Regulating prices for shifting between service providers

The price that a regulated access provider charges for shifting customers between service providers has significant welfare implications. Typical regulatory approaches to pricing, such as pricing based on fully allocated cost or incremental cost, ignore the characteristics of consumer demand. A theoretical alternative, Ramsey pricing, considers only the elasticity of demand for given products. This paper directs attention to the competitive process. Using US long-distance telephone services as an example, this paper shows how empirical evidence concerning customer acquisition costs, customer switching costs, and churn among service providers can help to inform price regulation.     

Employee involvement and group incentives in manufacturing companies: a multi-level analysis

The effects of employee involvement and group incentives on organisational commitment and turnover intention were examined using data from a survey of over 4,000 employees in 29 manufacturing companies. Using the mediated moderation model, we investigated the moderating role of capital intensity on the relationships between employee involvement and group incentives and these outcomes, and the mediating role of organisational commitment on the effects of employee involvement and group incentives on turnover intention. The findings revealed that employee involvement is more effective in capital-intensive companies than in labour-intensive companies, but group incentives are more effective in labour-intensive companies. The moderated effects on turnover intention were mediated through organisational commitment. Implications for company policies and future research are discussed.     

The Role of the Non-Farm Rural Sector in the Reconstruction of the Balkans

MOCT-MOST: Economic Policy in Transitional Economies -     

Cross-country differences in attitudes to business associations during the 2007–2010 recession

This paper uses empirical data gathered through an on-line survey of 206 small and medium-sized enterprises (SMEs), conducted in France, Sweden and the UK. The paper examines cross-country differences in SME managers’ perceptions of business associations as sources of political intelligence and their ability to influence policy responses to financial crises. Findings demonstrate that the respondents’ countries of origin are significantly correlated with (1) their use of information sources to gather political intelligence, (2) their perceptions regarding the effectiveness of business associations in influencing policy outcomes, and (3) their perceptions regarding policymakers’ appreciation of information provided by SME associations.     

The Market Perception of Convertible Debt Versus Straight Debt: some Empirical Evidence from U.S. Firms and Non-U.S. Firms Listed in the U.S.

Accounting for convertible debt has long been a source of controversy in the accounting profession in the U.S. Current U.S. accounting rules require classifying convertible debt at date of issuance as "entirely debt" until conversion, despite numerous studies that assert that convertible debt is not "entirely debt", but is a blend of debt and equity. Convertible debt has taken on international interest because of the issuance of International Accounting Standard (IAS) 32, Financial Instruments; Disclosure and Presentation, which prescribes reporting separate debt and equity components for convertible debt. This study examines convertible debt issued by U.S. firms and non-U.S. firms listed in the U.S. using a levels approach. Specifically, convertible debt is compared to straight debt and contrary to ex ante expectation, convertible debt was not found to be perceived as being significantly different than straight debt for U.S. firms for any years and is statistically different in only two of the six years tested for non-U.S. firms. The validity of this study's findings is underscored by its research design, which compares convertible debt and straight debt issued by the same firms. The findings suggest that investors regard reported amounts of convertible debt similar to straight debt in their assessment of firm value.     

Firm-specific cost savings and market power

Summary. We report a policy experiment that illustrates a potential problem of using historical pass-through rates as a means of predicting the competitive consequences of projected firm-specific cost savings in antitrust contexts, particularly in merger analysis. The effects of cost savings on welfare can vary vastly, depending on how the savings affect the industry supply schedule. In a capacity-constrained price-setting oligopoly, we observe that cost savings can overwhelm behaviorally salient market power incentives when the savings affect marginal (high cost) units. However, cost savings of the same magnitude on an infra-marginal unit leave market power unchanged.     

Representing interval orders by a single real-valued function

Let > be an interval order on a topological space X, and let $\text{x > 1 y}$ if and only if there exists x′ with $\text{x?x′>y}$. Then >1 is a preference relation with transitive indifference, which, under suitable conditions, can be represented by a utility function v of the usual sort. In that case, maximisation of v (subject to contraints) leads to a most preferred point relative to >. Following both the Debreu-Rader and the Arrow-Hahn approaches, we discuss the existence and continuity of such a function v.