Lobbying contests with alternative instruments

This is a model of a contest where, in order to win, each opponent can use two instruments. The probabilities of winning are explored, as well as the expenditures of the interest groups, and the relative rent-dissipation in both cases where the players have the option to use only one instrument (the standard Tullock contest) and where the players have the option to use two instruments in the contest. We show that the use of two instruments strengthens the player with the higher stake, decreases the relative rent dissipation and it decreases total expenditure if the parties are sufficiently asymmetric. Received: February 23, 2001 / Accepted: March 25, 2002 RID="*" ID="*" We are grateful to two anonymous referees and the editor Kai Konrad, for constructive comments.     

The 1997–1998 break in industrial statistics: Facts and appraisal

In 1998, the National Bureau of Statistics (NBS) in the published industrial statistics modified the scope of enterprises covered and the enterprise classification system. This paper highlights the modifications and identifies two implications. First, the use of a proportional allocation rule in data aggregation boosts the size of “public ownership,” an important cornerstone of socialism. Second, the switch from compiling detailed statistics on enterprises identified by an administrative criterion to enterprises that exceed a fixed volume of sales revenue poses new difficulties for comparative data analysis but also represents a change in statistical practice that may yet lead to data of better quality.     

Optimal economic institutions under rational overconfidence,with applications to the choice of exchange rate regime

We study the optimal choice of exchange rate regime when agents have beliefs that are mutually inconsistent. A general framework for identifying optimal policies in such situations is proposed and then used to compare fixed and floating exchange rate regimes. Agents are assumed to have diverse rational beliefs (rather than rational expectations), implying the prevalence of (rational) overconfidence. We argue that in such a situation, in comparing economic institutions, one should employ the concept of ex‐post optimality rather than that of Pareto optimality. Fixing the exchange rate is ex‐post optimal because it eliminates mistaken actions (based on mistaken beliefs).     

Measuring customer profitability in complex environments: an interdisciplinary contingency framework

Customer profitability measurement is an important element in customer relationship management and a lever for enhanced marketing accountability. Two distinct measurement approaches have emerged in the marketing literature: Customer Lifetime Value (CLV) and Customer Profitability Analysis (CPA). Myriad models have been demonstrated within these two approaches across industries. However, limited efforts have been made to explain when sophisticated CLV or CPA models will be most useful. This paper explores the advantages and limitations of sophisticated CLV and CPA models and proposes that the degree of sophistication deployed when implementing customer profitability measurement models is determined by the type of complexity encountered in firms’ customer environments. This gives rise to a contingency framework for customer profitability measurement model selection and five research propositions. Additionally, the framework provides design and implementation guidance for managers seeking to implement customer profitability measurement models for resource allocation purposes.     

Einsatz von Biomethan in Neubauten nach EEW?rmeG – Eine Hemmnis- und Wirtschaftlichkeitsanalyse

The German Federal Government aims at increasing the use of biomethane to 6 billion cubic meters per year by 2020. The German Act on the Promotion of Renewable Energies in the Heat Sector (Renewable Heat Act ?C EEW?rmeG) of 2009 has paved the way for renewable energies in the heating market with 14?% in 2020 being the ultimate goal. Biomethane is one of the options provided in the EEW?rmeG. Building owners can choose between different renewable energy sources as well as a range of compensatory measures such as district heating, insulation or combined heat and power. However, they do not make this decision independently but together with other members of a buying center that comprises architects, specialist consultants and installers. These other members are pursuing their own interests, which includes maximizing their contract volume. Moreover the owner takes his decision under incomplete information. Both factors are detrimental to an optimal decision. Biomethane is chosen for only 3?% of newly constructed buildings. For a better understanding of why the use of biomethane for heating purposes is so limited, the authors have developed an economic calculation method that compares different renewable energy sources as well as compensatory measures. For a single-family home, biomethane is the least attractive option from a financial perspective; for a multi-family house, on the other hand, it ranks third. In order to promote the utilization of biomethane and to achieve the 6 billion cubic meter/year goal by 2020, the Federal Government needs to open up the options for biomethane beyond the now mandatory cogeneration solution. Moreover, the EEW?rmeG, which applies to newly built houses only, should be expanded to existing buildings.