Technological change and timing reductions in greenhouse gas emissions

In 2007 Nicholas Stern’s Review (in Science 317:201–202, 2007) estimated that global GDP would shrink by 5–20% due to climate change which brought forth calls to reduce emissions by 30–70% in the next 20 years. Stern’s results were contested by Weitzman (in J Econ Lit XLV(3):703–724, 2007) who argued for more modest reductions in the near term, and Nordhaus (in Science 317:201–202, 2007) who questioned the low discount rate and coefficient of relative risk aversion employed in the Stern Review, which caused him to argue that ‘the central question about global-warming policy—how much how, how fast, and how costly—remain open.’ We present a simulation model developed by Färe et al. (in Time substitution with application to data envelopment analysis, 2009) on intertemporal resource allocation that allows us to shine some light on these questions. The empirical specification here constrains the amount of undesirable output a country can produce over a given period by choosing the magnitude and timing of those reductions. We examine the production technology of 28 OECD countries over 1992–2006, in which countries produce real GDP and CO₂ using capital and labor and simulate the magnitude and timing necessary to be in compliance with the Kyoto Protocol. This tells us ‘how fast’ and ‘how much’. Comparison of observed GDP and simulated GDP with the emissions constraints tells us ‘how costly’. We find these costs to be relatively low if countries are allowed reallocate production decision across time, and that emissions should be cut gradually at the beginning of the period, with larger cuts starting in 2000.     

Critical creativity criteria for students in higher education: taking the interrelationship effect among dimensions into account

It is known that the overall competitive advantages enjoyed by the Taiwanese higher education system have been decreasing in recent years relative to the educational systems of other countries. In light of aiming to become a kingdom of innovation, how to regain its competitive advantages over the very short term has become a critical issue requiring immediate attention. Based on previous research indicating that improving innovation is among the primary ways of enhancing an education system’s competitive advantages, that creativity is the foundation of innovation, that organizations that truly understand human creativity and are committed to nurturing it and living with the consequences of doing so are those that are most likely to succeed, and that students are a major group to be regarded as the backbone of a nation’s future development, the aim of this study is to explore critical criteria for creativity, which could significantly improve the creativity of college students. Although related studies can be found today, these studies seem to ignore the different effects of different dimensions of creativity evaluation, leading to results that are irrational and not completely suitable for real practice. In this regard, a perception of interrelationships among these dimensions is thus taken into account while calculating weights of evaluation creativity dimensions and criteria. In accordance with the result, the top six explored critical creativity criteria are shown to help enhance today’s college students’ creativity.     

Measuring the Economic Effect of Global Warming on Viticulture Using Auction,Retail, and Wholesale Prices

In this paper we measure the effect of year-to-year changes in the weather on wine prices and winery revenue in the Mosel Valley in Germany in order to determine the effect that climate change is likely to have on the income of wine growers. A novel aspect of our analysis is that we compare the estimates based on auction, retail, and wholesale prices. Although auction prices are based on actual transactions, they provide a thick market only for high quality, expensive wines and may overestimate climate’s effect on farmer revenues. Wholesale prices, on the other hand, do provide broad coverage of all wines sold and probably come closest to representing the revenues of farmers. Overall, we estimate a 1°C increase in temperature would yield an increase in farmer revenue of about 30%.     

Buyer Power and Industry Structure

This paper investigates the exercise of market power by a large buyer who emerges via growth, merger, or group purchasing. It explores the efficiency and redistributive effects of such an event when a competitive fringe of small buyers remains in the market. Terms of trade, including those for small buyers, depend on structural conditions on the supply side of the market and the nature of interactions between the newly emerged dominant buyer and suppliers. Predicted aggregate welfare effects have implications for antitrust.     

Students’ knowledge sources and knowledge sharing in the design studio—an exploratory study

Architectural design is a knowledge-intensive activity; however, students frequently lack sufficient knowledge when they practice design. Collaborative learning can supplement the students’ insufficient expertise. Successful collaborative learning relies on knowledge sharing between students. This implies that the peers are a considerable design knowledge source for the students. However, students are involved in grade competition. Students may not be willing to share because knowledge is a critical resource for students’ performance. The web technology has been used to facilitate knowledge exchange among students; nevertheless, the convenience of technology may tempt free riding behavior and impede the development of a knowledge sharing culture. The purpose of this exploratory study is to probe whether the peers and a web forum are the students’ primary knowledge source by investigating students’ knowledge sources during the design process. The results demonstrated that (1) studio-mates were a primary design knowledge source for the students, (2) the ill-defined nature of design problems may be the main contributing factor encouraging knowledge sharing behavior, (3) the shared web forum was not a primary knowledge source for the students and did not have a significant influence on the knowledge sharing culture, and (4) we can estimate the knowledge sharing culture in a design studio through investigating students’ knowledge sources. Furthermore, several additional findings and implications are elaborated.     

The bidirectional relationship between competitive intensity and collaboration: Evidence from China

This paper argues for a bidirectional relationship between competitive intensity perceived by a firm and its strategic response in the form of forging collaborations. Consistent with a variety of theoretical perspectives including enactment, cognition, and the resource-based view, we conceptualize competitive intensity as a firm-level construct and hypothesize that collaboration will reduce the perceived competitive intensity due to the twin mechanisms of information acquisition and risk reduction. We also predict an inverted U-shaped relationship for the impact of competitive intensity on the likelihood of forming at least one collaboration. We test our predictions using data on the dynamic and competitive Chinese market. Our analyses provide strong support to the bidirectional argument.     

The Effects of Average Norm Model Regulation: The Case of Electricity Distribution in Sweden

Following the reform of energy sectors, some countries have used engineering norm models in incentive regulation of network utilities. In 2003, Sweden adopted this approach to regulation of electricity distribution networks. This paper examines whether the norm models represent the real networks and create incentives for performance improvement. We analyse data from 138 network concession holders between 2000 and 2007. The results show that norm models are not adequate representations of real networks. Also, utilities that perform better than their norm models tend to behave opportunistically. Finally, we find that private utilities respond more strongly to incentives.     

Mobility norms,risk aversion,and career satisfaction of Chinese employees

Drawing on Turner’s (American Sociological Review, 25:855–867, 1960) framework of contest and sponsored mobility norms, this study investigated factors that affect employees’ career satisfaction in the Chinese setting. Using two organization-referenced variables, procedural justice and perceived organizational support (POS), to represent contest mobility norm and sponsored mobility norm, we evaluated their effects on career satisfaction. We also explored the moderating role of risk aversion on these relationships. Several hypotheses were developed and tested on a sample of 239 employees working in a foreign-invested enterprise in China. The results of regression analysis showed that procedural justice and POS contributed to career satisfaction in a cumulative manner. Further, among the risk-averse employees, the relationship between POS and career satisfaction was stronger.     

Economics at the FTC: Mergers,Dominant-Firm Conduct,and Consumer Behavior

Economists at the Federal Trade Commission (FTC) pursue the agency’s competition and consumer protection missions. In this year’s essay, in antitrust, we discuss the new Merger Guidelines, three exclusion cases, and R&D issues in the Thoratec/HeartWare merger and the Google/AdMob merger. In consumer protection, we discuss the FTC’s new rule on debt settlement, our efforts to improve disclosures, and our recent work on appliance energy disclosures.