Redefining safety in the era of risk trade-off and sustainability

While the risk level of visible factors has lowered, that of invisible and uncertain factors begin to attract attention, such as climate change triggering large-scale disasters and possible counter-risks arising from emerging technologies. Costs involved in reducing risk have risen considerably and a number of unintended counter-risks have also become apparent. Since the various measures implemented to counter global warming, including geoengineering measures, may lead to an increase in acute or chronic health and safety risks, there exists an urgent need for formulation of a framework for debating different kinds of risks by employing a common platform and expanding it along the spatial and temporal axes. In order to extend the scope of impact assessment with regard to the decision-making process and develop a common approach to risk assessment, the author argues that certain shortfalls need to be addressed, such as those that exist with regard to substances, domains, risks, and benefits, as well as in relation to time and space.     

RETURNS SYSTEM WITH REBATES*

We consider a variant of the newsvendor problem. Atomistic retailers each buy merchandise from a monopoly supplier for resale at a market‐determined common retail price that depends upon the total industry order quantity and upon a stochastic demand. After the orders are filled, the supplier learns the realization of demand but the retailers do not. We show that, in this setting, a returns system with rebates (with previously set buy‐back price for returns and ex post payments from the supplier to each retailer per unit actually sold) implements the optimal production and sales strategy, attaining maximum expected profit in the channel.     

Confidence and the real economy - the Japanese case

This paper empirically analyses whether consumer confidence has an effect on the real economy in Japan. This paper uses vector autoregressions including variables which represent consumer confidence. It is shown that in the cases of quarterly and monthly data, consumer confidence has a significant effect on GDP fluctuations, whereas in the case of semiannual data, it has no effect. In other words, consumer confidence has an effect on only short-term economic fluctuations.     

Global R&D management

Abstract
Global R&D management, the management of company R&D effort distributed over different countries, a task that concerns multinational firms, has not been widely studied. The authors have therefore carried out in-depth studies of global R&D conducted by 7 European and 15 Japanese companies. Their objective was to identify 'best practice' and so construct a framework for future research.
The authors' conclusions are as follows. Globalisation, that is decentralisation of R&D, has become a necessity for multinationals as a result of the localisation of competition, of product life becoming shorter than development time, and the need to locate laboratories near sources of new technological know-how.
Because foreign acquisitions often lead to the acquisition of laboratories, questions are raised about how best to integrate them with the administrative practices of the 'home' organization, whether to reorganize them or to close them down. When it is necessary to set up a new foreign-based laboratory deciding its exact location will require the weighing of factors such as whether the activities are to be market or process oriented, where on the R to D scale the activities will be placed, and how far direction of the laboratory's programmes and work will be decentralised.
Global management also demands special attention to the building of an open communication network among the laboratories, the best form of which has yet to be determined. The main concern in human resource management will be how to select and develop an internationally oriented management corps and how to train R&D professionals to communicate across sites.
If globally dispersed R&D laboratories are to be most effectively used then a new framework for their management needs to be developed.     

Income Tax and Endogenous Business Cycles

This paper investigates the dynamic implication of balanced–budget rules. We introduce public goods to an overlapping generations model with production and assume that public goods in each period are financed by the labor income taxes. We show that in our model, if the cost of providing public goods is financed by lump–sum taxes, endogenous fluctuations would never occur. But in cases where the government adopts proportional taxes, periodic and chaotic equilibria can exist.     

Coexistence and segregation of two groups in a metropolitan area through externalities

This paper proposes to regard the population distributions of two groups in a metropolitan area as equilibrium solutions of systems of ordinary differential equations. This approach—an extension of the Miyao's single subarea model to a many subarea case—allows us to incorporate the effect of fiscal/pecuniary neighborhood externalities into the classic Alonso-Mills-Muth model. This paper investigates its three typical cases, and obtains one coexistent and two segregated solutions. Consideration on these cases leads to the conclusion that substantial neighborhood externalities other than simple tax redistribution exist between the groups in the United States. As by-products of this analysis, it is also shown that positive bid gradients and discontinuities of bid prices are realized under suitable conditions.     

High Price Strategy and Quality Signalling

I investigate a high price strategy by a durable‐goods producer for signalling the high quality of goods. It is assumed that two types of monopolists exist: high‐quality and low‐quality. The monopolist's type is assumed to be unknown to consumers in the first period. Before the beginning of the second period, a product reputation established in the past period enables consumers to recognize the real type of the monopolist. I show that there occurs a signalling equilibrium where the high‐quality type monopolist uses a high price strategy. An interaction between the new and old products peculiar to the durable‐goods markets plays an important role in the pricing strategy.     

FEE VERSUS ROYALTY POLICY IN LICENSING THROUGH BARGAINING: AN APPLICATION OF THE NASH BARGAINING SOLUTION

In this paper, we consider a Cournot duopoly market in which the patent‐holding firm negotiates with its rival firm about payments for licensing a cost‐reducing innovation. Applying the Nash bargaining solution, we compare two licensing policies, a fixed fee and a royalty. Our results are as follows. Royalty licensing is better than fixed fee licensing for both firms if the innovation is not drastic. So, royalty licensing is always carried out. Moreover, though there exists a case in which consumers prefer fixed fee licensing, royalty licensing is always superior to fixed fee licensing from the social point of view.     

A new approach for testing the randomness of heteroskedastic time series data

Proposed is a conditional approach for testing the randomness of heteroskedastic time series data as well as for checking the validity of this testing. It is shown that the ordinary serial correlation test works correctly neither for daily sequence of the TOPIX index in Tokyo Stock Exchange nor for heteroskedastic models, while our approach works well for them. It is also shown that our approach is enough powerful for detecting the departure from the randomness. An advantage of this approach is that it allows us to use any quantity for testing. Its application to the TOPIX index detected statistically significant long term correlation which causes both the mean reversion and the outperformance of the Alexander's filter rule over the buy-and-hold strategy.