Simulation of strategies for long-term international development

Until the technology needed to surmount global physical limits is discovered and widely used, raising standards of living in much of the third world is a luxury. Three ways of creating the wealth required to support such a massive technological and investment programme are reviewed: letting present trends continue, going for increased regional autonomy, or greatly increasing prices of third world primary exports. A simple model with five sectors and three regions is used; it confirms aspects of The Limits to Growth models, and raises further qualms concerning social and political constraints.     

Testing multiple equality and inequality hypothesis in economics

The general case of equality and inequality hypotheses is considered and an abridged table of critical values for the test is presented.     

Risk Aversion and Technology Portfolios

This paper analyzes the choice of a technology portfolio by risk-averse firms. Two technologies with random marginal costs are available to produce a homogeneous good. If the risks that are associated with the technologies are correlated, then the firms might invest in a technology with a negative expected return or, conversely, might not invest in a technology with a positive expected return. If the technology with the lower expected cost is riskier than the other technology, then this “low-cost” technology will be eliminated from the firm’s portfolio if the risks are highly correlated. With imperfect competition, the portfolios of firms are different, and the difference in risk tolerance can explain the full specialization of the industry: The less risk-averse firms use the low-cost technology, and the more risk-averse firms use the less risky, higher-cost technology.     

Integrated market and nonmarket strategies: Political campaign contributions around merger and acquisition events in the energy sector

We examine how firms use political strategies to protect economic rents created by mergers and acquisitions against dissipation by regulators. In regulated industries, regulators can impose costly merger conditions, for instance consumer rate reductions in the utilities sector, thereby reducing shareholder gains. We investigate empirically whether and how firms use election campaign contributions to politicians as a method of influencing regulatory merger approvals. In a statistical analysis of campaign contributions by all electric utilities from 1998 to 2006, we find that utilities increased their contributions in the year before they announced a merger and that merging utilities increased their contributions more in states with greater political party competition. Our findings contribute to political strategy research by providing novel evidence that firms integrate market and nonmarket strategies. Copyright © 2013 John Wiley & Sons, Ltd.