Institutions and Multinational Ownership Strategy

This paper examines the impact of institutions on a multinational firm’s ownership strategy. We develop an international joint venture (IJV) model in which a multinational firm and its local partner both can undertake costly ex post actions to increase their revenue share specified by the ex ante IJV contract. The model captures the effects of two institutional features on the optimal IJV ownership structure: contract enforceability and cronyism. We introduce the IJV model into an industry equilibrium framework to analyze the impact of institutions on a multinational firm’s choice between forming an IJV or setting up a wholly-owned subsidiary. Ce papier examine l'impact des institutions sur la stratégie de propriété d’une entreprise multinationale. Nous développons un modèle de coentreprise internationale dans lequel une entreprise étrangère et son partenaire local peuvent ex post entreprendre des actions coûteuses pour augmenter leur part de revenus indiquée dans le contrat de coentreprise. Le modèle analyse les impacts de deux caractéristiques institutionnelles sur la structure de propriété optimale : le renforcement du contrat et le copinage. Nous introduisons le modèle de coentreprise dans un modèle d'équilibre général pour analyser l'impact des institutions sur le mode d’entrée des entreprises multinationales.liability of foreignness, international joint venture, contract enforceability, cronyism, coentreprise internationale, renforcement du contrat, copinage

Incentive Mechanisms for Internet Congestion Management: Fixed-Budget Rebate versus Time-of-Day Pricing

Mobile data traffic has been steadily rising in the past years. This has generated a significant interest in the deployment of incentive mechanisms to reduce peak-time congestion. Typically, the design of these mechanisms requires information about user demand and sensitivity to prices. Such information is naturally imperfect. In this paper, we propose a \emph{fixed-budget rebate mechanism} that gives each user a reward proportional to his percentage contribution to the aggregate reduction in peak time demand. For comparison, we also study a time-of-day pricing mechanism that gives each user a fixed reward per unit reduction of his peak-time demand. To evaluate the two mechanisms, we introduce a game-theoretic model that captures the \emph{public good} nature of decongestion. For each mechanism, we demonstrate that the socially optimal level of decongestion is achievable for a specific choice of the mechanism's parameter. We then investigate how imperfect information about user demand affects the mechanisms' effectiveness. From our results, the fixed-budget rebate pricing is more robust when the users' sensitivity to congestion is "sufficiently" convex. This feature of the fixed-budget rebate mechanism is attractive for many situations of interest and is driven by its closed-loop property, i.e., the unit reward decreases as the peak-time demand decreases.Comment: To appear in IEEE/ACM Transactions on Networkin

Input Specificity and Global Sourcing

This paper investigates the role of productivity on a firm’s organizational choice. We expand Antràs and Helpman (2004) by allowing heterogeneous firms to choose between adopting specific and generic inputs. In input-intensive industries, firms face a trade-off between the lower productivity of generic inputs and the reduced hold-up friction of generic outsourcing. We demonstrate that the hold-up friction under generic outsourcing increases with a firm’s productivity. This implies that: (i) high productivity firms choose ideal outsourcing to the South, (ii) medium productivity firms choose generic outsourcing to the South, (iii) low productivity firms choose generic outsourcing to the North. Cet article étudie le rôle de la productivité sur les choix organisationnels des entreprises. Nous élargissons l’étude d’Antràs et Helpman (2004) en permettant aux entreprises hétérogènes de choisir entre l’adoption d’intrants spécifiques ou génériques. Au sein des industries caractérisées par une forte utilisation d’intrants, les entreprises font face à un compromis entre une productivité réduite liée aux intrants génériques et un problème de hold-up moindre découlant de l’impartition générique. Nous démontrons que le problème de hold-up lié à l’impartition générique augmente selon la productivité d’une entreprise. Ce qui implique que : les entreprises dont le taux de productivité est élevé choisissent l’impartition optimale au Sud, (ii) les entreprises dont le taux de productivité est moyen choisissent l’impartition générique au Sud, (iii) les entreprises dont le taux de productivité est bas choisissent l’impartition générique au Nord.input specificity, outsourcing, firm heterogeneity, incomplete contracts, hold-up problem, spécificité des intrants, impartition, hétérogénéité des entreprises, incomplétude des contrats, problèmes de hold-up.

