Ceteris Paribus Methodology and Computerized Economics-Business Models

Professor Stanford is critical of computer programs that have been developed for use in economics and business courses. He admits to having “mixed feelings” about the use of computer models as classroom teaching devices, but recognizes their great potential. His fear is that the ceteris paribus methodology has not been adequately implemented when computer models have been constructed for use in the classroom. Consequently, he has constructed a set of computerized game models which feature “options for varying degrees of complexity.” These models, which permit progression from the simple to the complex, and which enable instructors to demonstrate the effects of changing variables, are brielly described in this article.     

Toward a Humanist Reconstruction of Economic Science

This paper examines whether governance matters for the economic growth of developing countries, empirically captured within the institutional economics theoretical framework using the panel data estimation procedure. In doing so, it tests the effect of several dimensions of governance on the growth of 84 low and middle-income economies using regression specifications common in the growth literature. The empirical results show that political stability and government effectiveness is significantly positively correlated with growth. Voice and accountability and corruption are statistically significantly negatively correlated with growth. The regulatory quality and rule of law dimensions of governance are negatively but statistically insignificantly correlated with growth. The findings of this study imply that the dynamics of the current modern economy makes it necessary for developing countries to act now and within their own country, improve the dimensions of governance and establish good governance practices that are domestically relevant and internationally comparable and consistent.     

Forecasting livestock prices with individual and composite methods

We investigate the incentives of private firms to adopt new technologies. Econometric investigation is performed on a pooled sample of individual US airline firms over the period 1971 to 1986 for which extensive information on available jet aircraft technology and fleet choice have been recorded. Given the incidence of successive commercial aircraft innovations and variation in production attributes across firms, we are able to consider a wider array of ‘time-dependent’ and ‘time-independent’ adoption influences than in previous firm-level studies. To the extent that our study provides useful general insights into adoption decisions by firms, the results have implications for US global competitiveness policy. One key finding is that firms subject to increased product market competition exhibit a higher propensity to adopt technological innovations.     

25 years of Psychology & Marketing: a multidimensional review

The first issue of Psychology & Marketing was published in 1984. The journal was conceived as a forum for academics and practitioners in psychology, marketing, and related fields to engage in an exchange of scholarly information. The raison d'être of the journal was to bring psychologically sophisticated information and methodologies to bear on all aspects of marketing theory and practice. This review analyzes the performance of Psychology & Marketing from several perspectives, and includes data comparing its performance to the performance of other journals. Looking back over the last 25 years of its history, it seems fair to conclude that Psychology & Marketing has clearly delivered on its tacit promise of effectively building the knowledge base of marketing through psychology‐based insights. Looking forward, it seems reasonable to anticipate that the journal's well‐established track record in terms of diversity in the content, research design, and methodologies of its published articles will continue to stand as a welcome and refreshing distinction from other journals covering comparable domains of study. © 2009 Wiley Periodicals, Inc.     

The long and winding roads: Perceived quality of scenic tourism routes

This study aims to understand self-drive tourists’ satisfaction with and loyalty toward scenic roads. Building on previous studies in the context of tourism destinations, satisfaction is hypothesised to be influenced by leisure and holiday motorists’ motivation for driving the routes and the provision of roadside facilities. In turn, satisfaction is assumed to increase motorists’ loyalty toward the route. The study comprises data from two scenic roads in Norway that differ with respect to landscapes formations, settlements, experiences along the routes, and travel distance. Data are analysed using structural equation modelling. Results show that roadside facilities play a crucial role in achieving overall satisfaction and loyalty among motor tourists, and that route managers should improve the quality of these and related infrastructure facilities and services. Moreover, the study indicates that it is important to take into consideration the motorists’ desire to experience attractive sceneries in order to increase overall route satisfaction. Finally, satisfaction is demonstrated to significantly increase route loyalty, although this relationship appears weaker than in conventional destination studies.     

