Random walk to innovation: Why productivity follows a power law

This paper examines a search model in which knowledge is created as rational, but poorly informed, innovators obtain new ideas from combinations of existing ideas. We assume that the productivity of an idea is stochastic and depends on the productivity of the parental ideas. Importantly, we assume that the contribution of these parents to the productivity of the final idea is enhanced by prior use of these in knowledge creation. We identify conditions on the search costs leading to two properties: 1) the tail of the distribution of the productivity of innovations is a power law, and 2) the number of citations, i.e., times an idea is used in the process of innovation, follows a displaced power law. Both these properties are consistent with the available empirical evidence on the productivity of innovations and on patent citations.     

Characterising equilibrium selection in global games with strategic complementarities

Global games are widely used to predict behaviour in games with strategic complementarities and multiple equilibria. We establish two results on the global game selection. First, we show that, for any supermodular complete information game, the global game selection is independent of the payoff functions chosen for the game?s global game embedding. Second, we give a simple sufficient criterion to derive the selection and establish noise independence in many-action games by decomposing them into games with smaller action sets, to which we may often apply simple criteria. We also report in which small games noise independence may be established by counting the number of players or actions.     

Sabotage in Tournaments with Heterogeneous Contestants: Empirical Evidence from the Soccer Pitch

In this paper, we address the problem of sabotage in tournaments with heterogeneous contestants. In a first step, we develop a formal model, which yields the prediction that favorites exert higher productive effort, while underdogs are more tempted to engage in destructive actions (sabotage). This is because favorites have a higher return on productive effort and both types of effort are substitutes. In a second step, we use data from German professional soccer to test this prediction. In line with the model, we find that favorite teams win more tackles in a fair way, while underdog teams commit more fouls.     

Political Processes in Management,Organization and the Social Shaping of Technology

The notion of path dependence is regularly deployed to account for the way past commitments have an important bearing on current choices. We make a distinction between the notions of past and path dependence and focus on path dependence as two types of event sequences: selfreinforcing and reactive. We then address the issue of how the notion of path dependence can be reconciled with a temporal-relational perspective on agency. These notions are tested and refined using a longitudinal case study of ICI's move away from chlorofluorocarbons (CFCs) and the decision to build three plants to produce one CFC alternative (HFC-134a) for the global refrigeration market. The paper concludes with a discussion of the implications of path dependence for research on technological and firm evolution.     

On the Transition from Long-period to Short-period Equilibria

The paper examines the contributions of Myrdal, Lindahl, Hicks and Hayek that initiated the transition from the traditional long-period method to the methods of 'intertemporal' and 'temporary equilibria' in neoclassical general equilibrium analyses. It is shown that in the early contributions the idea of a tendency towards a long-period position was not completely abandoned, and that the new 'dynamic' equilibrium concepts were conceived by some of their originators as useful analytical devices for studying transitions between long-period equilibria only.     

The Copeland rule and Condorcet’s principle

Summary. The purpose of this note is to shed some light on the relationship between the Copeland rule and the Condorcet principle in those cases where there does not exist a Condorcet winner. It will be shown that the Copeland rule ranks alternatives according to their distances to being a Condorcet winner.Received: 30 July 2003, Revised: 31 December 2003, JEL Classification Numbers: D70, D71.Christian Klamler: I am very grateful to Daniel Eckert and Nick Baigent for their helpful comments.     

Sraffa’s Constructive and Interpretive Work,and Marx

ABSTRACT

This article provides a summary account of Piero Sraffa’s constructive and interpretive work on the classical approach to the theory of value and distribution and its relationship with Marx’s contributions. It is shown that in the early phase of his constructive work Sraffa developed his equation systems by adopting a ‘physical real cost’ approach and a strictly objectivist point of view, and completely eschewed Marx’s labour-based approach and the related Marxian concepts. Only at a later stage did he explore systematically the relationship between his own modern re-formulation of the surplus approach to the theory of value and distribution and Marx’s contribution. He considered Marx’s most important analytical contribution to the further development of the surplus approach to consist of the re-integration of circular production relations, which allowed him to see the existence of a maximum rate of profits and its role in an analysis of accumulation and technical change.     

Machine Learning Predictions of Housing Market Synchronization across US States: The Role of Uncertainty

The Journal of Real Estate Finance and Economics - We analyze the role of macroeconomic uncertainty in predicting synchronization in housing price movements across all the United States (US) states...     

The Importance of Board Risk Oversight in Times of Crisis

Journal of Financial Services Research - This study investigates the relationship between board risk oversight practices at financial institutions in the EU and systemic risk during the sovereign...     

Leverage and Risk Taking under Moral Hazard

Journal of Financial Services Research - In this paper, I analyze the effectiveness of different capital regulations in mitigating the effects of moral hazard that exists only for systemically...