FREEDOM AND ACHIEVEMENT OF WELL‐BEING AND ADAPTIVE DYNAMICS OF CAPABILITIES

Extending D'Agata (2007, Journal of Socio‐Economics, 36, pp. 177–90), we consider adaptive dynamics of capabilities. In terms of the two‐way evaluation of well‐being à la Sen, we show the existence of a distribution of goods equalizing well‐being freedom (achievement) of each individual, the total amount of goods being fixed. On the other hand, by means of counter examples, we exemplify that two closely related focal variables can move in reverse directions (goods vs. well‐being, or freedom vs. achievement). In a dynamic context, one's well‐being achievement may decrease even with an increase in goods available, while, ceteris paribus, his/her well‐being freedom increases.     

Market Integration and Competition in Environmental and Trade Policies

Recent empirics suggest the relevance of transport cost reductions for world trade growth along with eliminations in protectionist trade barriers. To address the welfare effects of trade cost reductions in a context of ??trade and the environment,?? we develop a two-stage game model where governments choose environmental and trade policies and firms play a Cournot-Nash game. We show that reductions in transport costs lead to lower emission taxes and higher tariffs. And, we find that the degree of pollution damage plays a central role in whether market integration is welfare-improving relative to autarky.     

Leading without Followers: How Politics and Market Dynamics Trapped Innovations in Japan’s Domestic “Galapagos” Telecommunications Sector

While globally successful Japanese industries were able to use their domestic market as a springboard into international markets, Japan’s telecommunications sector became decoupled from global markets, trapping Japanese ICT firms in the domestic market. This persistent pattern of leading without followers was not simply the result of misguided technological choices, ill-informed corporate strategies, or insular government standard-setting processes. Rather, the dynamics of competition, shaped and reshaped by political dynamics and regulatory structures, decoupled it from global markets. These dynamics created a “Galapagos effect”, in which winning in an isolated domestic market led to losing in global markets. Major regulatory shifts transformed the dynamics of competition since the late 1990s, decreasing the isolation of Japan’s telecommunications sector, but some factors pulling it along a proprietary trajectory persist. This paper highlights the dilemma of how to develop beyond a follower status, but avoid becoming a leader without followers.     

A New Control Variate Estimator for an Asian Option

There exist several estimators for valuing the Asian option on the arithmetic mean. Among all variance reduction estimators, the one with the control variate derived from the geometric mean has been shown by Boyle et al. (1997) to perform best so far. In this paper, a new improved control variate estimator for this type of Asian option is proposed and investigated. Simulation results confirm that it does perform better than the control variate derived from the geometric mean. The improvement becomes more significant as the volatility increases and/or as the time to expiration lengthens.     

Strategic Transfer Pricing and Social Welfare under Product Differentiation

In this paper, we investigate the social impacts of strategic transfer pricing by oligopoly firms, aiming to derive regulatory implications for transfer prices. A notable finding from our model is that the negative effects on social welfare of transfer prices being set above marginal cost are pronounced when either (1) the number of competing firms is large and the product is relatively highly differentiated or (2) the number of firms is small and the product is not very differentiated. This result indicates that even when the number of firms in the industry is significant and the market is thus apparently competitive, the authorities should not overlook the possibility that setting transfer prices above marginal cost might seriously damage social welfare if the product is highly differentiated.     

Which firms benefit from market making?

Financial Markets and Portfolio Management - From 1998 until 2008, all firms on the JASDAQ exchange could choose and switch between a market-maker method similar to NASDAQ and a continuous auction...     

Disability and Economy: A Game Theoretic Approach

This paper takes a game theoretic approach to disability‐related issues by constructing a model that studies the case of hereditary deafness on Martha's Vineyard Island, USA from the seventeenth century to the early years of twentieth, where the island community adjusted itself to the hereditary deafness so that it was not treated as a disability. The model of the present paper has two stages. First of all, there are two types of continua of agents, the deaf and the non‐deaf. In the first stage, the non‐deaf agents become either bilinguals or monolinguals. In the second stage, agents are classified into deaf people, bilinguals and monolinguals. They are then randomly matched to form a trio to play a three‐person bargaining game with infinite horizon, random proposers and language constraints. Two bargaining games are considered. The first one is a majority bargaining game where only two out of three can agree to implement a bargaining outcome. The second one is a unanimity bargaining game where all three agents are required to reach an agreement. The majority game exhibits strategic complementarity, while the unanimity game exhibits strategic substitutability. This paper also takes an inductive approach to examine how prejudice against people with disability may emerge.     

Cost-effectiveness of intravitreal aflibercept versus other treatments for wet age-related macular degeneration in Japan

Objective: This analysis estimated the cost-effectiveness of intravitreal aflibercept injection(s) (IAI) for wet age-related macular degeneration (wAMD) compared with other treatments in Japan.

Methods: This was a cost-utility analysis based on published data. A state-transition cohort model was constructed with six health states based on best-corrected visual acuity in the better-seeing eye. The cycle time was 4 weeks, and the time horizon was 12 years. The model compared IAI 2?mg every 8 weeks (2q8) for 2 years after three initial monthly injections, ranibizumab as needed, ranibizumab 0.5?mg every 4 weeks (0.5q4), pegaptanib sodium 0.3?mg every 6 weeks, verteporfin photodynamic therapy (PDT), and best supportive care, assumed to include medical management and monitoring, but no active therapy. Costs (expressed as Japanese yen [JPY]) and quality-adjusted life years (QALYs) gained were estimated for each treatment and discounted at 2.0%. Input data were obtained from clinical studies, the Japanese drug tariff and social insurance reimbursement schedule, and expert opinion. The analysis was conducted from the societal perspective, including medical costs as well as costs of blindness.

Results: IAI 2q8 was dominant (i.e. more effective in terms of QALYs and less costly) to all other comparators (ranibizumab as needed, ranibizumab 0.5q4, pegaptanib sodium, PDT, and best supportive care), as shown by the incremental cost-utility ratio (i.e. cost per QALY gained).

Limitations: The strengths of the analysis include the wide range of comparators evaluated and the use of Japanese-specific utility data. The limitations include the use of one eye, inclusion of published data up to 2 years only, and assumptions on disease course over 5 years.

Conclusions: IAI 2q8 was more effective in terms of QALYs and less costly compared with other treatments for wAMD in Japan.