Discriminatory pricing by railroads may be better than marginal cost pricing with a subsidy of the resulting losses, since it gives the railroad correct incentives for deciding what rail lines to build. The argument, applied to long-haul/short-haul discrimination, shows that its prohibition may lead to nonoptimal construction decisions.
{"title":"IN DEFENSE OF THE LONG-HAUL/SHORT-HAUL DISCRIMINATION","authors":"D. Friedman","doi":"10.2307/3003361","DOIUrl":"https://doi.org/10.2307/3003361","url":null,"abstract":"Discriminatory pricing by railroads may be better than marginal cost pricing with a subsidy of the resulting losses, since it gives the railroad correct incentives for deciding what rail lines to build. The argument, applied to long-haul/short-haul discrimination, shows that its prohibition may lead to nonoptimal construction decisions.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121465656","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Working from the assumptions that Modigliani and Pogue made in their recent article, this comment explains why there is no incentive for a portfolio manager to prefer their Plan 1 fee over their Plan 2 fee, demonstrates why the portfolio manager and investment company are superfluous, and rebuts the authors' unduly pessimistic conclusions about portfolio manager behavior in an unregulated capital market.
{"title":"Alternative Investment Performance Fee Arrangements and Implications for SEC Regulatory Policy: Comment","authors":"William Margrabe","doi":"10.2307/3003284","DOIUrl":"https://doi.org/10.2307/3003284","url":null,"abstract":"Working from the assumptions that Modigliani and Pogue made in their recent article, this comment explains why there is no incentive for a portfolio manager to prefer their Plan 1 fee over their Plan 2 fee, demonstrates why the portfolio manager and investment company are superfluous, and rebuts the authors' unduly pessimistic conclusions about portfolio manager behavior in an unregulated capital market.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115932801","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents a model of the demand for reproducible capital, labor, and nonfuel mineral resources in six manufacturing industries that process exhaustible mineral resources. Partial substitution elasticities are estimated from translog unit cost functions and factor demand equations. These estimates are then used to simulate input demands in a setting of exhaustible resources scarcity. The principal finding is that substitution possibilities are much more limited than those implied by Cobb-Douglas production technology, and this has important implications for the possible conservation of exhaustible resources.
{"title":"Factor Demand and Substitution in Mineral-Intensive Industries","authors":"J. Moroney, J. M. Trapani","doi":"10.2307/3003523","DOIUrl":"https://doi.org/10.2307/3003523","url":null,"abstract":"This paper presents a model of the demand for reproducible capital, labor, and nonfuel mineral resources in six manufacturing industries that process exhaustible mineral resources. Partial substitution elasticities are estimated from translog unit cost functions and factor demand equations. These estimates are then used to simulate input demands in a setting of exhaustible resources scarcity. The principal finding is that substitution possibilities are much more limited than those implied by Cobb-Douglas production technology, and this has important implications for the possible conservation of exhaustible resources.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"273 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132027284","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We modify the technological specification of the standard neoclassical model of peak load pricing by considering the case where the level of capital input bounds the set of feasible choices of the variable input. As compared to the conclusions of the standard neoclassical model, we find two basic changes. First, optimal capacity production is possible. Second, the optimal prices paid by peak (capacity) users and their optimal contributions to fixed costs may not be equal.
{"title":"Peak Load Pricing in a Neoclassical Model with Bounds on Variable Input Utilization","authors":"A. Mariño","doi":"10.2307/3003624","DOIUrl":"https://doi.org/10.2307/3003624","url":null,"abstract":"We modify the technological specification of the standard neoclassical model of peak load pricing by considering the case where the level of capital input bounds the set of feasible choices of the variable input. As compared to the conclusions of the standard neoclassical model, we find two basic changes. First, optimal capacity production is possible. Second, the optimal prices paid by peak (capacity) users and their optimal contributions to fixed costs may not be equal.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130283970","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
An effective profit limitation policy must employ control techniques that yield a profit outcome, or ceiling, consistent with policy norms. In general, utility profit regulation achieves this by allowing a profit sufficient to attract capital and provide a "fair" return including a risk premium. Whatever else may be said, such regulation is articulated.
{"title":"Profit limitation: regulated industries and the defense-space industries","authors":"A. Burns","doi":"10.2307/3003068","DOIUrl":"https://doi.org/10.2307/3003068","url":null,"abstract":"An effective profit limitation policy must employ control techniques that yield a profit outcome, or ceiling, consistent with policy norms. In general, utility profit regulation achieves this by allowing a profit sufficient to attract capital and provide a \"fair\" return including a risk premium. Whatever else may be said, such regulation is articulated.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"110 ","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134004714","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Recently, the Federal Communications Commission and the Department of Justice have imposed detailed regulatory schemes governing the contractual relationship between the commercial television networks and program suppliers. This article provides empirical evidence on the determinants of program prices that indicates that the claims underlying the adoption of these regulations are unfounded. Although the network-supplier contract appears to place obligations only on suppliers, our analysis suggests that networks assume an implicit obligation to adjust program prices in response to improved information about program performance.
