Sequential capacity and price choices in a duopoly model with demand uncertainty

The paper is a revised version of chapter V of my thesis (Hviid, 1987). I would like to thank Huw Dixon, Clive Fraser, Birgit Grodal, Norman Ireland, Michael Teit Nielsen, Kevin Roberts, Peter Skott, and Bente Villadsen for helpful comments and discussion, and a referee for helpful suggestions. An earlier version was presented at the Universities of Aarhus, Copenhagen, Essex and Warwick. I am grateful to participants for many helpful suggestions and comments. The usual disclaimer applies. Financial support from The Danish Social Science Research Council is gratefully acknowledged.     

Technology transfer as a learning and developmental process: an analysis of Norwegian programmes on technology transfer

This paper focuses on understanding technology transfer. The point of departure is to construct a model for transfer of technology based on organizational theory. The model identifies the transfer as a socio-technical learning and developmental process (TLD process). Technology is understood as a social construction where human choice and values determine the outcome. A successful transfer of new technology depends on a socio-technical change process, where the success is reached when the local company profitably integrates technology in its day-to-day operation.The TLD model is used as the basis for an empirical analysis of Norwegian programmes on technology transfer. This work is introduced by giving an overview of the literature evaluating the programmes. This literature, strongly influenced by qualitative methodology, does not give much insight into the basic elements of the TLD process. Therefore, the next step in the research is to investigate the models for the programmes in operation.The main conclusion is that no programme design is consciousiy based on understanding technology transfer as a socio-technical learning and developmental process. Firstly, technology is usually considered as a material artefact and not as a carrier of knowledge and cultural values. Secondiy, the traditional developmental model is bureaucratic and top-down. The intention is to furnish companies with technology and not to let the potential use of new technology be integrated into a planned learning and developmental process.The key point in this paper is to advocate that policymakers and managers of technology transfer programmes redesign their programmes to incorporate the important and necessary learning and developmental processes. If this is taken seriousiy, it will be possible to take full advantage of technology transfer as an important element in technology policy.     

Catching-Up Investment without Regulatory Commitment

This paper analyses a regulated firms incentives to undertake catching-up investments when the firm has private information about the initial technology and the regulator is unable to commit himself to incentive contracts prior to the firms investment decision. In the absence of commitment power, the firm takes into account that the investment decision may serve as a signal to the regulator about the firms initial technology. Any pure strategy equilibrium of the signaling game is shown to be pooling in the sense that the efficient type mimics the inefficient type by investing. By not following this strategy, the efficient type reveals its efficiency to the regulator, who responds by inducing the firm to produce without rents. Restricting attention to undefeated pooling equilibria, the level of investment is shown to be lower than the first-best level.     

Benefit shifting: The case of sickness insurance for the unemployed

This study describes the probability of transition from unemployment with unemployment insurance (UI) to sickness insurance (SI), using a proportional hazard duration model and a large register-based dataset. The combination of limited UI duration and the fact that SI rights do not depend on remaining UI, creates an incentive to use SI to effectively extend UI. The separate effects of elapsed unemployment duration and of UI duration on hazard rates are identified through a reform of the UI system. The estimated hazard rate for transition from unemployment to SI increases sharply the last months before UI exhaustion. The spikes are larger for diagnosis for mental illness, and vary across individuals, but are present for all groups and all diagnoses.     

The external networking behaviour of public managers - the missing link of weak ties

There has been an increasing focus on managerial external networking behaviour within public administration. While most previous quantitative research has analysed such behaviour one dimensionally, we suggest a two-dimensional conceptualization based on the concepts of weak and strong ties. Utilizing measures resembling previous research, we explore the utility of the approach in an exploratory study of Danish local government. Our findings suggest that the two dimensions of external networking behaviour are distinct. We discuss our approach compared to previous approaches and argue that a conceptualization based on the distinction between strong and weak ties provides a promising framework for future research.     

Estimating Loan‐to‐Value Distributions

We estimate a model of house prices, combined loan‐to‐value ratios (CLTVs) and trade and foreclosure behavior. House prices are only observed for traded properties and trades are endogenous, creating sample‐selection problems for existing approaches to estimating CLTVs. We use a Bayesian filtering procedure to recover the price path for individual properties and produce selection‐corrected estimates of historical CLTV distributions. Estimating our model with transactions of residential properties in Alameda, California, we find that 35% of single‐family homes are underwater, compared to 19% estimated by existing approaches. Our results reduce the index revision problem and have applications for pricing mortgage‐backed securities.     

