Conjectural Variations, Market Power, and Optimal Trade Policy in a Vertically Related Industry

The paper introduces the conjectural variations and bargaining approaches into a vertical model wherein a foreign upstream firm supplies one input to two downstream firms that produce differentiated products for the export market. Various downstream firms’ competition modes and upstream's pricing schemes emerge as special cases of this formulation. The authors show that the optimal export policy of a downstream country depends crucially on the downstream firms’ conjectures of rivals’ responses, the upstream firm's pricing schemes, their relative bargaining powers, and the degree of product differentiation. If the upstream's pricing or bargaining power is strong (weak) and if the downstream's degree of competition is high (low), a tax (subsidy) is optimal owing to a strong (weak) vertical profit‐shifting effect and a weak (strong) horizontal effect.     

Chief executive officer compensation,firm performance,and strategic coopetition: A seemingly unrelated regression approach

Coopetition denotes the simultaneous cooperation and competition in a business relationship and is broader in depth and width than competition. This pioneering comparative study employs a seemingly unrelated regression system to investigate the impact of peer-pay bias and pay-for-relative performance upon the highly controversial chief executive officer (CEO) pay. The analysis of the 21 Dow–Jones firms from 1992 to 2013 shows that the pay-for-performance relationship is contingent on the fit between CEO's strategic decisions and firm's core competency. The CEO pay is driven by the intensification of firm coopetition. We contribute to executive compensation, corporate strategy, and econometric methods.     

Singapore's transition to innovation-based economic growth: infrastructure, institutions and government's role

Technological progress and innovation plays a central role in a country's economic progress. As an economy advances to the global technological frontier and narrows the technological gap, an innovation-based growth strategy that focuses on investments in R&D and technology creation offers the greatest potential for economic growth. In this paper, we discuss the requirements for a successful transition, in terms of changes to the technology infrastructure, economic institutions and the incentives' structure. This paper outlines the efforts made by Singapore to re-make itself as an innovation-based economy, and the challenges faced by the government in transforming the nation's infrastructure and institutions to develop innovation capabilities and encourage entrepreneurship.     

The effect of government highway spending on road users' congestion costs

Policymakers attempt to reduce the growth of congestion by spending billions of dollars annually on our road system. We evaluate this policy by estimating the determinants of congestion costs for motorists, trucking operations, and shipping firms. We find that, on average, one dollar of highway spending in a given year reduces the congestion costs to road users only eleven cents in that year. We also find that even if the allocation of spending were optimized to minimize congestion costs that it still is not a cost-effective way to reduce congestion. We conclude the evidence strengthens the case for road pricing.     

THE DISTRIBUTION OF INCOME IN TRINIDAD AND TOBAGO, 1957–76*

This article describes what happens to income distribution during intensive changes in gross domestic product due to external market conditions. It deals specifically with an open market petroleum-based economy, Trinidad and Tobago, and reviews changes in national product and income levels and the income distribution pattern over the twenty year period 1957–76. The paper argues that during the period characterized by subperiods of steady growth and rapid growth in GDP (the latter associated with the petroleum price rise), income inequality increased between 1957 and 1972 and then decreased in the post petroleum-price-rise period of rapid growth 1973–76. While the effect of intensive changes in national product did trickle down to the lower income groups, income inequality in 1975–76 was greater than that existing in 1957–58. An examination of the spatial, occupational and temporal aspect of the distribution pattern points towards the elimination of structural dualism in the economy as the surest path towards greater income equality in Trinidad and Tobago.     

A market-based proposal for encouraging water use efficiency in a tourism-based economy

Barbados is almost wholly reliant on groundwater as its source of water largely due to replenishment during the wettest 1-3 months of the year. Annual renewable freshwater resources place it in the top 15 of the world's most water scarce countries. Acknowledging the scope of the problem, government officials have noted that the amount of water available for economic activity has become very limited and might therefore affect future development. Most of the proposed measures to date have focused on mains replacement and increased energy efficiency but little thought has been given to demand-side management. This study therefore attempts to provide a framework for managing the water resources in the island's single largest industry: tourism. It is conceptualised that a system of tradable permits would not only enhance the management of water resources, but should also reduce the cost of water resources to hotels.     

Competing at the frontier: The changing role of technology policy in Singapore's economic strategy

For an economy competing at the global frontier, an innovation-based growth strategy requires a well-developed technological infrastructure, a set of capabilities-focused technology policies, as well as an institutional environment that stimulates innovation and entrepreneurship. This paper examines the role played by science and technology policy in an economy's transition to an innovation-based growth strategy. We discuss the challenges governments face as they restructure economic institutions to deepen R&D capabilities and encourage technology creation. We review Singapore's experience in this regard and assess its ongoing efforts to remake itself to compete at the global frontier.     

Household Demand, Network Externality Effects and Intertemporal Price Discrimination

This paper examines the optimality of intertemporal price discrimination when network externality effects are present in the consumption of a durable good. We conduct our study in two settings. In a model with two household types, utilities are dependent on the cumulative proportion of households that have purchased the durable good. Next, in a model with a continuum of household types, we extend the analysis to the case where households consume both a durable good and a stream of non-durable goods. We show that in both settings, the presence of network externalities facilitates a sales strategy with intertemporal price discrimination.