Showing papers in "Quarterly Journal of Economics in 1977"
TL;DR: In this article, the authors discuss the dependence and conjecture in entry, and the barriers to mobility, and conclude that diversification by established firms and intergroup mobility are the main obstacles to mobility.
Abstract: I. Interdependence and conjecture in entry, 242.—II. Barriers to mobility, 249.—III. Diversification by established firms and intergroup mobility, 257.—IV. Conclusion, 261.
2,023 citations
TL;DR: In this article, the authors estimate the social benefits of product innovations used by firms and households, and the gap between social and private rates of return between the two groups is discussed.
Abstract: I. Introduction, 221.—II. The sample of innovations, 222.—III. Estimation of social benefits: product innovations used by firms, 222.—IV. Parallel innovative efforts, time horizon, and rates of return, 226.—V. Product innovations used by households, 229.—VI. Process innovations, 231.—VII. Social and private rates of return, 233.—VIII. Factors associated with the gap between social and private rates of return, 235.—IX. Unemployment, repercussions on other markets, and future changes in technology, 238.—X. Conclusion, 239.
676 citations
TL;DR: In this paper, it was shown that the existence of scale economies is not a sufficient condition for the unprofitability of marginal cost pricing, and that with more than one output this is neither necessary nor sufficient for monopoly to be the least cost production mode.
Abstract: The concepts of economies and diseconomies of scale in production pervade much of economists' basic thinking about market structure and pricing. It is conventional wisdom that perfect competition can be viable only if firms' scale economies are exhausted at a level of output that is a small portion of the market. A monopoly firm allegedly minimizes industry costs and is stable against entry if economies of scale are important and unexhausted at the full extent of the market. Finally, it is supposed that a regulated or nationalized monopoly with scale economies must be permitted to price above marginal costs if its sales revenues are to cover its production costs. These standard insights rest on two rarely examined suppositions: (i) A firm with economies of scale cannot recover costs with marginal cost pricing; (ii) when the production technology exhibits scale economies over the full range of output, the least cost industry structure is monopoly. These suppositions are thought to follow from the standard definition: There are economies of scale if a small proportional increase in the levels of all input factors can lead to more than proportional increases in the levels of outputs produced.1 In this paper we find that both suppositions (i) and (ii) are, in general, false. The standard definition of scale economies fails to be a sufficient condition for the unprofitability of marginal cost pricing. While the presence of scale economies, as usually defined, does provide a necessary and sufficient condition for locally decreasing ray average cost, with more than one output this is neither necessary nor sufficient for monopoly to be the least cost production mode. Our focus, here, is the analysis of economies of scale in multioutput firms. We pose a new definition of the degree of scale economies S in terms of the multiproduct cost function. Given some familiar 1. See Debreu (1959), Lancaster (1968), Mansfield (1970), or Menger (1954), for example.
576 citations
TL;DR: In this article, the authors discuss the importance of insurance and protection against various kinds of losses provided to a large and perhaps increasing extent by the public sector in the public health domain.
Abstract: Insurance and protection against various kinds of losses are both valuable activities provided to a large and perhaps increasing extent by the public sector.
370 citations
TL;DR: In this paper, sources of bias in program selection are identified, and the number of programs and audience sizes in equilibrium are analyzed. And the results and policy are presented. But they do not consider the role of audience size.
Abstract: Introduction, 103.—Sources of bias in program selection, 106.—Numbers of programs and audience sizes in equilibrium, 114.—Summary of results and policy, 122.
294 citations
TL;DR: In this paper, the authors present a model for empirical analysis of the model and its relationship with the model's empirical analysis, and conclude that the model can be used to predict the future.
Abstract: I. Introduction, 59.—II. The model, 62.—III. Empirical analysis, 66.—IV. Further implications, 74.—V. Conclusions, 77.—Appendix: data and sources, 77.
242 citations
TL;DR: The pure sorting model implied by job-search theory has been investigated empirically in this paper, showing that the pure sorting process can be explained by sampling from length-biased populations.
Abstract: I. An introduction to sampling from length-biased populations, 39.—II. The pure sorting model implied by job-search theory, 44.—III. Empirical estimation of the pure sorting model, 48.—IV. Determining the underlying process—a possible experiment, 53.—Appendix, 56.
218 citations
TL;DR: In this article, the welfare criterion and the welfare conclusions and policy implications are discussed, as well as the welfare conclusion and the policy implications of Steiner's result. But, the authors do not consider the effect of economic conditions on welfare.
Abstract: Introduction, 15.—The welfare criterion, 16.—Assumptions, 18.—Calculating program patterns, 21.—Counterexamples to Steiner's result, 23.—Ownership structure, channel capacity, and program patterns, 26.—Consumer surplus and total surplus, 31.—Welfare conclusions and policy implications, 35.
