Optimal new-product pricing in regulated industries

Intertemporal pricing issues faced by regulated monopolists in market settings characterized by high rates of innovation have received little attention in the regulatory economics literature. Most analyses of regulatory pricing have focused on monopolies characterized by a stable multiple-good product set. In a regulated industry characterized by technological change in the form of new products and services (such as telecommunications), optimal pricing decisions may also reflect intertemporal market and production factors. In this paper, two such intertemporal factors are modeled: learning curve effects on the firm's cost function, and customer demonstration effects on the demand side of the market. Inclusion of these factors leads to an intertemporal pricing rule that may conflict with the standard regulatory practice whereby each product or service must recoup its own resource costs period by period. Our results suggest that this regulatory practice can result in efficiency losses, since it results in a rate of technological diffusion that is too low.     

Ethics in education: A comparative study

This study reports the results of a survey designed to assess the impact of education on the perceptions of ethical beliefs of students. The study examines the beliefs of students from selected colleges in an eastern university. The results indicate that beliefs which students perceive are required to succeed in the university differ among colleges. Business and economics students consistently perceive a greater need for unethical beliefs than students from other colleges. Michael S. Lane is an Associate Professor of Management at West Virginia University. He is the coauthor of Corporate Goal structures and Business students: A Comparative Study of Values, Journal of Business Ethics (1989). Dietrich L. Schaupp is Professor of Management at West Virginia University. He is the coauthor of Pygmalion Effect: An Issue for Business Education and Ethics, Journal of Business Ethics (1988).     

Confronting chaos

While it is common to observe that our society and world are becoming increasingly complex and fast paced, most of our theories provide no bases upon which to develop appropriate strategies. The need for developing holistic strategies is becoming urgent in two related areas: major interactive technologies and morality. Jonathan King is Associate Professor of Management at the College of Business at Oregon State University. He received his B.A. in philosophy from Antioch College (1965) and his M.B.A. in Finance (1975) and Ph.D. in Business, Government and Society (1980) from the University of Washington. His primary research interests are in the areas of moral philosophy and General Systems Theory. His most important publications are The Three Faces of Thinking, Journal of Higher Education (1986) and Prisoner's Paradoxes, Journal of Business Ethics (1988).     

Full price competition and Dupuit's defense of the long-and-short-haul “discrimination”

Condemnation of the long-and-short-haul discrimination has been nearly ubiquitous in the literature on economic theory and transportation. However, the French economist Dupuit developed a case against all transport regulation by relating it to a defense of the practice of place discrimination before the middle of the nineteenth century. He did so, moreover, within an early elaboration of a full price explanation of competitive functioning. This paper analyzes the idea in Dupuit's context and argues that this so-called form of price discrimination is actually an efficient and necessary form of the competitive process.     

Some economics of content protection

We are grateful to a perceptive referee for many constructive comments on an earlier version of this paper entitled The Economics of Content Protection: A Dual Approach. The usual disclaimer applies.     

Boundedly complete families which are not complete

Summary Completeness of a family of probability distributions implies its bounded completeness but not conversely. An example of a family which is boundedly complete but not complete was presented by Lehmann and Scheffe [5]. This appears to be the only such example quoted in the statistical literature. The purpose of this note is to provide further examples of this type. It is shown that any given family of power series distributions can be used to construct a class containing infinitely many boundedly complete, but not complete, families. Furthermore, it is shown that the family of continuous distributions , is boundedly complete, but not complete, whereU denotes the uniform distribution on [a, b] and {P _ϑ,ϑ ∈ IR}, is a translation family generated by a distributionP ₀ with mean value zero, which is continuous with respect to the Lebesgue measure.     

In search of the meaning of entrepreneurship

This paper is an attempt to build a bridge between the popular and the academic usage of the terms entrepreneur and entrepreneurship, and to identify the raw materials needed to construct an interpretive framework capable of illuminating the nature of entrepreneurship and its role in economic theory. We review briefly the contributions made to this topic by Cantillon, Schumpeter, Schultz and Kirzner. We advance a synthetic definition of the entrepreneur as someone who specializes in taking responsibility for and making judgemental decisions that affect the location, the form, and the use of goods, resources, or institutions. We then conclude with some observations on the basic choice confronting economics regarding the place of entrepreneurship in economic analysis.     

Professionals and social responsibility: Some patterns

Modern professionals are engaged in making things better, but the specific advances on the micro-level are increasingly undercut by problems on the macro-level. The content of this better is typically guided by values such as efficiency, productivity or cost-effectiveness, which are essentially output over input ratios unable to account for how a specific improvement will fit into the broader human, social and ecological contexts. Hence, micro-level advances lead to fragmentation and a loss of harmony, compatibility and conviviality. The situation is further complicated by the fact that, culturally speaking, science and technology have become good in themselves, making reasonable discourse difficult. This paper concludes with an analogy from an earlier epoch suggesting how the situation may be resolved. After completing a doctorate in Mechanical Engineering, Willem Vanderburg continued his studies of technology via the social sciences and humanities. He is currently the Director of the Centre for Technology and Social Development in the Faculty of Applied Science and Engineering at the University of Toronto. His publications include Technique and Culture, Vol. I, The Growth of Minds and Cultures (1985) and Perspectives on our Age (1981).     

A generalized maximum likelihood characterization of the normal distribution

LetP be a probability measure on ℝ andI _x be the set of alln-dimensional rectangles containingx. If for allx ∈ ℝⁿ and θ ∈ ℝ the inequality holds,P is a normal distributioin with mean 0 or the unit mass at 0. The result generalizes Teicher’s (1961) maximum likelihood characterization of the normal density to a characterization ofN(0, σ²) amongall distributions (including those without density). The m.l. principle used is that of Scholz (1980).     

The excess burden of the tax and social premium system for Dutch married women

Summary The excess burden of a tax is the diminution of utility above that which would have occurred had the tax been collected as a lump sum. Computing the excess burden for the 1983 and 1985 Dutch tax and social premium system enables a partial welfare evaluation of the recent changes in the system, the so-called Tweeverdienersmaatregelen. Based on the equivalent and compensating variation, the excess burden as a percentage of the taxes and social premiums for the 1983 and 1985 system are valued at 27010 and 84010, and 37010 and 58010 respectively. This result indicates that, welfare-theoretically, the old system seems preferable to the new one.The author wishes to thank Hans Doodeman, Paul Renaud and Jacques Siegers for their critical remarks on an earlier version of this article.