Endogenous institutions in bureaucratic compliance games

We consider a set-up where two governments have either conflicting or matching preferences on the provision of differentiated (local) goods supplied by a common monopoly bureau. We develop a two-stage game. At stage-1, the two governments decide whether or not to merge into a single institution. At stage-2, all players simultaneously and independently take their decisions in terms of production and rents, with perfect knowledge of the other players' strategies. We solve the subgame perfect Nash equilibrium of this game, and show that, if the bureau immediately updates its objective function to institutional changes, then the governments always prefer merging. However, if there is an initial bureaucratic inertia in adjusting the bureau's objective function to the institutional change, then ruling politicians may prefer decentralisation to centralisation, depending on the strategic properties of the compliance game and on their own discounting. Received: May 1999 / Accepted April 2000     

The impact of regulating mobile termination rates and MNO-MVNO relationships on retail prices

A mobile virtual network operator (MVNO) provides mobile telecommunication services by eluding the constraints of the radio communication infrastructure and establishing an agreement with a hosting network operator (HNO) for the use of its spectrum. Thus, MVNOs offer a wide range of mobile services and directly compete with every mobile network operator (MNO). This paper studies the economic justifications for potential regulatory intervention that defines the level of mobile termination rates (MTRs) and negotiations and agreements among MVNOs and HNOs. The results show that symmetric MTR reduction leads to competition growth among operators, forcing every operator to reduce retail prices and, consequently, to enhancing consumer welfare. The paper also finds that a collaborative strategy adopted by an HNO and an MVNO is advantageous for both and induces a reduction in retail prices, thus weakening other MNOs.     

Correction to: Highway to (Digital) Surveillance: When Are Clients Coerced to Share Their Data with Insurers?

Journal of Business Ethics - The initial online publication contained a typesetting mistake in the author information. The original article has been corrected.     

Technology and labor regulations: theory and evidence

This paper shows that different labor market policies can lead to differences in technology across sectors in a model of labor saving technologies. Labor market regulations reduce the skill premium and as a result, if technologies are labor saving, countries with more stringent labor regulation, which bind more for low skilled workers, become less technologically advanced in their high skill sectors, but more technologically advanced in their low skill sectors. We then present data on capital-output ratios, on estimated productivity levels and on patent creation, which tend to support the predictions of our model.     

On Linking Business Ethics, Bioethics and Bioterrorism

The 20th century produced overwhelming advances in biomedicine with the 1990s introducing 148,000 patents as part of the mapping and sequencing of the human genome. Bioethical realities and debates of prenatal genetic testing, new reproductive technologies, stem cell research, human cloning and DNA data banks have obscured the less provocative public and social issues of gun control, immunization, employee leave programs to assist care for dying relatives, emergency room use as primary care sites by the uninsured, and medical care provision to the homeless. With the events of September 11, the focus has shifted to bioterrorism: an international and global concern that portends broad environmental consequences while requiring a local, community response of which the business enterprise is a part. The tension that results from a required local and global response to bioterrorism and biotechnology by the business community forms a dialectic and provides a venue for addressing business ethics in an international forum. This paper explores the relationship of events and its meaning for business. Part I provides the background of biotechnology and bioterrorism and how the two form a dialectic reality that shapes ethical debate. Part II presents provocations and questions for an emerging ethic based on the integrative response from the public health, medical, business and religious communities. Four areas for business contribution in shaping emerging ethics in the age of biotechnology—bioterrorism are suggested.     

Shopping for Human Rights. An Introduction to the Special Issue

Globalization, free trade, and individualization have opened up a worldwide marketplace for trading goods. The fair trade movement and other political consumerist endeavours view consumers as important active holders of responsibility for global welfare. Civil society and governments strive to teach consumers how political consumerism can be used as a push factor to change market capitalism. The market itself can also create an interest in political consumerism and, thereby, teach consumers about the political responsibility embedded in their shopping choices. When this happens, the market works as a pull factor for securing human rights. Questions can be raised about the significance of political consumers as a way to solve complex global problems. Political consumerism may be a fair-weather option that loses its attractiveness in times of downward private and corporate economic spirals. Parts of the fair trade movement believe that there are problems with sole reliance on voluntary consumer choice and using personal money and private capital to solve human rights problems by shopping them away. The exponential growth of voluntary codes of corporate conduct and labelling schemes has also created contradictory practices, incoherence in efforts, and superficial changes or what activists call “sweatwash.” Increasingly, many actors call on international law to create new standards that apply direct human rights obligations on corporations.