Showing papers in "Quarterly Journal of Economics in 1969"
TL;DR: In this article, the authors describe the pursuit of monopoly and economies of scale as determinants of merger, and present a set of statistical tests to evaluate the effect of monopoly, economic disturbances and valuation discrepancies.
Abstract: Introduction, 624. — Economic disturbances and valuation discrepancies, 626. — Pursuit of monopoly and economies of scale as determinants of merger, 629. — Statistical tests, 631. — Security prices and valuation discrepancies, 637.
611 citations
TL;DR: Kahn and Tilton as mentioned in this paper made a number of important suggestions which improved the paper, although they are not responsible for any errors that remain, and they did not necessarily represent those of the other staff members, officers, or trustees of the Brookings Institution.
Abstract: produce some increase in market power, when they produce a technological or managerial economy of scale, or when the managers of the acquiring firm possess some special insight into the opportunities for profit in the acquired firm which neither its managers nor its stockholders possess.3 While these "synergistic" effects and managerial insights are often said to be present in various merger situations, their existence in sufficient strength to warrant the high premiums paid for other firms, often appears implausible when the merger is between firms in seemingly unrelated or loosely related industries. This is especially true when, as frequently happens, the acquired firm is left to operate as an autonomous division of the larger unit, operated by the same management team that controlled it before the merger. * This paper was written with the support of the Brookings Institution under a grant from the Alfred P. Sloan Foundation. Alfred E. Kahn and John E. Tilton made a number of important suggestions which improved the paper, although they are not responsible for any errors that remain. The views presented here are those of the writer and do not necessarily represent those of the other staff members, officers, or trustees of the Brookings Institution.
543 citations
TL;DR: In this paper, the effects on the demand for risky assets of income, capital gains, and wealth taxation, with and without loss-offsets, using a general expected utility maximization model, are discussed.
Abstract: Publisher Summary This chapter reviews the effects on the demand for risky assets of income, capital gains, and wealth taxation, with and without loss-offsets, using a general expected utility maximization model. It also explores the welfare implications of these alternative taxes. A proportional wealth tax increases, leaves unchanged, or decreases the demand for risky assets as the individual has increasing, constant, or decreasing relative risk aversion. On the other hand, a proportional wealth tax increases, leaves unchanged, or decreases private risk-taking as the individual has increasing, constant, or decreasing absolute risk aversion. If there is decreasing relative and absolute risk aversion, investment in the risky asset may be unchanged or decreased as the result of the imposition of an income tax. For a well-behaved utility function, with diminishing marginal utility and decreasing absolute risk aversion, the imposition of the income tax leaves the demand for risky assets unaffected. The chapter explores the effects of no loss-offset provision in an otherwise proportional income tax. It highlights the welfare implications of the preferential treatment of capital gains.
382 citations
TL;DR: In this paper, a new decomposition of the cross price derivatives is proposed, based on conditional demand functions and ordinary demand functions, and the Le Chatelier principle and beyond.
Abstract: Introduction, 60. — I. Conditional demand functions, 61. — II. Conditional demand functions and ordinary demand functions, 64. — III. A new decomposition of the cross price derivatives, 65. — IV. Consumer behavior under straight rationing, 70. — V. Hicksian aggregation, 74. — VI. The Le Chatelier Principle and beyond, 75.
295 citations
TL;DR: In this article, the Waugh-Oi results were used to show that the gains from price stabilization: a more general analysis, 290, and the distribution of gains among producers and consumers, 293.
Abstract: I. Introduction, 284. — II. The Waugh-Oi results, 285. — III. A model with producers and consumers, 288. — IV. A positive storage cost, 290. — V. The gains from price stabilization: a more general analysis, 290. — VI. The distribution of gains among producers and consumers, 293. — VII. Gains to individual producers and consumers, 294. — VIII. Quantity destablization, 296 — IX. Time trend, 297. — X. Conclusions, 297.
274 citations
TL;DR: In this article, some determinants of union growth are discussed, and empirical results are provided for some sub-periods of the union growth process: 439, 441, 442, 446, and 447.
Abstract: I. Some determinants of union growth, 435. — II. Empirical results, 439. — III. Consideration of some subperiods, 445. — IV Conclusion, 447.
270 citations
TL;DR: In this paper, the theory of inert areas and the inducement of change are discussed. But the authors focus on the utility-effort relations between utilities and utilities, and do not consider the influence of utility on change.
Abstract: I. Introduction, 600. — II. Utility-effort relations, 601. — III. The theory of inert areas, 606. — IV. Inert areas and the inducement of change, 612. — V. The innovational-diffusion model, 617. — VI. Conclusions, 620.
173 citations
TL;DR: In this paper, the authors considered the concept of risk differentials in corporate profit and proposed a model for measuring them, using this model, the risk-rate of return relationship was estimated for a sample of firms in various industry groups.
Abstract: : Although economists have great interest in the correlation between risk and profits, few studies have attempted to quantify the relationship. Consequently, this paper considers the concept of risk differentials in corporate profit and proposes a model for measuring them. Using this model, the risk-rate of return relationship was estimated for a sample of firms in various industry groups. For each industry group, average risk-adjusted rates of return were also obtained.
