Cooperation among competitors: A comparison of cost-sharing mechanisms

In this paper, we investigate the consequences of using outcome-based versus ex ante-based cost-sharing mechanisms in terms of competing firms' profitability and total welfare. We consider two firms making a joint expenditure, which can positively affect firms' demand and/or unit operating costs, while competing in the final market by setting either price or quantity. We compare two outcome-based cost-sharing mechanisms, i.e., Quantity Proportional (QP) and Total Margin proportional (TM), with the more competitive Fixed Share (FS) mechanism where cost-sharing is set up on an ex ante basis. We show that outcome-based mechanisms, and even a fully collusive behavior induced by the optimal cost-sharing mechanism, might actually enhance total welfare as compared with the more competitive FS mechanism. We also find that, although the FS mechanism is never more preferable than the TM mechanism, it can lead to higher profits than the QP mechanism when competition is mild. These results can support firms cooperating with competitors in the choice of the cost-sharing mechanism as well as provide important implications to policy makers

Concentration dynamics and bargaining power: a theory of two-dimensional competition in the agri-food complex

This thesis attempts to explain vertical market interaction within the food chain from a new perspective. It takes a two-stage game-theoretic framework from industrial organisation literature, and extrapolates this into the area of bargaining relationships. In turn, the inter-sectoral paradigm developed is applied to the specific area of agricultural marketing and the conventional wisdom of cooperatives is challenged. The resulting model allows new insights into such issues as countervailing market power, the dynamics of market structure and competition policy. Although the principles have been developed within the context of the U.K. food chain, they are of wider relevance. The conceptual framework developed underlines that in studying bargaining relationships and market structures the economic concept of equilibrium may be better replaced with a broader game-theoretic understanding of the market process

Essays on the Governance of Agricultural Products: Cooperatives and Contract Farming

Dit proefschrift analyseert besluitvormingsprocedures en de toewijzing van besluitvormingsrechten in twee beheersstructuren in de landbouw sector: cooperaties en contracten. De belangrijkste onderzoeksvragen hebben betrekking op de wijze waarop zeggenschap de keten verticaal coördineert in verscheidene beheersstructuren in een transitie economie (China), en onder welke omstandigheden een bepaalde beheersstructuur efficiënt is. Het theoretisch onderzoek richt zich op de rol van de Raad van Commissarissen in coöperaties, terwijl het empirische onderzoek gericht is op de organisatorische en strategische attributen van Chinese land- en tuinbouwcooperaties en de contractuele arrangementen in de Chinese fruit- en groente sector. In het theoretisch onderzoek is vastgesteld dat de Raad van Commissarissen waarde toevoegen in coöperaties vanwege het tweemaal beoordelen van investeringsvoorstellen. Het niveau van het beoordelingscriterium is gekarakteriseerd als een strategisch substituut. Het tweede resultaat is dat Chinese coöperaties worden bestuurd door zowel kernleden als niet kernleden, waarbij relaties en capaciteiten van de bestuurders een grote rol spelen. Specifiek menselijk kapitaal, in de vorm van het bewerkstelligen en onderhouden van relaties, en toegang tot markten blijkt een grotere rol te spelen dan specifiek fysiek kapitaal om de keuze van beheersstructuur te verklaren in de huidige Chinese institutionele omgeving. In de derde plaats, vele besluitvormingsrechten zijn van boeren naar verwerkers verschoven in contracten. Kwaliteit, reputatie en specifieke investeringen door ondernemingen bepalen het aantal besluitvormingsrechten dat wordt toegewezen aan ondernemingen, terwijl marktmacht en specifieke investeringen van boeren geen rol blijken te spelen in de toewijzing van besluitvormingsrechten.This thesis studies decision making procedures and decision rights allocation of two governance structures in agricultural sectors: cooperatives and contract farming. The main research questions are how authority coordinates upstream and downstream activities within various governance structures in a transitional institutional setting (China), and under what conditions one particular governance structure is efficient. The theoretical research focuses on the role of the board of directors in agricultural cooperatives, while the empirical research focuses on the organizational and strategic attributes of Chinese farmer specialized cooperatives and the contracting arrangements in the Chinese fruit and vegetable industry. It is found that, firstly, the board of directors adds value to cooperatives because of its dual screening characteristic. The screening levels are strategic substitutes. Secondly, the Chinese farmer specialized cooperatives are co-governed by both core members and non core-members based on relations and abilities. Human asset specificity in terms of establishing and maintaining relations and access to markets seems to be more important than physical asset specificity in accounting for governance structure choice in the current institutional setting. Thirdly, under contract farming, many decision rights are shifted from farmers to firms. Quality, reputation and specific investments by firms positively influence the number of decision rights allocated to agri-business firms, while monopsony-oligopsony power and specific investments by farmers do not play a role in allocating decision rights.Yamei Hu was born in Dezhou, China on 24 January, 1976. She studied Economic and Trade English from 1993 to 1995 at Yantai University. After two years’ working experience in a foreign trade company, she went to study Economics as a postgraduate student in Shandong University in 1997. In 2000, she received her MA in Economics from Shandong University with a thesis on von Hayek’s economic thoughts. She went on to study Economics in Renmin University of China. In 2003, she defended her PhD thesis on the deregulation of China’s financial markets and received her PhD in Economics. In July 2003, Yamei joined the Ph.D. program in the Department of Organization and Personnel Management at Erasmus University Rotterdam. Her research interests cover the theory of the firm, governance structures, industrial organization, institutional changes in developing countries, and transition economics. For her PhD thesis, she focused on the governance of agricultural products and conducted both theoretical and empirical research. The research of this thesis has been presented at International Society of New Institutional Economics, Economics and Management of NETworks, International Association of Agricultural Economists, European Association of Agricultural Economies, EURESCO seminar in Chania, University of Missouri, and Wageningen University. Parts of the thesis are published already

