A Common Pool Resource Game with Sequential Decisions and Experimental Evidence

We describe a common pool resource game in which players choose how much of the stock to extract in a sequential manner. There are two choices and one represents taking a larger proportion of the stock than the other. After a player makes a choice, the remaining stock grows at a constant rate. We consider a game with a finite number of alternating moves. It is shown that changes in the larger proportion of the stock that the players are allowed to take and the growth rate affect equilibrium, but have little effect on behavior in the laboratory. In addition to observing more cooperation than predicted, we observe that parameters that are strategically irrelevant affect behavior. The results of this research might help policy makers in developing adequate policies to prevent overexploitation of some natural renewable resources.     

Permit markets, market power, and the trade-off between efficiency and revenue raising

This paper focuses on an emissions permit market dominated by one firm and with a government concerned about social efficiency and permits revenue. In this setting, it is shown that the dominant firm's market power reduces the opportunities for the government to raise non-distortionary revenue from permits without loss of consumer surplus. Since the government's objectives are thus hampered in auctioning permits, the dominant firm should be excluded from the auction. Specifically, the regulator should sell permits directly, through bilateral negotiation, to the dominant firm, and auction off the remaining permits to the fringe firms.     

THE WELFARE EFFECTS OF UPSTREAM MERGERS IN THE PRESENCE OF DOWNSTREAM ENTRY BARRIERS*

We examine the incentives for upstream firms to consolidate horizontally and the impact of this process on industry performance, when there are downstream entry barriers and firms negotiate bilaterally. In the short run, consumers are not worse off with upstream mergers, since consolidation only results in a redistribution of industry rents. In the long run, consumers are better off after upstream mergers, since they induce more entry into that segment. When social welfare is evaluated, a limit on upstream consolidation may prevent excessive entry; but upstream entry can be sometimes insufficient, if the retailers' intrinsic bargaining power is excessive.     

The Wage–Health Insurance Trade‐off and Worker Selection: Evidence From the Medical Expenditure Panel Survey 1997 to 2006

Key provisions within healthcare reform will likely further increase the cost of employer‐sponsored insurance. Theory suggests that workers pay for their health insurance through a wage offset. We investigate this issue using data from the Medical Expenditure Panel Survey. GMM estimates aimed at correcting for endogenous worker mobility reveal evidence of a trade‐off for workers who are offered health insurance as the only fringe benefit. On the other hand, employees in establishments with a more comprehensive set of benefits enjoy higher wages relative to employees in establishments that offer no benefits. Health also affects the wage–health insurance trade‐off.     

Long‐Term Orientation and Commitment in Export Joint Ventures among Small and Medium‐Sized Firms

Alliances may be an important tool for overcoming the resource and capability deficiencies facing small and medium‐sized enterprises (SMEs), as they help strengthen their market position and facilitate access to new markets. In this paper we focus on domestic joint ventures (JVs) for export purposes. Our aim is to analyze the influence of partners' long‐term orientation on their commitment, while looking into the key antecedents of long‐term orientation: complementarity of partners' resources and trust. The hypotheses set forth are tested on a sample of 70 Spanish domestic export JVs. The data were analyzed using partial least squares (PLS) analysis. Our paper contributes to the literature on export JVs and SMEs by providing evidence that long‐term orientation reinforces commitment to devoting the necessary resources and efforts to enable the export JV to succeed. The results also indicate that trust decisively determines the long‐term orientation of the partners to an export JV, and that complementarity of resources plays a relevant role in the development of long‐term orientation by facilitating trust.     

Forward contracts and competition

This paper examines the strategic use of forward contracts in an industry where downstream firms must buy an essential input from imperfectly competitive upstream suppliers. When a single large firm and a fringe of firms exist downstream, the large firm buys forward contracts from the fringe, i.e. there is horizontal subcontracting from the large firm to the firms on the fringe, in order to make the spot market less competitive. Hence our paper argues that horizontal subcontracting becomes an anti-competitive device. We also compare the strategies of buying forward contracts and purchasing productive capacity and we find that both are equivalent tools. When the downstream industry has instead several large firms, they have a “horizontal” incentive to sell forward contracts in order to gain market share, but the former “vertical” incentive to buy them persists. In this case, forward contracting may then lead to less competition in the spot market. We are indebted to Ramon Faulí-Oller, José Manuel Ordó?ez and Juan Carlos Reboredo for their helpful comments and suggestions on an earlier draft. We also gratefully acknowledge the valuable observations made by two anonymous referees and a Co-Editor that led to substantial improvements. Of course, the usual disclaimer applies. Antelo acknowledges financial support from the Xunta de Galicia (Grant PGIDIT02PXIA20101PR) and Bru that from the Spanish Ministerio de Ciencia y Tecnología (Grant PB98-1402).     

Venture Creation Speed and Subsequent Growth: Evidence from South America

Though time is an important dimension of the venture creation process, our understanding of why some entrepreneurs are able to act more quickly than others is limited. Equally, not much is known about the relationship between venture creation speed and the subsequent venture growth. In this paper, we use a resource‐based perspective to provide insights into the factors that quicken or retard venture creation and to explore how speed impacts on subsequent growth. This is important because the topic remains generally underresearched and because even less is understood about venture creation speed in the context of South American economies. Data were collected from face‐to‐face interviews with 647 entrepreneurs in Argentina, Brazil, Chile, and Peru. Using a multivariate regression framework, we find that entrepreneurs make use of their human and social capital resources to shape the speed by which their venture is created. Moreover, their perceptions of unfavorable environmental conditions seem to retard venture creation. Findings also suggest that entrepreneurs who take more time to create a more solid resource base tend to receive better growth outcomes. Implications from the findings are discussed.     

Jean Antoine Chaptal: from chemistry to political economy

The article studies to which extent the economic ideas of Jean Antoine Chaptal were conditioned by his education and knowledge as a chemist. Chaptal's life and activities and the main elements of his economic thought as expressed in his written works suggest certain relationships between his education as scientist, doctor and chemist, and his economic thought. Chaptal's place in the history of economic thought is discussed, especially those opinions that define him as a neo-mercantilist, or as an economist of the nation in the pure industrialist sense. But on a closer analysis, Chaptal can be defined as an industrialist physiocrat as a result of his training.