{"title":"The Determinants of Network Television Program Prices: Implicit Contracts, Regulation, and Bargaining Power","authors":"John R. Woodbury, S. Besen, G. Fournier","doi":"10.2307/3003638","DOIUrl":"https://doi.org/10.2307/3003638","url":null,"abstract":"Recently, the Federal Communications Commission and the Department of Justice have imposed detailed regulatory schemes governing the contractual relationship between the commercial television networks and program suppliers. This article provides empirical evidence on the determinants of program prices that indicates that the claims underlying the adoption of these regulations are unfounded. Although the network-supplier contract appears to place obligations only on suppliers, our analysis suggests that networks assume an implicit obligation to adjust program prices in response to improved information about program performance.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"33 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134022485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article reports estimates of a cross national model for automobile ownership, fleet fuel efficiency, driving per vehicle, and as derived from these three, gasoline consumption. The model is a recursive system of equations derived by aggregating individual behavioral equations for the choice of a durable good and its usage. The results suggest that across countries, gasoline price differences exert themselves primarily by affecting the amount of driving, and not as time series studies show, through fleet fuel efficiency. The estimates also suggest that gasoline consumption is much more income elastic than it was previously thought to be and that most of this income effect derives from the impact of income on auto ownership.
{"title":"The Long-Run Structure of Transportation and Gasoline Demand","authors":"William L. C. Wheaton","doi":"10.2307/3003465","DOIUrl":"https://doi.org/10.2307/3003465","url":null,"abstract":"This article reports estimates of a cross national model for automobile ownership, fleet fuel efficiency, driving per vehicle, and as derived from these three, gasoline consumption. The model is a recursive system of equations derived by aggregating individual behavioral equations for the choice of a durable good and its usage. The results suggest that across countries, gasoline price differences exert themselves primarily by affecting the amount of driving, and not as time series studies show, through fleet fuel efficiency. The estimates also suggest that gasoline consumption is much more income elastic than it was previously thought to be and that most of this income effect derives from the impact of income on auto ownership.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"289 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134080519","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the following note the author supplies corrections for Lemmas 1 and 2 which appeared in his earlier article in this Journal. The revised Lemmas can be used to correct his original proof of Theorem 2.
{"title":"The Behavior of a Firm Subject to Stochastic Regulatory Review: Correction","authors":"A. Klevorick","doi":"10.2307/3003133","DOIUrl":"https://doi.org/10.2307/3003133","url":null,"abstract":"In the following note the author supplies corrections for Lemmas 1 and 2 which appeared in his earlier article in this Journal. The revised Lemmas can be used to correct his original proof of Theorem 2.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134600305","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In 1975 the Financial Accounting Standards Board and the Securities and Exchange Commission banned the deferral (capitalization) method of reporting R&D expenditures for financial statements. The prohibition against deferral mainly affected small companies. To determine whether there was any justification for a concern about the consequent reduction of R&D expenditures, the hypothesis of no decline was tested for a group of 43 small, high technology firms. The hypothesis was rejected. Additional evidence, in the form of responses to a survey of key financial officers of such firms, supports the finding of reduced R&D expenditures.
{"title":"The FASB, the SEC, and R&D","authors":"B. Horwitz, R. Kolodny","doi":"10.2307/3003521","DOIUrl":"https://doi.org/10.2307/3003521","url":null,"abstract":"In 1975 the Financial Accounting Standards Board and the Securities and Exchange Commission banned the deferral (capitalization) method of reporting R&D expenditures for financial statements. The prohibition against deferral mainly affected small companies. To determine whether there was any justification for a concern about the consequent reduction of R&D expenditures, the hypothesis of no decline was tested for a group of 43 small, high technology firms. The hypothesis was rejected. Additional evidence, in the form of responses to a survey of key financial officers of such firms, supports the finding of reduced R&D expenditures.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134056200","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The conditions derived by Bulow and Shoven concerning the circumstances under which a firm goes bankrupt, can be used to draw inferences about stockholders risk preferences. Bankruptcy becomes less likely, the higher the expected value of the firm as a going concern and, in some interesting cases, the higher the variance of profits. Because stockholders' returns are truncated from below, mean-preserving increases in the variance of firm returns increase only the expected value of stockholders' returns and not their risk. Thus, although equity holders may be risk neutral or risk averse with respect to their own returns, they may be risk preferring with regard to firm returns.
{"title":"The Effects of Imminent Bankruptcy on Stockholder Risk Preferences and Behavior","authors":"Devra L. Golbe","doi":"10.2307/3003528","DOIUrl":"https://doi.org/10.2307/3003528","url":null,"abstract":"The conditions derived by Bulow and Shoven concerning the circumstances under which a firm goes bankrupt, can be used to draw inferences about stockholders risk preferences. Bankruptcy becomes less likely, the higher the expected value of the firm as a going concern and, in some interesting cases, the higher the variance of profits. Because stockholders' returns are truncated from below, mean-preserving increases in the variance of firm returns increase only the expected value of stockholders' returns and not their risk. Thus, although equity holders may be risk neutral or risk averse with respect to their own returns, they may be risk preferring with regard to firm returns.","PeriodicalId":177728,"journal":{"name":"The Bell Journal of Economics","volume":"60 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131578192","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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