Growth and convergence in a multi-country empirical stochastic Solow model

The paper considers international per capita output and its growth using a panel of data for 102 countries between 1960 and 1989. It sets out an explicitly stochastic Solow growth model and shows that this has quite different properties from the standard approach where the output equation is obtained by adding an error term to the linearized solution of a deterministic Solow model. It examines the econometric properties of estimates of beta convergence as traditionally defined in the literature and shows that all these estimates are subject to substantial biases. Our empirical estimates clearly reflect the nature and the magnitude of these biases as predicted by econometric theory. Steady state growth rates differ significantly across countries and once this heterogeneity is allowed for the estimates of beta are substantially higher than the consensus in the literature. But they are very imprecisely estimated and difficult to interpret. The paper also discusses the economic implications of these results for sigma convergence. © 1997 John Wiley & Sons, Ltd.     

Concern for appropriateness and ad context effects

Are some people more sensitive than others to ad context effects? Recently, it has been shown that certain types of people are particularly sensitive to situational cues in social contexts. Such people vary how they behave according to the social context because they are highly concerned with social appropriateness. Is it possible that such people are also highly sensitive to mass communication contexts? In this research an experiment is performed to determine if such people are more sensitive than others to a highly inappropriate ad context. The results show that they are. Implications for persuasive communications are discussed. © 1997 John Wiley & Sons, Inc.     

Enhancing National Security and Energy Security in the Post-911 Era: Group Decision Support for Strategic Policy Analysis under Conditions of Conflict

Energy source diversity has become a fundamental principle of both US energy security and national security. The decision of whether or not to approve a new power plant facility in the US involves complex group decision and negotiation processes. These contentious, value-laden, and multi-faceted self organizing processes involve many decision makers (broad constituencies) with conflicting priorities and dynamic preferences, high decision stakes, limited technical information (both in terms of quality and quantity), and difficult tradeoffs. As population pressures and energy demands continue to mount, advances in conflict resolution can help to improve power plant siting processes as well as US energy security and national security. Specifically, this paper uses advances in the Graph Model for Conflict Resolution and its associated decision support system (DSS) GMCR II to analyze strategic aspects of a multi-party energy dispute involving the co-management of a shared air shed in the Fraser Lowland Eco-Region based on Sumas Energy 2 (SE2), a contentious power plant project proposed for the US side of the international border between the city of Abbotsford, British Columbia and town of Sumas, Washington. GMCR II provides strategic insights for enhancing energy security, national security, and environmental risk management in the United States.     

Convergent Validity of Attribute-Based,Choice Questions in Stated-Preference Studies

The application of attribute-based choice questions is well established in the marketing literature, but there are unique aspects of the design that warrant investigation to assess their validity for economic welfare estimation. Three design issues are investigated in this paper: (1) the placement of the monetary stimulus (policy cost to respondents) in the sequence of attributes, (2) the number of policy alternatives respondents are asked to consider in choice questions (two versus three), and (3) the inclusion, versus exclusion, of a status-quo alternative in choice questions. The data used to implement these investigations are from a survey designed to estimate the value Maine residents place on a farmland conservation easement program. Tests of convergent validity indicate that the placement of the monetary stimulus, first versus last in the list of attributes, did not affect estimates of preference parameters, significant differences between questions with three versus two alternatives did occur, and the inclusion/exclusion of a status-quo alternative did not affect preference parameters.     

Speculative attacks and defenses as wars of attrition

This paper extends the currency crisis models in Obstfeld [Obstfeld, M., 1994. The logic of currency crises. Cahiers Economiques et Monetaries], [Obstfeld, M., 1996. Models of currency crises with self-fulfilling features. European Economic Review 40, 1037–1047] by modeling both the government's side and speculators' side and introducing uncertainty about each party's payoff. We argue that a speculative attack (defense) can be well modeled as a war of attrition between the government and speculators under asymmetric information. We then solve for a pure strategy, weakly perfect, Bayesian rational expectation equilibrium in which each party's time until concession depends on her benefits from winning and her costs of fighting. Using this model, we are able to explain important facts of currency crises. First, the model shows that failed defenses (attacks) can be ex-ante rational for governments (speculators). Second, the model predicts systematic variations in the durations of defenses. Finally, we also show that currency crises can be self-fulfilling in the sense that there exist multiple rational expectation equilibria in our model.     