Strategic paradigms as a frame of explanation of innovations: a theoretical synthesis

Innovation has mainly been analysed as a rather narrow phenomenon. This has been an obstacle to a more operationally useful understanding of innovation processes. Two main approaches to explain innovation exist, namely economic innovation theory and the theory of entrepreneurship. Both are criticized in the article, the economic innovation theory for being based on a technological reductionism, the entrepreneurship theory for being based on an individualistic determinism. The two theories have not been coordinated to form a more comprehensive synthesis. The concept of technological paradigm within the economic innovation theory and the concept of entrepreneurial networks within the entrepreneurship theory mark some improvement in establishing a broader understanding of innovation, but have not yet been synthesized. The idea of paradigms is used in the article for a broader, synthesizing conception of innovations as being determined by shifts in strategic paradigms. A theoretical model of factors causing shifts in the strategic paradigm is set up.     

Max weber revisited: Some lessons from East Asian capitalistic development

Weber's thesis of the incompatibility of the Confucian ethos and rational entrepreneurial capitalism has been challenged by the economic miracles of many East Asian countries. One thesis presented here is that Confucianism is compatible with and has facilitated Asian capitalism by its influence on managerial values and practices. According to Weber, the release of tensions created by Calvinism was an important motivating force in the development of capitalism in the Occident. Confucianism offers a parallel mechanism to the profit-seeking drive in Western capitalism. We show that, in Confucian societies, there also exists tensions — in this case, between ideals and reality. These tensions are released through the Confucian concept of a ceaseless pursuit of renovation, a motivational mechanism for the development of capitalism in East Asian societies that parallels the West. Weber held that the classic model of bureaucracy, with impersonality at its core, is essential to the development and continuation of capitalism. Our second thesis is that humanism is an important element in Confucian bureaucracy and that humanistic bureaucracy can be both effective and efficient for the development of capitalism.     

Cable television and competition : Theory, evidence and policy

There is currently widespread discussion in the USA of the merits of amending legislation to allow competition in the cable television market, notably from the telecommunications companies. This article explores what economic theory can contribute to this debate, and adduces empirical evidence on the effects of competition in the cable market where it presently exists. The authors conclude that blocking entry into cable, and indeed into telecommunications markets, is likely to be poor policy, and that increased competition would foster the development of an efficient modern broadband network.     

Entry and product quality under price regulation

Spence (1975, footnote 5, p. 420) has shown that, in equilibrium, a price-regulated monopoly will supply a socially suboptimal level of quality. This tendency to undersupply quality has been used to justify an expansion of regulatory controls to the quality dimension in certain regulated industries (e.g., electricity and telecommunications). In this paper, we examine the effects of entry on equilibrium product quality in an industry which is price-regulated. A generalized conjectural variation model is used which allows both monopolistic and oligopolistic market structures. Using this model, we find that regulation generally leads to a socially nonoptimal (either too high or too low) level of quality, where the direction of the resulting departure from optimal quality depends upon the conjectures that firms form. Spence's result is obtained as a special case. We then demonstrate that a policy that encourages (or, at least, does not discourage) entry into the regulated market will cause equilibrium quality to move in a social-welfare-improving direction, regardless of the direction of the original distortion.     

Household Food Demand in Burkina Faso: Implications for Food Policy

Chronic food production deficits since the early 1970s have prompted policymakers of Burkina Faso to emphasize technological research with the goal of increasing the production of the most-consumed locally-grown cereals: sorghum, millet and maize. Meanwhile, urban consumers have been developing preferences for rice and wheat, cereals that are primarily imported. This study estimates demand relationships among food items in Ouagadougou, Burkina. The results of the estimation suggest that prices, income, household composition, education, marital status and urbanization were jointly important in explaining household expenditure allocations. Both local and imported cereal consumption responded positively to an income increase. However, incremental income changes would lead to relatively greater consumption of locally produced cereals by low-income households whereas high-income households would consume relatively more wheat and rice. The household model is then used to demonstrate its relevance in addressing food policy issues, by forecasting the levels of urban grain demand under alternative income and demographic scenarios. With increased production due to advances in technology, the urban demand levels do not exhaust the rural surplus of local cereals, but deficits persist in the rice-wheat sector. The results underscore the importance of technological research since Burkina could become self-sufficient in at least the production of sorghum, millet and maize.