Unbundling the local loop

We study competition for high bandwidth services in the telecommunications industry by introducing the possibility of unbundling the local loop, where leased lines permit the entrant to provide services without building up its own infrastructure. We use a dynamic model of technology adoption and study the incentives of the entrant to lease loops and compete “service-based”, and/or to build up a new and more efficient infrastructure and compete “facility-based”, given the rental price.We show that the incumbent sets too low a rental price for its loops; hence, the entrant adopts the new technology too late from a social welfare perspective. The distortion may appear not only on the timing of technology adoption but also on the type (quality) of the new technology to be adopted. We also show that while regulating the rental price may suffice to achieve socially desirable outcomes, a sunset clause does not improve social welfare.     

Option value of emission allowances

We study the market for emission allowances stipulated in the 1990 Clean Air Act Amendment. We assume that the number of allowances is fixed and that demand is affected by a stochastic parameter that follows a Wiener process (Brownian motion). The optimal investment policy for scrubbers is characterized. Investments in scrubbers are reduced if there is greater uncertainty about future market conditions. This is because purchases of emission allowances provide flexibility to adapt to demand conditions in a way that installing scrubbers does not. The price of emission allowances may therefore exceed the marginal cost of scrubbers by an amount called the option value. We derive an explicit formula for the option value and present computational results to illustrate its likely magnitude.     

The Rise and Demise of Defined Benefit Pension Plans

The Defined Benefit Pension Plan (DBPP), once regarded as the gold standard of traditional corporate pension plans, has fallen upon hard times. Corporate sponsors regard the plans as financial drains, fountains of bad publicity, and targets for heavy-handed government regulation. Employees covered by the plans fear they will not deliver on the promises employers made to provide financial security after retirement. Legislative fixes for the system have hastened, not slowed down, the exodus of employers from DBPP. The authors of this paper agree that DBPP is, indeed, an endangered species in the private sector, but concur with the criticism that the conventional explanations for it – particularly in the trade literature – tend be self-serving, superficial and not convincing and often incomplete in their analysis. Using Porter’s model of competition to identify the relative strengths and weaknesses of competing influences we endorse the conclusion that the failure of DBPP is one of strategic choice by employers whose power and influence in the global economy is not effectively counter-balanced by labor, or by forces sympathetic to labor. The growing trend towards the Defined Contribution Pension Plan (DCPP) is consonant with employers’ interests but a setback for employees who had to give up the “gold standard” (DBPP). Even the paradoxical effect of ERISA hastening the demise of the pension system it was created to reform is less puzzling when examined in the context of who had influence in drafting the legislation, writing regulations and enforcing the law.     

The co–evolution of technologies and institutions: a comparison of Taiwanese hard disk drive and liquid crystal display industries

In this paper, we examine the different evolutionary processes and outcomes of the hard disk drive and liquid crystal display industries in Taiwan. To this end, we make two general theoretical claims. First, that an appreciation of the globalization of technology is as important as national institutions in understanding industry development in catch–up economies such as Taiwan. Second, in addressing both industrial survival and failure, that national institutions can have either a positive or a negative impact on sectoral activities. Empirically, we show that, in Taiwan, rigid social institutions conflict with the hard disk drive technology. This conflict, in turn, produces obstacles to Taiwanese firms' search for new markets and skills in hard disk drives. On the other hand, Taiwan's institutional structures provide a source of technical efficiency and market opportunity for the emerging liquid crystal display trajectory. This, in turn, drives Taiwanese industry towards adopting new practices in the manufacture of liquid crystal displays.     

Volatilities and Momentum Returns in Real Estate Investment Trusts

We examine the relation of time-varying idiosyncratic risk and momentum returns in REITs using a GARCH-in-mean model and incorporate liquidity risk in the asset pricing model. This is important because illiquidity may be more severe for REITs due to the nature of their underlying assets. We find that momentum returns display asymmetric volatility, i.e., momentum returns are higher when volatility is higher. Additionally, we find evidence that REITs with lowest past returns (losers) have higher idiosyncratic risks than those with highest past returns (winners) and that investors require a lower risk premium for holding losers’ idiosyncratic risks. Therefore, although losers have higher levels of idiosyncratic risks, their low risk premia cause low returns, which contribute to momentum. Lastly, we find a positive relation between REITs’ momentum return and turnover.     

