theoretical reflection needs words, not only numbers and mathematics.
Essays and papers expand the room for thinking by sharing an international
view on the subjects in order to invite the reader to co-operation
with the Institute.
retailing opportunities and threats using agent-based simulation
As a valuable supporting tool for the marketing
analysis of opportunities and threats on retail markets, an agent-based
simulator is proposed, providing insights to answer to questions
- What happens in the distribution landscape
if we open a new outlet? Where should it be located? What profile
(assortment composition, price levels, size) the new outlet should
- What if competitors open or close outlets? What should we then
change in the profile of our outlets?
- What if the purchasing behaviour of consumer households changes?
E.g. purchasing power and decision rules changes due to economic
- What if the cost structure changes? E.g. there is easy funding
of outlets in less-favoured areas by municipalities and regional
the poor pay more than the rich (2014)
This paper presents eleven groups of reasons
and conditions under which, painfully surprisingly, the poor has
to pay a higher price than the rich for the same good or for the
same fulfillment of a need. This is conducive to devise innovative
anti-poverty policies and business practices.
This paper explore mismatches between ECON101
textbook theory of economics and empirical evidence from the real
world that you can collect by yourself, so to replicate (confirming,
widening or rejecting) the proposed analyses, as a scientific approach
would authorise and ask for.
Essay: The marketing
mix of the hotel “U Lišky”: an example of strategic choices leveraging
By analyzing and evaluating the 7P’s marketing
mix of the hotel “U Lisky” (product, price, promotion, place, people,
process and physical evidence), the author build upon personal insights
and literature (including this paper
from EWI) to suggest future improvements.
Is anything worth keeping in microeconomics?
A poignant critique of neoclassical microeconoimcs,
and in particular supply and demand curves. Contrary to all good
sense, microeconomists assume that all agents are price-takers,
without saying who makes and changes these prices. But people trade
with each other, and not withthe market.
Some polemics in paid press followed after publication,
to which the authors replied here.
From the same authors, a
description of the messy issues involved when zero profits are considered
as the short or long run equilibrium in a competitive market.
A further essay is here.
Essay: The rich
and the poor
This short paper presents an exploration of the
differences between the rich and the poor, as they result from a
space and West-East flows of tourists The role of Italy
The broad concept of "trajectory" covers
a crucial phenomenon in the contemporary reshaping of European space.
Dividing and defining European identities as they did, the traditional
geographical borders are rapidly losing their role, since social,
cultural and economic identities are increasingly to be defined
in dynamic terms as evolution along a path. Published by the Polish
Academy of Science, this short paper by Valentino Piana, underlines
the meaning of tourism as a symptom of the emergence of new stronger
trajectories, provides a quantitative analysis of data on West-East
bilateral flows of tourists, supplies a longer discussion of the
qualitative role of Italy in these flows and in their deeper meaning.
healthcare and microfinance
Harnessing the strengths of two Sectors to improve
health and alleviate poverty
Essay: Our Plan
B for macro-economic recovery
and structural change (31st October 2011)
EWI has been asked to sign this program to change
the macro-economic policies to cope with the combined financial,
economic, social and environmental crisis in UK and other countries.
accepted to sign a letter published by the Guardian and would
like to offer to our readers' reflection the following policy essay:
leading economists have done the same.
Addressing a missing element in the Toledo Declaration with industrial
ecology (May 2011)
landmark of urban regeneration policy for EU, the Toledo Declaration,
amidst the call for an integrated approach to address sustainability
challenges by the declaration, exhibits a predominant focus on using
local actions to solve local problems.
This lope-sided scope may give rise to policies that end up shifting
problems beyond the local jurisdiction. Some of these problems can
be deduced using key industrial ecology concepts, such as material
flow analysis and life cycle assessment.
