Should Firms Employ Personalized Pricing?

This paper theoretically considers a duopoly model in which all firms do not always employ personalized pricing. Our model incorporates the fact that firms engage in marginal cost‐reducing activities after they decide whether to employ personalized pricing. When the ex ante cost difference between the firms is large, the less‐efficient firm does not employ personalized pricing even when the fixed cost to do so is zero. This is because employing personalized pricing induces the rival firm to engage more in reducing its costs, which is more likely to harm the less‐efficient firm.     

Welfare properties of strategic R&D investments in Hotelling models

In linear-city models, if firms are allowed (not allowed) to locate outside the linear city, they engage in excessive (insufficient) R&D investments from the normative viewpoint. This implies that the feasible set of locations drastically affects their investments.     

Individual preferences on trade liberalization: evidence from a Japanese household survey

This paper studies an individual’s preference on trade liberalization using a Japanese household survey, the Keio Household Panel Survey. As a result, we show that preferences toward trade liberalization are affected by economic factors (income, gender, family, asset, and job status) as well as noneconomic factors (noncognitive factors and behaviroal biases). We find that male, educated, and people with smaller family prefer trade liberalization. Furthermore, people who prefer liberty to equality and have less local patriotism, tend to be positive to trade liberalization.

     

A dynamic model of fiscal reconstruction

This paper investigates dynamic properties of fiscal reconstruction by analyzing the infinite duration differential game among interest groups with a framework of voluntary acceptance of tax burden. By comparing the first-best solution of fiscal reconstruction, the open-loop Nash equilibrium path, and the feedback Nash equilibrium path, we highlight the free-riding behavior of interest groups in the process of fiscal reconstruction. We derive explicitly the target levels of government debt and primary expenditures, and the adjustment speed of fiscal reconstruction under the respective solutions. We also examine the impacts of consumption taxes on their adjustment speeds as well as long-run outcomes of the respective paths.     

How does environmental performance affect financial performance? Evidence from Japanese manufacturing firms

This paper examines the effects of environmental performance on financial performance using the data of Japanese manufacturing firms from 2004 to 2008. As the environmental performance, our study considers the two different environmental issues of waste and greenhouse gas emissions in capturing the effects of corporate environmental management on financial performance. In addition, to clarify how each financial performance responds to a firm's effort in dealing with different environmental issues, we utilize many financial performance indices reflecting various market evaluations. Our estimation results show the different effects of each environmental performance on financial performance. Waste emissions do not generally have significant effects on financial performance. On the other hand, greenhouse gas reduction leads to an increase in financial performance in the whole sample and clean industries, although it does not have significant effects on financial performance in dirty industries. Furthermore, as the firm growth rate increases, the partial effects of waste emissions on financial performance decrease, whereas the partial effects of greenhouse gas emissions on financial performance increase.     

International environmental outsourcing

In recent years there has been a dramatic increase in the number of firms shifting stages of their production processes overseas. In this paper we investigate whether firms outsource the dirtier stages of production to minimise domestic environmental regulation costs—a process broadly consistent with the pollution haven hypothesis. We develop a theoretical model of international environmental outsourcing that focuses on the roles played by firm size and productivity, transport costs and environmental regulations. We test the model’s predictions using a firm-level dataset for Japan and do find evidence of an ‘environmental outsourcing’ effect.     

Globalization and business cycle transmission

The paper uses long-run GDP data for developed countries drawn from Maddison [Maddison, A. (2003). The world economy—Historical statistics. Paris: OECD Development Centre] to generate deviation cycles for the period from 1870 to 2001. The cyclical deviates are examined for their bilateral cross-correlation values in three separate periods, those of the first globalization wave (1870–1914), the period of the “bloc economy” (1915–1959) and for the period of the second globalization (1960–2001). Cluster analysis is applied and the McNemar test is used to test for the relative coherence of alternative groupings of countries in the three periods. The bloc economy period emerges as one that features some well-defined sub-global clusters, where the second globalization period does not, the first globalization period lying between the two in this respect. The second globalization period shows a generally higher level of cross-correlations and a lower variance than the other two periods. The features uncovered suggest that the second globalization period is indeed one that comprises a more inclusive world economy than ever before.     

Endogenous timing in the switching of technology with Marshallian externalities

We analyze endogenous timing in the switching of technology. Each user chooses when to purchase a new product which embodies new technologies characterized by Marshallian externalities. The technological switch occurs when a large number of users purchase new products. Under complete information, multiple market equilibria exist, and one of the equilibria in which technological switching occurs is efficient. However, if we introduce even a small amount of uncertainty, the switch is delayed in the unique equilibrium under perfect competition, resulting in a loss of social welfare. The market power of a monopolistic supplier of new products alleviates this inefficiency.     

On the level of optimal capital import in a decentralized competitive economy

In a competitive economy, capital import will affect the distribution of income among domestic economic units. Our main aim is to determine the optimal level of capital import, given that the distribution of income among people is accounted for. In order to consider explicitly the effect of capital import on saving behavior, we shall adopt a simple, two-period life cycle growth model. It will be shown that in order to know if the government can increase everybody's long-run utility, the criterion of the golden rule is important.