On the use of low-price guarantees to discourage price cutting

This paper formulates a novel test to assess whether, and to what extent, firms might be using low-price guarantees to discourage their rivals from cutting prices. The test is based on a comparison of paired observations of advertised prices that are set by competing firms at the same point in time on similar items, where one price is set by a firm that has a low-price guarantee and the other by a firm that does not have a low-price guarantee. Using data on retail tire prices, we find that the majority of paired observations involving firms that have price-matching guarantees are consistent with what one would expect if firms were using them to discourage price cutting, whereas the majority of paired observations involving firms that have price-beating guarantees are not. This suggests that price-matching and price-beating guarantees may be serving different purposes. The evidence also suggests that guarantees that apply to advertised prices only may be serving different purposes than guarantees that apply to both advertised and selling prices.     

Forecasting the Commercial Attractiveness of User‐Generated Designs Using Online Data: An Empirical Study within the LEGO User Community

Web 2.0 technologies and the rapid emergence of virtual user communities have created new challenges and opportunities for producer firms. The challenges concern the problem of idea overload when a large number of users are empowered to develop their own design creations. At the same time, opportunities arise because firm‐hosted user communities offer a promising source of creativity outside the firms' boundaries. In this paper, we study which data present in firm‐hosted online communities on user‐generated designs and user‐designers can be used to help a focal producer firm to reduce its workload in the selection phase by predicting which user‐generated designs it would most likely perceive as commercially attractive. Prior research emphasizes that among the vast amount of ideas generated in online user communities, it is the lead users' ideas that tend to stick out in terms of commercial attractiveness. Our paper aims to provide the next step by developing a heuristic for filtering commercially attractive ideas that are generated in online user communities. Therefore, prior lead user research is used as a point of reference for our study. This research stream has produced rich insights into the characteristics of users who are capable of developing new products that are commercially attractive from the perspective of a focal producer firm, as well as the characteristics of artifacts that such users tend to develop. Based on prior lead user research, we use theories on problem solving, creativity, and new product adoption to develop hypotheses on the factors that might influence the attractiveness of user‐generated designs from the focal producer firm's perspective in such a setting. Applying multilevel generalized linear modeling, 1799 designs from 116 user‐designers in the LEGO user community are analyzed. Our findings show that three prominent variables, the complexity of a given design, positive feedback from the community on specific designs, and the intensity of design activity by a user‐designer, can be used by a focal producer firm as filtering heuristics for the selection of promising user‐generated designs. We find an inverted U‐shaped relationship between the complexity of a user‐generated design and its perceived commercial attractiveness. Furthermore, we find a positive relationship between the positive feedback received by a given user‐generated design within the peer community and its perceived commercial attractiveness, as well as a U‐shaped relationship between the intensity of a certain user‐designer's activities and the likelihood that a given design by that user will be perceived as commercially attractive. The study is a first step toward a new Web‐based marketing research approach that can enable firms to filter vast numbers of user‐generated designs more effectively and efficiently.     

The Transnational State and the Infrastructure Push

In 2010, the G20, in cooperation with major international organisations, launched a comprehensive effort – here labelled the infrastructure push – to promote infrastructure investments around the world. Using selected transnationalised elements from historical materialism, this is explained as a transnational state initiative to secure general material conditions for capitalist growth in a manner that is profoundly shaped by power relations. The infrastructure problem was allowed to grow during neoliberalism because of the hegemony of finance; the push is a result of and reflects a weakening of finance and strengthening of industrial interests in the transnational power bloc, as well as a strengthening of the emerging economies. This potential hegemonic project has gained the support of the global labour movement, while also has been subject to serious criticism from civil society organisations, speaking for the most vulnerable subaltern social forces. The empirical analysis also shows that the transnational state in this policy area works as a flexible, networked cooperation of G20 states and leading international organisations in ongoing dialogue with non-state actors, especially transnational business. In this cooperation, the international organisations have a relatively autonomous role in line with a historical materialist understanding of state apparatuses.     

Consumption,government spending,and the real exchange rate

Using panel structural VAR analysis and quarterly data from four industrialized countries, we document that an increase in government purchases raises output and private consumption, deteriorates the trade balance, and depreciates the real exchange rate. This pattern of comovement poses a puzzle for both neoclassical and Keynesian models. An explanation based on the deep-habit mechanism is proposed. An estimated two-country model with deep-habits is shown to replicate well the observed responses of output, consumption, and the trade balance, and the initial response of the real exchange rate to an estimated government spending shock.