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Economic Theory

2013

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Full-Text Articles in Business Administration, Management, and Operations

A Dynamic Model Of Competitive Entry Response, Matthew Selove Dec 2013

A Dynamic Model Of Competitive Entry Response, Matthew Selove

Business Faculty Articles and Research

I develop a dynamic investment game with a “memoryless” research and development process in which an incumbent and an entrant can invest in a new technology, and the entrant can also invest in the old technology. I show that an increase in the probability of successfully implementing a technology can cause the incumbent to reduce its investment. Under certain conditions, if the success probability is high, the incumbent allows the entrant to win the new technology so that firms reach an equilibrium in which they use different technologies, and threats of retaliation prevent attacks; but if the success probability is …

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How Do Firms Become Different? A Dynamic Model, Matthew Selove Oct 2013

How Do Firms Become Different? A Dynamic Model, Matthew Selove

Business Faculty Articles and Research

This paper presents a dynamic investment game in which firms that are initially identical develop assets that are specialized to different market segments. The model assumes that there are increasing returns to investment in a segment, for example, as a result of word-of-mouth or learning curve effects. I derive three key results: (1) Under certain conditions there is a unique equilibrium in which firms that are only slightly different focus all of their investment in different segments, causing small random differences to expand into large permanent differences. (2) If, on the other hand, sufficiently large random shocks are possible, firms …

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Voice Without Say: Why Capital-Managed Firms Aren’T (Genuinely) Participatory, Justin Schwartz Aug 2013

Voice Without Say: Why Capital-Managed Firms Aren’T (Genuinely) Participatory, Justin Schwartz

Justin Schwartz

Why are most capitalist enterprises of any size organized as authoritarian bureaucracies rather than incorporating genuine employee participation that would give the workers real authority? Even firms with employee participation programs leave virtually all decision-making power in the hands of management. The standard answer is that hierarchy is more economically efficient than any sort of genuine participation, so that participatory firms would be less productive and lose out to more traditional competitors. This answer is indefensible. After surveying the history, legal status, and varieties of employee participation, I examine and reject as question-begging the argument that the rarity of genuine …

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Teacher Qualifications And Student Achievement: A Panel Data Of Analysis, Trevor Collier Jan 2013

Teacher Qualifications And Student Achievement: A Panel Data Of Analysis, Trevor Collier

Economics and Finance Faculty Publications

Recent academic research suggests that teacher quality plays an important role in student achievement: however, empirical research on the efficacy of policies requiring teachers to obtain certain degrees is inconclusive, particularly in elementary education. This paper models a panel data production function with fixed effects using the Early Childhood Longitudinal Study (ECLS-K) to asses the relationship between different undergraduate and graduate majors and elementary student test scores. Specifcally, we aim to discern if there is a difference in teacher efficacy within the different education related majors (e.g. early childhood education and elementary education) and between education and non-education related majors.

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