Managerial and Decision Economics

Published by Wiley
Online ISSN: 1099-1468
Publications
Article
Organizations are composed of stable, predominantly cooperative interactions or n-person exchanges. Humans have been engaging in n-person exchanges for a great enough period of evolutionary time that we appear to have evolved a distinct constellation of species-typical mechanisms specialized to solve the adaptive problems posed by this form of social interaction. These mechanisms appear to have been evolutionarily elaborated out of the cognitive infrastructure that initially evolved for dyadic exchange. Key adaptive problems that these mechanisms are designed to solve include coordination among individuals, and defense against exploitation by free riders. Multi-individual cooperation could not have been maintained over evolutionary time if free riders reliably benefited more than contributors to collective enterprises, and so outcompeted them. As a result, humans evolved mechanisms that implement an aversion to exploitation by free riding, and a strategy of conditional cooperation, supplemented by punitive sentiment towards free riders. Because of the design of these mechanisms, how free riding is treated is a central determinant of the survival and health of cooperative organizations. The mapping of the evolved psychology of n-party exchange cooperation may contribute to the construction of a principled theoretical foundation for the understanding of human behavior in organizations.
 
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This article examines the effects of knowledge sharing or endogenous spillovers among R&D consortia participants on R&D competition when R&D enhances a firm's absorptive capacity. A three-stage model illustrates how different compositions of R&D consortia affect endogenous spillover rates and R&D spending of participants. When consortium participants possess complementary knowledge, the model suggests that participation increases the degree of knowledge sharing and intensifies firms' R&D efforts to learn from other members compared with the case when no cooperation takes place. This type of R&D consortia is welfare enhancing, justifying government support for these projects. Copyright © 2003 John Wiley & Sons, Ltd.
 
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We present microeconomic evidence on US pricing dynamics pre and post-establishment of the Bretton Woods (BW) monetary regime. We track prices of 49 goods (1172 observations) in 1938-1951 Sears, Roebuck catalogs. The average length between (nominal) price changes was over 2 years. The average was higher (2.05 years) in the pre-BW period than in the later (2.01 years). We find that prices of brand name goods were relatively rigid; three never changed price. Price changes were larger during the 1945-1951 period than pre-BW by between 0.60 and 1.83%. Price changes displayed a higher correlation with inflation pre-BW. Copyright © 2007 John Wiley & Sons, Ltd.
 
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In more recent years, the social significance of consumption has increased to such an extent that activity in the so-called 'positional economy' is now seen to threaten prospects for sustainable, long-term economic growth. In particular, the demand for status goods, fuelled by conspicuous consumption, has diverted many resources away from investment in the manufacture of more material goods and services in order to satisfy consumer preoccupations with their relative social standing and prestige. This paper looks at the policies and prescriptions which have been proposed in order to reduce levels of 'conspicuous waste' in the positional sector, and to redirect resources back into more productive economic activity. Copyright © 2000 John Wiley & Sons, Ltd.
 
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The 1971 ban on TV and radio advertising of cigarettes offers a unique opportunity to uncover the industry response to a change in the mix of advertising. Following the ban, advertising expenditures were shifted away from TV and radio towards print media. Accounting for the impact of this event within a supply and demand framework, the empirical results show that advertising had an insignificant effect on demand during the pre- and post-1971 periods; however, advertising did stimulate competition in the industry prior to the 1971 ban. Copyright © 1999 John Wiley & Sons, Ltd.
 
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There was no production of crude oil and natural gas in 1973. However, exploration and preparatory production work were well underway. The paper examines the impact within Scotland in 1973 of the expenditure required to supply these activities. The data used for the study are those contained in or associated with the 1973 Scottish Input Output tables and the analysis uses input-output techniques. The pattern of crude oil consumption within the Scottish economy in 1973 is also examined.
 
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An empirical investigation of the downsizing-productivity relationship has emerged from the USA. This paper presents further evidence drawn from another country's experience. Detailed commentary on key trends in the UK motor vehicle industry informs an analysis applying the Baily et al. [Baily, Bartelsman and Haltiwanger (1994) Downsizing and productivity growth: myth or reality? National Bureau of Economic Research Working Paper No. 4741; (1996a) Downsizing and productivity growth: myth or reality? In Sources of Productivity Growth (edited by D.G. Mayes), New York: Cambridge University Press; (1996b) Downsizing and productivity growth: myth or reality? Small Business Economics, 8 , 259-278] taxonomic model, yielding insights into the varieties of downsizing-productivity linkages therein. Evidence presented shows productivity growth was indeed higher in those plants that successfully downsized, but that those plants that were unsuccessful at downsizing tended to have among the worst productivity growth rates. Unsuccessful downsizers accounted for a significant part of the overall decline in productivity after 1989. Copyright © 1999 John Wiley & Sons, Ltd.
 
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In this paper, we study the market power of European airlines in an oligopoly structure with product differentiation for the period 1976-1990 and test the monopoly hypothesis (Captain, 1993). The paper analyzes the level of competition among eight major European airlines and finds little evidence for market power in the industry over that period. One of our main findings is that the high prices in Europe are not entirely due to the bilateral agreements (leading to possible monopoly power), but rather are a result of very high cost structures in the industry. These results are broadly in agreement with those of Roeller and Sickles (1994) which analyzes these issues in the European Industry by estimating a structural, two-stage game. © 1997 John Wiley & Sons, Ltd.
 
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How are excess resources redeployed when an industry declines? These resources can be redeployed within the firm through diversification and across firms through a market interface. Acquisitions can play an important role in either of these mechanisms. First, acquisitions can provide new complementary resources and facilitate the redeployment of excess resources within the firm through recombination. Second, horizontal acquisitions can facilitate consolidation and disposal of excess or redundant resources that can be redeployed elsewhere through a market interface. I study both these kinds of acquisitions in the US defense industries (1978-1996), and explain the choice between the two acquisition strategies on the basis of the business environment, underlying resources of the firm, and to a lesser extent, as a consequence of agency forces within the firm. I derive implications for strategic transformation of firms, and the resource-based and evolutionary perspectives. Copyright © 2004 John Wiley & Sons, Ltd.
 
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This paper analyzes a model of platform competition in markets of system products composed of hardware and complementary software, with a specific focus on exclusive contracting. When hardware products are strongly differentiated, or when consumers value the marginal benefit of additional software variety highly, we find that, in equilibrium, hardware firms will engage in exclusive contracting of software development. This finding is strongly supported by our empirical results in the Japanese home video game industry, dominated by Nintendo from 1984 to 1994. Copyright (C) 2010 John Wiley & Sons, Ltd.
 
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This paper examines UK franchise contracts over the period 1989-1999. Franchising is modelled as comprising three main variables, contract length, royalty rate and initial franchise fee. Up to now most authors have concentrated on the latter two variables, but with the data in this paper it is possible to assess the characteristics that impact on all three. Further, our analysis looks at what affects the probability of contract change. We take account of the limited dependent variable nature of the data and exploit sectoral heterogeneity. Our main findings are that the focus of attention on 'aggregate' variables is inappropriate and that contract length appears to be an important aspect of the franchise contract which is theoretically obvious, but until now has not been empirically tested. Copyright © 2003 John Wiley & Sons, Ltd.
 
Top-cited authors
Jay B. Barney
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Margaret A. Peteraf
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Henry G Grabowski
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Joseph T. Mahoney
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