The author, a Singaporean scholar, provides a few possible strategies
to cope with the issue, after a longitudinal study showing a specific
Bringing Heterodox Recipes to Policymakers: "The Example
of Innovative Economic Policies for Climate Change Mitigation"
Paper presented to the 12th Conference of the Association of Heterodox
Essay: How to
tranfer knowledge to SMEs
Guidelines on effective knowledge and technology
transfer activities to SMEs in the food sector with particular focus
on traditional food manufacturers.
A path-breaking contribution from an original
consortium of both trade associations and R&D providers, that
delivers a far-reaching approach that should be followed in many
further fields to enhance appropriate innovation and diffusion.
and Transfer of Climate Change Mitigation
Technologies on a Global Scale: A Study Drawing on Patent Data
An innovative policy to spread clean technologies
and economic development: theory, policy and history
Development as a Catch-up Process: What is Different About the Current
Environment by R. R. Nelson
in product space and diversification strategies
An empirical measurement of how difficult is to produce a new good
when your country or your firm already produces another one. Based
on a new methodology proposed in a
paper by Hidalgo, Klinger, Barabasi, and Haussman, several key
datasets are freely distributed and ten steps of intentional diversification
of national economies are outlined.
Package size, price, and consumer rules
Optimal commercial offer by retailers depends
not only on efficient logistics and buyer's power with respect to
the supply chain: it hinges on the segmentation of customers according
to their rules of choice.
In this paper, an example of purchase basket over
many categories, varieties and package sizes is constructed and
commented, freely offering the Excel file with all open programming
Consumers can find out their style of shopping;
managers have a device to fix the prices
in your commercial premise, the researchers
and the absolute beginners can
simply explore the unexpected consequences of the interaction of
such trivial, but real, things like package size, weight, and budget
A small tax levied on non-adopters can boost
the diffusion of any new technology, including those required in
climate change mitigation and adaptation strategies. The tool costs
nothing to the policy-maker and can enjoy a fairly good opinion
in the general public.
Essay: Peak oil:
coming soon but when?
The former director of what is now Puerto Ricos's
Energy Affairs Administration, Lewis L. Smith, sets forth a compelling
framework for the economically-feasibile production of oil to peak
before 2020 with a 90% of chance.
diachronic trade network data with Stata
by Dr. Simon Fink quoting EWI work on trade data
Complexity meets development - A Felicitous Encounter on
the Road of Life
whole number of Interdisciplinary
Description of Complex Systems where the paper appeared first.
Market dynamics with firm-specific fixed and variable
In this easy evolutionary model you'll find a
market with a large number of firms, each characterised by a different
cost structure, and you'll be able to study the evolution of profits
over time, according to changes in demand and endogenous technology
A key statement will relate the way demand interacts
with the kind of technological innovation
approved by top management.
Levels of product differentiation in the global mobile phones
6 different levels of product differentiation
are proposed and interpreted in a new enhanced way by Prof. Andonov.
theory: the neoclassical model and its opposite alternative
An alternative evolutionary approach to consumer theory is here
presented and contrasted with the neoclassical model.
The Performativity of Routines:
Theorising the Influence of Artefacts and Distributed Agencies on
Routines Dynamics by L. DAdderio
A new consideration or evoolutionary routines.
Economic development from the perspective of evolutionary
Evolutionary theory sees the economy as always in the process of
change that involves economic actors taking actions that break from
previous behavior, and an environment in continuing flux because
of the innovation.
neoclassical theory sees the economy as at rest, or undergoing well
anticipated change it has nothing to say about these kinds of conditions.
the author, Richard Nelson, believes the processes of economic catch-up
have to proceed under the implicit or explicit guidance of an evolutionary
in Ghana: an overview (2007)
A sound example of vibrant and innovative economy,
Ghana offers a great institutional richness of microfinance institutions,
as explained in this paper. Outlining the challenges, a Central
Bank insider calls for further improvements in the organization
of the sector.
Peak oil and South Africa:
impacts and mitigation (8 March 2007)
From a tough scenario to policies in a key African country.
and their linkages to literacy
An exploration of the manyfolds relations of
exports and the growth of the number of people capable to write.
strategies: innovate or die
To devise new modified versions earlier than
expected during the product life cycle can costs you cannibalising
your own product but leaves no room to competitors, thus resulting
in long-term business success.
