Showing papers on "Managerial economics published in 1998"
TL;DR: In this article, the adoption and design of flexible benefit plans through four theoretic lenses: institutional, resource dependence, agency, and transaction cost, and they integrate the relevant insights gained from these theories into a more complete model and derive propositions for future research.
Abstract: In this article we explore theoretical explanations of managers' decisions about flexible benefit plans First, we examine the adoption and design of flexible benefit plans through four theoretic lenses: (1) institutional, (2) resource dependence, (3) agency, and (4) transaction cost We then integrate the relevant insights gained from these theories into a more complete model and derive propositions for future research Finally, we generalize the insights gained from exploring a specific innovation to broader questions surrounding decisions about other human resource innovations
162 citations
01 Jan 1998
TL;DR: The first industrial application of an experimental stock market, which was designed to support project management decisions, was reported in this paper, where people who work in a software development project were motivated to trade in simple real money double auction markets.
Abstract: In this paper we report about a first industrial application of an experimental stock market, which was designed to support project management decisions. People who work in a software development project were motivated to trade in simple real money double auction markets. The design of these markets was focused on the date the project should be finished and should help to aggregate privat and semi-public information on the progress of the project more quickly than conventional management techniques. Part two of this paper present a half year of trading in our experimental markets, a short analysis of the results and some final conclusions. 1 Assistant Professor at the Dep. of Managerial Economics and Industrial Organization at University of Technoloy Vienna. email:ortner@ebwnov.tuwien.ac.at, http://ebweb.tuwien.ac.at/ibwl/ 2 In cooperation with Siemens PSE (Austria) and Kumo Inc. (Canada). With special thanks to Franz Schweiger, Rudolf Siebenhofer and Erich Berger (from Siemens PSE) and Sean Morgan, Ken Kittlitz (from Kumo Inc.) for supporting this experiment.
63 citations
Book•
01 Jan 1998
TL;DR: In this paper, the authors present the theoretical, econometric and applied foundations of the economics of innovation as well as offering a new approach to the measurement of technical change, and critically review current schools of thought and presents his own contribution to measurement techniques.
Abstract: This important new book presents the theoretical, econometric and applied foundations of the economics of innovation as well as offering a new approach to the measurement of technical change. The author, a leading expert in innovation economics and management, critically reviews current schools of thought and presents his own contribution to measurement techniques.
57 citations
TL;DR: In this paper, a tension between the basic tenant of New Institutional Economics and the manner in which it has been applied in the debate on post-socialist transformation is explored in the context of four main perspectives on NIE: (i) property rights, transaction costs economics, new economic history, and evolutionary economics.
Abstract: The paper suggests that there is a tension between the basic tenant of New Institutional Economics (NIE) and the manner in which it has been applied in the debate on post-socialist transformation This tension is explored in the context of four main perspectives on NIE: (i) property rights, (ii) transaction costs economics, (iii) new economic history, and (iv) evolutionary economics There are two main arguments The first is that the transformation phase should be seen as ‘open-ended’ rather than a ‘closed process’ where the ‘pure market’ is the inevitable end result The second is that, although the NIE literature touches on most of the issues which are relevant to post-socialist transformation, the insights that it offers are still too general for policy guidance
52 citations
Posted Content•
TL;DR: The Economics of Imperfect Knowledge as discussed by the authors is an excellent book for those interested in microeconomic theory, industrial organization and competition policy, and it will be welcomed by many interested in industrial organization.
Abstract: The Economics of Imperfect Knowledge will be welcomed by those interested in microeconomic theory, industrial organization and competition policy.
37 citations
Journal Article•
TL;DR: For example, this article argued that human behavior is rational when it conforms to the model of rational choice, whatever the state of mind of the chooser, and that departures from this model would be random and would therefore not affect the overall power of the economic analysis.
