Law Enforcement Agencies as Multiproduct Firms: An Econometric Investigation of Production Costs

In this paper we study the relationship between costs, input prices and activity levels in a sample of approximately thirty medium sized city police departments for the years 1968, 69, 71, and 73. Our interest lies in determining the functional structure of law enforcement production technology

Law Enforcement Agencies as Multiproduct Firms: Correcting Some Misconceptions

The comment by Pyle and Deadman [PD] on our paper deals with several points which arise regularly in empirical applications of economic theory and especially in applications in which firms do not operate in traditional market places. Their first point concerns the appropriate definition of output in law enforcement agencies: Is the final output deterrence of future crimes, solving existing crimes, both, or something else? PD argue that deterrence {crime prevention) is the primary output of law enforcement agencies, and from society\u27s perspective, this is undoubtedly true. But as we attempted to make clear in our paper, we were interested in modeling the decision process of an individual agency. Conversations, both with academics working in the area of law enforcement and with practitioners, convinced us that on a day to day basis, police departments were much more likely to be interested in solving crimes than in deterrence

The multi-output translog production cost function: the case of law enforcement agencies

In this paper we study the relationship between costs, input prices and activity levels in a sample of approximately thirty medium sized city police departments for the years 1968, 69, 71 and 73. Our interest lies in determining the functional structure of law enforcement production technology

Technical and allocative efficiency: preliminary ideas toward discrimination between the hypotheses

Two levels of efficiency lie behind the supply and demand equations of neoclassical economic theory. First, firms are assumed to be technically efficient, in that maximum output is obtained from any given mix of inputs. Second, firms are assumed to be allocatively (or price) efficient, in that input and output mixes are chosen such that profits are maximum. Although it has often been argued that firms must be efficient in a competitive economy, only a very limited amount of work has been directed to measuring the extent of any inefficiencies. In this paper we provide a framework for such measurements with a special emphasis on decomposing observed inefficiencies into technical and allocative components

Optimal Pricing in the Presence of Experience Effects

In this paper we analyze the problem of optimal intertemporal pricing for a monopolist when current (and past) output affect future cost and/or demand conditions through experience in production and/or in consumption. Learning by doing, the experience curve, contagion, habit formation, bandwagon, and snob effects are all examples of terminologies used to describe such situations. We call these experience effects for convenience and explore profit-maximizing pricing behavior when such effects exis

Export-Oriented International Joint Venture: Endogenous Set-Up Costs and Information Gathering

We analyze the formation of an export-oriented international joint venture (IJV) between a multinational corporation (MNC) and a domestic firm under demand uncertainty and in a principal-agent framework. The MNC possesses a superior production technology and is better at predicting foreign market demand. The domestic firm can reduce set-up costs of the IJV with effort levels that is endogenously determined. We examine how the MNC\u27s preference for, and the ownership structure of, a joint venture depend on the efficiency of information gathering and of cost reduction, and on the nature of credit markets. We find, inter alia, that when the credit constraint is severe the MNC does not push the domestic firm to its reservation profit level. A relaxation of the credit constraint facing the domestic firm never makes it better off and in fact makes the domestic firm worse off when the credit constraint is severe