Migration in search of good government

Residents both enjoy the policies adopted in their cities, and choose those policies. If some people can better evaluate policies than can others, then the most perceptive people will be the most willing to move to the city with better policies, thereby making that city more likely to adopt good policies in the future. Such migration can cause agglomeration, with some cities prospering and others failing.     

Negotiating Complex Contracts

Work to date on computational models of negotiation has focused almost exclusively on defining contracts consisting of one or a few independent issues and tractable contract spaces. Many real-world contracts, by contrast, are much more complex, consisting of multiple inter-dependent issues and intractably large contract spaces. This paper describes a simulated annealing based approach appropriate for negotiating such complex contracts that achieves near-optimal social welfares for negotiations with binary issue dependencies.     

Volume 7 2000

Authors Index

Volume 7 2000     

Japanese–American Joint Restructuring of National Steel Corporation

In 1984, NKK corporation, a leading Japanese steel maker, acquired from the National Intergroup Inc. (NII), an American holding company, its 50% equity interest in National Steel Corporation (NSC), the fourth largest integrated steel firm in the US. In spite of the US economic recovery that began in 1992, NSC continued to operate in deficit and in June 1994 NKK brought in a new management team consisting of six American executives and one Japanese executive. Since the third quarter of 1994, NSC has turned its financial performance around. In this paper, using Bayesian estimation procedures, we estimate the join point or the time at which the productivity of NSC's major production lines experienced an upward shift; if the join point occurs after an appropriate gestation period of the new management team, NSC's recovery may be said to be due to the efforts by the new management team. After confirming that indeed this is the case, we discuss how the management team achieved the turnaround. The organization of the paper is as follows. The next section presents the background. In the third section Bayesian procedures for estimating a join point are presented. In the fourth section we discuss restructuring at NSC and the Japanese Total Quality Control system. Conclusions are given in the final section. © 1997 John Wiley & Sons, Ltd.     

Facebook e-Portfolios for Career Education Focused on Japanese Employment Practice: A Case Study

The authors propose the effectiveness of Facebook functions in the promotion of career education. In recent years, career education in Japanese universities has differed slightly from that in other countries. Japanese students are trained to be competitive in the job-hunting process; they need to obtain the technical skills and knowledge necessary to pass a company entrance examination or a university oral interview. This practice is in stark contrast with the intrinsic meaning of vocational/career education, which is the process by which students acquire the abilities and independence required by a certain industry. This meaning is manifested in the purpose of the career education program of Hokkai-Gakuen University’s Faculty of Business Administration. The program’s purpose is to foster independence in its students rather than the acquisition of skills for the job-hunting process. The professional independence of every student is important to their career development after graduating from the university. On the other hand, it is known that e-portfolios generally encourage students to record and assess their activities. To promote the activities that students tackle in the program, we introduced an e-portfolio using Facebook. This study shows the characteristics and achievements of our e-portfolio.     

The Determinants of the Location of Foreign Direct Investment by Japanese Small and Medium-sized Enterprises

Japanese manufacturing small and medium enterprises (SMEs) have actively undertaken Foreign Direct Investment (FDI) in Asia since the mid-1980s. FDI contributes to economic growth of the FDI recipient countries, as it brings in not only financial resources for investment but also technologies and managerial know-how, which are important factors for promoting economic growth. Recognizing these benefits of receiving FDI, policy makers in developing countries have formulated various strategies to attract FDI. This paper examines the factors in the host countries that would attract FDI by Japanese SMEs. Our results show the importance of both supply-side and demand-side factors in the recipient countries for attracting FDI by Japanese SMEs. Supply-side factors include abundance of low-wage labor, availability of well-developed infrastructure, and good governance of the host government, while an important demand-side factor is the presence of sizable local market. In addition, Japanese SMEs regard industrial agglomeration, which has a element of both supply and demand factors, as an important factors making FDI decision. Supply-side factors are found to be important for attracting Japanese FDI in developing countries, while demand-factors play a role in attracting Japanese FDI in developed countries. A comparison of the results for SMEs to those for large firms reveals that SMEs are more sensitive to the conditions in the host countries in making their FDI decision. In particular, SMEs regard the availability of low-wage labor, well-developed infrastructure, and industrial agglomeration as important elements much more than large firms. High sensitivity of SMEs to local economic conditions in their decision on FDI location may be explained by their limited availability of financial and human resources and high dependence on overseas production in their business. In light of these findings, we conclude that countries interested in hosting FDI have to provide a very attractive business environment.     

Limited information Bayesian analysis of a simultaneous equation with an autocorrelated error term and its application to the U.S. gasoline market

Using Markov Chain Monte Carlo algorithms within the limited information Bayesian framework, we estimate the parameters of the structural equation of interest and test weak exogeneity in a simultaneous equation model with white noise as well as autocorrelated error terms. A numerical example and an estimation of the supply and demand equations of the U.S. gasoline market show that if we ignore autocorrelation we obtain unreasonable posterior distributions of the parameters of interest. Also we find that the hypothesis of the asymmetric effect of the changes in oil price on the changes in gasoline price is rejected. Oil inventory has a significant negative effect on the gasoline price.     

Endogenous Alleviation of Overreaction Problem by Aggregate Information Announcement

It is well‐known that agents overreact to public information in markets characterized by strategic complementarities. We propose a simple and implementable method of alleviating the overreaction problem. Extending the beauty‐contest game of Morris and Shin to a multi‐region economy, we show that, under an aggregate information announcement, each agent converts purely public information into imperfect public information endogenously. This makes the agents’ beliefs dispersed and alleviates the overreaction problem. Moreover, we compare the welfare effect of the aggregate information announcement with that of a separate announcement. We find that there exist plausible situations where the aggregate information announcement is better than the separate information announcement despite reduced quality.