Inside and outside fiat money, gains to trade, and IS-LM

Summary. We build a one-period general equilibrium model with money. Equilibrium exists, and fiat money has positive value, as long as the ratio of outside money to inside money is less than the gains to trade available at autarky. We show that the nominal effects of government fiscal and monetary policy can be completely described by a diagram identical in form to the IS-LM curves introduced by Hicks to describe Keynes' general theory. IS-LM analysis is thus not incompatible with full market clearing, multiple commodities, and heterogeneous households. We show that as the government deficit approaches a finite threshold, hyperinflation sets in (prices converge to infinity and real trade collapses). At the other extreme, if the government surplus is too large, the economy enters a liquidity trap in which nominal GNP sinks and monetary policy is ineffectual. Received: January 2, 2002; revised version: April 8, 2002 Correspondence to: P. Dubey     

Efficiency properties of strategies market games: An axiomatic approach

The paper investigates the conditions under which an abstractly given market game will have the property that if there is a continuum of traders then every noncooperative equilibrium is Walrasian. In orther words, we look for a general axiomatization of Cournot's well-known result. Besides some convexity, continuity, and nondegeneracy hypotheses, the crucial axioms are: anonymity (i.e., the names of traders are irrelevant to the market) and aggregation (i.e., the net trade received by a trader depends only on his own action and the mean action of all traders). It is also shown that the same axioms do not guarantee efficiency if there is only a finite number of traders. Some examples are discussed and a notion of strict noncooperative equilibrium for anonymous games is introduced.     

Some people just want to read: The roles of age,interactivity, and perceived usefulness of print in the consumption of digital information products

With the advent of digital technologies, both academic researchers and marketing practitioners alike continually seek a richer understanding of the way information is produced and consumed. Against this backdrop, this study explores the relationship between interactivity, consumer satisfaction and adoption intention in the context of digital information products. Drawing broadly on the services marketing literature, interactivity literature and diffusion theory, the results of our study suggest that in a utilitarian context, consumers are more likely to adopt interactive books than more traditional static e-books. However, satisfaction with interactivity is moderated by the age of the consumer, with older “digital immigrant” participants more satisfied by static e-books and younger “digital native” participants more satisfied by interactive e-books. Also, the less useful consumers find print products, the more likely they will be to adopt interactive digital books, and this effect is also moderated by the age of the consumer. Finally, with the proliferation of digital devices only expected to continue, these findings have important implications for both product development and marketing communication programs.     

Product classifications,consumer characteristics,and patronage preference for online auction

An important unanswered question in the area of Internet auctions is what dynamics influences consumer preferences for shopping on these online auctions. Two key aspects of studying what sells on the Internet auctions are (a) the characteristics of products to be purchased and (b) consumer characteristics. This research focuses on the relationship between product purchase preference, prior experience, and socioeconomic characteristics for the online auction participants. It uses product classification theory rooted in information economics and marketing. The study results are based on a US national sample of online auction participants. The findings suggest that product class affects online auction patronage, yet socioeconomic characteristics may not be as influential as once perceived. The online merchants can benefit from the inquiry to improve auctions for search, experience, and credence goods. The five key contributions of the findings add value to the theory and practice of consumer behavior.     

THE COORDINATED REFORM OF TARIFFS AND INDIRECT TAXES

Tariff reduction designed to encourage outward-oriented developmentwill work only if alternative sources can be found to replenishrevenue lost in the cause of reducing protection. Integratedreform of tariffs with taxes would seem to be the answer, butso far analysts have often tended to treat the two instrumentsseparately. This article looks at the tariff and tax instruments used bydeveloping countries to protect their producers and to increasetheir revenues, and then lays out the contours of an integratedstructure for taxes with tariffs. This structure takes intoaccount not only objectives of efficiency and equity but alsoconstrained administrative capacity. The analysis concludeswith an examination of how these ideas may be used to guidethe coordinated reform of tax and tariff structures.      

Incentives, Risk, and Agency Costs in the Choice of Contractual Arrangements in Agriculture

The author develops a theory of the choice of contractual arrangements in agriculture by analyzing the incentives, risk-premia, and agency (supervision and shirking) costs under different contracts using the principal–agent framework. The theory is able to explain many tenancy-related issues, such as why sharecropping can be the optimal contract even in the presence of considerable shirking by the tiller, the predominance of sharecropping and of the 50*T*:*T*50 output share, the coexistence of sharecropping with other contracts, and the tenancy ladder.     

Online/offline (hybrid) consumers and the attention economy

Yoram (Jerry) Wind, Vijay Mahajan, & Robert Gunther. 2002. Convergence Marketing: Strategies for Reaching the New Hybrid Consumer. Upper Saddle River, NJ: Prentice Hall. 368 pages. ISBN 0‐13065‐075‐7. Thomas H. Davenport & John C. Beck. 2001. The Attention Economy: Understanding the New Currency of Business. Boston, MA: Harvard Business School Press. 272 pages. ISBN 1‐57851‐871‐7.     

Store Brands: Who Buys Them and What Happens to Retail Prices When They Are Introduced?

Review of Industrial Organization - In this paper we study store brand demand behavior by examining a panel ofhousehold level and store-level data in five stores located in a competing marketarea....