The Assessment: Games and Coordination

Coordination problems arise in a multitude of economic interactions.Recent advances in the field of game theory have shed new lighton these problems and the ways in which they might be analysed.This issue of the Oxford Review of Economic Policy first examinessome of the theoretical dimensions to this literature, as wellas some empirical and experimental insights. It goes on to applysome of these ideas to a number of important policy areas, includingmacroeconomic policy coordination, public good provision, andproblems of political coordination.     

Continuous measurement of self-report of emotional response

There has been substantial recent interest in measurement of emotional responses to advertising. One of the promising methods recently introduced has been the continuous measurement of specific feelings through a “warmth monitor” introduced by Aaker, Stayman, and Hagerty (1986). This article reports research extending the work of Aaker, Stayman, and Hagerty (1986) in two ways. First, it tests whether the warmth monitor method distinguishes feelings from the global reactions that are more commonly measured with continuous self-report measures. Second, it tests the extension of the method to a general emotion monitor that measures feelings other than warmth. Support is found for discrimination between feelings and overall liking and for the validity of a humor, but possibly not irritation, monitor. © 1993 John Wiley & Sons, Inc.     

Product Diversity under Monopoly: Two High Quality Results

A mild relaxation of Mussa and Rosen's (1978) preference assumption implies that, contrary to their result, a monopoly selling a line of vertically differentiated goods may include higher-quality varieties than would a competitive industry.     

The Emergence of Post-Suburban Landscapes on the North Coast of New South Wales: A Case Study of Contested Space

Since 1980, population trends in Australia have indicated new patterns of urbanization involving substantial growth not only in the dominant conurbations, but also in suburban areas and in an extensive coastal zone (Paris, 1994). Comparisons can be made with the emergence of post-suburban forms and processes in other parts of the world (Kling et. al., 1991). The principal aim of this paper is to present an analysis of some of the major local development conflicts and planning and environmental protection issues that are being faced by developers, planners and local communities as the urban restructuring of Australia takes place. The paper draws on evidence of urbanization on the upper North Coast of New South Wales and provides a detailed examination of two shires in the region — Ballina and Byron — where a study was carried out by the authors in 1994 and 1995. Previous research on the population and development trends in Australia is reviewed to provide a context within which the patterns in New South Wales and its North Coast may be placed, and a discussion is presented of the implications of new development with reference to Ballina Shire and Byron Shire. The usefulness of the postfordist model as an explanatory framework for examining these post-suburban landscapes and contested space issues on the North Coast of NSW is also explored.     

An exploratory investigation of the firm size effect

We investigate the firm size effect for the period 1958 to 1977 in the framework of a multi-factor pricing model. The risk-adjusted difference in returns between the top five percent and the bottom five percent of the NYSE firms is about one to two percent a year, a drop from about twelve percent per year before risk adjustment. The variable most responsible for the adjustment is the sensitivity of asset returns to the changing risk premium, measured by the return difference between low-grade bonds and long-term government bonds.     

Manufacturing outsourcing,onshoring, and global equilibrium

Manufacturing is now a national strategy for many countries to combat slow economic growth, and positively viewed with the current trend of onshoring foreign manufacturing operations. We develop a cross-country regression model that predicts manufacturing employment as a function of population growth, foreign direct investment, and purchasing power parity. Results through the year 2100 suggest that manufacturing is trending toward a global equilibrium with higher levels of manufacturing outputs but much lower levels of manufacturing employment. The reason is that countries tend to evolve from having little manufacturing to commodity manufacturing at large scale and low wages. As infrastructure and human capital develop, there is the tendency to pursue advanced manufacturing in support of higher valued goods. The manufacture of commodity products is then outsourced to those countries with lower costs justified by their less-developed infrastructure and human capital, and so the virtuous cycle continues. While this model suggests that current efforts in revitalization of domestic manufacturing would lead to an increase in wealth in the United States, the bad news is that these gains are unlikely to be sustainable in the long term. However, the good news is that manufacturing acts as a rising tide that raises all nations and our global quality of life.