Third-Degree Price Discrimination, Consumption Externalities, and Market Opening

This study investigates the effects of monopolistic third-degree price discrimination on market opening in the presence of consumption externalities between separate markets. Assuming symmetric interdependent linear demands and constant marginal cost, we indicate the possibility that with negative externalities a monopolist can do better by closing the relatively small market from the social welfare viewpoint, while it prefers opening that market if price discrimination is feasible. This result contradicts the previous literature on third-degree price discrimination and market opening which asserts that, in the case of non-increasing marginal cost, price discrimination improves social welfare if it opens new markets that are closed under uniform pricing.     

An artificial Wicksell–Keynes economy integrating short-run business cycle and long-term cumulative trend

Journal of Economic Interaction and Coordination - Economists have investigated how price–wage rigidity influences macroeconomic stability. A widely accepted view asserts that increased...     

Corruption and natural resource rents: evidence from quantile regression

This study examines the impacts of oil rents on corruption for 157 countries. While existing studies have primarily focused on average effects, we employ quantile regression to estimate the effects of natural resource abundance for different corruption levels. We consider the effects of natural resource rents, mainly oil rents and then compare them with those of total and non-oil natural resources rents. The estimation results show that, generally, more oil rents increase corruption. Specifically, impacts are larger in countries with an intermediate level of corruption and smaller in highly corrupt countries. While total resource rents increase corruption significantly, non-oil resource rents do not. This may be due to non-oil resource rent management (mainly inland) being more subject to public scrutiny. Non-oil natural resources are concentrated in the less-developed sub-Saharan African countries, where corruption is prevalent; therefore, the impacts of natural resource rents are unremarkable.     

How does environmental performance affect financial performance? Evidence from Japanese manufacturing firms

This paper examines the effects of environmental performance on financial performance using the data of Japanese manufacturing firms from 2004 to 2008. As the environmental performance, our study considers the two different environmental issues of waste and greenhouse gas emissions in capturing the effects of corporate environmental management on financial performance. In addition, to clarify how each financial performance responds to a firm's effort in dealing with different environmental issues, we utilize many financial performance indices reflecting various market evaluations. Our estimation results show the different effects of each environmental performance on financial performance. Waste emissions do not generally have significant effects on financial performance. On the other hand, greenhouse gas reduction leads to an increase in financial performance in the whole sample and clean industries, although it does not have significant effects on financial performance in dirty industries. Furthermore, as the firm growth rate increases, the partial effects of waste emissions on financial performance decrease, whereas the partial effects of greenhouse gas emissions on financial performance increase.     

Current accounts of Japanese airports

The paper examines the current account of 41 major airports. When we exclude depreciation costs, only seven airports are profitable. When depreciation is excluded, only three airports are making profits. Airports managed by local governments are very difficult to sustain financially without subsidies. Airports with more than 5.2 million passengers are profitable when depreciation is taken into account, however most local airports have fewer than 2.5 million passengers. When depreciation costs are excluded, airports need at least 2.7 million passengers to be viable.     

How to Fight Hard Core Cartels? Comments on Collusion in Industrial Economics

Industrial economics has successfully clarified the mechanism of collusive conduct and its facilitating factors. But policy implications for remedial actions are less straightforward. This paper provides some supplementary comments from the viewpoint of enforcement issues against price-fixing agreements. There are some disagreements among practitioners concerning the probative value of circumstantial (or economic) evidence. Information exchange may be a possible clue to elucidate the evidentiary standard. On the other hand, there seems to be a unanimous agreement, if appropriately designed, on the desirability of leniency programs. Necessity of leniency programs must be a reflection of stricter standard of proof in court decisions, resource constraints of antitrust enforcer, or increasingly defensive acts of conspirators.     

Cooperation and Institution in Games

Based on recent developments in non‐cooperative coalitional bargaining theory, I review game theoretical analyses of cooperation and institution. First, I present basic results of the random‐proposer model and apply them to the problem of involuntary unemployment in a labour market. I discuss extensions to cooperative games with externalities and incomplete information. Next, I consider the enforceability of an agreement as an institutional foundation of cooperation. I re‐examine the contractarian approach to the problem of cooperation from the viewpoint that individuals may voluntarily create an enforcement institution.     

Vilfredo Pareto on Labor: A Critical Re-examination

This article comprehensively examines Vilfredo Pareto's thoughts on labor and highlights their significance within his body of work. Like the other pioneers in neoclassical economics, Pareto disregarded worker subjectivity toward labor performance and the resulting variability in the substance of labor. Thus emasculating the human traits of labor, in his theory of pure economics, Pareto identified the nature of labor exchange with that of the exchange of nonhuman objects, thereby subsuming the former under his general equilibrium system. This neoclassical principle of rationalizing the market determination of labor exchange on its deindividuation governed Pareto's speculations throughout his work. Even his arguments in applied economics in favor of worker solidarity and strikes were grounded on this principle. It remained the basis for Pareto's opinions on actual labor relations. Pareto's frustration here turned him into an anti-unionist, but it also helped to mold his prime ideas regarding sociology and his awareness of the limits of economics. However, Pareto's adherence to his former concept of labor exchange contradicting its nature became a chief cause of his failure to integrate his economic thinking with its sociological counterpart and occasioned his sympathy with Fascism. Thus, this article concludes that Pareto's thoughts on labor profoundly affected his entire body of thought and that their flaw is not exclusive to him but inherent in neoclassical economics.     

Inefficiency and social exclusion in a coalition formation game: experimental evidence

This paper experimentally investigates the impact of reciprocal behavior in multilateral bargaining and coalition formation. Our results show that reciprocal fairness strongly affects the efficiency and equity of coalition formation. In a large majority of cases, inefficient and unfair coalitions are chosen when their coalition values are relatively high. Up to one third of the experimental population is excluded from bargaining and earns nothing. In monetary terms economically significant efficiency losses occur. We find that the interplay of selfish and reciprocal behavior unavoidably leads to this undesirable consequences. We also compare the predictions of recently developed models of social preferences with our experimental results. We find that some of these models capture the empirical regularities surprisingly well.     

The Interdependent Telecommunications Demand and Efficient Price Structure

Rapid growth of mobile telecommunications is a widespread phenomenon in the world. This emerging network is supposed to be closely interdependent with the wire-based network. In this paper, after reviewing the Japanese regulatory scheme for mobile telecommunications, we investigate the interdependency by estimating both price elasticities and network effects among them. The own-price elasticities are relatively high, and the substitution, as well as the network, effect is substantial. Moreover, the resulting super-elasticities of mobile telephones are consistently larger than those of fixed-line telephones. These findings indicate that the Ramsey optimal price structure may have required a lower price–cost margin of mobile networks, relative to that of fixed-line networks. It should be noted, however, that the difference in super-elasticity between the two networks seems to have substantially diminished during our sample period. J. Japan. Int. Econ., December 1999, 13(4), pp. 311–335. Shinshu University, Nagano 390-8621, Japan and InfoCom Research Institute, Tokyo 107-0062, Japan. Copyright 1999 Academic Press.Journal of Economic Literature Classification Numbers: D12, L43, L96.