Firm's R & D Behavior Under Rational Expectations

This paper formulates dynamic R&D investment decisions of private firms as an optimal stochastic control problem. It derives explicitly R&D investment decision rule and the cross equations parameter restrictions imposed by the rational expectations hypothesis, using the Riccati equations only and not requiring the use of Wiener-Kolmogorov prediction formula. Idenfitication and estimation of the structural parameters are essential for evaluating policies such as R&D subsidies, firm size, market concentration so that the evaluations of these policies stand against Lucas critique. We find conditions under which the structural parameters are identified; we then discuss econometric procedures for using aggregate time series data or panel data on firms to deal with unobserved technological knowledge, to estimate the structural parameters, and to test the model.research and development, rational expectations, stochastic control

Long Term Effects of Preschool Investment on school Performance and Labor Market Outcome

Using the NLSY data set, this paper formulates and then empirically estimates the production processes for social, motivational and cognitive skills during early childhood development and the long-term effects of these skills on learning and life-time earnings of an individual. Using these estimated relationships, the paper provides a calibrated intergenerational altruistic model of parental investment in children's preschool. This dynamic model is then used to estimate the effects of publicly provided preschool to the children of poor socioeconomic status (SES) on college mobility and intergenerational social mobility and to estimate the tax burden of such a social contract.Preschool Investment, Early Childhood Development, Intergenerational Social Mobility, College Mobility

R&D Activities and Export Performance of Indian Private Firms

This paper formulates a model of optimal export decision of private firms and then empirically studies the effect of firm size, R&D activities and competitiveness on export performance of Indian private firms during the period 1975-1986. The paper argues that the Cragg model is more appropriate to model firms’ export behavior than the commonly used Tobit model. The evaluation of the export promotion and partial import liberalization policies of 1980 based on the Tobit model is found to be qualitatively quite different from the evaluation based on the Cragg model. The LR and LM specification tests reject the Tobit model against the Cragg model in all specifications.Exports, R&D, Price-Cost-Margin

Learning to Perfect Manipulation: Implications for Fertility, Savings, and Old-Age Social Security

In this paper we consider an overlapping gnerations model with endogenous fertility and two-sided altruism and show the limitations of applying commonly used open loop Nash equilibrium in characterizing equilibrium transfers from parents to children in the form of bequest, and transfers from children to parents as voluntary old-age support. Since in our model children are concerned with parents' old-age consumption, agents have incentives to save less for old age and to have more children so as to strategically induce their children to transfer more old-age support. We formulate such strategic behavior within a sequential multi-stage game and introduce a notion of learning equilibrium to characterize equilibrium manipulative behavior and then study the consequences of such strategic manipulations on private intergenerational transfers, fertility and savings decisions, and on Pareto optimality of equilibrium allocation. We show that the learning equilibrium notion of the paper simplifies computation of subgame perfect equilibrium, subgame perfect equilibrium is the long-run outcome of dynamic learning equilibrium paths (this aids in selecting, sometimes, a unique equilibrium among multiple subgame perfect equilibria), and an open-loop Nash equilibrium involves "incredible" threats from children. We provide an alternative explanation for the existence of publicly provided social security program and examine its role to correct distortions created by strategic manipulation.two-sided altruism, endogenous fertility, subgame perfect manipulation of children, social security

Comparative study of the electron conduction in azulene and naphthalene

We have studied the feasibility of electron conduction in azulene molecule and compared with that in its isomer naphthalene. We have used non-equilibrium Green's function formalism to measure the current in our systems as a response of the external electric field. Parallely we have performed the Gaussian calculations with electric field in the same bias window to observe the impact of external bias on the wave functions of the systems. We have found that, the conduction of azulene is higher than that of naphthalene inspite of its intrinsic donor-acceptor property, which leads a system to more insulating state. Due to stabilization through charge transfer the azulene system can be fabricated as a very effective molecular wire. Our calculations shows the possibility of huge device application of azulene in nano-scale instruments.Comment: 6 pages, 8 figure