A note on Stackelberg competition

This note investigates a Stackelberg–Nash competition model. We determine the conditions under which the leaders may achieve better profits than the followers when all firms compete on quantity in a two stage game. We focus on the properties of the followers’ best response functions. It is shown that the Stackelberg equilibrium may coincide with the Cournot equilibrium. In addition, the followers may achieve higher profits than the leaders. Such results put forward the working and the consequences of strategic complementarities. These results are illustrated with three examples.     

Strategic manipulation of a pollution permit market and international trade

We consider a framework where firms which compete in an international product market are not all submitted to a pollution permit market. Using the Brander and Spencer’s framework (J Int Econ 18:83–100, 1985), we seek to determine the optimal strategies of both a dominant firm in the pollution permit market and the regulator in a such context. We first show that the dominant firm pursues a strategic manipulation to increase its profit. We also find that the regulator uses a sophisticated strategic policy to increase the domestic welfare by using two instruments: the initial allocation of pollution permits and the pollution cap.     

The effect of the Internet on front-line employee skills: exploring banking in Sweden and France

This paper aims to explore (1) the Internet effects on the nature of the face-to-face service encounter and (2) what demands this introduces on front-line service employee skills in a banking context. The paper draws on empirical data generated from two banks in Sweden and France, where in-depth interviews with 21 managers have been carried out. The paper argues that in light of the Internet, the face-to-face service encounter is becoming increasingly interactive and customized, where much attention is paid towards building and maintaining relationships with customers, providing advice and support in customer's decision making, and also, learning from and acquiring qualitative information about the customer. This up-scaling of the face-to-face service encounter entails an increase in job complexity and task discretion, involving demands for high-level skills such as information provisioning and evaluation, and emotional skills such as empathy, interpretive skills, conversational skills, and management of body language.     

Party time: recreation rituals in the world of B2B

Abstract

We examine the role of business parties in business markets: why do B2B companies spend such large amounts of money to sponsor events meant for public consumption, such as sporting events, when most of their activity involves selling to other organisations? Drawing from extensive qualitative fieldwork in the world of tennis tournaments, we detail the specific universe of parties that happen backstage, between companies sponsoring these events. This context helps illuminate the critical role of business parties in business networks. Far from being mere recreation at the company’s expense, business parties are important opportunities for executives to develop and manage their relationships. We show that a business party functions as a particular kind of ritual by creating a distinct universe with its own language, gestures, and other modes of interaction.

Summary statement of contribution Our theoretical contribution to the literature on relationship marketing is to detail the unifying function of business parties in local business markets, where relationships with a variety of organisations are key to a company’s success. Our methodological contribution is to illustrate the relevance of anthropological approaches and concepts, such as rituals, to the world of B2B.     

Judgemental Overconfidence, Self-Monitoring, and Trading Performance in an Experimental Financial Market

We measure the degree of overconfidence in judgement (in the form of miscalibration, i.e. the tendency to overestimate the precision of one's information) and self-monitoring (a form of attentiveness to social cues) of 245 participants and also observe their behaviour in an experimental financial market under asymmetric information. Miscalibrated traders, underestimating the conditional uncertainty about the asset value, are expected to be especially vulnerable to the winner's curse. High self-monitors are expected to behave strategically and achieve superior results. Our empirical results show that miscalibration reduces and self-monitoring enhances trading performance. The effect of the psychological variables is strong for men but non-existent for women.     

CONTINGENT PRICES AND MONEY*

Price posting with directed search is a widely used trading mechanism. Coles and Eeckhout showed that if sellers are allowed to post prices contingent on realized demand instead of one price, then there is real market indeterminacy. In this article, we fit this contingent price‐posting protocol into a monetary economy. We show that, as long as holding money is costly, there exists a unique equilibrium rather than a continuum. In this equilibrium sellers post a low price for when the buyer is alone, a high price for when several buyers show up, and buyers randomize between sellers and money holdings.     

Cross-country performance of Lévy regime-switching models for stock markets

This article compares the performance of regime-switching Lévy models across sixteen (16) international stock markets. From a cross-country perspective, the empirical application is dedicated to the study of equity markets in the Americas, Asia and Europe. The results are of interest for a financial audience in order to document the sensitivity of stock indexes to the intensity of jumps, under changing economic regimes (expansion or recession). We pick up singularities in Japan and Malaysia compared to other countries and regions of the world.     

BANKING AND BORROWING IN THE EU ETS: A REVIEW OF ECONOMIC MODELLING,CURRENT PROVISIONS AND PROSPECTS FOR FUTURE DESIGN

Abstract This paper deals with the issue of banking and borrowing in the context of the European Union Emissions Trading Scheme (EU ETS) by attempting to provide a policy‐oriented unifying theoretical framework. After describing the main features of the EU ETS, the core part of the paper consists of variations of an intertemporal continuous time optimization model. Additional elements include flexibility measures currently discussed and proposed in other emissions trading systems (USA, Australia), which include the use of safety valves, minimum price auctioning or offsets from domestic or international projects.     

Does Project Management Affect Business Productivity? Evidence From Australian Small to Medium Enterprises

A fundamental assumption of project management practice and research is that using project management to achieve organizational objectives improves organizational performance. However, there is little published research that directly questions this assumption. This paper tests the hypothesis that using project management increases the productivity of small to medium enterprises, using data from two longitudinal surveys of Australian businesses with less than 200 staff members. These data were used to create models of the relationship between productivity and business skills using binary logistic regression. The models demonstrate that project management has a significant impact on small to medium enterprise productivity.     

Estimating the effect of a retraining program on the re-employment rate of displaced workers

In this article, we estimate the effects of a French retraining program on the re-employment rate of displaced workers by matching techniques. This program, called ‘Conventions de conversion’, was intended to improve re-employment prospects of displaced workers by proposing them retraining and job seeking assistance for a period of 6 months beginning just after the dismissal. Our empirical analysis is based upon non-experimental data collected by the French Ministry of Labour. Matching estimates show that this program succeeded in increasing the employment rate of trainees by approximately 6 points of percentage in the medium-term, namely in the 2nd and 3rd years after the date of entry into the program. This improvement is essentially due to an increase of their re-employment rate in regular jobs, namely jobs under long-term labour contracts.