Abstract: I. INTRODUCTION The emergence of the modern law and economics analysis generally is dated to the early 1960s with the publication of seminal work by Ronald Coase1 and subsequently by Guido Calabresi and Douglas Melamed.2 These articles laid the foundation for the relation between legal rules, wealth maximization, and transaction costs, which provided the pivotal application of economic analysis to legal problems.3 However, the current sweep of law and economics would have been inconceivable without Gary Becker's insight into the application of neoclassical comparisons of marginal utility to the stuff of everyday life.4 Becker's analysis of routine decision making in terms of the likely returns from marginal choices allowed for the expansion of law and economic analyses into virtually every area of law. This approach is the keystone for Richard Posner's introduction of the law and economics methodology: [E]conomics is the science of rational choice in a world-our world-in which resources are limited in relation to human wants. The task of economics, so defined, is to explore the implications of assuming that man is a rational maximizer of his ends in life, his satisfactions-what we shall call his "self-interest.' Rational maximization should not be confused with conscious calculation. Economics is not a theory about consciousness. Behavior is rational when it conforms to the model of rational choice, whatever the state of mind of the chooser.5 Clearly, the conception of rational utility calculations is key to this law and economics approach. But this conception is impossible without further simplifying assumptions. The most apparent assumptions are that, first, behavior could be presumed rational only when it conformed to the model of utility maximization, and second, that departures from this model would be random and would therefore not affect the overall power of the economic analysis. The combined effect of these initial assumptions in turn allows law and economics to operationalize its insights. Since virtually all law and economics scholarship exists at the theoretical plane, turning on formal models rather than observed behavior, the presumption of behavior conforming (in the aggregate) to the economic predictions was an indispensable move. To the extent that this economic model tried to understand individual patterns of thought, it relied on a highly reductionist view of the human psyche: [T]he economic approach does not assume that decision units are necessarily conscious of their own efforts to maximize or can verbalize or otherwise describe in an informative way reasons for the systematic patterns in their behavior. Thus it is consistent with the emphasis on the subconscious in modern psychology.6 Such attribution of microeconomic strategies to the human subconscious is not only extremely suspect; it serves to highlight the reductionist assumptions necessary for translating this first generation of applied economic insights into models of individual behavior. This reductionism invited a second-generation inquiry into the extent to which the law and economics methodology could survive outside the hermetically sealed environment of formal models. What if it were possible to relax the assumptions about human behavior and actually observe how individuals behave? What if in turn it were possible to use the resulting psychological insights to refine both legal analysis and legal rules to anticipate departures from presumed rational responses? The result could be, to quote a truly felicitous phrase, "economics with a higher 'R^sup 2^"7 Or, put more aggressively, "The future of economic analysis of law lies in new and better understandings of decision and choice."8 While I share the enthusiasm for a richer understanding of the behavioral dynamics of market actors, I wish to issue some cautions prior to the declaration of victory over more established economic analyses of the law. …
36 citations
TL;DR: In the second half of the twentieth century, Spanish accounting research was quite isolated, and with the return of democracy and the move towards greater European involvement much research was devoted to issues of financial accounting harmonization and standardization.
Abstract: Economia de la Empresa (Business Economics) emerged in Spain as a distinct academic discipline in the second half of the twentieth century. In its early years, Business Economics shared common influences with Accounting, particularly ideas and theories acquired from the translation of Italian and German works on Economia Aziendale and Betriebswirtschaftslehre. However, partly because of the institutional structure of Spanish universities, the two disciplines moved apart. During the Franco regime, Spanish accounting research was quite isolated, and with the return of democracy and the move towards greater European involvement much research was devoted to issues of financial accounting harmonization and standardization. This normative research was of little interest to Business Economics researchers, who were developing analytical approaches grounded in economic theory. More recently, academics working in the two disciplines have drawn on a wider range of theoretical approaches, from empirical studies to be...
33 citations
Book•
01 Jan 1998
TL;DR: The third edition of applied transport economics has been completely revised and updated to cover the latest developments and thinking in transport economics as discussed by the authors, which provides a transport economics text book for managers who are not familiar with economics techniques, students preparing for examinations in transport and other areas of business and public policy.
Abstract: this third edition of applied transport economics has been completely revised and updated to cover the latest developments and thinking in transport economics. professor stuart cole examines the application of economics techniques first to commercial transport operations, and second to public policy issues such as investment, integrated transport and competition, and third to the role of transport in its wider economic context. the style and approach, which proved so popular in the first two editions has been retained. this approach provides a transport economics text book for a) managers who are not familiar with economics techniques, b) students preparing for examinations in transport and other areas of business and public policy where an applied approach to economics is required, and c) economists entering the transport field. fully and extensively updated throughout, this third edition will contain: *new information on se asia and eastern europe *updated and extended case studies *a new bibliography; *an extended further reading section.
30 citations
TL;DR: This paper introduced the information theoretic or economics of information approach, showed how this relates to innovation and illustrates an example of an information economics model of innovation, and attempted to demonstrate that information economics perspective, both generally and in the context of a simple model, improves understanding of and provides new insights into innovation, compared to a more conventional economic approach.
Abstract: Introduces the information theoretic or economics of information approach, shows how this relates to innovation and illustrates an example of an information economics model of innovation. Attempts to demonstrate that an information economics perspective, both generally and in the context of a simple model, improves understanding of and provides new insights into innovation, compared to a more conventional economic approach.
