On the behavior of a noncompetitive firm when the supplies of inputs are random

This study reformulates and extends the demand for inputs models developed by Turnovsky (1969) for a competitive firm and by Blair (1974) for a noncompetitive firm draws further conclusions regarding the effects of risk on the demand and on the optimal production-expansion path. The main idea is that uncertainty and risk aversion impose additional costs on the firm that divert the subjective marginal factor costs from the objective marginal factor costs. Implications for optimal-inputs employment are derived for two explicit behaviors of the noncompetitive firm with regard to input purchases: quantity setting and price setting.     

Capture,governance, and resilience: strategy implications from the history of Rome

Organizational resilience is a subject of great interest to management and strategy scholars. Drawing on over 1,000 years of historical data on the Republic of Rome, and focusing primarily on the period of its establishment (509 BC–338 BC), we identify two generic strategies, capture and governance, that together are essential for organizational resilience. Capture strategy relates to market expansions, while governance strategy refers to the capacity of an organization to assimilate, retain, defend, and increase its dominance within annexed markets. The history of Rome also reveals four supporting tactics—saving power, maintaining a stronghold base, isolating and weakening adversaries, and creating forward outposts—that shore up and reinforce the capture and governance strategies, to create a more enduring and resilient enterprise. Interestingly, a system‐wide view of the strategy‐tactic framework also offers insights on resilience through smallness, thus illustrating its conceptual utility to organizations of all sizes including small enterprises. Copyright © 2010 John Wiley & Sons, Ltd.     

The effect of pro-environmental attitudes and eco-labelling information on green purchasing decisions in Australia

The main purpose of this study is to measure the effects of pro-environmental attitudes, knowledge, and eco-labeling information on green purchasing decisions. Data were collected from 400 undergraduate students studying at an Australian University. The findings suggest that pro-environmental attitude and eco-labeling information significantly affect green purchasing decisions. Eco-labeling, however, plays a more significant role in influencing green purchasing decisions. Finally, implications and suggestions for future research are discussed.     

Junk-food,home cooking,physical activity and obesity: The effect of the fat tax and the thin subsidy

In an effort to reduce the growing prevalence of obesity, a tax on junk-foods, known as ‘fat tax’, has been proposed, the revenue from which could be used to finance a ‘thin subsidy’ for healthy foods or exercising equipment. The present paper addresses the fat tax and thin subsidy within a food-intake rational-choice model. Assuming that healthy meals are cooked at home with purchased ingredients and time input, the paper examines the effects on obesity of a tax on junk-food meals and a subsidy to cooking ingredients, distinguishing between a weight-conscious and a non-weight conscious individual, and between a weight-conscious individual who is physically active and physically inactive. The results show that for a non-weight conscious individual a fat tax will unambiguously reduce obesity, whereas a thin subsidy may increase obesity. However, for a weight-conscious individual, particularly one who is physically active, even a fat tax may increase obesity, as it may reduce not just the consumption of junk-food, but also the time devoted to physical activity. The paper explores conditions under which obesity will rise, fall, or remain intact following the introduction of a fat tax or a thin subsidy.     

Trademark infringement and optimal monitoring policy

The paper addresses a trademark infringer who seeks to capitalize on the reputation of a trademark owner, sells an identical product under a trademark which is confusingly similar to that of the owner, charges the same price and competes with him in the same market. We show that the welfare-maximizing monitoring intensity is zero, hence the government is not likely to engage in monitoring infringement. Recognizing this, the trademark owner may consider monitoring the market himself, discovering, however, that this is worth his while only if the penalty for infringement, which he fully collects, is sufficiently high. Given the entry condition, an increase in the penalty may either raise or lower the optimal monitoring intensity. In the former case it will counter-intuitively increase the infringer's expected profit, apparently because a higher penalty will also lead to a raise in price. While monitoring enables the trademark owner to maintain a positive profit level, it reduces social welfare. The government may intervene to eliminate the private incentive for monitoring through taxing the collected penalty.     

Dynamic Volume-Return Relation of Individual Stocks

We examine the dynamic relation between return and volume ofindividual stocks. Using a simple model in which investors tradeto share risk or speculate on private information, we show thatreturns generated by risk-sharing trades tend to reverse themselves,while returns generated by speculative trades tend to continuethemselves. We test this theoretical prediction by analyzingthe relation between daily volume and first-order return autocorrelationfor individual stocks listed on the NYSE and AMEX. We find thatthe cross-sectional variation in the relation between volumeand return autocorrelation is related to the extent of informedtrading in a manner consistent with the theoretical prediction.     

The (non)equivalence of optimal tariffs and quotas under uncertainty

Tariffs and quotas are compared as instruments for restricting imports to improve the terms of trade in a world in which domestic and/or foreign supply and demand conditions are stochastic. The two instruments are not generally equivalent in their welfare effects, and furthermore there is no general presumption in favour of one instrument over the other. In a particular model, characterized by linear supply and demand curves for imports, quotas are more likely to be superior when the predominant source of uncertainty is with respect to foreign supply conditions and when the supply of imports is inelastic.     

Factor market rivalry and interindustry competitive dynamics

We study competitive dynamics by using 10 years of data from the biotech industry on patent infringement lawsuits because they capture offensive actions and defensive responses. Results suggest that larger patent portfolios, long‐term partnerships, and short‐term agreements lead to factor market rivalry. Specifically, long‐term research partnerships are associated with lower proclivity and vulnerability to attack, while short‐term licensing and marketing agreements with increased proclivity and vulnerability to attack. Lastly, although nonbiotech companies attack biotech firms, the proclivity of the latter to launch cross‐industry attacks is not significant. We discuss how the results contribute to competitive dynamics research and theory.