocated in practice to mitigate the adverse effects of clear cutting. The forest stand under consideration is similar to a Faustmann stand, with the following difference: rather than being single aged, the forest tract contains trees of two age classes so that it is submitted to a form of selective cutting. Each harvest involves all of the older trees and only a fraction of the younger ones; hence the name mixed rotation. Trees left standing at harvest help stimulate natural regeneration and improve various environmental and amenity characteristics of the forest. We model this effect by using a cost function that varies with respect to the harvest rate of younger trees. We derive the properties that this cost function must exhibit in order some form of mixed rotation to be superior to the conventional single rotation à la Faustmann; we also characterize the mixed rotation in terms of duration and the harvest rate of younger trees, and we compare its properties with Faustmann’s rule.     

Proactive behavior and industrial salesforce performance

Proactive behavior has been indirectly linked to effective selling, an assertion underpinned by a logic, which states that in a world of high competition and choice, the passive, reactive seller is unlikely to do as well as his or her more proactive counterpart. Yet, little direct empirical evidence exists to substantiate this link. In this paper, we address this knowledge gap by describing a study that assesses the effect of proactive behavior on the performance of an industrial sales force. The paper explores the issue of salesperson performance and the construct of proactive behavior (or proactiveness). Using the Proactive Personality (PP) Scale to measure proactiveness and the line manager's subjective evaluation to indicate salesperson performance, it was found that a small but significant relationship exists. The results are discussed, with areas for future research delineated and implications for practitioners explored.