Building Core Competencies in Crisis Management Through Organizational Learning: The Case of the French Nuclear Power Producer

Drawing from the resource-based theory of the firm, we develop a conceptual framework to show how organizational learning helps companies build a set of embedded knowledge assets (core competencies). The evolution of the core competencies over time depends on the ability of the firm to maintain a high level of organizational learning. In this article, we take the case of the French nuclear industry to illustrate how the most powerful French electricity producer and supplier, EDF, had succeeded, for 20 years, in building a core competence in nuclear risk and crisis management. Referring to the future deregulation of the European electricity market and the fierce competition of substitute resources of energy, the article shows that nuclear safety is a crucial issue for the survival of EDF and the European nuclear industry. We explore how EDF has learned from Three Mile Island in 1979 and Chernobyl in 1986 to improve and enrich continuously its core competence in risk and crisis management. We distinguished three phases in the learning process of EDF: the technical phase (1977–1982), the human phase (1982–1989), and the cultural phase (1989–1995). Each phase is analyzed as a step toward a greater awareness of the multidimensional nature of risk and crisis management.     

Endogenous rationing,price dispersion and collusion in capacity constrained supergames

This paper examines the feasibility of collusion in capacity constrained duopoly supergames. In each period firms simultaneously set a price–quantity pair specifying the price for the period and the maximum quantity the firm is willing to sell at this price. Under price–quantity competition firms are able to ration their output below capacity. For a wide range of capacity pairs, the equilibrium path providing the smaller firm with its highest stationary perfect equilibrium payoff requires that it undercut its rival’s price and ration demand. Furthermore, for some capacities and discount factors supporting security level punishments, price shading and rationing arise everywhere on the set of stationary perfect equilibrium paths yielding (constrained) Pareto optimal payoffs. That is, price shading may not only be consistent with optimal collusion, it may be a requirement of optimal collusion.     

Spreading and Shifting Costs of Lateral Control Among Peers: A Structural Analysis at the Individual Level

This paper uses three-way and sociometric data to reconstitute individual conceptions of peer-driven intervention for the protection of common resources in a collegial organization, a Northeastern corporate law firm. Variations in partners' individual conceptions are explained in terms of management of costs of lateral control. Costs of control are mainly expressed as costs to members in terms of social capital. Management of such costs includes spreading or concentrating them among partners, shifting them to others or bearing them oneself, and using similarities among others to smooth the control process among peers. Leverage styles are identified. They tend to combine various ways of spreading and shifting such costs, and characterize three levels of seniority. Seniority appears to be a key variable for a theory of unobtrusive protection of common resources among peers.     

Consistent price systems and arbitrage opportunities of?the?second kind in models with transaction costs

In contrast with the classical models of frictionless financial markets, market models with proportional transaction costs, even satisfying usual no-arbitrage properties, may admit arbitrage opportunities of the second kind. This means that there are self-financing portfolios with initial endowments lying outside the solvency region but ending inside. Such a phenomenon was discovered by M. Rásonyi in the discrete-time framework. In this note, we consider a rather abstract continuous-time setting and prove necessary and sufficient conditions for a property which we call no free lunch of the second kind, NFL2. We provide a number of equivalent conditions elucidating, in particular, the financial meaning of the property B which appeared as an indispensable “technical” hypothesis in previous papers on hedging (superreplication) of contingent claims under transaction costs. We show that it is equivalent to another condition on the “richness” of the set of consistent price systems, close to the condition PCE introduced by Rásonyi. In the last section, we deduce the Rásonyi theorem from our general result by using specific features of discrete-time models.     

Is the 2008 financial turmoil increasing the risk of a bank run？ An empirical research in Geneva

In this paper, the authors present the results of an empirical study that attempts to analyse the risk of bank run in Geneva, Switzerland. Two similar surveys have been conducted upon two independent samples of Geneva population （June 2008 and February 2009） to detect the existence of predictive signals leading to a bank run within the selected area. The authors discover that Geneva inhabitants are generally confident in Swiss banks; the risk of a bank run in the area is low. However, reliance to the national banking system is worsening： The number of people fearing about their savings and those thinking the default of a major Swiss bank as ＂possible＂ has significantly risen. Also, more and more people keep updated about the current financial crisis; overall trust in Swiss banks has slightly decreased.     

Love thy children or money

This paper presents a simple OLG model which is consistent with observed consumer behavior, capital accumulation and wealth distribution, and yields some new conclusions about fiscal policy. By considering a society in which individuals are distinguished according to two characteristics, altruism and wealth preference, we show that those who in the long run hold the bulk of private capital are not so much motivated by dynastic altruism as by preference for wealth. In this setting, estate taxation is a questionable instrument of redistribution: it penalizes the wealthy, but favors the top wealthy. On the other hand, even though Ricardian equivalence holds, both public debt and PAYG pensions lead to a transfer of resources from the top wealthy to the other individuals.     

Purchasing power parity: Evidence from developing Countries

This paper utilizes the dynamic error-correction model (DECM) to examine the issue of purchasing power parity (PPP) for 11 developing countries (Argentina, Bolivia, Colombia, Cote d'Ivoire, Ecuador, Guatemala, Kenya, Nigeria, Peru, South Africa, and Venezuela). For comparison purposes, evidence from the traditional unit root methods of the augmented Dickey-Fuller (ADF) and Phillips-Perron is presented. The results from the conventional unit root tests failed to find evidence of PPP in all of the cases. However, the results from the generalized error-correction model detected evidence of PPP for nine out of the 11 countries under consideration. Based on these results, it was concluded that PPP holds in the long-run for the sample countries and that the implicit restrictions associated with unit root tests prevented earlier studies from finding evidence in support of PPP theory.The views expressed in this paper are those of the authors only. They do not reflect the views of the World Bank.     

Urban squatting and community organization in developing countries

It is estimated that up to 30–35 percent of the total urban population of the Third World (about 185 million people) live in squatter settlements. This paper presents, from an economic perspective of tenure choice under uncertainty, a unified and consistent theoretical framework of this phenomenon, which has heretofore been studied mainly by other social scientists. The model is able to explain why land invasions occur. Furthermore, it provides some insights as to why the number of squatters in an urban area depends on a squatter community's ability to form coalitions to fully protect its members' rights. It is shown in the paper that, if a community is successful in controlling its size, government efforts which are meant to reduce the number of squatters may lead to the opposite results. In particular, the imposition of heavier fines or the increase of government expenditures on eviction activity (threat campaigns, eviction in other jurisdictions, etc.) will likely lead to an increase in the optimal number of squatters, unless the decline in expected utility caused by these efforts is so great that squatting no longer becomes viable at any community size.