The Organizational Implications of Creativity: The US Film Industry in Mid-XXth Century

We develop a basic framework to understand the organization of highly creative activities. Management faces a fundamental tradeoff in organizing such activities. On the one hand, since creativity cannot be achieved by command and control or by monetary incentives, internal/contractual production of creative products is plagued by hazards arising from their fundamental characteristics: extremely high input, output and market uncertainty, and the inherent informational advantages of creative talent. Procuring highly creative products in the market place, though, exposes the distributor to a fundamental risk: independently produced creative goods are generic distribution-wise. Thus, in procuring creative products in the marketplace, distributors face the unavoidable winner's curse risk. Since this risk is, to a large extent, independent of the creative nature of the product, the higher the creative content, the higher the relative hazards associated with internal or contractual production. Thus, internal/contractual production of creative goods will tend to be less prevalent the higher the creative content associated with its production. We apply this insight to the evolution of the U.S. film industry in the mid-XXth century. We exploit two simultaneous natural experiments -- the diffusion of TV and the Paramount antitrust decision forcing the separation of exhibitors from distributors and prohibiting the use of block-booking. Both events increased the demand for creative content in movies. We develop empirical implications which we test by analyzing in detail the decision by distributors to produce films internally or to procure then in the market place, in the face of an increase in the demand for creative content.

Buy, Lobby or Sue: Interest Groups' Participation in Policy Making - A Selective Survey

The participation of interest groups in public policy making is unavoidable. Its unavoidable nature is only matched by the universal suspicion with which it has been seen by both policy makers and the public. Recently, however, there has been a growing literature that examines the participation of interest groups in public policy making from a New Institutional Economics perspective. The distinguishing feature of the New Institutional Economics Approach is its emphasis in opening up the black box of decision-making, whether in understanding the rules of the game, or the play of the game. In this paper we do not attempt to fairly describe the vast literature on interest group's behavior. Instead, the purpose of this essay for the New Institutional Economics Guide Book is to review recent papers that follow the NIE mantra. That is, they attempt to explicate the micro-analytic features of the way interest groups actually interact with policy-makers, rather than providing an abstract high-level representation. We emphasize the role of the institutional environment in understanding interest groups' strategies.

Strategic Judicial Decision Making

This survey paper starts from the basic, and intuitive, assumption that judges are human and as such, can be modeled in the same fashion we model politicians, activists, managers: driven by well-defined preferences, behaving in a purposive and forward-looking fashion. We explore, then, the role politics play in judicial decision-making. We provide a brief overview of what is called the "strategic approach," compare it to alternative approaches to understand judicial behavior, and offer some concluding thoughts about the future of positive analyses of judicial decision-making.

Judicial lobbying: The politics of labor law constitutional interpretation

This paper links the theory of interest groups influence over the legislature with that of congressional control over the judiciary. The resulting framework reconciles the theoretical literature of lobbying with the negative available evidence on the impact of lobbying over legislative outcomes, and sheds light to the determinants of lobbying in separation-of-powers systems. We provide conditions for judicial decisions to be sensitive to legislative lobbying, and find that lobbying falls the more divided the legislature is on the relevant issues. We apply this framework to analyze supreme court labor decisions in Argentina, and find results consistent with the predictions of the theory

Competition and mergers in airline networks / 1523

Includes bibliographical references (p. 25)

Damage Valuation of Indirect Expropriation in Public Services

damage valuation, expropriation, public services, contracting, privatization

Regulation, institutions and commitment : the Jamaican telecommunications sector

The Jamaican telecommunications sector today is much more dynamic than it was before and provides much better service. There is widespread skepticism about the current regulatory framework, which is criticized for encouraging a tight telecommunications monopoly, little administrative discretion, and continous price adjustments to satisfy what many see as a high rate of return requirement. But the authors suggest that the regulatory framework is a"second-best"alternative, a pragmatic response to The Jamaican's institutional realities. The authors analyze why the reforms of the late 1980s took the form they did, and whether they could have been better. They find that the changing nature of regulatory institutions, ownership arrangements, and sector performance in the past 50 years is traceable to intense contracting problems between firms or interest groups and the government. Attempts to resolves these contracting problems have continuously constrained the government's (and firms) ability to implement efficient pricing schemes. In the abstract, The Jamaican's regulatory structure looks inefficient. In the context of The Jamaican's political system, politics, judiciary, bureaucracy, and interest groups, the regulatory framework developed in the late 1980s emerges as a fairly pragmatic, welfare-improving set of policies. Perhaps it could have been better, but its current design reflects basic commitment problems the government has with public utilities.Public Sector Economics&Finance,Economic Theory&Research,National Governance,Environmental Economics&Policies,ICT Policy and Strategies

Estimating the Welfare Effects of Digital Infrastructure

While much economic policy presumes that more information infrastructure yields higher economic returns, little empirical work measures the magnitudes of these returns. We examine investment by local exchange telephone companies in fiber optic cable, ISDN lines and signal seven software, infrastructure which plays an essential role in bringing digital technology to local telephone networks. We estimate the elasticity of the derived demand for infrastructure investment faced by local exchange companies, controlling for factors such as local economic activity and the political disposition of state regulators. Our model postulates a regulated profit maximizing local exchange firm and a regulatory agency with predetermined political leanings in favor of consumer prices or firm profits. The model accounts for variation in state regulation and local economic conditions. In all our estimates we find that consumer demand is sensitive to investment in modern infrastructure, particularly as represented by fiber optic cable. Our estimates imply that infrastructure investment is responsible for a substantial fraction of the recent growth in consumer surplus and business revenue in local telecommunication services.

Modeling Supreme Court Strategic Decision Making: Congressional Constraint

This paper addresses the contradictory results obtained in Segal (1997) and Spiller and Gely (1992) concerning the impact of institutional constraints on the US Supreme Court decisionmaking. by adapting the Spiller and Gely model to the data set utilized by Segal. The major findings are as follows: first, by adapting the Spiller and Gely (1992) maximum likelihood model to the Segal (1997) dataset, we find support for the hypothesis that the Court adjusts its decisions to Presidential and congressional preferences. Second, data from 1947-92 indicate that the average probability of the Court being constrained has been approximately one third. Third, we show that the results obtained in Segal (1997) are the product of biases introduced by a misspecified econometric model. Finally, the estimation highlights the usefulness of Krehbiel’s model of legislative decision-making.