170 citations
TL;DR: In this paper, the authors propose a theory of competitive price-quantity equilibria in markets that are subject to speculative uncertainty, based on the "perfect knowledge" model.
Abstract: In his prologue to the theory of speculation, Samuelson (1966a,
p. 947 and passim) deals exclusively with the case of "foreseen changes
in future supply and demand" in outlining a theory of intertemporal
competitive price-quantity equilibria in markets that are subject to
speculation. The analysis was considered to be a preliminary step to
the more complicated cases involving uncertainty. Modern extensions
of the theory (Mandelbrot, 1971; Samuelson, 1972; Schimmler, 1973)
to include uncertainty have been accompanied by such vestiges of this
original "perfect knowledge" model (e.g., common, well-defined expectations)
as demanded, perhaps by the limitations of mathematical
machinery and imagination for restructuring the theory.
100 citations
91 citations
TL;DR: In this paper, the linear case is considered and the linear model is shown to be a better model for linear models than the non-linear case, and proofs are given.
Abstract: I. Introduction, 579—II. The model, 581.—III. The linear case, 586.—IV. Proofs, 593—V. Conclusion, 596.
TL;DR: An industrial relations paradigm, 433 as discussed by the authors, industrial outcomes, determinants of outcomes, 435, correlation results, 440, regression results, 445, summary, 447, and Appendix A: Classification of contract provisions, 448.
Abstract: An industrial relations paradigm, 433.—Industry outcomes, 435.—Determinants of outcomes, 435.—Correlation results, 440.—Regression results, 445.—Summary, 447.—Appendix A: Classification of contract provisions, 448.—Appendix B: Data sources, 450.
TL;DR: Mancke as mentioned in this paper has argued that the association between the profit rates of large manufacturing companies and the market shares that they hold bears no causal relation to market power or scale economies.
Abstract: Several studies have affirmed a significant statistical relation between the profit rates of large manufacturing companies and the market shares that they hold Richard Mancke suggests that this relation may reveal nothing about market power or scale economies1 Instead, "one of the most important determinants of many firms' ex post performance" is their respective successes with large and ex ante uncertain investments Because the lucky firms under certain assumptions gain market share as well as profitability, the association between the two could reflect common random disturbances and bear no causal relation to market power or scale economies Mancke establishes that his assumptions are logically sufficient to explain an observed share-profits relation His simulated statistical results embody these assumptions and do nothing more than illustrate their sufficiency But Mancke evidently believes that his randomprocess explanation is necessary as well as sufficient The primary purpose of this note is to question this necessity It is questionable because other sufficient explanations of the profit-share relation exist Gale2 has advanced the behavioral explanation that a firm's share in an oligopolistic market is related to its ability to slant the oligopolistic bargain in a direction favorable to its own attributes and situation, and thus to its profitability On that analysis market power within
TL;DR: In this paper, the analytical framework is presented for the proof of Proposition 1,479 and 2,480, and a discussion of the economic impact of these propositions is presented. But the analysis is limited.
Abstract: I. Introduction, 469—II. The analytical framework, 469.—III. Fiscal policy, 473.—IV. Exchange rate adjustments, 475.—V. Summary, 478.—Appendix A: Proof of Proposition 1,479.—Appendix B: Proof of Proposition 2,480.
TL;DR: In this article, the estimation of the Japanese cotton-spinning industry production function is presented, accounting for productivity change and labor absorption, and results on the conventional production function are given.
Abstract: Accounting for productivity change and labor absorption, 196.—Data and data sources, 199.—The estimation of the Japanese cotton-spinning industry production function, 200.—Results on the conventional production function, 204.—The estimation of the fundamental equations, 209.—Summary and conclusion, 218.
TL;DR: In this article, the authors concentrate their attention on the implicit moral bias in Walras's theorem of maximum social satisfaction and how this bias was brought out into the open in the analysis of Gossen's theory of maximum subjective gain from trade.
Abstract: Though Walras's Elements d'economie politique pure is couched in the language of pure theory and appears, on the surface, as a completely wert-frei synoptic view of the interdependent operations of an economic system under a hypothetical regime of perfectly free competition, nevertheless the implicit moral convictions that inform the model occasionally show through nowhere better than in Walras's theorem of maximum social satisfaction. I propose, therefore, to concentrate my attention on that theorem: showing in the first part how, for want of proper attention to Walras's moral bias, the theorem came to be misunderstood by Walras's most eminent critics, and, in the second part, how this bias was brought out into the open in Walras's analysis of Gossen's theory of maximum subjective gain from trade.
TL;DR: In this article, an application of corporate income tax is discussed. But the impact of the tax rate on investment under distortion is not considered, and the application is limited to a single application: Corporate income taxation.
Abstract: I. Optimal government investment under distortion, 653.—II. An application: Corporate income taxation, 656.—III. The impact of depreciation, 661.—IV. Concluding remarks, 662.
