Detail-free mechanism design in twice iterative dominance: Large economies

This paper investigates unique implementation in large economies with incomplete information and interdependent values; we degenerate the common knowledge assumptions and assume that a central planner is unaware of the specifications of an environment. With a minor restriction on the class of environments, we demonstrate that there exists a detail-free mechanism that virtually implements competitive allocations with complete information in twice iterative dominance, irrespective of how the environment is specified.     

The impact of designated market makers on security prices

This paper is divided into two distinct parts. Part I, Empirical Evidence, tests a previously formulated variance, thinness relationship for security returns. First quarter 1972 daily returns variance is regressed on market value of shares, share price, trading activity, sales variance, and institutional holdings for 178 firms selected by stratified random sampling from AMEX and NYSE (specialist exchanges), and from Tokyo and Rio de Janeiro (non-specialist exchanges). The principal finding is that returns variance and market value are inversely related on non-specialist exchanges, but not on specialist exchanges; this difference is attributed to specialists' impact. Part II, Policy Proposals, discusses the manner in which designated market makers may be effectively incorporated into a continuous auction exchange. Issues discussed include: desirability of price stabilization, transfers implicit in the existing U.S. specialist system, consolidation and public availability of the limit order book, number of designated market makers for a security, competitive bidding, and compensation for performing the price stabilization function. Stabilization is modeled as an external economy, and specific policy proposals for internalizing it are advanced.     

A welfare analysis of global patent protection in a model with endogenous innovation and foreign direct investment

This paper constructs a North–South quality-ladder model in which foreign direct investment (FDI) is determined by the endogenous location choice of firms, and examines analytically how strengthening patent protection in the South affects welfare in the South. Strengthening patent protection increases the South's welfare by enhancing innovation and FDI, but it also allows the firms with patents to charge higher prices for their goods, which decreases welfare. However, the model shows that the former positive welfare effect outweighs the latter negative effect. Moreover, introducing the strictest form of patent protection in the South, that is, harmonizing patent protection in the South with that in the North, may maximize welfare in the South as well as in the North. Further, a similar result can also be obtained in a nonscale effect model.     

Retracted: Dynamics of Unclosed Triangles in Alliance Networks: Disappearance of Brokerage Positions and Performance Consequences

We depart from previous research on brokerage advantages in interorganizational networks by shifting focus to the dynamics of brokerage positions. We investigate causes of the disappearance of these positions and its influence on organizational performance. Using a subnetwork consisting of a broker and its two partners as the unit of analysis, we postulate that the brokerage position disappears either when the two partners develop ties or when the ties between the broker and the partners dissolve. We predict that the patterns of interactions in which this subnetwork is embedded exert multilevel influences on the disappearance, and that embedded structures promoting persistence constrain brokerage advantages. Our analysis of codeshare alliance data in the global airline industry supports the theory and demonstrates that the persistence of brokerage positions decreases broker performance. The findings explain why brokerage positions rarely persist and why the persistence of brokerage positions does not benefit brokers.     

Product cycles, endogenous skill acquisition, and wage inequality

Abstract .  This paper presents an endogenous product cycle overlapping generations model, where the supply of skilled labour is endogenously determined. This is used to examine how production shifts through imitation by developing countries affect the domestic wage differential and supply of skilled labour in developed countries. In the model, production shifts increase the demand for researchers in developed countries and cause higher relative wages for skilled labour: this leads to more individuals acquiring the skills. As a consequence, the model helps to explain the simultaneous increase in the domestic wage gap and in the supply of skilled labour observed in developed countries.     

Does yardstick regulation really work? Empirical evidence from Japan’s rail industry

This paper investigates the effectiveness of yardstick regulation by using a data set of rail companies in Japan and estimating the variable frontier cost function. In the variable cost function, both the coefficient of the yardstick regulation dummy and the coefficient of the competitive pressure outside the industry show the negative sign with statistical significance, indicating that the introduction of yardstick regulation and competition tend to decrease a rail company’s variable cost. Between 1995 and 2000, railways to which yardstick regulation was applied improved cost efficiency by about 11.5%.     

Privatization and entries of foreign enterprises in a differentiated industry

We investigate whether or not privatization is beneficial from the viewpoint of social welfare in a monopolistic competition model. We discuss the relationship between the welfare effects of privatization and the degree of foreign direct investment in the private sector, which is an important problem in developing countries and in transition economies such as China and Central and Eastern European countries. We find that, in the long run, privatization of a public firm is more likely to improve welfare when the country depends on foreign capital in the private sector, whereas the opposite tendency exists in the short run.     

Empirical Analysis of Brands: A Survey

In this paper, we survey the empirical analysis of brands. The difficulty in this area of research is that even though a brand is easily identifiable, its economic roles are not directly observable. We first discuss methods where the effect of a brand is measured as the unobservable component of sales or price of a product, which researchers recover as a residual of the sales or price regression. We then describe the approaches to estimate the various roles of brands, such as providing information and increasing the utility of consumption. Finally, we provide examples of research that highlight the role of brands in exploiting the irrationality of consumers for profit.     

The cost-effectiveness of dulaglutide versus insulin glargine for the treatment of type 2 diabetes mellitus in Japan

Aims: Dulaglutide is a new once weekly glucagon-like peptide-1 (GLP-1) receptor agonist administered via a disposable auto-injection pen for the management of type 2 diabetes mellitus (T2DM). The objective of this study was to estimate the cost-effectiveness of dulaglutide vs insulin glargine for the management of T2DM from a Japanese healthcare perspective, in accordance with recently approved Japanese Cost-Effectiveness Guidelines.

Methods: The IQVIA CORE Diabetes Model (version 9) was used to estimate the long-term costs and effects of treatment with dulaglutide and insulin glargine. Direct comparative data from the Araki 2015 trial (NCT01584232) was used to inform the analysis. Costs associated with treatment and complications were derived from Japanese sources wherever possible and inflated to 2015 Japanese Yen (JPY). Utilities were based upon a European systematic review of diabetes utilities and adjusted for use in a Japanese population. One-way and probabilistic sensitivity analyses (OWSA and PSA) were conducted on all inputs and key modeling assumptions.

Results: Dulaglutide 0.75?mg was associated with higher quality-adjusted life years (QALYs), life years (LYs), and total costs, compared to insulin glargine, resulting in an incremental cost-effectiveness ratio (ICER) of 416,280 JPY/QALY gained. Treatment with dulaglutide increased the time alive and free from diabetes-related complications by 4 months. OWSA and PSA indicated that results were robust to plausible variations in input parameters and modeling assumptions.

Limitations: Key limitations of this study are similar to other cost-utility analyses of diabetes, including the extrapolation of short-term clinical trial data into lifelong durations. In addition, due to the lack of robust published Japanese data, some values were derived from non-Japanese sources.

Conclusions: This analysis suggests that dulaglutide 0.75?mg may be a cost-effective treatment alternative to insulin glargine for patients with T2DM in Japan.     

Environmental regulation and technology transfers

This paper analyzes the situation in which a national government introduces environmental regulations. Within the framework of an international duopoly with environmental regulations, an environmental tax imposed by the government in the home country can induce a foreign firm with advanced abatement technology to license it to a domestic firm without this technology. Furthermore, when the domestic firm's production technology is less efficient than that of the foreign firm, the foreign firm may freely reveal its technology to the domestic firm. These improvements through the voluntary transfer of technology imply that environmental regulations have positive impacts on innovation.