A systematic mapping study of process mining

This study systematically assesses the process mining scenario from 2005 to 2014. The analysis of 705 papers evidenced ‘discovery’ (71%) as the main type of process mining addressed and ‘categorical prediction’ (25%) as the main mining task solved. The most applied traditional technique is the ‘graph structure-based’ ones (38%). Specifically concerning computational intelligence and machine learning techniques, we concluded that little relevance has been given to them. The most applied are ‘evolutionary computation’ (9%) and ‘decision tree’ (6%), respectively. Process mining challenges, such as balancing among robustness, simplicity, accuracy and generalization, could benefit from a larger use of such techniques.     

A multidimensional scale of activity attachment for leisure tourists

Although the concept of activity attachment has been studied previously, the existing scales of activity attachment used only a single dimension or did not embody the discussion on behavioral domain. Furthermore, no previous studies have followed rigorous scale development procedures to explore the nature of activity attachment. In an effort to address this gap, this study aims to develop and validate a multidimensional scale of activity attachment for leisure tourists based on attachment theory. First, initial questionnaire items were generated from literature reviews and expert discussions. Second, exploratory factor analysis was conducted and four underlying dimensions were identified: emotion-symbol attachment, functional attachment, word-of-mouth intention attachment, and actual behavior attachment. Third, confirmatory factor analysis was employed and the result showed that the multidimensional activity attachment scale with four dimensions and 18 items has good fit, reliability, and validity. Implications of these findings for practical applications and future research are also provided.     

Internet Access and Farm Household Income – Empirical Evidence using a Semi‐parametric Assessment in Taiwan

There is considerable literature examining individuals’ behaviour with respect to Internet use, but less attention is paid to farm household use of the Internet. Among the few studies on farm households, the emphasis is on the correlation between socioeconomic factors and the adoption of the Internet. Thus, relatively little is known about the association between Internet use and farm household well‐being. In an effort to fill this void, this paper investigates Internet access among farm households and examines the effects of Internet access on farm household income. Given the observed income gap between Internet users and non‐users, we then investigate the extent to which socioeconomic factors may be associated with this income gap. Using a nationwide survey of farm households in Taiwan, a novel econometric model is proposed and estimated employing a semi‐parametric technique. Our results support the conclusion that Internet use improves farm household income. Most of the income gap between adopters and non‐adopters can be explained by the differences in the return of the socioeconomic factors.     

Gender,generation and sustainable consumption: Exploring the behaviour of consumers from Izmir,Turkey

This study investigates the relationship between consumers’ sustainable consumption behaviour and both gender and generation‐related individual differences in a sample of Turkish consumers. A total of 393 participants from different generations and gender took part in the study. To measure sustainable consumption behaviour, we used four‐dimensional sustainable consumption behaviour scale. The results showed that generation is associated with unneeded consumption as a dimension of sustainable consumption behaviour. Consumers who are Baby Boomers found to have the highest level of unneeded consumption behaviour while Gen‐Zers have fewest. Additionally, data supported the association between gender and sustainable consumption behaviour. Women showed a higher level of sustainable consumption behaviour both in overall behaviour and tendency to reuse products. Taken together, the findings suggest that gender and generation of consumers can differentiate sustainable consumption behaviour. The implications of these findings, as well as the limitations and future directions, are also discussed.     

The economics of land fragmentation in the north of Vietnam*

Land fragmentation, where a single farm has a number of parcels of land, is a common feature of agriculture in many countries, especially in developing countries. In Vietnam, land fragmentation is common, especially in the north. For the whole country, there are about 75 million parcels of land, an average of seven to eight plots per farm household. Such fragmentation can be seen to have negative and positive benefits for farm households and the community generally. Comparative statics analysis and analysis of survey data have led to the conclusion that small‐sized farms are likely to be more fragmented, and that fragmentation had a negative impact on crop productivity and increased family labour use and other money expenses. Policies which allow the appropriate opportunity cost of labour to be reflected at the farm level may provide appropriate incentives to trigger farm size change and land consolidation. Policies which tip the benefits in favour of fewer and larger plots, such as strong and effective research and development, an active extension system and strong administrative management, may also lead to land consolidation.