Competitive Neutrality in Access Pricing

This article examines the notion of competitive neutrality when setting access prices for vertically integrated bottleneck networks. In contrast to the claims of regulated firms (for example, Telstra), it is not possible to argue that access charges that involve unit prices in excess of short‐run marginal cost reflect competitive neutrality. That is, we demonstrate that in general models of downstream oligopoly, upstream prices that differ from marginal cost are not competitively neutral in the sense of placing integrated and non‐integrated firms on an equal basis.     

Book Notices

Books review in this article:
The German Dilemma: An Appraisal of Anti-Semitism, Ultra-Nationalism and Democracy in West Germany.
Diary of a Strike. By Bernard Karsh
A Short History of New York State. By David M. Ellis, James A. Frost, Harold C. Syrett and Harry J. Carman
Dalla puberta alia prostituzione. By Primo Sacripanti
Dictionary of Personnel and Industrial Relations. By Esther L. Becker     

Changing Agricultural Markets: Industrialization and Vertical Coordination in the Dry Edible Bean Industry

The agricultural sector is undergoing a transformation that is altering marketing relationships to better serve customer needs. These changes are drawing consumers, processors, and farmers into closer marketing relationships, improving the flow of information up the supply chain, and enabling firms to better meet customer demand. This paper uses case studies to analyze this process as it is occurring in the dry edible bean industry. A major finding is that contracts are not necessarily used in these new marketing relationships. Other factors—such as quality monitoring, certification procedures, and reputation—were also found to be highly important.     

RESIDUAL WAGE DISPARITY AND COORDINATION UNEMPLOYMENT*

How much of residual wage dispersion can be explained by an absence of coordination among firms? To answer, we construct a dynamic directed search model with identical workers where firms can create high‐ or low‐productivity jobs and are uncoordinated in their offers to workers, calibrated to the U.S. economy. Workers can exploit ex post opportunities once approached by firms, and can conduct on‐the‐job search. The stationary equilibrium wage distribution is hump‐shaped, skewed significantly to the right, and, with baseline parameters, generates residual dispersion statistics 75–90% of those found empirically. However, the model underestimates the average duration of unemployment.