Transboundary Pollution and the Welfare Effects of Technology Transfer

We examine the welfare effects of a transfer of pollution abatement technology in a two-country model. In each country, one industry discharges pollution as a byproduct of output, and the sum of domestic and cross-border pollution decreases the productivity of the other industry. We show the effects of technology transfer on the terms of trade, pollution levels, and welfare. Technology transfer decreases the pollution affecting each country under certain conditions. We derive and interpret the conditions under which technology transfer enriches the donor and the recipient. The results essentially depend on the trade pattern and the fraction of cross-border pollution.     

Bayesian Estimation of Entry Games with Multiple Players and Multiple Equilibria

Entry game models are often used to study the nature of firms' profits and the nature of competition among firms in empirical studies. However, when there are multiple players in an oligopoly market, the resulting multiple equilibria have made it difficult in previous studies to estimate the payoff functions of players in complete information, static and discrete games without using unreasonable assumptions. To overcome this difficulty, the present paper proposes a practical estimation method for an entry game with three players using a Bayesian approach. Some mild assumptions are imposed on the payoff function, and the average competitive effect is used to capture the entry effect of the number of firms. Our proposed methodology is applied to Japanese airline data from the year 2000, when there were three major airline companies, ANA, JAL and JAS. The model comparison is conducted to investigate the nature of strategic interaction among these Japanese airline companies.     

The role of audit evidence in a strategic audit

This study examines how audit risk (the probability of false acceptance) and its components change when the auditor obtains audit evidence in an acceptance sampling model. Inherent risk and audit risk increase with audit evidence if the auditee has a sufficiently strong incentive for committing fraud. Detection risk always increases when audit evidence is introduced. If the auditor has a sufficiently strong incentive for avoiding false rejection, audit risk also increases with audit evidence. The analysis indicates that requiring auditors to obtain information is not effective in preventing material misstatements in at least some instances.     

Standards policy and international trade: Multilateralism versus regionalism

We develop a simple model of policy coordination on domestic standards and examine whether domestic standards policy can lead to regional and multilateral harmonization of standards under the principle of national treatment. This paper focuses on mandatory product and process standards affecting the characteristics of a final good that control negative consumption externalities (e.g., vehicle emissions control and safety standards, restrictions on the use of pesticides for agricultural goods, and safety standards for electrical products). Only the products that meet a country's national standards are allowed to circulate in that country's market. Raising standards reduces negative externalities caused by consumption of a traded good but increases firms’ costs. We use the core as the solution concept. A standards regime is considered to be in the core if it is not blocked by any coalition within countries. The main finding is that a multilateral agreement on standards that maximizes world welfare is only in the core if externalities are local or slightly transboundary. Otherwise, only a regional agreement on standards is in the core. As extensions, we consider many and asymmetric number of firms, asymmetry in market size, fixed costs for different standards, and a multilateral agreement on different standards.     

A characterization and an impossibility of finite length anonymity for infinite generations

In the context of ranking infinite utility streams, the impartiality axiom of finite length anonymity requires the equal ranking of any two utility streams that are equal up to a finite length permutation ( Fleurbaey and Michel, 2003). We first characterize any finite length permutation as a composition of a fixed step permutation and an “almost” fixed step permutation. We then show that if a binary relation satisfies finite length anonymity, then it violates all the distributional axioms that are based on a segment-wise comparison. Examples of those axioms include the weak Pareto principle and the weak Pigou-Dalton principle.     

National culture and its impact on the choice of managing director in international production: the case of foreign firms in Greece

The aim of this study is to determine whether attitudinal differences between British and Japanese managers observed in the workplace can be attributed to culture or to the employment system. The findings provided substantial support for attribution to the employment system. Cultural differences between British and Japanese managers were not as large as the cultural thesis claims. The stereotyped cultural characteristics of Japanese managers - high social orientation at work and unconditional priority of work over family - were observed only in limited groups such as managers on the shop floor or senior managers. Attitudinal differences in the workplace were not simply the consequence of cultural differences, but rather to be understood as rational behavioural responses. Both British and Japanese managers' attitudes were considered to be a rational response to their employment systems.     

Tied Aid and Welfare

In this paper we present a model of tied aid to shed light on the dispute between Kemp and Kojima (1985 ) and Schweinberger (1990 ) and to complement their analyses. We show that if the households of the recipient country are not informed of the transfers at their consumption decision, they have an incentive to trade the purchased goods from their domestic production income whenever transfer paradoxes occur. We also demonstrate that when they are aware of the transfers and can trade the purchased goods from their production income, there are no transfer paradoxes under the normality condition of commodities.     

Substitution and expansion effects in production theory: The case of joint production

This paper is concerned with a systematic examination of what happens when a firm that has been in equilibrium at certain prices of inputs and prices of outputs experiences a change in these prices. The mutual effects between inputs and between outputs and the cross effects between inputs and outputs are explored by means of various kinds of decomposition equations in production theory. A definition of the “normal” technology is given to show that inputs are not gross substitutes, nor are outputs, and that the input-output relations are not regressive.