Sunk costs,contestability and airline monopoly power

This paper examines the effects of sunk costs and potential competition on pricing behavior in monopoly airline markets. We find little evidence to support the proposition from contestable markets theory that the level of sunk costs influences pricing by monopolists. Rather, the results support the view, consistent with numerous game theoretic oligopoly models, that the costs and the price-cutting reputation of potential entrants influence incumbent behavior. These results suggest that contestability theory may not be robust. Even in the markets characterized by increasing returns to scale, the perfectly contestable market may not be a useful welfare standard.I am grateful to Richard Levin, Merton J. Peck, Sharon Oster, Paul MacAvoy, Dan Kaplan, Michael Levine, David Sappington, Andrea Shepard, and Diana Strassman for their advice. Participants at numerous workshops also made useful comments. Steven Davis, Tadas Osmolshis, and Maeve O'Higgins provided help with the data and technical assistance. I acknowledge financial support from Yale University and the Eno Foundation for Transportation. The usual disclaimer, of course, applies.     

In search of sustained competitive advantage: the impact of organizational culture,competitive strategy and human resource management practices on firm performance

We develop and test a dynamic model of co-specialized resources for competitive advantage. Using matched data from senior executives and human resource managers, we test the direct and interactive effects of high-performance human resource (HPHR) practices and organizational culture on firm performance. Although the HPHR practices were not an important influence on performance, our findings indicate that organizational culture can be a valuable resource for companies.     

Production of and trade in African indigenous vegetables in the urban and peri-urban areas of Durban,South Africa

This paper reports on the farming and trade of lesser known crops, here termed African indigenous vegetables (AIVs), in the Durban metropole. Most households grow AIVs, and collect them from the wild, primarily for home consumption. Modal income from sale was approximately R30 per month per farmer, most of whom were middle-aged to elderly females, with limited education, who had been cultivating AIVs here for many years. The main constraints to greater sales were deemed to be low market demand and adverse climate. The commonest AIVs grown were pumpkin leaves, taro and amaranth. Although most farmers sold very little, there is a thriving retail trade in AIVs. Generally, retailers were females, but younger and more educated than the farmers. The majority viewed retailing as a full-time occupation. Modal income for retailers was R450 per month, but included non-AIV produce. Most of the traders thought there was insufficient market demand for AIVs.     

Purposeful Unintended Consequences with Innovative Derivatives

We suggest that the use of traditional market, outcome, and process controls for innovative derivatives trading may not provide adequate safeguards for clients, investors, or the entire financial system to control “purposeful unintended consequences.” We propose a more cautious examination of this aspect of the financial system using a combination of perspectives from finance and technology/innovation management. © 2001 John Wiley & Sons, Inc.     

Managing the Risks Associated with Using Biomedical Ethics Advice

This paper discusses the criticisms that exist about corporate use of ethics advice by bioscience companies and offers suggestions on how ethics advisors can be used so as to maximize their utility and avoid the criticism.     

Hotel management style: a study of employee perceptions and preferences

This study investigates employee perceptions of, and preferences for, management practices within a five-star, medium-sized hotel. In particular, the study examines the hypothesis that hotel managers have become more consultative. Using longitudinal data over a 4-yr period, the study examines the perceptions of staff of the management practices and styles in the changing environment of one hotel. The findings suggest that, while staff prefer a decisive style of management, supervisors and department heads were perceived as being autocratic. In fact, in the 4 yr over which the data had been collected, the style of management had become less consultative and more autocratic. Implications for management are discussed, as are recommendations for future research.     

A preliminary assessment of the function and conference service product at a UK stately home

The UK conference market is estimated to be worth £6 billion and is thought to be the fastest growing sector of the hotel industry. An increasing number of less conventional venues are aiming to attract corporate business, though most empirical research focuses on the hotel conference product. A UK stately home is the venue studied in this article. To identify possible areas for improvement, a telephone survey of customers was undertaken to assess the service and facilities. The high average ratings indicate that generally organisers have a favourable impression of the stately home. The research revealed significant differences in the average ratings given for the Main Hall and His Lordship's Apartment, the two rooms available for functions. Event category and organiser experience were not found to influence the ratings. Due to the relatively small sample size, only tentative observations are made about the trends which emerged from the analysis.     

The sustainability of consumer credit growth in late twentieth century Australia

This article reports on a study about the use of credit by Australian consumers between 1980 and 1996. Considerable growth in the use of credit by consumers was coupled with an increasing reliance on credit to finance purchase transactions as consumers’ other sources of purchase finance became depleted. An increasing number of consumers were found to be experiencing difficulty meeting their debt‐ servicing commitments. These results suggest that the growth in use of consumer credit that has occurred in Australia may not be in the long‐term interest of consumers or the economy.