26 citations
TL;DR: In this article, the assumption that employment is characterized by managerial control is tested using evidence from an electronics producer, and it is shown that factors affecting the employment status of workers, such as asset specificity, task interdependence, and high knowledge requirements, also affect the degree to which workers are managerially controlled.
Abstract: Transaction cost economics recognizes two alternative forms of governing production and exchange – market coordination and managerial control. When examining the contractual relationship between firms and workers, researchers generally consider employment to represent managerial control. This paper tests the assumption that employment is characterized by managerial control. Using evidence from an electronics producer, this paper tests whether factors affecting the employment status of workers, such as asset specificity, task interdependence, and high knowledge requirements, also affect the degree to which workers are managerially controlled. This research helps explain a number of market, organizational, and managerial innovations, such as employee self-management and the use of temporary workers.
17 citations
TL;DR: In this article, the authors review two books by leading management accounting researchers which rely on advances in the economics of internal organization for their theorectical foundation and identify areas where alternative theoretical perspectives might be used to address the main weaknesses of models based on conventional notions of economic rationality.
01 Oct 1998
TL;DR: In this paper, the authors developed and used the Model of Emerging and Constructed Opportunities (MECO) to analyze the emergence of systematic institutional and gender-based differential advantage.
Abstract: This paper develops and uses the Model of Emerging and Constructed Opportunities (MECO) to analyze the emergence of systematic institutional and gender-based differential advantage. Using an evolutionary process with reference group effects, certain household power relations that are "less fit" are abandoned in favor of household power relations that are "more fit." The model illustrates processes whereby institutional and gender-based differential advantage could emerge: (1) through stochastic processes if different genders experience asymmetric shocks affecting their economic opportunity; (2) as the result of gender-based differences in investment bias; or (3) as the result of gender-based differences in responses to servility. The evolutionary process in the MECO is one where agents within households see themselves as servile if they have less ability to influence the allocation of resources in their household than their peers. When agents deem themselves as servile they shirk and household production is diminished. As such, there are costs and benefits to having power in the household. Both agents in the household may be made better off by abandoning one household power relation in favor of another. In particular, the MECO contributes to the literature by analyzing the emergence of (1) gender-based differences in "exit options" and (2) gender-based differences in terms of ability to influence intra-household allocations.
Posted Content•
01 Jan 1998-Journal of Institutional and Theoretical Economics-zeitschrift Fur Die Gesamte Staatswissenschaft
TL;DR: In this paper, the authors focus on the structure and process of group choice in the context of a legislative committee, the board of directors of a firm, or the dinner-table decision-making of a family.
Abstract: When the New Institutional Economics looks at politics, it is often to find a solution to the commitment problem For instance, Furubotn and Richter [1997, 418] write that "Institutional arrangements have tremendous impact on the ability of agents to make political commitments credible" A large, wellknown literature examines how institutional and constitutional features such as federalism (Weingast [1995]) or separation of powers (North and Weingast [1989]) allow rulers to escape their own incentives to impose inefficient distributional arrangements (property rights, contract enforcement) on productive economies Indeed, this tension between efficiency and the profit-seeking ruler is a manifestation of a general problem in mechanism design (Miller [1997, 1195]) But there is more to politics than the problem of credible commitment We believe economists will benefit by drawing on another important research program of analytical political science, one about the structure and process of group choice, whether the context is that of a legislative committee, the board of directors of a firm, or the dinner-table decision making of a family Indeed, this program, which studies the self-consciously designed architecture of collective choice, is one of the most significant contributions of political science to the "new institutionalism" This new institutionalism, like much of political science, embraces many approaches One acute synthesis reduces it to two contrasting theoretical approaches, "rational choice institutionalism" and "sociological institutionalism," whose methodologies provide the "calculus" and "cultural" approaches used by an eclectic "historical institutionalism" (Hall and Taylor [1996]) Of these three approaches we draw below on the rational, since its assumptions will be compatible with those of the economists whose investigations are to benefit We view institutions as rules, procedures, norms, or conventions which are designed self-consciously to determine "who has the power to do what when?" This view emphasizes two important features of most collective choice situations: that the sequence in which the choice process unfolds is important and that the individuals comprising the group are not symmetrically endowed with powers We review a series of important theoretical papers and note some significant applications We cover only a sliver of the rational approach to
Book•
27 Apr 1998
TL;DR: Chapman et al. as mentioned in this paper presented an economic model of International Joint Venture Strategy and a longitudinal study of the Internationalization Process in a Small Sample of Pharmaceutical and Scientific Instrument Companies.
