We operationalize a firm's competitive strategy through a new empirical measure, and develop a framework for empirical analysis of the market value of strategic behavior. Using this framework, we study announcement effects of R&D spending. The announcing firm's stock prices are positively influenced by a change in spending, and negatively by our competitive strategy measure (CSM). Competitors' stock prices are positively influenced by the interaction between the market's reaction to the announcing firm and the CSM. Our results are consistent with positive effects of ‘accommodating’ competition with strategic substitutes, and nonpositive effects of ‘tough’ competition with strategic complements.

We develop a model of electoral competition in which citizens choose whether or not to run as candidates. A winner implements her favorite policy. The equilibrium number of candidates depends negatively on the cost of running and positively on the benefits of winning. For some parameter values all equilibria under plurality rule have exactly two candidates, whose positions are distinct. Two-candidate elections are more likely under plurality rule than under a runoff system (cf. Duverger's Law). The candidates' positions are less differentiated under a runoff system. There exist equilibria under both systems in which some candidates have no chance of winning.

This paper examines the cross-industry determinants of the importance of Japanese direct investment activities in U.S. manufacturing through an extension of the analysis in a recent article by Bruce Kogut and Sea Jin Chang (1991). The results indicate significant positive roles for Japanese technology and marketing assets. While U.S. technology assets are insignificant, a significant negative effect for U.S. marketing assets suggests that entry barriers related to marketing are more important than any use of foreign direct investment by Japanese firms to access these assets. In addition, U.S. government policies toward defense-oriented industries appear to act as a deterrent to Japanese direct investment.

Shareholder-initiated proxy proposals on corporate governance issues became popular in the late 1980s as corporate takeover activity declined. We find firms attracting governance proposals have poor prior performance, as measured by the market-to-book ratio, operating return, and sales growth. There is little evidence that operating returns improve after proposals. The proposals also have negligible effects on company share values and top management turnover. Even proposals that receive a majority of shareholder votes typically do not engender share price increases or discernible changes in firm policies.

We study a barter economy in which each good is produced in two qualities and no trader can distinguish between the qualities of those goods he neither consumes nor produces. We show that in competitive equilibrium there exists a (unique) good—the one for which the discrepancy between qualities is smallest—that serves as the medium of exchange: this good mediates every trade. Equilibrium is inefficient because production of the medium would be lower if it were not for its mediating role. Introducing fiat money enhances welfare by eliminating this distortion. However, high inflation drives traders back to the commodity medium.

Thomas J. Hoerger, Gabriel A. Picone, Frank A. Sloan, Public Subsidies, Private Provision of Care and Living Arrangements of the Elderly, The Review of Economics and Statistics, Vol. 78, No. 3 (Aug., 1996), pp. 428-440

We consider a wide number of applications of an intrafirm bargaining game within organizations where employees and the firm engage in wage negotiations. Under our presumption that contracts cannot bind employees to the organization, the resulting stable wage and profit profiles give rise to an objective function for the firm that places weight on inframarginal profits in an economically significant manner. We in turn employ this methodology to explore applications of organizational design, hiring and capital decisions, training and cross-training, the importance of labor and asset specificity, managerial hierarchies, preferences for unionization, responses to competition, and internal capital budgeting.

The SNP density estimator is a truncation (or sieve) estimator based upon a Hermite series expansion. Other nonparametric estimators based on orthogonal series expansions have been proposed.

Because many individuals do not complete their degrees in the standard number of years, previous estimates of diploma effects, which have been based only on an individual's years of education, are biased. Using a data set from a matched sample of the 1991 and 1992 March Current Population Survey that has information on both years of education and diplomas received, this paper improves on earlier estimates and finds that using 'true' information on degree receipt substantially increases estimated sheepskin effects of high school and college degrees. Unlike past research, this paper finds that there are few statistically significant differences in sheepskin effects between race and sex groups. The relative returns to Associates and post-graduate degrees are also examined.