Currency Crises in Emerging - Market Economis: Causes, Consequences and Policy Lessons

Currency crises have been recorded for a few hundreds years but their frequency increased in the second half of the 20th century along with a rapid expansion of a number of fiat currencies. Increased integration and sophistication of financial markets brought new forms and more global character of the crises episodes. Eichengreen, Rose and Wyplosz (1994) propose the operational definition, which helps to select the episodes most closely fitting the intuitive understanding of a currency crisis (a sudden decline in confidence towards a specific currency). Among fundamental causes of currency crises one can point to the excessive expansion and over-borrowing of the public and private sectors, and inconsistent and nontransparent economic policies. Over-expansion and overborrowing manifest themselves in an excessive current account deficit, currency overvaluation, increasing debt burden, insufficient international reserves, and deterioration of other frequently analyzed indicators. Inconsistent policies (including the so-called intermediate exchange rate regimes) increase market uncertainty and can trigger speculative attack against the domestic currency. After a crisis has already happened, the ability to manage economic policies in a consistent and credible way becomes crucial for limiting the crisis' scope, duration and negative consequences. Among the dilemmas that the authorities face in such circumstances is the decision on readjustment of an exchange rate regime, as the previous regime is usually the first institutional victim of any successful speculative attack. The consequences of currency crises are usually severe and typically involve output and employment losses, fall in real incomes of a population, deep contraction in investment and capital flight. Also the credibility of domestic economic policies is ruined. In some cases a crisis can serve as the economic and political catharsis: devaluation helps to temporarily restore competitiveness and improve a current account position, the crisis shock brings the new, reform-oriented government, and politicians may draw some lessons for future. The responsible macroeconomic policy can help to diminish a risk of an occurrence of a currency crisis. It involves balanced and transparent fiscal accounts, proper monetary-fiscal policy mix, and low inflation, avoiding indexation of nominal variables and intermediate monetary/ exchange rate regimes. On the microeconomic level key elements include privatization, demonopolization and introduction of efficient competition policy, prudential regulation of the financial sector, trade openness, and simple, fair and transparent tax system. All the above should help elimination of soft budget constraints, overborrowing on the side of both private and public sector and moral hazard problems. All these measures need to be strengthened by legal reforms, efficient and fair judiciary system, implementation of international accounting, reporting and disclosure standards, transparent corporate and public governance rules, and many other elements. Reforms can be supported by the IMF and other international organizations, which on their part should depoliticize their actions and decision-making processes, sticking to the professional criteria of country assessment and their consequent execution.currency crisis, financial crisis, contagion, emerging markets, transition economies, exchange rates, monetary policy, fiscal policy, balance of payments, debt, devaluation

