Competition and the location of overseas assembly

Abstract. How does international competition affect overseas outsourcing? To address this question, this paper studies production decisions in the U.S.'s overseas assembly program (OAP). In this setting, a number of regularities emerge. First, prior participation is highly correlated with current participation, which suggests that sunk costs influence outsourcing choices. Second, increases in own‐country costs and declines in competitor‐country costs reduce participation probabilities. In addition, these persistence and cost effects are much larger for outsourcing in developing countries. Finally, outsourcing responses appear to reflect differences in 'market thickness,’ as cost sensitivity generally rises with competitor presence.     

How to use benchmarking to reduce planning and purchasing costs

Each year at budget time, the standard question asked of the materiel management group is "Why do you have so many people?" Our answer had been that we do not have enough people. With more people, we could lower total cost and manage inventories better. The inevitable standoff occurs with each side feeling that the other does not understand the need for materiel management services. In early 1993, we decided to be prepared to answer the famous question of Dr. W. Edwards Deming, "How do you know?" We wanted to show people we really did know our business and thus initiated a project to benchmark planning, purchasing, and scheduling services of other companies. This article shares not only the results of the benchmarking efforts, but also the techniques for getting started.     

Preservation: Planning for the survival of things

Preservation—the immortalisation of living and designed things—is a channel for transmitting messages from the past to the future. Image is all important for conveying the meaning. To be preserved, a thing must have a constituency of supporters and a long-lived institution to serve as trustee: when appreciators of the message are no longer recruited, extinction is at hand. Community ecology, if extended to images, suggests some appropriate preservation policies for societies approaching steady state, eg adding to the total stock of biomass, to diversity, and to useful knowledge, while promoting new organised relationships between man and environment.     

The intraday liquidity management game

We use a game theoretical framework to analyze the intraday behavior of banks with respect to settlement of interbank claims in a real-time gross settlement setting. The game played by banks depends upon the intraday credit policy of the central bank and it encompasses two well-known game theoretical paradigms: the prisoner's dilemma and the stag hunt. The former arises in a collateralized credit regime where banks have an incentive to postpone payments when daylight liquidity is costly, an outcome that is socially inefficient. The latter arises in a priced credit regime where the postponement of payments can be socially efficient. Banks are risk neutral, but we show that most of the results are unaffected by risk aversion.     

Generating Enhanced Fishery Rents by Internalizing Product Quality Characteristics

This paper demonstrates howadditional rents are generated in a fisherycharacterized by intraseasonal variation infish characteristics, including size,condition, and composition. Based on anexpanded conceptual model of the optimalharvest rule, fish characteristics affect preand post harvest production yields and outputprices. A dynamic empirical model, which uses asystem of quality characteristics and anhedonic equation, illustrates the complexrelationships and management choices associatedwith internalizing seafood qualitycharacteristics in a hake fishery. The modelretains the regulated open access managementsystem, but controls intertemporal andintersectoral quotas, production portfolios,and total allowable catch. Results demonstratethat including revenue-side effects frominternalizing fish quality can generatesignificantly greater rents and reduce therelative benefits of increased productionyields. If excluded, bioeconomic models canunderestimate the level of regulatory rentdissipation and overemphasize managementobjectives such as full utilization, whichcould misdirect processing decisions and resultin a suboptimal resource management plan.Implications for data collection,multidisciplinary analysis, and improvements inmarine resource management are discussed.     

How are Scope and Adding up Relevant for Benefits Transfer?

In this paper, we explore ways in which the theoretical constructs of scope and adding up can inform and improve the practice of benefit transfer. Specifically, we examine how the stated preference literature on scope and adding up can inform three critical steps in benefits transfer: study site selection, including studies to select for use in a meta-regression; calibrating benefit functions; and assessing transfer validity.     

Existence of a Pareto-optimal equilibrium in nearly-stationary overlapping-generations economies

Summary In overlapping-generations models of fiat money, the existence of a Pareto-optimal equilibrium — which defines an optimal quantity of money — is more general than well-known counter-examples suggest. Those examples, having no optimal equilibrium just because there are small variations in households' tastes and endowments across generations, are not typical. On the contrary: For an open-dense, full-measure subset of smooth stationary economies and an open-dense subset of continuous stationary economies, introducing small variations in tastes and endowments across generations preserves the existence of an optimal equilibrium. Put simply, optimal equilibria generically exist for nearly-stationary economies.I thank Scott Freeman, Katsuhiko Kawai, and two referees for proofreading this text; all lead to clarifications.     

Francesco Forte’s Contributions to <Emphasis Type="Italic">Essentials of Fiscal Sociology</Emphasis>

Francesco Forte has made major contributions to many areas of economics with the result that his theoretical work and applications have opened new areas of inquiry. This paper connects Forte’s work with the work of Jürgen Backhaus on fiscal sociology. Positioned at the crossroads of economics and sociology, the answers to these questions helped fill the void which gave rise to the field of fiscal sociology. Fiscal sociology is primarily a study of taxation and fiscal policies which illuminates core issues in the sociology of contemporary capitalism. It includes the causes of poverty and inequality in rich countries and adds to our understanding the basis for the inequality between rich and poor countries. Our paper reviews several of Forte’s papers on Pareto’s fiscal sociology and the failure of European planning for less-developed regions. The paper highlights Forte’s contributions to economic theory focusing on Pareto’s sociological theory and the influence of the European Union on regional development.