Hedonic price equilibria, stable matching, and optimal transport: equivalence, topology, and uniqueness

Hedonic pricing with quasi-linear preferences is shown to be equivalent to stable matching with transferable utilities and a participation constraint, and to an optimal transportation (Monge–Kantorovich) linear programming problem. Optimal assignments in the latter correspond to stable matchings, and to hedonic equilibria. These assignments are shown to exist in great generality; their marginal indirect payoffs with respect to agent type are shown to be unique whenever direct payoffs vary smoothly with type. Under a generalized Spence-Mirrlees condition (also known as a twist condition) the assignments are shown to be unique and to be pure, meaning the matching is one-to-one outside a negligible set. For smooth problems set on compact, connected type spaces such as the circle, there is a topological obstruction to purity, but we give a weaker condition still guaranteeing uniqueness of the stable match.     

Marketing in medium-sized manufacturing firms: The state-of-the-art in France and in Quebec

An examination of the relationship between marketing and SMEs raises two kinds of questions: the first relates to the categories of SMEs studied, and it goes without saying that their responses will depend on their size (very small, small, and medium); the second depends on the elements likely or not to bring out a marketing approach. In fact, we can infer a large part of this approach from the answers having to do with segmentation practices, positioning, and information research. These three practices constitute the foundation of this approach. For all that, to ask questions directly (especially with regard to segmentation) would lead to biased responses. Taking these premises into account and with understanding of marketing behaviour in the medium-sized firms as an objective, we conducted two surveys in two locations, France and Québec (Canada), in which only enterprises with 50 to 250 employees were retained. The results show that if the marketing approach of the medium-sized firms is always focused on client distinction (more than on the market as such), competition leading to positioning is very much a part of their preoccupations; finally, these enterprises commonly practice commercial intelligence. This implies structuring commercial activity in general and marketing in particular, the two not always well delimited. These last two traits differentiate them from the other categories of SMEs, the very small enterprises (VSEs) and the small enterprises (SEs).

Networks,weak signals and technological innovations among SMEs in the land-based transportation equipment sector

On apprend plus par la conversation des Doctes,

que par la lecture de leurs livres

Les épistres de Seneque

Translation by François de Malherbe,

Paris, Anthoine de Sommaville, 1639, p. 21

Small and medium-sized enterprises, because of their limited resources, use a variety of sources and are linked to different networks to obtain the information they need to develop their strategy and then to gradually organize their environment. Among other things, networks keep them up-to-date with changes in the economy and allow them to take advantage of opportunities to innovate, thus remaining ahead of their competitors. The networks – personal or business – with which these firms interact the most are usually geographically or sociologically close by, embedded in the environment, and are known as strong tie networks. They generally supply signals in a familiar language, based on habit as well a good reciprocal knowledge, which are easy to understand. In addition to this, however, the most dynamic firms also have contacts with weak tie networks, which are further removed from the usual behaviours of entrepreneurs and provide weak signals that, while difficult to grasp and decode, nevertheless offer new, pre-competitive information that can support major innovations. Very little empirical research has been done so far to test the probability of this theory. This paper reports on the results of a survey involving 147 SMEs, all in the land-based transportation equipment sector. It confirms the importance of weak tie networks as opposed to other types of networks, recognizing their complementary contribution to technological innovation. The organization's absorptive capacity is also found to be a significant intermediary factor in taking advantage of weak tie networks.     

Longevity and environmental quality in an OLG model

Whereas existing OLG models with endogenous longevity neglect the impact of environmental quality on mortality, this paper studies the design of the optimal public policy in a two-period OLG model where longevity is influenced positively by health expenditures, but negatively by pollution due to production. It is shown that if agents, when choosing how much to spend on health, do not internalize the impact of their decision on environmental quality (i.e. the space available for each person), the decentralization of the social optimum requires a tax not only on capital income (to internalize the pollution externality), but, also, on health spending (to internalize the congestion externality). We also examine the second-best policy under a limited set of taxation instruments, and explore its sensitivity to the pollution process and to individual preferences.     

