Fiscal policy in good and bad times

In this paper we analyze whether the effect of fiscal policy differs across the business cycle. To tackle this question, we use a regime-switching error-correction framework, where nonlinearities are only modeled in the short-run and have no impact on the long-run equilibrium. Regime specific shocks to government revenue and government purchases are identified using sign restrictions. Linear combinations of the impulse responses of these basic shocks are used to construct a deficit-spending shock and a deficit-financed tax-cut shock. We find that active spending policies have a stronger impact in recession, with multipliers exceeding unity, and should be preferred to deficit-financed tax-cuts.     

Stand-alone costs,Ramsey prices,and postal rates

This paper discusses two external benchmarks for assessing the results of the 1990 postal rate proceeding. First, we generate stand-alone cost estimates for third-class bulk advertising mail, based on market data from private mail carriers. Second, we derive Ramsey optimal prices for all classes of mail. Private delivery costs for bulk advertising are significantly below the third-class bulk regular rates adopted by the U.S. Postal Rate Commission, indicating that the new third-class rates are well above stand-alone costs for an efficient enterprise. Moreover, the Ramsey price analysis suggests that the rate structure adopted reflects, at least implicitly, considerations other than economic efficiency.     

The CPSC's ATV risk model

Evaluations of the Consumer Product Safety Commission's impact on safety have been generally unfavorable. The CPSC's questionable effectiveness may be because many of its actions have been based on erroneous assessments of the factors associated with accident risk. This paper analyzes the statistical underpinnings of the CPSC's regulatory approach to all-terrain vehicles (ATVs), one of the most prominent issues faced by the agency. By investigating a wider range of risk models, we find the principal provisions of the CPSC's ATV policy, most notably stopping the sale of new three-wheel ATVs, are not supported by the risk data.We acknowledge with gratitude the helpful comments of Robert Trost, Kip Viscusi, and the referees, and the assistance of Monica Bettendorf and Chung-Shing Lee. The usual disclaimer applies.     

Cross-Cultural Business Research: Introduction to the special issue

As markets become increasingly global, an understanding of the world's cultures is imperative. This special issue consists of nine articles devoted to increasing our understanding of culture. It follows the 11th Cross-Cultural Research Conference, which was held in Puerto Rico in December 2005. An open invitation to conference participants and other interested researchers resulted in 56 submissions for the special issue. Articles chosen were subjected to several rounds of double-blind reviews and revisions. They cover a variety of topics including vacationing, managerial competency appraisal, horizontal and vertical individualism and collectivism, consumer services, cultural conditioning, electronic word-of-mouth, the global hip-hop culture, ethical attitudes, and impulse buying behavior.     

Improving ICANN’s governance and accountability: A policy proposal

The Internet Corporation for Assigned Names and Numbers (ICANN) has control over extremely important aspects of the Internet. Yet, its non-profit corporation status, combined with the way that it is funded and governed, make accountability a serious problem. This paper draws on the accountability framework that has been developed by Mueller (2009) to evaluate the structure and governance of ICANN and then compares it to the structure and governance of a number of other organizations that perform a roughly comparable range of coordination and standard-setting functions, to explore what might be applicable to ICANN. Virtually all of these other organizations are governed by their direct users, thereby building accountability into their structures. We suggest that this would be a good model for ICANN as well.     

Introduction to the RIO Special Issue on Antitrust and the Platform Economy

The emergence of large technology platforms has raised fundamental questions about antitrust enforcement. These questions, which are the subject of this RIO special issue, are now challenging scholars and policy makers. The topics covered here include the role of economics and the consumer welfare standard in antitrust; lessons from historic antitrust cases; the role of big data in antitrust analysis; antitrust analysis of multi-sided markets; and the interplay between competition and privacy regulation.

     

The efficiency costs of the postal monopoly: The case of third-class mail

This paper provides an estimate of the efficiency costs of the letter monopoly for third-class bulk advertising, the Postal Service's second largest category of mail. Using market data from private mail carriers, excess costs to mailers in 1992 are estimated to be about $2.5 billion, almost one-third of the Postal Service's third-class mail revenues. These costs are the sum of (1) the allocative efficiency loss due to reduced output ($237 million); (2) the increased production costs due to non-cost-minimizing behavior ($712 million); and (3) transfers to postal labor ($1.511 billion). Total efficiency costs-the sum of (1) and (2)—are estimated to be about $950 million.The author would like to thank Roger Sherman and an anonymous referee for helpful comments and Monica Bettendorf and Stephen McGonegal for their assistance in preparing this paper.     

Decision‐making capabilities of a hybrid system applied to the auditor's going‐concern assessment

The purpose of this study is to evaluate a hybrid system as a decision support model to assist with the auditor's going‐concern assessment. The going‐concern assessment is often an unstructured decision that involves the use of both qualitative and quantitative information. An expert system that predicts the going‐concern decision has been developed in consultation with partners at three of the Big Five accounting firms. This system is combined with a statistical model that predicts bankruptcy, as a component of the auditor's decision, to form a hybrid system. The hybrid system, because it combines the use of quantitative and qualitative information, has the potential for better prediction accuracy than either the expert system or statistical model predicting separately. In addition, testing of the system provides some insight into the characteristics of firms that experience problems, but do not necessarily receive a going‐concern modification. Further investigation into those firms that have problems could reveal factors that may be incorporated into decision support systems for auditors, in order to improve accuracy and reliability of these decision tools. © 2001 John Wiley & Sons, Ltd.