Coexistence of large firms and less efficient small firms under price competition with free entry

This study constructs a game of technology selection and Bertrand-like price competition in a market with free entry. It demonstrates the existence of a Nash equilibrium in which a small number of firms adopting a large-scale technology coexist with, and charge a lower price than, a large number of firms adopting a small-scale technology. In this equilibrium, both available technologies and resources are allocated efficiently. This result provides a new economic rationale for antitrust law in general and, in particular, the US Sherman Act, wchich regards free entry and price competition as of foremost importance for maintaining market quality.     

Continuity and Change in the Employment and Promotion of Japanese White-Collar Employees: The Case of the House of Mitsui

Lifetime employment is one of the most conspicuous featuresof contemporary large Japanese corporations. The employmentpractices of merchant houses in the Edo period (1603–1868)are sometimes proposed as one origin of such lifetime commitment.Little attention has been paid, however, to the connectionsbetween long-term employment in the Edo period and its practicein the twentieth century. This article examines how Edo employmentpractices were adapted to the environment of the early twentiethcentury within a new context of modern educational institutionsand the need for professional managers.     

Learning-Oriented Sales Management Control: The Case of a Pharmaceutical Company

ABSTRACT

Purpose: The primary goal was to identify organizational conditions for developing a learning-oriented behavioral control system, an issue that has been neglected in previous studies.

Design/Methodology/Approach: The authors conducted a case study of Nippon Boehringer Ingelheim (NBI).

Findings: We found that a behavior-based sales management control system facilitates learning by salespersons when 1) the focus is on skill development, 2) fewer key performance indicators are being used, and 3) supportive supervision and knowledge sharing are promoted.

Research Limitations: Because this was a single case study, it is necessary to investigate other cases in other countries and to compare the results with those of NBI to develop theories about learning-oriented behavior control systems.

Practical Implications: In the early stages of sales reform, sales managers and medical representatives should not use multiple process indicators for multiple evaluations; rather, they should use a small number of process indicators (e.g., number of visits per day) so that all individuals concerned about a problem can share information and promote improvement.     

Sales management: Learning and innovation in Japan

Abstract

The purpose of this study was to examine ways to promote learning, based on four empirical studies of salespeople and sales departments in Japan. First, analyses of survey data of 192 real estate salespeople indicated that customer- and goal achievement-oriented sales beliefs enhanced experiential learning at work. Second, analyses of data of 193 sales departments indicated that customer orientation in sales departments promotes innovation by facilitating task conflict and preventing process conflict. Third, analyses of survey research of 199 sales departments indicated that behavior-based and knowledge-based management control systems are effective at promoting learning and innovation. Finally, a case study of Nippon Boehringer Ingelheim (NBI) revealed several ways to facilitate learning using a behavior-based sales management control system. Theoretical implications for sales management systems were examined.     

A Note on Environmental Awareness and Cross-Border Pollution

Considering a Nash equilibrium in which a developed country chooses the amount of foreign aid and a developing country sets the emission tax rate and the proportion of the received aid allocated to public abatement of pollution, it is shown that an increase in the recipient countrys environmental awareness will reduce the level of cross-border pollution and benefits the donor though its foreign aid is increased.     

INSUFFICIENT ENTRY OF EMPLOYEE‐CONTROLLED FIRMS IN A FREE‐ENTRY OLIGOPOLY

This study is a theoretical examination of whether employee‐controlled firms (ECFs) enter a free‐entry oligopolistic market excessively or insufficiently, from the viewpoint of welfare maximization. The excess entry theorem is well known in oligopoly theory. According to this theorem, a greater number of profit‐maximizing firms enter a free‐entry oligopolistic market than is optimal for welfare maximization. We demonstrate the possibility that insufficient entry arises when ECFs compete in a free‐entry market. In particular, we show that if both the demand and cost functions are convex, insufficient ECF entry necessarily occurs. Our results suggest that competition among firms seeking purposes other than profit might lead to insufficient entry because differences in competing firms’ objectives affect the intensity of market competition.     

Does advertising mislead consumers to buy low-quality products?

This paper investigates the interaction between consumer learning and advertising using a simulation model. Consumers use advertising to estimate the quality change, but learn advertising's trustworthiness through their consumption experience. Firms spend on not only advertising but also R&D to improve its product quality, following satisficing principles. We found that, if consumer learning is slow, an advertising-intensive firm captures most of the market in the long run despite its low product quality; in this sense, advertising misleads consumers. When learning is fast or when consumers do not rely on advertising at all, advertising is unlikely to mislead them. Easy imitation of rival products also prevents advertising from being misleading. These results are consistent with existing empirical findings on advertising-quality relationships.     

新兴市场区位特定优势所带来的超额利润问题探析——服务业和分销业案例

地域优势带来的额外利润问题不仅限于制造业。近年来,跨国公司陆续将服务型和销售型子公司转移至相对低成本的新兴市场,产生了与制造业转移同样的转让定价反避税挑战。在不同的转让定价方法下,处理该类型公司的地域优势问题遇到的挑战有所不同。面对这些挑战,纳税人和税务当局都必须通过客观而严密的经济学分析进行探讨,方能得出一个各方满意的解决方案。     

On the Uniqueness of the Welfare–maximizing Number of Firms Under Cournot Oligopoly

Under Cournot oligopoly with a homogeneous product, we present a sufficient condition that guarantees the uniqueness of the welfare–maximizing number of firms to attain the global maximum level of welfare by implementation of a piecemeal policy changing the number of firms gradually. We adopt Selten's (1973) 'fitting–in function' method, which relates an individual firm's output to an industry's output. When the number of firms is unique, then introducing a lump–sum profit tax (subsidy) can attain the optimal level of welfare. Indirect entry regulation is superior to direct entry regulation from the standpoint of welfare if each entrant engages in rent–seeking activities.     

Credit spreads on corporate bonds and the macroeconomy in Japan

Using secondary market data on corporate bonds issued in Japan between 1997 and 2005, this paper explores the determinants of the credit spread of corporate bond rates over interest swap rates. We find that the credit spreads properly reflect financial factors at the firm level, including debt-to-equity ratios, volatility, and maturity, particularly for longer-term bonds. In addition, an economy-wide factor common among bond issues unable to be captured by firm-level factors, plays an important role in determining credit spreads, and these economy-wide effects to a great extent cancel out firm-level factors for some subsample periods. We also identify possible factors responsible for the significant economy-wide effects.