Strategic complementarities and nested potential games

This paper reports that every finite game of strategic complementarities is a nested pseudo-potential game defined by Uno [Uno, H., 2007. Nested potential games. Economics Bulletin 3(17), 1–8] if the action set of each player is one-dimensional, except possibly for one player.     

Number of Shareholders and Stock Prices: Evidence from Japan

Merton (1987) proposes that an increase in a firm's investor base increases the firm's value. In Japan, companies can reduce their stock's minimum trading unit—the number of shares in a "round lot"—which facilitates trading in the stock by small investors. We find that a reduction in the minimum trading unit greatly increases a firm's base of individual investors and its stock liquidity, and is associated with a significant increase in the stock price. Further, the stock price appreciation is positively related to an increase in the number of shareholders.     

Are regional asymmetries detrimental to tax coordination in a repeated game setting?

This paper reexamines the main findings of Cardarelli et al. [Cardarelli, R., Taugourdeau, E., Vidal, J.-P., 2002. A repeated interactions model of tax competition, Journal of Public Economic Theory 4, 19-38], and Catenaro and Vidal [Catenaro, M., Vidal, J.-P., 2006. Implicit tax co-ordination under repeated policy interactions, Recherches Economiques de Louvain 72, 1-17], who show that regional asymmetries undermine the implicit collusion of tax coordination in a repeated game model of capital tax competition. In particular, this paper investigates how increased regional differences in per capita capital endowments and/or production technologies affect the willingness of each region to cooperate in achieving tax coordination. It is shown that there may exist cases where as regional asymmetries in net capital exporting positions increase, regions are more likely to cooperate on capital taxes and thereby achieve tax coordination.     

Sequential point estimation of the powers of a normal scale parameter

We consider the sequential point estimation problem of the powers of a normal scale parameter σ^r with r≠ 0 when the loss function is squared error plus linear cost. It is shown that the regret due to using our fully sequential procedure in ignorance of σ is asymptotically minimized for estimating σ⁻². We also propose a bias-corrected procedure to reduce the risk and show that the larger the distance between r and −2 is, the more effective our bias-corrected procedure is. Received August 2000     

On forecasting of innovations

The forecasting of basic technological innovations is focused. Clarification of the involved key concepts and an analytical framework are given. The forest industry serves as a background and illustration to the discussion. Considerable uncertainty prevails with respect to strategic investments in production in this industry. Industries, technological products, etc. have empirically been shown to pass similar phases of development over time. This life cycle starts with a basic innovation following on a previous invention. Due to competetion from more recent basic innovations the final phase is one of decline. Basic innovations are suggested to be exogenously determined and to cause structural change. The choice of forecasting strategy is suggested to be made dependent on the type of innovation, knowledge base, and life cycle position.     

Three-stage confidence intervals for a linear combination of locations of two negative exponential distributions

Mukhopadhyay and Padmanabhan (Metrika 40:121–128, 1993) considered the construction of fixed-width confidence intervals for the difference of location parameters of two negative exponential distributions via triple sampling when the scale parameters are unknown and unequal. Under the same setting, this paper deals with the problem of fixed-width confidence interval estimation for a linear combination of location parameters, using the above mentioned three-stage procedure.     

Implementing partial tax harmonization in an asymmetric tax competition game with repeated interaction

This paper investigates the conditions under which partial harmonization for capital taxation is sustained in a repeated interactions model of tax competition when there are three countries with heterogenous capital endowments. We show that regardless of the structure of the coalition (i.e., full or partial tax coordination), whether partial tax harmonization is sustainable or not crucially depends on the extent to which the capital endowment of the medium‐sized country is similar to that of the large or small country. The most noteworthy finding is that the closer the capital endowment of the median country is to the average one, the less likely the tax harmonization including the median country is to prevail and the more likely the partial tax harmonization excluding the median country is to prevail. We also show that partial tax harmonization makes the member countries of the tax union better off and non‐member countries worse off, which stands in sharpe contrast with previous studies, such as Konrad and Schjelderup (1999) and Bucovetsky (2009).     

Endogenous leadership and sustainability of enhanced cooperation in a repeated interactions model of tax competition: Endogenous leadership in tax competition

In this study, the endogenous timing of moves is analyzed in an infinitely repeated game setting of capital tax competition between a subgroup (a tax union) of countries agreeing on partial tax harmonization and outside countries. It is shown that in a subgame perfect equilibrium of the infinitely repeated tax competition game, they simultaneously set capital taxes in every stage game when a tax union comprises similar countries with respect to productivity, whereas they may set capital taxes sequentially in every stage game when a tax union comprises dissimilar countries. This finding is significantly different from Ogawa (2013), although we also assume that capital is owned by the country's residents, as in Ogawa's model. This is because a disadvantaged member country of the tax union would suffer from larger losses when a tax union comprising dissimilar countries, and thus the tax union will choose the strategy of moving Late for the sake of sustaining tax harmonization to avoid such losses.