TL;DR: In this paper, the authors define dependent risk as legitimate risk, and show that endogenous versus endogenous risk and structure are two different types of risk, respectively, and conclude that dependent risk is legitimate risk.
Abstract: The study, 158.—"Interdependent risk" as legitimate risk, 161.—Exogenous versus endogenous risk and structure, 162.—Summary and conclusions, 163.
TL;DR: In this article, the Houthakker-Taylor demand model is used to estimate the demand of a demand in the context of the Iran-Contra-Continent Dispute Resolution Conference.
Abstract: I Introduction, 127—II The Houthakker-Taylor demand model, 128—III Theoretical analysis, 129—IV Estimation, 133—V The empirical results, 136—VI Conclusions, 141
TL;DR: In this article, the authors cast the problem of internalizing pollution externality generated by an upstream firm that damages the product of a downstream firm into a von Thunen-like model and analyzed in this framework the effects of externalities on land utilization and rent along the stream.
Abstract: The notion of ''internalizing'' pollution externality generated by the effluent of an upstream firm that damages the product of a downstream firm is a classical case in the literature on externalities (J. Econ. Lit., 9: 1-28(Mar. 1971)). This paper casts this problem into a von Thunen-like model and analyzes in this framework the effects of externalities on land utilization and rent along the stream. The firms' pollutants accumulate and diffuse by water streams or airstreams, damaging the production of the downstream firms or the welfare of the urban center. The polluters can be agricultural firms, mines, or any other industry located along the stream. The analysis is applied to an industry that operates in a competitive system whose share in the market is relatively small so that product and factor prices are given. The maximization of the joint net profit minus the social costs of pollution at the urban center results in Pareto optimal resource allocation. In the case treated here, the market can achieve this efficient resource allocation if the pollution externalities are internalized by taxation and the tax revenues are redistributed without affecting production decisions. The characteristics of the resource allocation and the corresponding price system, with andmore » without this taxation, are elaborated upon.« less
TL;DR: In this article, limited search and technology transfer, 265, and empirical results, 271, and policy implications, 286, have been discussed, and discussed in detail, in detail.
Abstract: I. Introduction 263.—II. Limited search and technology transfer, 265.—III. Empirical results, 271.—IV. Policy implications, 286.
TL;DR: In this article, the basic model, notation and assumptions of the n = 1 case, and analysis of the no-joint production case with n > 1,301 were presented.
Abstract: I. Introduction and summary, 289.—II. The basic model, notation and assumptions, and analysis of the n = 1 case, 296.—III. The no-joint production case with n > 1,301.—IV. The joint production case with n > 1,303.—V. The social rate of return, 306.—VI. Concluding remarks, 312.
TL;DR: In this article, the authors discuss the publicness of the characteristics of products, and the competitive production of public goods, under perfect information, and show that public goods are public goods.
Abstract: I. Monopoly versus competition, under perfect information, 420.—II. The competitive production of public goods, 425.—III. Afterword, 428.—Appendix: The publicness of the characteristics of products, 428.
TL;DR: A summary of the debate can be found in this article, with a discussion of the neoclassical contributions to the debate and an analysis of the basic equation of the wage equation.
Abstract: I. A summary of the debate, 390.—II. The neoclassical contributions to the debate, 393.—III. An eclectic model of wage dynamics, 398.—IV. Empirical analysis of the basic equation, 403.—V. Conclusions, 411.—Appendix, 414.
TL;DR: In this paper, the authors discuss the role of personnel serving the market function and the expenditure of shopping time in the provision of services to the public market, and some broader issues.
Abstract: I. Introduction, 81.—II. Bureaucratization, 82.—III. Personnel serving the market function, 86.—IV. Expenditure of shopping time, 91.—V. Some broader issues, 98.—VI. Summary, 100.—Statistical notes, 100.
TL;DR: In this article, a simplified optimal price formula and a more general tax formula are presented. But the model is based on a simplified version of the optimal price model, which is not suitable for the general tax model.
Abstract: I. Introduction, 639.—II. The model, 640.—III. A simplified optimal price formula, 642.—IV. An example reconsidered, 645.—V. A more general tax formula, 648.—VI. Concluding remarks, 649.
TL;DR: In this paper, the operation of an efficient competitive economy is discussed. But the model is based on random process models and the operation is different from ours, and it is not a deterministic model.
Abstract: I. Random process models and the operation of an efficient competitive economy, 677.—II. Statistical evidence, 679.
TL;DR: The Lindahl budget determination model has been used for collective budget determination under majority rule as mentioned in this paper, where the majority rule is used to determine the minimum budget for a given budget item.
Abstract: I. Introduction, 315.—II. Collective budget determination under majority rule, 316.—III. The Lindahl budget determination model, 322.—Appendix, 324.