Incentive schemes for Internet congestion management: Raffles versus time-of-day pricing

The Internet is plagued with congestion problems of growing severity which are worst at peak periods. In this paper, we compare two schemes that incentivize users to shift part of their usage from the peak-time to the off-peak time. The traditional time-of-day pricing scheme gives a fixed reward per unit of shifted usage. Conversely, the raffle-based scheme provides a random reward distributed in proportion of each user's fraction of the total shifted usage. Using a game-theoretic model, we show that both schemes can achieve an optimal level of decongestion at a unique Nash equilibrium. We provide a comparison of the schemes' sensitivity to uncertainty of the users' utilities.National Science Foundation (U.S.) (Grant CNS-0910711

A game theory model for electricity theft detection and privacy-aware control in AMI systems

We introduce a model for the operational costs of an electric distribution utility. The model focuses on two of the new services that are enabled by the Advanced Metering Infrastructure (AMI): (1) the fine-grained anomaly detection that is possible thanks to the frequent smart meter sampling rates (e.g., 15 minute sampling intervals of some smart meter deployments versus monthly-readings from old meters), and (2) the ability to shape the load thanks to advanced demand-response mechanisms that leverage AMI networks, such as direct-load control. We then study two security problems in this context. (1) In the first part of the paper we formulate the problem of electricity theft detection (one of the use-cases of anomaly detection) as a game between the electric utility and the electricity thief. The goal of the electricity thief is to steal a predefined amount of electricity while minimizing the likelihood of being detected, while the electric utility wants to maximize the probability of detection and the degree of operational cost it will incur for managing this anomaly detection mechanism. (2) In the second part of the paper we formulate the problem of privacy-preserving demand response as a control theory problem, and show how to select the maximum sampling interval for smart meters in order to protect the privacy of consumers while maintaining the desired load shaping properties of demand-response programs

Congestion pricing using a raffle-based scheme

We propose a raffle-based scheme for the decongestion of a shared resource. Our scheme builds on ideas from the economic literature on incentivizing contributions to a public good. We formulate a game-theoretic model for the decongestion problem in a setup with a finite number of users, as well as in a setup with an infinite number of non-atomic users. We analyze both setups, and show that the former converges toward the latter when the number of users becomes large. We compare our results to existing results for the public good provision problem. Overall, our results establish that raffle-based schemes are useful in addressing congestion problems.National Science Foundation (U.S.) (Grant CNS-0910711)National Science Foundation (U.S.) (Grant CCF-0424422)United States. Air Force Office of Scientific Research (FA9550-06-1-0244

Special Issue on the Economics of Security and Privacy: Guest Editors’ Introduction

This editorial introduces the special issue on the economics of security and privacy. The global adoption of the Internet has transformed economies and societies. However, Internet technologies have also resulted in heightened societal concerns about information security and privacy. Insufficient safeguards—actual or perceived—have become a barrier to certain economic activity, and a source of downside risk to growth and sustainability, with possible systemic impact. Scholars have long realized that choices pertaining to security and privacy affect the world in ways that are not captured within the narrow modeling of engineering systems. In essence, these choices are strategic decisions. Thus, the analysis that is performed should incorporate the models and methods developed in economics and, where applicable, in the behavioral sciences

Hypoparathyroidism-retardation-dysmorphism syndrome—Clinical insights from a large longitudinal cohort in a single medical center

BackgroundHypoparathyroidism, retardation, and dysmorphism (HRD) Syndrome is a rare disease composed of hypoparathyroidism, retardation of both growth and development, and distinctive dysmorphic features. Here, we describe the long-term morbidity and mortality in a large cohort of HRD patients and suggest recommendations for follow up and treatment.MethodsMedical records of 63 HRD syndrome patients who were followed at Soroka Medical Center during 1989–2019 were reviewed retrospectively. Information regarding demographics, medical complications, laboratory findings, and imaging studies was collected.ResultsThe mortality rate was 52%. The main causes of death were infectious diseases including pneumonia, septic shock, and meningitis. Multiple comorbidities were found including brain anomalies in 90% of examined patients (basal ganglia calcifications, tightening of corpus callosum, Chiari malformation, hydrocephalous, and brain atrophy), seizures in 62%, nephrocalcinosis and/or nephrolithiasis in 47%, multiple eye anomalies were recorded in 40%, bowel obstructions in 9.5%, and variable expression of both conductive and senso-neural hearing loss was documented in 9.5%.ConclusionHRD is a severe multisystem disease. Active surveillance is indicated to prevent and treat complications associated with this rare syndrome