The effect of a magazine’s free digital content on its print circulation: Cannibalization or complementarity?

We examine how offering digital content affects demand for print magazines. Using a searchable website archive, we measure the digital content offered by a sample of US consumer magazines from 1996 to 2001. We find strong evidence that digital content cannibalizes print sales. On average, a magazine’s print circulation declines about 3–4% when it offers a website. However, the effect varies with the type of digital content offered. Offering digital access to the entire contents of the current print magazine reduces print sales by about 9%. We find no evidence that digital content complements print magazines. These results are robust to including controls for unobserved magazine, category, and time effects, as well as controls for the impact of contemporaneous price changes and other factors.     

Component efficient solutions in line-graph games with applications

Recently, applications of cooperative game theory to economic allocation problems have gained popularity. We investigate a class of cooperative games that generalizes some economic applications with a similar structure. These are the so-called line-graph games being cooperative TU-games in which the players are linearly ordered. Examples of situations that can be modeled like this are sequencing situations and water distribution problems. We define four properties with respect to deleting edges that each selects a unique component efficient solution on the class of line-graph games. We interpret these solutions and properties in terms of dividend distributions, and apply them to economic situations. This research has been done while the third author was visiting Tinbergen Institute at the Free University, Amsterdam. The research is part of the Research Programme “Strategic and Cooperative Decision Making” at the Department of Econometrics. Financial support from the Netherlands Organization for Scientific Research (NWO) in the framework of the Russian-Dutch programme for scientific cooperation, is gratefully acknowledged. The third author also appreciates partial financial support from the Russian Leading Scientific Schools Fund (grant 80.2003.6) and Russian Humanitarian Scientific Fund (grant 02-02-00189a). We thank three anonymous referees for their valuable comments.     

Decomposing Redistributive Effects of Taxes and Transfers in Australia: Annual and Lifetime Measures

This paper decomposes the redistributive effect on annual and lifetime inquality of a range of taxes and transfers in Australia, using a dynamic cohort lifetime simulation model. The redistributive effect is decomposed into vertical, horizontal and reranking effects. Horizontal inequities in the tax and transfer system are found to be negligible. The extent of reranking is greater in the lifetime than in the annual context and is affected by the equivalence scales used to adjust household incomes. If no adjustment is made to household incomes, reranking is about nine per cent of the reduction in lifetime inequality. However, if each child is counted as equivalent to one-third of an adult, reranking is found to be less than one per cent.     

Evolution of harvesting strategies: replicator and resource dynamics

Abstract. Economic theories of managing renewable resources, such as fisheries and forestry, traditionally assume that individual harvesters are perfectly rational and thus able to compute the harvesting strategy that maximizes their discounted profits. The current paper presents an alternative approach based on bounded rationality and evolutionary mechanisms. It is assumed that individual harvesters face a choice between two harvesting strategies. The evolution of the distribution of strategies in the population is modeled through a replicator dynamics equation. The latter captures the idea that strategies yielding above average profits are demanded more than strategies yielding below average profits, so that the first type ends up accounting for a larger part in the population. From a mathematical perspective, the combination of resource and evolutionary processes leads to complex dynamics. The paper presents the existence and stability conditions for each steady-state of the system and analyzes dynamic paths to the equilibrium. In addition, effects of changes in prices are analyzed. A main result of the paper is that under certain conditions both strategies can survive in the long-run. Correspondence to: J. Noailly     

Ideology, markets and money

Contemporary economic theory is considered in terms of the science/ideologydistinction. Marx's critique of Hegel is then used to derivea demarcation criterion that sharply separates scientific knowledgefrom ideology. This critique interprets Hegelian methodologyas fundamentally ideological because it understands realityin terms of abstract thought and then hypostatises that thoughtas reality. This process is more generally treated in termsof Marx's theory of value and money, in which money really doesdo what Hegelian logic purports to do. The consequences of consideringMarxian theory in this way provide some purchase on the logicand limitations of contemporary economic theory.