Changes in Assortative Matching and Inequality in Income: Evidence for the UK*

The extent to which like-with-like marry is important for inequality as well as for the outcomes of children who result from the union. In this paper, we present evidence on changes in assortative mating and its implications for household inequality in the UK. Our approach contrasts with others in the literature in that it is consistent with an underlying model of the marriage market. We argue that a key advantage of this approach is that it creates a direct connection between changes in assortativeness in marriage and changes in the value of marriage for the various possible matches by education group. Our empirical results do not show a clear direction of change in assortativeness in the UK between the birth cohorts of 1945–54 and 1965–74. We find that changes in assortativeness pushed income inequality up slightly, but that the strong changes in education attainment across the two cohorts contributed to scale down inequality.     

Public Subsidies to Business: An International Comparison

The paper compares the design and outcome of public subsidies to business across a number of industrialized countries. The comparison of the amount of subsidies shows that the share of GDP devoted to total public support is markedly lower in the USA than in Europe but the share of GDP devoted to support that improves economic performance is comparable. Implementing public support follows two models. The first model (Anglo-Saxon) model is primarily “soft” in nature and decentralized. The second model is more interventionist and centralized. The former model seems to perform better especially in term of science and technology. However, the impact of public support policies remains seriously under-researched and more research is crucially needed to draw firm conclusions.     

The Competition Policy Approach in the New Regulatory Framework for Electronic Communications. Comments on Koski and Kretschmer

Koski and Kretschmer have presented a large review of the recent literature on network industries, particularly on market structure, firm strategies and public policies. They provide a very useful summary of the main papers and highlight some important conclusions, in particular in the context of the policy debate. My objective in this paper is to provide short and limited comments on the first two parts, on market structures and firm strategies, and to discuss more the last section, on public policy issues, in particular on the basis of the competition policy aspects of the new regulatory framework for electronic communications.     

The regional variations of entrepreneurial dynamism: a mixed methods study

ABSTRACT

Given that added knowledge and deeper understanding are needed with regard to regional variations in the creation of new firms, this study seeks to answer the following two research questions: What are the variables that explain entrepreneurial dynamism and how may they be apprehended under the four necessary and complementary dimensions of this phenomenon, namely the demand, supply, institutional and spatial dimensions? And how should the nature and interrelatedness of these dimensions and their associated variables influence regional policymakers and other regional stakeholders in their efforts to stimulate entrepreneurship in their region? In order to do so, we used mixed methods to collect and analyze regional data, first doing a regression analysis of quantitative data on 97 small regions in Canada’s province of Québec, followed by a qualitative survey of regional stakeholders on eight matched pairs of regions. A phenomenological qualitative analysis was then effectuated in order to gain a deeper understanding of the research variables’ effects and thus grasp the complex socio-economic reality of entrepreneurial dynamism in a region. The results of the study confirm the importance and interrelatedness of the four dimensions of entrepreneurial dynamism in providing new insights into these questions. Moreover, the findings that results from these quantitative, qualitative and holistic analyses have implications for the policies of regional authorities and for the actions of other regional stakeholders.     

Towards the formalization of ‘small is beautiful’: Societal effectiveness versus economic efficiency

Economic efficiency criteria are often based on considerations of concentration, standardization and centralization of activities which may undertake or omit entirely various internal and external diseconomies of by-products associated with any growth process. This paper re-examines the context in which the efficiency criterion is usually applied. The notion of effectiveness is analysed theoretically from two perspectives. Social costs are introduced initially in a static framework and then the inertia of large organizations is discussed in a dynamic perspective. The flexibility of the system in adjusting to rapid changes in technology is analysed from a structural approach based on smaller and more decentralized organizations.     

Process and context in choice models

We develop a general framework that extends choice models by including an explicit representation of the process and context of decision making. Process refers to the steps involved in decision making. Context refers to factors affecting the process, focusing in this paper on social networks. The extended choice framework includes more behavioral richness through the explicit representation of the planning process preceding an action and its dynamics and the effects of context (family, friends, and market) on the process leading to a choice, as well as the inclusion of new types of subjective data in choice models. We discuss the key issues involved in applying the extended framework, focusing on richer data requirements, theories, and models, and present three partial demonstrations of the proposed framework. Future research challenges include the development of more comprehensive empirical tests of the extended modeling framework.