Out-of-equilibrium economic dynamics and persistent polarisation

Most of economics is equilibrium economics of one sort or another. The study of outof- equilibrium economics has largely been neglected. This thesis, engaging with ideas and techniques from complexity science, develops frameworks and tools for out-of-equilibrium modelling. We initially focus our attention on models of exchange before examining methods of agent-based modelling. Finally we look at a set of models for social dynamics with nontrivial micro-macro interrelationships. Chapter 2 introduces complexity science and relevant economic concepts. In particular we examine the idea of complex adaptive systems, the application of complexity to economics, some key ideas from microeconomics, agent-based modelling and models of segregation and/or polarisation. Chapter 3 develops an out-of-equilibrium, fully decentralised model of bilateral exchange. Initially we study the limiting properties of our out-of-equilibrium dynamic, characterising the conditions required for convergence to pairwise and Pareto optimal allocation sets. We illustrate problems that can arise for a rigid version of the model and show how even a small amount of experimentation can overcome these. We investigate the model numerically characterising the speed of convergence and changes in ex post wealth. In chapter 4 we now explicitly model the trading structure on a network. We derive analytical results for this general network case. We investigate the e�ect of network structure on outcomes numerically and contrast the results with the fully connected case of chapter 3. We look at extensions of the model including a version with an endogenous network structure and a versions where agents can learn to accept a `worthless' but widely available good in exchanges. Chapter 5 outlines and demonstrates a new approach to agent-based modelling which draws on a number techniques from contemporary software engineering. We develop a prototype framework to illustrate how the ideas might be applied in practice in order to address methodological gaps in many current approaches. We develop example agent-based models and contrast the approach with existing agent-based modelling approaches and the kind of purpose built models which were used for the numerical results in chapters 3 and 4. Chapter 6 develops a new set of models for thinking about a wide range of social dynamics issues including human capital acquisition and migration. We analyse the models initially from a Nash equilibrium perspective. Both continuum and �nite versions of the model are developed and related. Using the criterion of stochastic stability we think about the long run behaviour of a version of the model. We introduce agent heterogeneity into the model. We conclude with a fully dynamic version of the model (using techniques from chapter 5) which looks at endogenous segregation

Environmental risk management system design for hazardous waste materials

Hazardous materials can be generally deemed as any material which, because of its quantity, concentration, or physical, chemical, or infectious characteristics, may cause, or pose a substantial or potential hazard to human health or the environment. In the context of "sustainable development", most 'materials' could be deemed to be 'hazardous' at some stage of their lifecycle, i.e. from extraction to final disposal.This PhD study develops a decision support system for engineers and policy makers to help limit environmental burden, by reducing the environmental risk and the associated carbon footprint, from the perspective of 'hazardous' materials in product design, through the application of 'game theory' and 'grey theory' etc, as well as various computational approaches, by helping the designer identify novel solutions or mitigation strategies.The thesis starts by introducing the problem situation of the study and identify the research objectives, as well as previous studies have been reviewed in order to set this study in context.Since it is evident that consumers drive the open market, and their preference may be influenced by the carbon footprint label of products, the decision support system proposes an improved carbon labelling scheme to demonstrate the significance of a product‘s carbon footprint in a more visual way. The prototype of the scheme is derived from the concept of 'tolerability of risk', providing a framework by which judgments can be made as to whether society will accept the risk from hazardous materials.Application of game theory for decision support is a novel approach in this study, which aids decision-making by selecting appropriate strategies for both organisations and policy makers to reduce environmental impact. In this context, a game between manufacturers and government in the field of clean production is generated with various game scenarios to reflect the variation trend of strategic actions, and then developed to discuss the reduction of the inherent risk posed by 'hazardous' materials and carbon emissions on the supply chain network.The 'hierarchy of waste' suggests that the most preferable state for sustainability is prevention or the elimination of waste. Although this is not wholly practicable in real terms, the framework gives the importance to waste minimisation and prevention, especially promotes the cleaner production. In addition to strategy selection for mitigating environmental impact, the decision support system also develops an evaluation methodology for application by engineers to aid decision-making on materials selection, thus to improve the materials performances, promote cleaner production and provide better and sustainable products for public consumption

Economics of Institutions and Law

This book provides a set of lectures for an intermediate course in Public economics devoted to four topics, in many elements related each other. The first one is the Economics of institutions and political economy, as a general framework to analyze the public intervention in modern economies. The second one is the Economics of Law, which is at the basis of the working of the exchange economy. The third one is the Economics of public services enterprises ownership and the fourth one is the Economics of the organization of public administration in providing public services, with particular reference to the National health care systems and to the local public municipalities. As the standard textbooks in the field usually do not treat within unitary and comprehensive terms these issues, the book would provide an attempt in this direction

Managing (Sales)People towards Performance: HR Strategy, Leadership & Teamwork

Managing people towards performance is one of the most critical priorities for managers in practice. This dissertation focuses on this important issue and explores how HR Strategy, Leaders, and Teams, impact performance. It addresses respectively how HR as a system of coherent attributes, multiple dimensions of transformational leadership, and team reflexivity can enhance the performance of (sales)people in organizations. Based on a series of field-studies, the present dissertation demonstrates a number of novel insights. First, it reveals that internal coherence of HR strategy has a positive effect on organizational performance. Second, it demonstrates that both a leader’s level of transformational leadership, as well as a team’s level of reflexivity can be functional, but also dysfunctional for job performance of people in organizations. These results are important for managers, as they represent evidence-based insights, some of which are counter-intuitive, on how they can effectively manage people towards performance. For researchers, the findings contribute to a deeper understanding of the HR-performance relationship