Industrial Organization Commons^™

Production, Price, And Inventory Theory, George A. Hay

George A. Hay

This paper is an attempt to derive empirically testable hypotheses regarding the principal determinants of firms' decisions on production, price, and finished goods inventory. The general approach to the problem is that many of the same factors which affect the optimal value for one variable will also influence decisions on the other two, and that a "proper" model must take into account the interdependence of these variables and the simultaneous nature of the decisions involving them. This is in contrast to literature on the theory of inventories (see Paul Darling and Michael Lovell) in which the firm is assumed to …

External Economies And Competitive Equilibrium, George A. Hay, John J. Mcgowan

George A. Hay

In an article published in 1955, Murray Kemp analyzed the case for interference with the competitive allocation of resources when external economies of production are present. In the specific model we are interested in—where the costs of any one producer's operations are affected by the total output of all producers of the same product—Kemp attempted to show that where entry into the industry is closed (although the industry is otherwise perfectly competitive), "there can always be found a subsidy, either on the product or on a particular factor, which will be a sufficient incentive to firms to produce an optimal …

Sources Of Productivity Spillovers: Panel Data Evidence From China, Badi H. Baltagi, Peter H. Egger, Michaela Kesina

Center for Policy Research

This paper assesses sources of productivity spillovers in China's electric and electronic manufacturing industry using a rich panel data-set of 25,360 firms observed over the period 2004-2007. This industry is characterized by its important reliance on technology. In particular, the paper focuses on the role of other firms' productivity as well as productivity shifters in affecting own firm-level total factor productivity. In addition, this paper examines the possible difference between spillovers from foreign-owned units and from units which participate at global markets through exporting in comparison to domestically-owned and non-exporting units. We find evidence of stronger spillovers from exporting firms …

Firm-Level Productivity Spillovers In China’S Chemical Industry: A Spatial Hausman-Taylor Approach, Peter H. Egger, Badi H. Baltagi, Michaela Kesina

Center for Policy Research

This paper assesses the role of intra-sectoral spillovers in total factor productivity across Chinese producers in the chemical industry. We use a rich panel data-set of 12,552 firms observed over the period 2004-2006 and model output by the firm as a function of skilled and unskilled labor, capital, materials, and total factor productivity, which is broadly defined. The latter is a composite of observable factors such as export market participation, foreign as well as public ownership, the extent of accumulated intangible assets, and unobservable total factor productivity. Despite the richness of our data-set, it suffers from the lack of time …

Negotiating Deals From A Position Of Powerlessness, Michael Schaerer, Roderick I. Swaab

Research Collection Lee Kong Chian School Of Business

When you are negotiating a deal it pays to have viable alternatives to fall back on – or at least that’s what most people think. New research suggests that being powerless can be liberating and help you achieve better deals.

The Nonlinear Price Fynamics Of Us Equity Etfs, Gunduz Caginalp, Mark Desantis, Akin Sayrak

Economics Faculty Articles and Research

We investigate the price dynamics of large market-capitalization U.S. equity exchange-traded funds (ETFs) in order to uncover trader motivations and strategy. We show that prices of highly liquid ETFs can deviate significantly from their daily net asset values. By adjusting for changes in valuations, we report the impact of non-classical variables including price trend and volatility using data from 2008 to 2011. We find a cubic nonlinearity in the trend suggesting that traders are not only aware of the underreaction of others, but also self-optimize by anticipating others' reactions, and sell when the uptrend is stronger than usual.

Bilateral Bargaining With Externalities, Catherine De Fontenay, Joshua Gans

Catherine de Fontenay

This paper provides an analysis of a non-cooperative pairwise bargaining game between agents in a network. We establish that there exists an equilibrium that generates a coalitional bargaining division of the reduced surplus that arises as a result of externalities between agents. That is, we provide a non-cooperative justification for a cooperative division of a non-cooperative surplus. The resulting division is akin to the Myerson-Shapley value with properties that are particularly useful and tractable in applications. We demonstrate this by examining buyer-seller networks and vertical foreclosure.

Pipeline Congestion And Basis Differentials, Matthew E. Oliver, Charles F. Mason, David C. Finnoff

Charles F Mason

No abstract provided.

Teece's Competing Through Innovation, Herbert J. Hovenkamp

All Faculty Scholarship

This essay reviews David J. Teece's book, Competing Through Innovation: Technological Strategies and Antitrust Policies (2013).

Implications Of Export Competitiveness And Performance Of Textile And Clothing Sector Of Pakistan: Pre And Post Quota Analysis, Nawaz Ahmad

Nawaz Ahmad

Textile and Clothing sector of Pakistan has been facing different international trade reforms i.e. Multi-fiber Arrangements, Quota elimination and for some of the developing countries European union, introduced special trade arrangements like GSP plus to improve their balance of trade conditions. In the light of pre quota elimination and post quota elimination periods, this paper highlights trade performance of textile and clothing sector in depth. This study focused on finding the extent of revealed comparative advantage of textile and revealed comparative advantage of clothing sector on overall textile and clothing trade performance of Pakistan. For this purpose study applied Johansen …

Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

The Supreme Court’s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Court’s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.

