A GAME THEORETIC FOUNDATION OF COMPETITIVE EQUILIBRIA WITH ADVERSE SELECTION

We construct an extensive form game that captures competitive markets with adverse selection. It allows firms to offer any finite set of contracts, so that cross‐subsidization is not ruled out. Moreover, firms can withdraw from the market after initial contract offers have been observed. We show that a subgame perfect equilibrium always exists. In fact, when withdrawal is costless, the set of equilibrium outcomes may correspond to the entire set of feasible contracts. We then focus on robust equilibria that continue to exist for small withdrawal costs. We show that the Miyazaki–Wilson contracts are the unique robust equilibrium outcome.     

Demand for dairy products in Mexico

Mexico is the world's largest importer of non-fat dry milk (NFDM) and imports of cheese, fluid milk, and whey have increased rapidly in the past four years. In the wake of GATT and the NAFTA, as well as recent economic developments in Mexico, world dairy markets will be affected as a result of changes in the Mexican dairy sector. The study analyzes both domestic and import demand for dairy products in Mexico to determine price and income elasticities as well as import elasticities. The results indicate that the demand for fluid milk is the most responsive to price changes and NFDM demand is inelastic with respect to its own price. There is little subtitution between fluid milk and non-fat dry milk, although fluid milk is relatively elastic, which suggests the existence of other substitutes for fluid milk. Estimation of import demand equations reveal similar trends in response to price changes, but income elasticity of imports was highest for fluid milk which suggests that Mexico will import possibly more fluid than dry milk as incomes rise. The exchange rate was the most significant variable influencing all dairy product imports.     

Coming out of conflict: How migrant entrepreneurs utilise human and social capital

This paper examines how human and social capital influences the entrepreneurial activity of migrant entrepreneurs, with special reference to forced migrants due to conflict. The study uses Riinvest Migrant’s Survey data collected at the end of 2008 and beginning of 2009 to estimate the probability of entrepreneurial activity among Kosovan migrants. The findings demonstrate that host networking (foreign spouse and foreign language fluency) exerts a positive effect on entrepreneurial activity of migrants, while co-ethnic networking is found not to be important. We show that migration experience has a positive impact on the probability of entrepreneurship. Exposure to host country (both measured as years in migration and age) increases probability to start a business. Educational qualifications in the country of origin before migration do not have any influence on entrepreneurship, while specific business training in the country of residence has a positive impact. Contributions to scholarship on migrant entrepreneurship and policy approaches to mobilise them are discussed.     

Synergies in destination image management: a case study and conceptualisation

This paper addresses the question of how operators and destination authorities work within a destination region, illustrating a method by which the problems resulting from different geographical scales and objectives of business units can be tackled through co‐operative marketing within a strong destination image. Following a review of the literature, a case study covering the research underpinning a cooperative marketing programme involving hotels in Port Douglas, Tropical North Queensland (TNQ) is presented. The research methodology is outlined. The policy implications of the findings for the State Tourist Organisation and for organisations involved in destination image management are considered, and a conceptual model of cooperative marketing at the destination level is proposed. Copyright © 2002 John Wiley & Sons, Ltd.     

BEYOND THE TRIAGING OF NEGLECTED THINGS: Connecting Place and Participation Across an Urban System

What is the relationship between top-down governance reform and place-based participatory and deliberative spaces? In this article I argue that in Toronto, an urban system of public participation and deliberation is intimately interwoven into partisan scalar restructuring processes, as well as enduring tensions over the ways and means by which the public can have authoritative input on solving local issues. Regardless of top-down political manoeuvring, the public mobilizes in various spaces across the city, but the urban system remains disconnected and geared towards triaging. This means that the public must work autonomously across the city and within the crevices of city processes, prioritizing how to make gains on issues that they feel are important. I discuss how to move beyond this by building on deliberative systems theory and findings from interviews with local city staff and residents, and through an analysis of public deputations at the official Special Committee on Governance. Ultimately, there is a need for spatially integrated opportunities for more people to come together and assemble in different ways. Some of these will align with autonomous activities, some are liminal and woven within institutional partners, and others are more about geographical bridge building.     

Commitment and discretion in contracts: theory and evidence from retirement plans*

We consider a firm's problem of incentivizing its workforce through relational contracts, when workers effectively face a shorter time horizon due to possible separation shocks. Commitment issues then generate a trade-off between efficiency and distribution, which affects both performance and profits. Profits under relational contracting can exceed those under formal contracting, despite lower performance, when discounting is moderate, firm bargaining power is weak, and shocks are likely. Using a matched employer–retirement plan dataset, and interpreting discretionary profit-sharing plans and employee stock ownership plans as relational and formal contracting, respectively, we find some support for our predictions.