Setting price or quantity: Depends on what the seller is more uncertain about

We consider a seller with uncertain demand for its product. If the demand curve were certain, then setting price and setting quantity would be equivalent ways to frame the seller’s problem of choosing a profit-maximizing point on its demand curve. With uncertain demand, these become distinct sales mechanisms. We distinguish between uncertainty about the market size and uncertainty about the consumers’ valuations. Our main results are that (i) for a given marginal cost, an increase in uncertainty about valuations favors setting quantity whereas an increase in uncertainty about market size favors setting price; (ii) keeping demand uncertainty fixed, there is a nonmonotonic relationship between marginal costs and the optimal selling mechanism (setting price or quantity); and (iii) in a bilateral monopoly channel setting, coordination occurs except for a conflict zone in which the retailer’s choice of a selling mechanism deviates from the coordinated channel selling mechanism.     

Capital controls,capital flows and external crises: evidence from India

Despite the widespread use of capital controls, India has experienced several balance of payments crises. This paper examines the solvency and sustainability of India's external imbalances and analyses the optimality of its capital flows. We use two approaches: an intertemporal model of the current account that allows for capital controls, and a composite model of macroeconomic indicators that yields probabilities of future balance of payments crises. The results indicate that India's intertemporal budget constraint is satisfied and that the path of its current account imbalances is sustainable, with some support for the optimality (given capital controls) of its external borrowing.     

When the former ceo stays on as board chair: effects on successor discretion,strategic change,and performance

Prior research on CEO succession has omitted consideration of a critical institutional reality: some exiting CEOs do not fully depart the scene but instead remain as board chairs. We posit that predecessor retention restricts a successor's discretion, thus dampening his or her ability to make strategic changes or deliver performance that deviates from pre‐succession levels. In short, a predecessor's continuing presence suppresses a new CEO's influence. Based on analysis of 181 successions in high technology firms, and with extensive controls (for circumstances associated with succession, the firm's need and capacity for change, and for endogeneity), we find substantial support for our hypotheses. In supplementary analyses, we find that retention has a more pronounced effect in preventing a new CEO from making big performance gains than in preventing big drops. Copyright © 2011 John Wiley & Sons, Ltd.     

Effects of information about invasive species on risk perception and seafood demand by gender and race

In this paper we consider the effects of negative and positive risk information on perceived seafood risks and seafood consumption by gender and race. The data is from a Mid-Atlantic survey of coastal seafood consumers. We elicit risk perceptions in three risk scenarios with a dichotomous choice with a follow-up question format. We elicit continuous revealed and stated preference seafood consumption in nine risk and price scenarios. Analysis in four gender and race categories indicates that demographic groups respond to the positive and negative information in different ways. Communication of risk information as risk mitigation policy is a challenge.     

Pasture taxes and agricultural intensification in southern Mali

This study integrates biophysical simulation data with a farm household model of intertemporal optimization, to investigate changing crop-livestock management practices in the Sudano-Guinean zone of Mali. Over a 15-yr time horizon we find that free grazing on the commons remains more attractive to the representative household than adopting more labor-and capital-intensive confinement systems, but that a relatively low level of pasture tax (around US$3 per livestock unit per year) would be sufficient to induce intensification. Because confinement raises output, the net cost of the tax to the household is only about US$1 per unit per year. Imposing pasture taxes to induce intensification could raise community welfare, if the value of commons resources liberated by reduced grazing pressure exceeds that level.     

Staffing marketing positions during global hyper-competitiveness: a market-based perspective

As organizations globalize their operations, there appears to be an imperceptible shift in focus from internal tangible resources to those of external intangible relational resources; in other words, economies of scale appear to being replaced by economies of global scope. The strategic implications of this swing in the importance of resource bases can also have a significant impact on the international human resource management area. Identifying managers with local market knowledge and contacts becomes a critical consideration in the selection process. Maintaining on-going personal relations in foreign markets also helps to cement inter-organizational relationships such as strategic alliances. In the ‘think global, act local’ relational networks of global business, inpatriate managers appear to have the necessary characteristics of both organizational trust and local tacit knowledge to be effective global managers.     

THE CLIOMETRICS OF INTERNATIONAL MIGRATION: A SURVEY

Abstract This is a survey of some of the key studies in the literature on international migration in history that may be described as cliometric. This literature uses the concepts and approaches of applied economics to investigate a range of historical issues and there are strong parallels with the questions that have been addressed in the literature on contemporary migrations. Here I focus on the period 1850–1940 and chiefly on migration from Europe to the New World. The survey is organized around six themes that include the forces driving migration, over time and across space; the assimilation of migrants and their effects on wages and income distribution in source and destination countries; and the evolution of immigration policy. Although this literature has drawn heavily on the tool kit of applied economists it also provides a wider perspective on many of the issues that concern migration today.     

How much prestige is enough? Assessing the value of multiple types of high-status affiliates for young firms

Young, unproven firms can signal their worthiness, or potential, through affiliations with various types of prestigious parties. Drawing from signaling theory, we present a formal consideration of the implications of multiple numbers and types of prestigious affiliates for IPO valuations. We argue that different types of prestigious affiliates – prestigious executives, directors, venture capital firms, and underwriters – convey different signals of IPO worth, depending on the extent to which they provide certification or substantive benefits. Based on a sample of 257 software IPOs, we find considerable support for our expectations. The benefits of prestigious executives and directors accumulate in a linear, more is better fashion; in contrast, the payoffs from VC and underwriter prestige accumulate in a curvilinear fashion. We discuss the theoretical implications of these findings and propose an agenda for future research.