Abstract: Introduction PART 1: THEORETICAL BACKGROUND: ECONOMICS AND ANTHROPOLOGY Economics as an Imperialist Social Science (co-author M.Casson ) Economics and Social Anthropology - Reconciling Differences (co-author M.Chapman ) The Perception and Measurement of Transaction Costs (co-author M.Chapman ) PART 2: INTERNATIONAL BUSINESS: THEORY AND METHOD Theory and Method in International Business (co-author M.Chapman ) An Economic Model of International Joint Venture Strategy (co-author M.Casson ) A Longitudinal Study of the Internationalization Process in a Small Sample of Pharmaceutical and Scientific Instrument Companies (co-author M.Chapman ) PART 3: BUSINESS PROCESS DESIGN, INNOVATION AND KNOWLEDGE Organizing for Innovation: the Multinational Enterprise in the Twenty-First Century (co-author M.Casson ) The Economics of Business Process Design (co-author M.Carter ) The Economics of Business Process Design in Multinational Firms (co-author M.Carter ) A Longitudinal Study of the Management of Cooperative Strategies (co-author M.Chapman ) Wise Before the Event : the Creation of Corporate Fulfilment (co-author M.Chapman )
Book•
01 Jan 1998
TL;DR: In this article, the authors argue that strategic change in government agencies is a process by which line managers continually seek to align core strategy, internal organizational design, and external environment, and provide a working model of an efficient government agency that allows managers to identify areas of misalignment.
Abstract: The paper argues that strategic change in government agencies is a process by which line managers continually seek to align core strategy, internal organizational design, and external environment. It first provides a working model of an efficient government agency that allows managers to identify areas of misalignment, which then become the basis for Bank-sponsored interventions. In helping managers realign government agencies, the paper recommends that the Bank employ three sets of instruments - incentives, information-processing institutions, and coordination mechanisms. Finally, it illustrates how managers in client countries can systematically consolidate efficiency gains by mobilizing appropriate stakeholders, enforcing broad checks and balances to enhance transparency, and establishing system-wide change agents. Certain new aspects of institutional reform, namely information processing, are highlighted and will prove useful to Bank operations and policy research.
01 Jan 1998
TL;DR: This article proposed a new approach based on the economics of organization and management (EOM) to the core business course in managerial economics, which provides students with a framework for integrating business concepts across the curriculum, introduce more substantive and direct managerial applications, and create an environment conducive to interactive learning.
Abstract: This article proposes a new approach, based on the economics of organization and management (EOM), to the core business course in managerial economics. EOM is a relatively new area of economic study that seeks to understand managerial decisions and activities within organizations. The proposed course will provide students with a framework for integrating business concepts across the curriculum, introduce more substantive and direct managerial applications, and create an environment conducive to interactive learning. The justifications for these statements are delineated in a discussion of the limitations of current perspectives and the benefits of adopting the integrative approach.
TL;DR: In this paper, the authors present representative views of these two groups and also the trend towards new approaches in economics, namely the use of game theory, simulation models and the study of social behaviour and evolution.
Abstract: In recent years, the use of mathematics in modern economics has generated criticisms, both from the profession (economists) as well as from other scientists concerned with the epistemological context of social sciences. In our paper we present representative views of these two groups and also the trend towards new approaches in economics, namely the use of game theory, simulation models and the study of social behaviour and evolution.
TL;DR: In this paper, the difficulties encountered in teaching a unit in managerial economics to undergraduates, especially those studying in the distance mode, are examined, and teaching innovations designed to overcome these probles are described.
Abstract: This paper describes the difficulties encountered in teaching a unit in managerial economics to undergraduates, especially those studying in the distance mode The particular problems faced by distance students are examined, and teaching innovations designed to overcome these probles are described In addition, a research project undertaken to determine students' perceptions about the unit and their work patterns is discussed in detail, and the wider applications of the findings, particularly to the teaching of economics, considered
The paper concludes by describing the opportunities offered by the Internet for improving the position of external students vis-a-vis those studying the unit on campus
TL;DR: In this paper, the authors focus on the microeconomics course in the core curriculum and offer proposals which introduce alternative value bases to orient, motivate, and drive the firm in the economic environment.
Abstract: A period of extraordinary change is pressuring schools of business to rethink their curricula and mission statements in order to adapt to new environments The authors, both economists with many years of teaching experience, focus on the microeconomics course in the core curriculum and offer proposals which introduce alternative value bases to orient, motivate, and drive the firm in the economic environment These include proposals from the frameworks of humanistic and social economics