Strategic Certification and Provision of Quality

We study the effect of the presence of a certification intermediary in an environment where information asymmetries are particularly severe. The intermediary improves the information that buyers have about quality. This in turn increases the incentives that the seller has to provide high-quality goods. Efficiency is increased by the presence of the intermediary, but quality is underprovided in equilibrium relative to full information. The intermediary can implement the optimal policy in many ways. The amount of information revealed ranges from full disclosure to partial, noisy disclosure.     

Supply chain finance schemes in the procurement of agricultural products

Product, information, and finance flows are all interrelated within the modern supply chain; thus, it is now more than ever of paramount importance for practitioners to integrate procurement and financial decisions. This challenge is exemplified in many agricultural supply chains, where operational risks are significant and access to capital differs sharply across firms. We study three management tactics that some large food/beverage manufacturers – situated downstream in these chains – have used to meet the challenge: ordinary fixed price contracts (or soft tolling) with direct suppliers, hard tolling and contract farming where the manufacturer intervenes upstream, providing capital, and coordinating procurement decisions. We place these upstream intervention schemes in the theoretical context of supply chain finance (SCF) and model their application to a three-echelon agricultural supply chain. We perform a numerical study in order to understand how the structure of capital constraints in the chain may influence the manufacturer's choice of SCF scheme. The numerical study is based on a business case that reflects the barley–malt supply chain of Heineken N.V. Despite greater coordination opportunities, we show that upstream intervention is not necessarily preferable for the manufacturer. Nevertheless, the preferred SCF scheme can be inferred on the basis of relatively simple characterization of the capital constraints in the supply chain.     

The Bertrand Paradox,the Useless Auctioneer and the Launhardt Model

We revisit the Cournot–Bertrand debate in the light of Cournot, Edgeworth and Launhardt, tracing back to Launhardt the origin of price competition in duopoly models with constant returns to scale. Then, we discuss the formalisation of consumer utility function for differentiated products, first appearing in Launhardt and then in Bowley. This allows us to point out that assuming that firms know the demand function(s) is equivalent to assuming that they know the structure of consumer preferences. Therefore, we argue that there is no role for the auctioneer, either in Cournot or in Walras.     

SOCIAL COOPERATIVES IN ITALY: ECONOMIC ANTECEDENTS AND REGIONAL DISTRIBUTION

Social cooperatives represent the most notable form of non‐profit organizations operating in Italy in the social services field, the birth and development of which has been strongly linked to, and conditioned by, the needs and resources of territories and communities. This paper intends to demonstrate how certain socio‐economic factors, recognized in economic literature as antecedents of the development of social enterprises, may account for the spread of social cooperatives in different Italian regions. Furthermore, the research results demonstrate an inter‐regional differentiation of the shape social cooperation has entered into in Italy.     

On Price Competition with Market Share Delegation Contracts

We identify a mistake in the specification of the demand system used in the strategic delegation model based on market shares by Jansen, van Lier and van Witteloostuijn, whereby the price remains above marginal cost when goods are homogeneous. After amending this aspect, we perform a profit comparison with the alternative delegation scheme à la Fershtman and Judd (1987). Copyright © 2012 John Wiley & Sons, Ltd.     

A model of growth with inherited tastes

This research aims at studying a general equilibrium closed economy with overlapping generations and inherited tastes (aspirations), as in de la Croix (Econ Lett 53(1):89–96, 1996). It shows that the interaction between the intensity of aspirations and the elasticity of substitution of effective consumption affects the qualitative and quantitative long-term dynamics from both local and global perspectives. The related literature is extended by showing that (1) the Neimark–Sacker bifurcation found by de la Croix (1996) does not necessarily give rise to fluctuations and (2) endogenous (long-lasting) fluctuations occur through the emergence of period-doubling bifurcations.     

American institutionalism at Chicago: A documentary note

Abstract

This note provides new evidence concerning American institutionalism at Chicago during the 1920s and 1930s.     

The economic and environmental performances of rural districts in Italy: Are competitiveness and sustainability compatible targets?

This paper analyses the economic performances of the rural system and the level of land sensitivity to degradation in Italy. Three indicators (district value added, share of agriculture on total product, and a composite index of land sensitivity) were used to classify 784 Italian local districts into eight performance classes. Four classes share a combination of high environmental quality (in terms of land degradation), high (or low) economic performances, and high (or low) productivity of the primary sector. The remaining four are characterised by a combination of low (and declining) environmental quality, high (or low) economic performances, and high (or low) productivity of the primary sector. The eight classes were grouped into four ‘environmental quality’ types and four ‘target performance’ categories to discriminate among high- and low-performance districts by considering twelve additional variables within a Discriminant Function Analysis (DFA). 148 high environmental performance districts (18% of total) were identified mainly across the Alps and Apennine while 314 districts (41%) were classified in the lowest performance class and concentrated in flat areas of southern Italy. The districts with high environmental performances were characterised, on average, by medium to low district value added, moderately low economic weight of the primary sector, and tourism specialisation. Districts with high economic performances and low environmental performances were characterised by high sensitivity to LD, low district value added, high share of agriculture in total product, and the lowest productivity of labour in all economic sectors. In these districts the risk of entering a downward spiral of rural poverty and environmental degradation is potentially high.     

External wealth, the trade balance, and the real exchange rate

We examine the link between the net foreign asset position, the trade balance and the real exchange rate. In particular, we decompose the impact of a country's net foreign asset position (‘external wealth’) on its long-run real exchange rate into two mechanisms: the relation between external wealth and the trade balance; and, holding fixed other determinants, a negative relation between the trade balance and the real exchange rate. We also provide additional evidence that the relative price of nontradables is an important channel linking the trade balance and the real exchange rate.