162 citations
TL;DR: In this paper, a loanable funds model was proposed for the first time, and empirical results showed that the model can be used to evaluate the suitability of the loanable fund model.
Abstract: I. Introduction, 127. — II. A loanable funds model, 130. — III. Empirical results, 132. — IV. Macauley's criticism reconsidered, 138. — V. Conclusions, 139.
153 citations
TL;DR: The conditions of noncircular voting, 481 as discussed by the authors and the size of the decision set, 482 and 485, respectively, are the conditions of voting in the United States.
Abstract: I. Degree of voter agreement, 478. — II. The conditions of noncircular voting, 481. — III. Size of the decision set, 482. — IV. Democratic processes, 485. — V. Conclusions, 486. — Mathematical note, 487.
133 citations
TL;DR: In this article, the authors present a model for policy adjustment and compare the model with the policy adjustment model and simulated policy responses, and conclude that the model is a good fit for the real world.
Abstract: Introduction, 1. — I. The model, 3.— II. Comparative statics of the model, 7. — III. The policy adjustment model, 9. — IV. Numerical examples, 12. — V. Simulated policy responses, 15. — VI. Conclusions from the analysis, 22.
TL;DR: Lotteries as alternatives for social choices, 696 as mentioned in this paper, 697, 698, 699, 610, 611, 612, 613, 614, 615
Abstract: Lotteries as alternatives for social choices, 696. — Intransitivity difficulties, 697. — Sufficient conditions to avoid such difficulties, 699.
TL;DR: The cycle, 153. High-income products, 155. Product variations, 158. Economics of scale, 160. Transportation and tariffs, 161. Conclusions, 161 as discussed by the authors...
Abstract: The cycle, 153. — High-income products, 155. — Product variations, 158. — Economics of scale, 160. — Transportation and tariffs, 160. — Conclusions, 161.
TL;DR: In this paper, a model of decentralization of employment and its impact on the urban negro's employment problem is presented, and regression results are used to evaluate the effect of such a model.
Abstract: I. Introduction, 299. — II. Changes in employment patterns, 300. — III. Negro population changes in the urban areas, 304. — IV. A model of decentralization of employment and its impact on the urban negro's employment problem, 304. — V. The regression results, 307. — VI. Conclusions and implications, 309.
TL;DR: In this article, the Ellsberg problem is used to measure non-monetary utility, and a probabilistic interpretation of utility interpretation is proposed. But the utility interpretation does not consider the utility of nonmonetary utilities.
Abstract: Introduction, 324. — I. The Ellsberg problem, 326. — II. Probabilistic interpretation, 326. — III. Utility interpretation, 327. — IV. Measuring nonmonetary utility, 328.
TL;DR: In this paper, the setting of the problem is described, and the specification of the model is given, along with the empirical results and the adjustment properties and forecasting performance of model.
Abstract: I. Introduction, 173. — II. The setting of the problem, 174. — III. Specifications of the model, 175. — IV. The empirical results, 180. — V. The adjustment properties and forecasting performance of the model, 187. — VI. Conceptual experiments, 189. — VII. Conclusions, 193. — Statistical appendix, 194.
TL;DR: In this article, the traditional view, the modern view, and the new husbandry, are discussed, with a focus on labor requirements, and a discussion of the traditional and modern view.
Abstract: Introduction, 375. — The traditional view, 377. — The modern view, 380. — The new husbandry, 385. — Labor requirements, 392. — Conclusion, 394.
TL;DR: In this paper, the relative advantages of rings or mules in the United States and Great Britain were discussed, and the role of cotton prices as a function of counts spun was discussed.
Abstract: Introduction, 25. — Observed investment behavior, 27. — The relative advantages of rings or mules in the United States and Great Britain, 29. — The role of cotton prices, 34. — Relative factor costs as a function of counts spun, 39. — Costs and benefits, 42.
TL;DR: In this paper, a price-price inflation and a wage-wage inflation are discussed and a general equilibrium is established for the two types of inflations and general equilibrium for general equilibrium.
Abstract: I. Introduction, 353. — II. A price-price inflation, 355. — III. A wage-wage inflation, 363. — IV. Spontaneous inflations and general equilibrium, 371. — V. Conclusions, 373.
TL;DR: The social value of government expenditure and alternative principles in taxation are discussed in this article, where the authors propose a test of alternative principles for taxation and the test is based on the social value.
Abstract: I. Introduction, 464. — II. Test of alternative principles in taxation, 467. — III. The social value of government expenditure, 474. — Appendix, 476.
TL;DR: In this paper, the authors present a pure stock adjustment model and the effects of portfolio growth on short-term capital movements in U.S. stock market, and the interrelationships between interest rates, portfolio size, and capital and interest flows.
Abstract: Introduction, 242. — I. The pure stock adjustment model, 244. — II. The effects of portfolio growth, 246. — III. An empirical application: U.S. short term capital movements, 249. — IV. Interest costs, 252. — V. The interrelationships between interest rates, portfolio size, and capital and interest flows, 257. — VI. Summary and conclusions, 259.
