Should civil servants be restricted in wage bargaining? A mixed-duopoly approach

Should civil servants (employees in the public sector) be allowed to bargain collectively? To answer this question, we construct a model of unionized mixed duopoly and examine the regulatory framework of public institutions, especially focusing on a wage regulation imposed on the public firm. The wage regulation turns out to yield critical welfare implications as it gives rise to two opposing strategic effects: the wage regulation intensifies downstream-market competition while it loosens upstream-market competition. The overall welfare effect is ambiguous, depending crucially on the degree of product differentiation between the firms. We also show that, in contrast to the popular belief, granting the right to bargain collectively to civil servants would not necessarily help them because they tend to demand excessively high wages when they are allowed to bargain collectively. Finally, we briefly discuss a new perspective on the role of profit motives in public institutions when the wages are determined endogenously.     

INSTITUTIONAL REFORM IN INDONESIA'S FOOD SECURITY SECTOR: THE TRANSFORMATION OF BULOG INTO A PUBLIC CORPORATION

The National Food Logistics Agency (BULOG) which had managed food security, buffer‐stock operations, and domestic food price stabilization through its monopoly over imports and distribution was reorganized into a public corporation, “Perum BULOG”, in May 2003. This study investigates the background and the process of reforming BULOG, and seeks to clarify the characteristics and remaining problems of institutional reform implemented in Indonesia since the economic crisis and the impact of globalization. The major findings are: (1) the reforms led by the IMF and World Bank were an attempt to curtail the rent‐creation mechanism in BULOG and to improve its corporate governance; (2) globalized and standardized modules of institutional reform methods were applied for reforming BULOG, but the implanted institutions will need substantial time to take root; (3) there is still a failure to coordinate among food security institutions, particularly between the Ministry of Agriculture and Perum BULOG.     

Cartel Stability in a Delivered Pricing Oligopoly

Using the spatial price discrimination framework, the relationship between the locations of firms and their ability to collude is investigated. Gupta and Venkatu (2002) show that in a duopoly model agglomeration at one point is the most stable location. We find that agglomeration stabilizes the cartel when there are three firms, too. When there are more than three firms, however, agglomeration of all firms is never the most stable location. With four firms, the following location pattern produces the most stable cartel: two firms at one point and the other two at the farthest point from the first two.     

Price regulation,product location,and welfare

This paper investigates the imposition of a binding price ceiling and how it affects overall welfare and the location of a monopolist that is price-discriminating between two markets. The analysis shows that the imposition of a price-ceiling induces the monopolist to locate at the regulated market and that the imposition may actually reduce welfare. The setting is extended to a duopoly market. Two types of regulation are considered. The welfare implications of the regulations are discussed.      

Lesser evil? Public opinion on regulating fake news in Japan,South Korea,and Thailand – A three-country comparison

This study quantitatively examines and compares public opinion on regulating fake news, and factors affecting the opinion in three Asian countries: Japan, South Korea, and Thailand. Based on the third-person effect, it is hypothesised that the perceived harm of fake news on society increases people's support for fake news regulation. In parallel, according to the lesser evil principle, it is also anticipated that people will be less supportive of regulating fake news if they are aware that there are other non-regulatory counter fake news solutions such as fact-checking. Using original survey data collected from the three countries (n = 5218) and multi-group SEM, it is found that while the first hypothesis holds for all three countries, the second one holds only for Japan and South Korea (the two mature democracies), but not for Thailand (the semi-democratic country). This finding implies that the lesser evil principle also applies in Asian countries, but only in mature democracies where freedom of speech is protected.     

Dynamic Analysis of Imitation and Technology Gap

This paper investigates how imitation activities affect the technology gap between developing and developed countries using a North-South model in which the variety of goods is expanding over time. If imitation productivity is high enough, nonrivalrous ideas and inexpensive labor enables developing countries to reduce their technological backwardness by imitating products even if their initial level of technology is far behind the technology in developed countries. We also show that the rise of imitation productivity may benefit both developing and developed countries if they prefer a sufficient variety of goods.