STRATEGIC EXPORT POLICY IN VERTICALLY RELATED MARKETS

This paper analyses how strategic export policies are affected by introducing an imperfectly competitive intermediate good into a Bertrand duopoly model with product differentiation, where a home and a foreign final‐good firm export to a third‐country market. It is shown that when the home and foreign markets for the intermediate good are segmented, the optimal export policy towards the final good is a tax. In contrast, under integrated markets, the optimal export intervention is a subsidy. Whether bilateral export intervention is welfare improving compared with free trade, depends on the degree of product differentiation between the home and foreign final goods.     

Choosing Price or Quantity? The Role of Delegation and Network Externalities in a Mixed Duopoly

This paper considers a differentiated goods managerial mixed duopoly composed of one social welfare‐maximising public firm and one profit‐maximising private firm. We model the firm choice of the strategic contract. We find that when the strength of network effects is sufficiently strong, the price competition can become the unique equilibrium market structure. Furthermore, we show that there exists an area of the degree of product differentiation and the strength of network effects such that the situation wherein the public firm chooses its price contract whereas the private firm chooses its quantity contract can become the unique equilibrium structure.     

Dynamic models of the labor force behavior of married women which can be estimated using limited amounts of past information

This paper examines the extent of the inadequacy of standard cross-sectional models of US labor force behavior and considers the abilities of alternative models to capture the observed continuity in the hours of work and earnings of individuals as well as in their employment histories. Both of the alternatives to the standard cross-sectional model considered in this study incorporate limited amounts of information about past work behavior that could easily be collected as part of a national population census. Using a population of 21 to 64 year old married working women taken from a 1969 through 1978 Michigan Panel Study of Income Dynamics, the variables included in the Z vector age: 1) age of the wife; 2) education of the wife; 3) state average hourly wage in manufacturing measured in 1967 dollars; and 4) unemployment rate for the state in which the wife lives. Results show that by using information about a women's hours of work and wage rate in the previous year, it may be feasible to improve on forecasts of a woman's employment and earnings behavior. For each model a separate estimate is made for wives aged 21 through 46, and for those aged 47 through 64. The dummy and difference models perform much better than the standard model, with the dummy model having the higher pseudo-chi-square statistic. These models show that systematic errors made in determining which individuals work, what they earn per hour, or how many hours they work, should result in prediction errors of the same sort year after year in the computation of annual earnings. These findings with respect to years of work and nonwork, years of part time versus full time work, and cumulative earnings over a 10 year period, confirm and extend Heckman's findings; thus, forecasting models of the work behavior of individuals should not be estimated using pure cross-sectional data. It would be important if researchers could identify what observable factors, if any, increase the likelihood that wives will alter their work behavior from what it has been in the immediate past, even if they are not able to fully understand or explain this previous work behavior.     

Finite-dimensional utilities

Summary. Sufficient axioms are identified for the existence of a finite- dimensional quasilinear utility function whose lexicographically ordered vectors preserve a decision maker's preference order on a mixture set . It is shown that those axioms are also necessary for the linear lexicographic representation when the underlying set is a mixture space. Received: August 20, 1998; revised version: December 14, 1998     

Micro-foundation for a constant elasticity of substitution production function through mechanization

We consider an increase in the range of capital use as a form of mechanization. A constant elasticity of substitution (CES) production function is dynamically derived from Leontief production functions through the endogenous complementary relationship between capital accumulation and mechanization. This implies that a CES production function can be resolved into technological change that does not involve changes in total factor productivity. Furthermore, using the normalizing procedure of the CES production function developed by de La Grandville [de La Grandville, O., 1989. In quest of the Slutsky diamond. American Economic Review 79, 468–481], we investigate how mechanization is related to the elasticity of substitution in our endogenous growth model.     

Corrigendum to “Stable matchings and preferences of couples” [J. Econ. Theory 121 (1) (2005) 75–106]

We correct an omission in the definition of the domain of weakly responsive preferences introduced in [B. Klaus, F. Klijn, Stable matchings and preferences of couples, J. Econ. Theory 121 (2005) 75–106] or KK05 for short. The proof of the existence of stable matchings [KK05, Theorem 3.3] and a maximal domain result [KK05, Theorem 3.5] are adjusted accordingly.