Sanctions and Leniency to Individuals,and its Impact on Cartel Discoveries: Evidence from the Netherlands

Many competition authorities employ a leniency programme to fight cartels. We examine the impact of the introduction of sanctions and leniency for individuals responsible for the cartel, on the number of cartel discoveries. In our empirical study of the Dutch leniency programme, we find that this did not lead to more cartels being desisted as the number of cartel discoveries decreases over time. An analysis of characteristics of cartel members shows harsher enforcement after the revision, which indicates that the decrease in cartel discoveries is in line with higher cartel deterrence. Nevertheless, the number of cartel cases involving leniency actually decreases after the revision.     

The credibility approach to experience rating

Summary

Chapter 1 presents the problem of experience rating and the objective of credibility theory. In Chapter 2 the so-called “limited fluctuation credibility theory” is presented briefly. The far more important and developed “greatest accuracy credibility theory” is introduced in Chapter 3. The discussion in Chapters 1–3 is carried through with a minimum of mathematics, the aim being to explain the basic ideas and techniques. A fuller account of the greatest accuracy theory is given in Chapter 4. The division of the matter into paragraphs reflects the distinction between what can be called the classical or empirical Bayes point of view and the (purely) Bayesian point of view. In Chapter 5 are mentioned some selected problems related to practical applications of the theory.     

Time Inconsistency and the Exchange Rate Channel of Monetary Policy

This paper analyses time–inconsistency problems related to the exchange rate channel of monetary policy. Within a simple open–economy macroeconomic model, where the exchange rate is the only forward–looking variable, we show that a difference emerges between optimal policy under discretion and under commitment. Moreover, the nature of the time–inconsistency problem resembles that resulting from standard New Keynesian models: when cost–push shocks occur, the exchange rate channel gives rise to excessive output stabilisation and insufficient inertia in monetary policy under a discretionary policy.
JEL classification : E 42; E 52; E 61     

THE SOCIAL SIGNIFICANCE OF INCOME DISTRIBUTION STATISTICS

In both political discussions and scientific literature the income distribution has come to occupy a central position for the consideration of social welfare and economic equalization. It has been assumed that an individual's income reflects his consumption opportunities and therefore his standard of living or economic welfare. The thesis of this paper is, however, that there are reasons for being quite pessimistic about drawing meaningful conclusions from income distribution data. As illustrated by the use of Swedish data, the distribution of income gives an extremely incomplete picture of the distribution of consumption for a wide variety of definitional and statistical reasons. The distribution of consumption, furthermore, cannot be transformed into a corresponding distribution of welfare, since there is no well defined concept of welfare. The treatment of public consumption in empirical analysis of the distribution of welfare also raises problems. The paper closes with the presentation of the conceptual basis for an alternative to the traditional method of analyzing the distribution of income.     

VASIČEK BEYOND THE NORMAL

A general Ornstein-Uhlenbeck (OU) process is obtained upon replacing the Brownian motion appearing in the defining stochastic differential equation with a general Lévy process. Certain properties of the Brownian ancestor are distribution-free and carry over to the general OU process. Explicit expressions are obtainable for expected values of a number of functionals of interest also in the general case. Special attention is paid here to gamma- and Poisson-driven OU processes. The Brownian, Poisson, and gamma versions of the OU process are compared in various respects; in particular, their aptitude to describe stochastic interest rates is discussed in view of some standard issues in financial and actuarial mathematics: prices of zero-coupon bonds, moments of present values, and probability distributions of present values of perpetuities. The problem of possible negative interest rates finds its resolution in the general setup by taking the driving Lévy process to be nondecreasing.     

Eine Verallgemeinerung des skandinavischen Modells der Inflation

Summary The Scandinavian Model divides the economy of a small country into two sectors. The exposed sector produces commodities traded on the world market, the sheltered sector produces commodities not traded externally. The E-sector is a price taker, while the price level in the S-sector is set by firms of this sectors. This model developed byO. Aukrust andG. Edgren, K.O. Faxén, C.O. Odhner is generalized by introducing a Phillips relation into the E-sector. The rate of inflation of a small economy thus is influenced by three components: imported inflation, a structural component (due to the Aukrust-EFO-model) and an excess demand component (measured by the rate of unemployment). The model is estimated with OLS and 3SLS (ordinary respectively three stage least squares). The results show that the rate of inflation in Austria during the period 1960–1974 can be fairly well explained by Phillips curve augmented Aukrust-EFO-model.In a final chapter the results of applying the same model to Austria and Sweden are discussed by comparing the respective estimates.     

Production Risk and Productivity Growth: Some Findings for Norwegian Salmon Aquaculture

This paper deals with estimation of primal panel data models of production risk, focusing on measurement of risk properties of inputs and productivity growth. Under production risk one should estimate technical change separately for the deterministic part and risk part of the technology, since risk averse producers will take into account both the mean and variance of output when they rank alternative technologies. For a panel of Norwegian salmon farms fish feed and fish input are found to increase output risk, while labor has a risk-decreasing effect on output. In the analysis of technical change by the first order stochastic dominance criterion the increase in mean output dominates the increase in output risk.     

Survival of New Plants in Different Industry Environments in Norwegian Manufacturing: AS Semi-Proportional Cox Model Approach

Using a rich plant level data set from Norwegian manufacturing we analyse possible determinants of survival for ten plant cohorts during the period 1977–92. By specifying a semi-proportional hazards model of plant exit, we are able to accommodate for structural differences between entrepreneurial entrants and new plants of existing firms. Industry heterogeneity in terms of plant size, capital intensity and productivity is also accounted for in the model. According to our estimated models, there are significant structural differences between new small firms and new plants of existing firms. For example, the size of the plant relative to the industry average had less influence on the survival probability for entrepreneurial entrants. Hence, the empirical results suggest that the two types of entrants establish themselves in different market niches with distinct technological characteristics. The results underscore the necessity of adjusting for the dissimilar environments facing plants which enter different industries.     

Off-sites that work

Of all the meetings top executives go to in a year, none is more important than the strategy off-site, where the most essential conversations for the future of the business occur. Yet it is the rare management team that can say its strategy off-site truly changed the way the business is run. At best, participants do some vague direction setting and work on team-building skills; at worst, they write off the retreat as a waste of time and resources. It needn't be like that. From their two decades of experience designing and facilitating strategy off-sites in companies large and small around the world, the authors have distilled a set of best practices that businesses can use to make the most of this annual opportunity. Essentially, the problem with most strategy off-sites is that they're insufficiently structured. People think that if you schedule a meeting, invite top leaders (and perhaps an outside expert), and block off units of time to discuss big subjects, the rest will take care of itself. In reality, formlessness leads to aimlessness. Oddly enough, only rigorously designed meetings give rise to truly candid strategy discussions. That rigor starts before the meeting, when the scope of the matters discussed must be limited, the participant list drawn up accordingly, the relevant materials (and only those) sent out and absorbed, and a detailed agenda established. During the meeting, the pace and quality of the conversation can be managed through attention to politics and by using carefully tailored frameworks, decision points, and group exercises. After the meeting, an action plan ensures clear accountability and follow-through. If you and your executive team spend four days a year rafting down rivers together, you'll eventually get good at rafting down rivers. Spend four days a year having well -designed strategy conversations together, and you will transform your annual off-site from a meaningless junket into a genuine turning point for your business.