As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to …

Exchange Rates And Export Structure, Wen-Tai Hsu, Yi Lu, Yingke Zhou

Research Collection School Of Economics

This paper studies whether changes in the exchange rate affect a country’s export structure, using an arguably exogenous sudden appreciation of renminbi on July 21, 2005 as the main source of identification. Employing combined regression discontinuity and difference-in-differences approach, we show that China’s export structure became more similar to that of the developed countries after the currency appreciation. We also find that the majority of the appreciation effect comes from the inter-firm resource reallocation rather than the inter-region or intra-firm resource reallocation.

Interpreting, Stephanie Jo Kent

Doctoral Dissertations

What do community interpreting for the Deaf in western societies, conference interpreting for the European Parliament, and language brokering in international management have in common? Academic research and professional training have historically emphasized the linguistic and cognitive challenges of interpreting, neglecting or ignoring the social aspects that structure communication. All forms of interpreting are inherently social; they involve relationships among at least three people and two languages. The contexts explored here, American Sign Language/English interpreting and spoken language interpreting within the European Parliament, show that simultaneous interpreting involves attitudes, norms and values about intercultural communication that overemphasize information and discount …

Empirical Studies On The Effectiveness Of Soda Taxes To Curb Obesity, Francesca Colantuoni

Doctoral Dissertations

This dissertation presents a series of empirical studies to evaluate the effectiveness of soda taxes to curb the obesity epidemic. Chapter 1 describes the extent and severity of the obesity problem in the U.S., and discusses the policy interventions that have been proposed or enacted with the intent to fight obesity (e.g., sales taxes). Chapter 2 contains a study on the effect of two tax events on soda consumption: a 5.5% sales tax on soft drinks imposed in Maine in 1991, and a 5% sales tax on soft drinks levied in Ohio in 2003. We investigate this question by using …

Research On Development Strategy Of Rizhao Port Industrial Cluster, Ying Bian

World Maritime University Dissertations

No abstract provided.

Research On The Competition Structure Of Container Terminals In The Yangtze River Delta, Lu Shi

World Maritime University Dissertations

No abstract provided.

Essays On Resource Allocation Efficiency And Behavior, Julianna Marie Butler

Doctoral Dissertations

This dissertation is comprised of three papers in the field of microeconomics. The first examines bidder’s choice auctions using both field and laboratory experiments. The field experiments demonstrate that traditional bidder’s choice auction theory does not always hold; the laboratory experiments subsequently isolate several characteristics of this auction format to explain why. We find that while price revelation does not impact the revenue superiority of the auction mechanism, multi-good demand significantly reduces the revenue premium. Intuitively, risk aversion plays less of a role when bidders have the opportunity to win multiple goods. The second chapter is theoretical and presents a …

Tax Policy And Entrepreneurship, Xiaowen Liu

Doctoral Dissertations

Small businesses and the entrepreneurial spirit are among the driving forces in economic growth and development in the United States. The US governments (both federal and state) have long been aware of the importance of entrepreneurship, and many policies are directed toward helping small businesses. However, whether such policies give rise to expected behavioral responses from small businesses remains inconclusive. This dissertation looks into the behavioral response of self-employed filers to individual income tax and the impact of state and federal tax policies on entrepreneurship. In the first chapter, we examine taxpayers’ behavioral response to the Alternative Minimum Tax (AMT). …

The Role And Growth Of New-Car Leasing: Theory And Evidence, Justin Johnson, Henry S. Schneider, Michael Waldman

Henry S Schneider

An important change in the automobile market over the last few decades has been the substantial growth in new-car leasing. Building on recent theoretical research, we construct a model of the leasing decision in which leasing mitigates adverse selection and reduces transaction costs, but moral hazard limits its use. Also, in our model the prevalence of leasing is related to new-car reliability, so it suggests that the growth in leasing over time is at least partly due to improvements over time in new-car reliability. We use this model to derive a number of testable implications and then conduct an empirical …

Implementation Of A New Enterprise Resource Planning System, Lacy Payne

Masters Theses & Specialist Projects

The objective of this thesis was to upgrade an Enterprise Resource planning system that was outdated into a new age Enterprise resource planning system based centered on a scheduling algorithm. This was a key change that needed to be made to transform the company from old thinking to new. Primarily the testing of this implementation was done through mapping of processes, followed by trial and error, and finally improving and sustaining the processes it took to use the system correctly. The mapping of the processes was completed by the Process Manager as well as the Lead, Supervisor, or Manager of …

Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis

David E. Davis

Buyer Alliances As Countervailing Power In Wic Infant-Formula Auctions, David E. Davis

David E. Davis

The Evolution Of Innovation And The Evolution Of Regulation: Emerging Tensions And Emerging Opportunities In Communications, John W. Mayo

John W Mayo

Changes to an industry’s core technologies inevitably create tension for regulatory institutions. This is true for any sector experiencing persistent disruptive innovation, and that has been the defining feature of the communications industry for the last two decades or longer. In very short order, a century of switched voice communication networks have been supplanted by new, packet-based voice, video and data networks, rendering both the legal and regulatory framework hammered out for the switched-voice era increasingly strained. This incongruity has created tangible regulatory asymmetries. Wireline telephony provided by a “telco” is regulated by the Federal Communications Commission under Title II …

Economic Impact Of Legalizing Retail Alcohol Sales In Craighead, Faulkner, And Saline Counties, Katherine A. Deck, Mervin Jebaraj

Publications and Presentations

Converting from dry county to wet county status would have a number of tangible and intangible economic benefits for Craighead, Faulkner, and Saline counties. Legal retail alcohol sales are a signal of a contemporary economic development environment. Quantifying the value of that perception is quite difficult, but it is entirely possible to estimate sales effects, tax collections, and other economic impacts of becoming a wet county. This study was conducted by the Center for Business and Economic Research to assess the magnitude of those economic effects.

Social Media And Entrepreneurship: The Case Of Food Trucks, Scott J. Wallsten, Corwin Rhyan

Scott J. Wallsten

While the use of social media by firms is nearly ubiquitous, there has been little analysis of its effectiveness in helping small businesses succeed in a highly competitive market. To begin studying this question, we created an extensive dataset on over 250 mobile food trucks—a dynamic, somewhat homogenous, and low-entry cost business that is highly dependent on social media for its business model—which operated in the Washington, DC metro area from 2009 to 2013. We explore how their use of social media and Internet services like Twitter, Facebook, and business webpages effect their ability to stay in business. We find …

Overcoming Postcommunist Labour Weakness: Attritional And Enabling Effects Of Mncs In Central And Eastern Europe, Aleksandra Sznajder Lee, Vera Trappmann

Political Science Faculty Publications

Based on micro-level analysis of the developments in the steel sector in Poland, Romania and Slovakia, this paper examines the effects of multinational corporations (MNCs) on labour unions in Central and Eastern Europe. It makes a three-fold argument. First, it shows that union weakness can be attributed to unions’ strategies during the restructuring and privatization processes of postcommunist transition. Consequently, tactics used for union regeneration in the West are less applicable to CEE. Rather, the overcoming of postcommunist legacy is linked to the power of transnational capital. Through attritional and enabling effects, ownership by MNCs forces the unions to focus …

Competition Policy And The Technologies Of Information, Herbert J. Hovenkamp

All Faculty Scholarship

When we speak about information and competition policy we are usually thinking about oral or written communications that have an anticompetitive potential, and mainly in the context of collusion of exclusionary threats. These are important topics. Indeed, among the most difficult problems that competition policy has had to confront over the years is understanding communications that can be construed as either threats to exclude or as offers to collude or facilitators of collusion.

My topic here, however, is the relationship between information technologies and competition policy. Technological change can both induce and undermine the use of information to facilitate anticompetitive …

Antitrust And The Close Look: Transaction Cost Economics In Competition Policy, Herbert J. Hovenkamp

All Faculty Scholarship

This paper briefly examines the contributions of Transaction Cost Economics (TCE) to antitrust analysis, focusing on vertical integration and its contractual substitutes, mainly, minimum and maximum resale price maintenance, vertical nonprice restraints, tying, bundled discounts and exclusive dealing and related exclusionary contracts.

TCE generally assumes that business firms organize their activities so as to maximize their value, which they can do both by economizing and also by obtaining higher prices. Sensible antitrust policy recognizes that both advantageous contracting and monopoly can be profitable to a firm, and it can be expected to pursue both when they are available. Nevertheless, the …

Essay On Firm Inventory And Innovation Behavior, Ye Gu

Doctoral Dissertations

This dissertation studies firm’s decisions on inventory investment and innovation activities. The first chapter examines firm inventory behavior. It resolves and simulates the production smoothing/buffer stock model using different sets of parameters. It shows that the relationship between a sales shock and inventory investment could be ambiguous which is different from previous predictions. The production smoothing/buffer stock model and the (S, s) model of inventory are tested using a rich Chinese firm-level dataset covering 769 manufacturing firms from 1980 to 1989, and I find that sales are positively correlated with inventory for raw materials, but negatively correlated with …

Institutional Setting And Carrier Viability In The Airline Industry: A Continuing Review Of The Post-Deregulation Experience, Sean W. Sullivan

Chancellor’s Honors Program Projects

No abstract provided.