Two-Part Trade Policy under Imperfect Competition

In this paper we consider the potential gain of a government pursuing a two-part trade policy: an import license for entry, along with a per-unit tariff on imports. The model is a two-stage game of complete but imperfect information. In the first stage, the domestic government sets trade policy, while in the second stage the home and foreign producers behave as Cournot competitors. The paper demonstrates that the optimal trade policy depends upon the number of firms, the degree of heterogeneity in cost functions, and the degree of convexity in cost functions.     

Market Failures in Real-Time Metering

Policies to promote real-time metering (RTM) require more than showing benefits from more timely responses to variations in cost. They require positive externalities to imply that too few meters would be installed through private transactions. RTM presents no systematic externalities when utilities must serve peak period users, and may present negative externalities under some conditions. Positive externalities are likely when electricity is rationed through blackouts. RTM may or may not increase welfare when peak period wholesale markets are not competitive; a prohibition on RTM might be appropriate in such situations even if metering itself were costless.     

A comparison of franchise and independent small business survival rates

Aspiring entrepreneurs choosing to become franchisees certainly expect to improve their chances of survival during the turbulent early years of business startup and operation. Alignment with a franchisor parent company offers the franchisee managerial assistance, access to financial capital, and access to markets via the right to utilize the parent company trademark. This study examines survival patterns among franchise and nonfranchise small firms started between 1984 and 1987: survival through late 1991 is tracked for all firms. Although the franchise operations are larger scale, better capitalized young firms, the independent business startups are found to be more profitable and their survival prospects are better than those of franchises.Research reported in this study was supported by the Woodrow Wilson International Center for Scholars and it was conducted on-site at the Center for Economic Studies, U.S. Bureau of the Census. Findings expressed are those of the author and do not necessarily reflect the views of the U.S. Bureau of the Census. Suggestions and assistance from Alfred Nucci and Robert McGuckin are gratefully acknowledged.     

THEORY AND PRACTICE IN THE CLASSROOM: A REPEATED GAME OF MULTIMARKET OLIGOPOLY

This article describes a repeated game of multimarket contact, designed to be played throughout an entire term. Besides enjoying reciprocal advantages in their home markets, firms are perfectly informed after every round about each other's decisions. For most of the game, it appears there is always a future in which to punish deviations, and (with the game's parameters) zero-cost punishments can always be implemented. Thus the game provides all the elements for an escape from the prisoner's dilemma. Theoretical foundations, predictions, and some results are also discussed.     

Endowed chairs in entrepreneurship: deans’ preferences versus chair holders’ expericences

Business school deans’ feelings about the importance of various teaching research and service activities in the roles played by holders of endowed chairs in Entrepreneurship were contrasted with the views of chair holders themselves, based on their experiences. Differences were highlighted and discussed. Results suggest that the chair holder role is negotiated between multiple constituencies, with deans’ influence being strong but limited. Implications for individuals aspiring to hold chairs are discussed.     

Roles of chairs in entrepreneurship: What deans expect

Major donations, especially for endowed chairs, put Colleges of Business and Universities in the spotlight and create a great deal of excitement, highlighting the important role that educational institutions play in benefiting the students, the community, and society in general. This kind of excitement needs to be sustained over time, signifying the link that the endowed Chair or Professorship in Entrepreneurship creates between the past, the present, and the future. Consequently, there is a need for a long-term personal connection and close relationship between the donor, the faculty holding the endowed chair, and the institution represented by the Dean that should be preserved over time. This study reports findings of a survey of the perceptions of AACSB Deans on what an Endowed Chair in Entrepreneurship is, and what it could, and should mean for their institution.     

Tax competition and tax structure in open federal economies: Evidence from OECD countries with implications for the European Union

Tax competition arguments suggest that governments that operate in an open economy (such as local governments) should not and will not rely on non-benefit taxes, such as the income tax. Yet we observe reliance on income taxes by local governments in many countries, and such reliance changes over time. Evidence from a panel data set of 13 OECD countries over the period 1975-1984 suggests that competition between levels of government (resulting in a vertical fiscal externality) and between governments at the same level (resulting in a horizontal fiscal externality) provide some economic rationale for these changes. Moreover, the evidence indicates that the vertical and horizontal fiscal externalities interact. These results have some interesting implications for fiscal policy in the European Union, particularly as the EU continues to evolve. One implication for the EU is that enlargement that increases tax base disparities within the EU (and is not accompanied by an EU-level income tax) will tend to lower national income tax rates, although this must be qualified because it also depends on the mobility of the population. A second implication is that fiscal expansion of the EU to include an EU-level income tax may tend to lower the reliance of national governments on income taxes through the vertical externality, but may also tend to equalize tax bases across countries, and so increase reliance on national income taxes through the horizontal externality.