The factory system in the British industrial revolution: A complementarity thesis

This paper offers an explanation for the rise of the factory system in Britain during the Industrial Revolution (1770-1850) based on the concept of complementarity: Investment in machinery, process supervision, and improved quality control formed a cluster of complementary activities in which adopting any one increased the marginal return to also adopting the others. Further, factory owners introduced process supervision not only to increase work effort, but also to balance worker incentives among production, quality control, and asset maintenance tasks. To test this hypothesis, I have constructed a new data set from firm studies and archival records. Measures of firms’ adoption of the activities are positively correlated in the cross-section of firms, providing evidence in favor of the complementarity hypothesis.     

DOES MONOPOLISTIC COMPETITION EXIST IN THE MENA REGION? EVIDENCE FROM THE BANKING SECTOR

The goal of this paper is to empirically assess the level of banking competition in selected Middle East and Northern African (MENA) countries. The analysis employs the estimation of a non‐structural indicator (H‐statistic) introduced by Panzar and Rosse and draws upon a panel dataset of eight MENA countries (Algeria, Egypt, Israel, Jordan, Morocco, Oman, Saudi Arabia, and United Arab Emirates) over the period 1997–2012. The empirical findings are robust towards three different panel data econometric techniques (Ordinary Least Squares, Pooled Generalized Least Squares with Fixed Effects, and Generalized Method of Moments) and consistent with other similar studies, providing sufficient evidence in favour of a banking monopolistic competition regime. Furthermore, the estimation of three other alternative measures of competition (Lerner index, adjusted Lerner index, and conduct parameter) provides similar results, revealing that the banking sector in the MENA region is characterized by a low level of Significant Market Power (SMP). Overall, the analysis shows that, despite similarities in the process of financial regulatory reforms undertaken in the eight MENA countries, the observed competition levels of banks vary substantially, with Algeria and Morocco consistently outperforming the rest of the region.     

Innovation timing games: a general framework with applications

We offer a new algorithm for analyzing innovation timing games. Its main advantage over the traditional approach is that it applies to problems that had previously been intractable. We use the algorithm to examine two classical innovation problems. We find that the competition takes the form of a waiting game with a second-mover advantage either for any level of R&D costs (process innovation) or for high R&D costs (product innovation). Moreover, both models predict that the second-mover advantage is monotonically increasing in the costs of R&D.     

Open‐shop unions and product market competition

Abstract Evidence on the effect of product market competition on unionized wages is mixed. In this paper we show theoretically that the result may reflect genuine heterogeneity in the response of union wages to product market conditions. For low levels of unionization, union bargaining power may actually be enhanced by market competition, as firms have more to lose when there is a strike. Using recent data from the UK, we explore interactions between the level of industry competition and unionization, and find supporting evidence for this hypothesis.     

The trade-off between innovation and defense industrial policy: A simulation model analysis of the Norwegian defense industry

The paper investigates the trade-off between innovation and defense industrial policy. It presents an agent-based simulation model calibrated for the Norwegian defense industry that compares different policy scenarios and examines the effects of a pending EU market liberalization process. The paper points to two main results. (1) It finds that a pure scenario where national authorities focus on, and provide support exclusively for, either a) international competitiveness or b) national defense and security objectives, is more Pareto efficient than a corresponding mixed strategy where policy makers simultaneously pursue both international competitiveness and defense and security objectives. (2) Under the conditions of the new EU liberalization regime, it finds that a stronger and more visible trade-off will emerge between international competitiveness and national defense and security objectives. Policy makers will have to choose which to prioritize, and set a clear agenda focusing on one of the two objectives.     

Endogenous cartel formation: Experimental evidence

In a Bertrand-oligopoly experiment, firms choose whether or not to engage in cartel-like communication and, if so, they may get fined by a cartel authority. We find that the four-firm industries form cartels more often than the duopolies because they gain less from a hysteresis effect after cartel disruption.     

Paying not to sell

In this paper we show that, in the presence of buyer and seller power, a monopolist can enter into a costly contractual relationship with a low-quality supplier with the sole intention of improving its bargaining position relative to a high-quality supplier, without ever selling the good produced by that firm.