TL;DR: The Arrow-Debreu models of consumer and entrepreneurial choice under uncertainty have been studied in this paper, where the existence of a competitive equilibrium under uncertainty has been shown to exist.
Abstract: I. Introduction, 533. — II. The Arrow-Debreu models of consumer and entrepreneurial choice under uncertainty, 534. — III. Consumer choice under uncertainty, 538. — IV. Entrepreneurial choice under uncertainty, 543. — V. The existence of a competitive equilibrium under uncertainty, 547. — VI. Concluding remarks, 553. — Appendix, 556.
TL;DR: In a recent comment as discussed by the authors, Long attempted to bastardize Weisbrod's conceptualization of option demand and strip away its legitimacy by holding that option demand is nothing more than the "unrecognized son of that old goat, consumer surplus."
Abstract: In a recent comment Millard F. Long attempted to bastardize Weisbrod's conceptualization of option demand.' He attempted to strip away its legitimacy by holding that it is nothing more than the "unrecognized son of that old goat, consumer surplus." It is argued here that Long achieved his aim in this regard by setting up a conceptual experiment where option demand could not possibly exist. Testing for it and finding it lacking, he thereby sentenced Weisbrod to wear the "scarlet letter." This note is intended to restore his good name. Weisbrod originally indicated that option demand might be present where two conditions exist: (1) where demand is uncertain and infrequent, and (2) where alteration of production plans is prohibitively costly in the short run. Where such conditions exist, he held, it is possible that individuals who do not plan to use a facility or service might be willing to pay something to insure that the item will be available in case they later change their minds. Since in the course of natural events many such individuals do not change their minds, some revenues are never collected, hence output is never extended to optimal levels. Weisbrod unnecessarily illustrated his argument with examples all of which displayed discreteness properties (i.e., should a park or hospital operating in the red be permitted to close, etc.). It was perhaps these examples which turned Long's attention toward discreteness and led him to declare that "option value . . . is closely related to the conditions of the option;" hence, "the option value is exactly the expected consumer surplus from consuming the good at the terms specified in the option." This led him to conclude that "option value, like consumer surplus, is only of importance for discrete changes in a commodity for which there is no good substitute." Missing from Long's entire discussion is any allusion to the critical condition explicitly stipulated in Weisbrod's original article:
TL;DR: In this article, the authors present a hypothesis and a comparative evaluation of Asia and Latin America for PhiHppine growth in the Philippines, and conclude that education is a source of PhiHppe growth.
Abstract: I. Introduction, 93. — II. Economic growth in the Philippines: the initial reconnaissance, 95. — III. Education as a source of PhiHppine growth, 99. — IV. An hypothesis and a comparative evaluation: Asia and Latin America, 105. — V. Summary, 108.
TL;DR: In this paper, the general model and regression model were used to evaluate the correlation and regression results of a regression model with a general model, and the regression model was used for regression results.
Abstract: The general model, 660 — The regression model, 663 — Correlation and regression results, 666 — Evaluation, 667 — Some conclusions, 670 — Appendix, 671
TL;DR: This paper presents a simulation model for estimating the response of the immune system to the presence of infectious disease in the context of a drug-free environment.
Abstract: I. Introduction, 220. — II. A simulation model, 221. — III. Estimation of the model, 223. — IV. Results of the simulation, 228. — V. Tests of the simulation hypotheses, 232. — VI. Summary and conclusions, 238. — Statistical appendix, 240.
TL;DR: In this article, Jorgenson's 1963 investment model was used to determine the desired capital stock, and the adjustment mechanism was proposed to adjust the model's predictive powers and estimate and prediction of the model.
Abstract: I. Introduction, 580. — II. The determination of desired capital stock, 581. — III. Jorgenson's 1963 investment model, 585. — IV. The adjustment mechanism, 588. — V. The predictive powers of the model, 592. — VI. Estimation and prediction, 597. — VII. Conclusions, 599.
TL;DR: The two components of education's contribution to growth are discussed in this paper, where the authors present a method for generating time series data on relative wages and compare them with the International comparison.
Abstract: Introduction, 449. — I. The two components of education's contribution to growth, 450. — II. Generating time series data on relative wages, 452. — III. International comparisons, 459.
TL;DR: In this article, the authors present a model and the experience of the Philippines in terms of demand patterns, demographic change, and economic growth, and conclude that demand patterns and demographic change are correlated with economic growth.
Abstract: I. Introduction, 110. — II. The model, 112. — III. The model and Philippine experience, 115. — IV. Demand patterns, demographic change, and economic growth, 120. — V. Implications and conclusions, 124. — Appendix, 125.
TL;DR: In this article, the authors proposed a portfolio selection strategy based on portfolio selection, portfolio selection and alternative capital gains tax, 563.564.567.568.
Abstract: Portfolio selection, 563. — Alternative capital gains tax, 567. — Borrowing, 568. — Uncertainty, 570. — Wealth and price effects, 571. — Market equilibrium, 573. — Empirical observations, 577.