Price cap regulation of a dominant firm facing competition

Price cap regulation is typically applied to natural monopolies operating with subadditive costs. Price caps are known to provide superior incentives for the regulated monopoly to pursue cost reduction and, in a multiservice/product context, undertake welfare enhancing price discrimination. It is well known that capping a Laspeyres index of the firm’s prices induces the monopoly to charge socially optimal “Ramsey” prices in the long run. This paper examines the suitability of the Laspeyres form of regulation when the regulated firm faces competition in the market for one of its services (outputs). We present the appropriately modified Ramsey pricing rule for the regulated dominant firm and demonstrate that capping a Laspeyres index of the dominant firm’s prices leads to prices that satisfy this pricing rule in the long run.     

Self-confidence does not come isolated from the environment

A smart way to build confidence is to gain the most success within the constraints of the environment. Trying things that the infrastructures fail to support may bring more frustration than confidence. Out of this consideration, Asian researchers might have concentrated on “original equipment manufacturing” type of research—exporting their research to the larger, Western market—in the past due to limited resources and colonial governance. However, with the change in environment, Asian researchers have to undo their old beliefs and participate in building infrastructures that facilitate original and advanced research in management.

Access Regime Design and Required Rates of Return: Pitfalls in Adjusting for Inflation and Tax Effects*

Some access pricing regimes derive allowable cash flows to provide investors with an expectation of receiving a required real pre-(company) tax rate of return, with compensation for inflation built in via the allowable return of capital (depreciation). The required real pre-tax return is derived from nominal (or real) post-tax required returns. Techniques commonly used to transform post-tax into real pre-tax returns are biased, because they fail to capture accurately the characteristics of tax depreciation allowances. There is no general solution to this “transformation problem”, but alternative approaches can achieve the benefits prompting the use of a “real pre-tax” approach without suffering from this problem *I am grateful to the referee for valuable comments.     

Towards new Triple Helix organisations? A comparative study of competence centres as knowledge,consensus and innovation spaces

This contribution explores new organisational forms facilitating Triple Helix relations. Analysts have pointed to the blurring of institutional boundaries and the emergence of hybrid organisations at the interface between university, industry and government. Starting out from the notion that Triple Helix organisations develop and maintain knowledge, consensus and innovation spaces, we explore four cases of competence centres that operate in this context. Comparing them, we identify Finnish SHOK centres as the most radical departure from more traditional forms of university–industry collaboration. These can be characterised as independent legal entities that are involved in integrating a large, possibly cluster‐level or technology‐focused network, defining the agenda for specific specialisation areas by engaging in all or most of the Triple Helix spaces. We argue they could be better positioned than existing intermediary organisations to deliver the Triple Helix concept.     

Control and Expectancy: Locus of Control as a Predictor of Psychological Entitlement

Utilizing Vroom’s (1964) Expectancy Theory as a foundation, we suggested that locus of control has a significant impact on psychological entitlement. An additional hypothesis suggested that self-monitoring moderates the relationship between external locus of control and entitlement. After analyzing data from 173 participants, results provide strong support for the assertion that internal locus of control is a negative predictor of entitlement perceptions, while external locus of control increases entitlement beliefs. Results addressing the moderation hypothesis also show that there is a significant interaction between external locus of control and self-monitoring, such that higher levels of self-monitoring strengthened the external locus of control to entitlement belief relationship. These findings provide insight into the entitlement formation process and provide guidance for future research aiming to produce a comprehensive model of entitlement formation.