Large newsvendor games

We consider a game, called newsvendor game, where several retailers, who face a random demand, can pool their resources and build a centralized inventory that stocks a single item on their behalf. Profits have to be allocated in a way that is advantageous to all the retailers. A game in characteristic form is obtained by assigning to each coalition its optimal expected profit. We consider newsvendor games with possibly an infinite number of newsvendors. We prove in great generality results about balancedness of the game, and we show that in a game with a continuum of players, under a nonatomic condition on the demand, the core is a singleton. For a particular class of demands we show how the core shrinks to a singleton when the number of players increases.     

How does public service motivation affect teacher self-reported performance in an education system? Evidence from an empirical analysis in Italy

Quality & Quantity - This paper deals with self-reported teacher performance, and the starting point is the relationship between teacher performance and the main determining factor, public...     

On Lipschitz continuity of policy functions in continuous-time optimal growth models

Summary. This paper proves the C ^1,1 differentiability of the value function for continuous time concave dynamic optimization problems, under the assumption that the instantaneous utility is C ^1,1 and the initial segment of optimal solutions is interior. From this result, the Lipschitz dependence of optimal solutions on initial data and the Lipschitz continuity of the policy function are derived, by adding an assumption of strong concavity of the integrand. Received: July 29, 1996; revised version: November 25, 1997     

Can people learn rational expectations?

In this note the stability of the rational expectations equilibrium for the Foster and Frierman (1990) version of the Blume and Easley (1982) model is investigated under the assumption that the learning mechanism used by economic agents is based on a selection mechanism on a class of competing models having a physical meaning for the agent and not on the interpolation of models having no clear physical meaning, as it is often the case in the literature on learning rational expectations. It is found that, under the standard assumption that the rational expectations model is in the information set of the uninformed trader no matter his degree of rationality, convergence to it is less likely the higher the uninformed agent's degree of rationality, in a sense to be specified in the paper. Some comments on the result are also provided.     

Demand,innovation, and the dynamics of market structure: The role of experimental users and diverse preferences

The history of a number of industries is marked by a succession of eras, associated with different dominant technologies. Within any era, industry concentration tends to grow. Particular eras are broken by the introduction of a new technology which, while initially inferior to the established one in the prominent uses, has the potential to become competitive. In many case new entrants survive and grow, and the large established firms do not make the transition. In other cases, the established firms are able to switch over effectively, and compete in the new era. This paper explores a model which generates this pattern and has focused on the characteristics of the demand. We argue that the ability of the new firms exploring the new technology to survive long enough to get that technology effectively launched depends on the existence of fringe markets which the old technology does not serve well, or experimental users, or both. Established firms initially have little incentive to adopt the new technology, which initially is inferior to the technology they have mastered. New firms generally cannot survive in head-to-head conflict with established firms on the market well served by the latter. The new firms need to find a market that keeps them alive long enough so that they can develop the new technology to a point where it is competitive on the main market. Niche markets, or experimental users, can provide that space.

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Franco MalerbaEmail:

     

An empirical examination of the currency denomination of trade

The currency denomination of trade has important effects on inflation and the macroeconomic transmission of shocks. This study examines the currency denomination of Italian exports and imports with countries outside the European Union during 2010. By using a unique dataset we find evidence to suggest that invoicing currencies do not always have consistent determinants. Significant effects, new to the literature, include the massive, robust effect of geography and tax treaties, which suggest the importance of information asymmetry. The distance between trading partners has one of the largest marginal effects, increasing the likelihood of vehicle currency use relative to the euro.     

Innovative performance effects of institutional quality: an empirical investigation from the Triad

ABSTRACT

Using data for a set of 823 R&D-intense manufacturing firms within the Triad and the Quality of Government (QoG) dataset over the 2002–2010 period, this article investigates the effects of institutional quality upon firms’ inefficiency, through the application of a Stochastic Frontier Approach (SFA). Empirical evidence, which is robust to alternative specifications of the technology employed and different lag structures in R&D activities, reveals that improvements in the quality of institutions significantly reduce firms’ inefficiency and suggests that, among the set of relevant institutional factors considered, a pre-eminent role is found for the rule of law.     

Hospital Mergers with Regulated Prices

We study the effects of a hospital merger in a spatial competition framework where semi‐altruistic hospitals choose quality and cost‐containment effort. Whereas a merger always leads to higher average cost efficiency, the effect on quality provision depends on the strategic nature of quality competition, which in turn depends on the degree of altruism and the effectiveness of cost‐containment effort. If qualities are strategic complements, then a merger leads to lower quality for all hospitals. If qualities are strategic substitutes, then a merger leads to higher quality for at least one hospital, and might also yield higher average quality provision and increased patient utility.