Selection,Heterogeneity, and Entry in Professional Markets

We analyze two different cases of entry regulation in professional markets: first, when licensing is a requirement for becoming a professional (lawyers); second, when entry and price restrictions are applied on a geographical basis (pharmacists). Both cases are investigated within a circular model of localized competition and heterogeneous players. The analysis reveals that licensing introduces a selection mechanism which is effective in preventing entry of inefficient players in markets with large ex ante heterogeneity. Furthermore, because in the second case excessive entry is reduced as the degree of heterogeneity increases, our analysis lends support to a policy that simultaneously relaxes entry and price restrictions.     

Detecting the relationship between competitive intensity and firm product line length: Evidence from the worldwide mobile phone industry

The way firms lengthen or shorten their product line with respect to rivals is regarded as one of the possible strategies firms can pursue to respond to competition. This article builds and tests hypotheses to study the effect of different levels of competitive intensity on product line length. The empirical analysis of data on 3,527 handset models introduced by 66 mobile phone vendors from 1994 to 2010 shows a consistent inverse U‐shaped relationship between competitive intensity and the firm's product line length. In this way, we pinpoint an interesting link between the product line extension literature and the competitive dynamics and competitive intensity perspectives. Copyright © 2013 John Wiley & Sons, Ltd     

Inter industry and occupational wage differentials in Italy

The vast literture on wage determination in the post-war era extensively documents the existence of large and persistent wage differentials among industries and workers of comparable skills. This paper addresses the issue of wage dispersion in the context of the Italian economy. The stability over time of industry relative wages confirme previous results obtained for the other countries. A wide class of earings equations is estimated using microdata for the Italian manufacturing industry. The results provide little evidence in support of the view that wage dispersion can be explained by either unmeasured workers' charcteristics or by compensating wage differentials. Conversely, the estimated pattern of industry-occupation wage differentials is consistent with the existence of rent sharing mechanisms and fairness considerations.     

Internal and External R&D: A Sample Selection Approach*

This study underlines that the decision to enter into an external R&D relationship is related to an antecedent decision to carry out R&D. This calls for an empirical approach that permits the joint analysis of the determinants of the two decisions, correcting for sample selectivity. Based on a sample of Italian manufacturing firms, the results confirm the need to adopt this approach. Another contribution made by this study is the managerial implications that can be derived from its empirical model, which provide a better understanding of the factors associated with a firm's decision to engage in R&D both independently and with external partners.     

The diffusion of a new telecommunication service : Network constraints and service quality in a dynamic interpretative model

In this paper, a discrete time model for the adoption of a new telecommunication service is proposed. We analyze the interaction of three sets of agents involved in the process: users, information providers, and network providers. We consider the effects of the network constraint and of the expectations of the users and suppliers.     

Liquidity needs and vulnerability to financial underdevelopment

This paper provides evidence that financial development has a large causal effect in the reduction of macroeconomic volatility resulting from the role of the financial system in liquidity provision. In particular, financial system development leads to a comparatively larger reduction in the volatility of output in sectors with high liquidity needs. Most of this decline results from the stabilization of the output of existing firms, although the volatility of the number of firms also drops significantly. Among different aspects of the financial system, the depth of financial intermediaries plays the main role in the reduction of volatility.     

STUDYING INEQUALITY IN INCOME DISTRIBUTION OF SINGLE-PERSON HOUSEHOLDS IN FOUR DEVELOPED COUNTRIES

The increasing frequency of single-person households has become a major economic phenomenon, and is likely to become an important political force. This paper focuses on differences related to inequality of income distribution among single-person households in Europe's four largest economies, i.e. France, Germany, Italy and the U.K. Income distribution was modeled in terms of individual characteristics using a parametric model with heterogeneous model parameters. Poverty differences were also broken down using the results of Biewen and Jenkins (2005 ) in order to understand the relationship between poverty and individual characteristics among countries.     

Can price regulation increase cost-efficiency?

This paper examines the possibility that price regulation increases a monopolist's cost-efficiency. When the firm's choice of cost-reducing effort depends on the output supplied, a binding price-cap, by compelling the monopolist to produce more, results in lower costs. On the basis of a two-period asymmetric information model, the paper demonstrates that price regulation increases efficiency when the elasticity of demand is sufficiently low, even assuming very conservative preferences of the regulator and asymmetric information. Moreover, contrary to previous findings and conventional wisdom, we find that a periodical rate base review may increase productive efficiency through the positive effect on future cost-reducing effort, counterbalancing its well known adverse effect on the current level of effort.