The impact of market structure and irreversibility
on investment under uncertainty: an empirical analysis
This paper estimates a model of investment
under product price uncertainty for 23 French industries during
the period 1977-1997 and represents the first empirical work that
includes variables of market structure (in terms of degree of competition)
in a model of investment under uncertainty.
In the paper, Sara
Maioli presents one of the very first attempts to make explicit
the empirical relationship between investment and uncertainty
under different degrees of irreversibility.
and Software :
You are a monopolist
The traditional monopolist's choice about price and quantity is now
given a new dynamic setting where you can interact. Demand is unknown
and the produced good is durable across periods of time. Thus, sales
needn't be equal to production since inventories can pile up and go
down. A lot of strategic consequences arise, as you can discover playing
with the business game.
Who matters in a complex society?
Key people can change history, especially when the global system
is complex and under transition. A long-term view, presented in
this paper, identifies the categories of competences and individuals
interpreting and prompting structural changes.
Outward foreign direct investment and technology transfer:
selected results from the U.S. and Taiwan in the electronics industry
Outward Foreign Direct Investment will be heavily criticized if
the outgoing investment appears to transfer or outsource jobs that
are seen as needed by the home country’s
workers, and if there is a perceived danger of allowing critical
technology to be dispersed. Any Inward FDI will be criticized if
it is seen as allowing foreign entities to own the engines of industry
and gain control of critical technology.
This paper focuses on the electronics industry
and presents some examples of countries’ policies concerning
technology transfers and the effects on industry of each of the
three reactions by policy makers and high-level managers.
published at IAMOT
Profits, competition and opportunity costs: two introductory
papers on the flaws in neoclassical approach
Prof. Kepa M. Ormazabal
points out at contradictions in neoclassical theory of firm where
two opposite notions of profits
are used together, making the maximization of profits irrational
if owners' revenue is considered as cost.
The definition of competitive profit as the opportunity cost of
capital is shown to involve a self-contradictory notion of opportunity
cost. The student will better follow this argument thanks to a constant
reference to Varian's standard texbook.
the second paper, the neoclassical theory of competition is critically
re-examined and compared to the solutions of classical theory.
Essay: The economics
of ex ante coordination
Sergio Bruno and Alessandra
De Lellis present in this paper a few fundamental elements of
a new perspective in economics, stressing complex time structures
and co-ordination issues in investment,
It integrates innovation
theories and the earlier studies on the economic development
of nations to single out overlapping issues and solutions.
decision rules for agent-based models
A clear-cut introduction to evolutionary consumption
microfoundation in agent-based models. It proposes several rules
to cope with budget constraints, product differentiation, purchase
repetition over time.
In particular, you shall find the rules of consumer
behavour used in the freely downloadable model "Race
to market", which gave rise to these micro-data.
Moreover, it suggests to ACE modellers a "golden
rule" for more realistic models.
Essay: The production
function of students' grade
A critical introduction to the neoclassical concept
and use of the "production function". To help students
understanding the concept and its limitations, the author proposes
to take into consideration a particular production process that
should be well known to them: the production of grades in an exams
after an education course.
the employment effect of FDI inflows to Egypt: Does the mode of
entry matter? (2008)
Egypt has attempted to attract Foreign
Direct Investments since 1974 and has offered generous incentives
to achieve this target, motivated by low domestic savings
rates accompanied by inefficient financial intermediation and
the opportunity to benefit from the direct and indirect effects
of FDI on increasing demand for labour.
This is especially important given a chronic unemployment
problem that the Egyptian economy suffers from. This paper extensively
assess empirically the effect of FDI and argue about the importance
of studying FDI at the most disaggregated possible level, since
they are not homogeneous in their effects.
Earlier published at the Arab
Planning Institute as proceedings to the conference "“The
Unemployment Crisis in the Arab Countries”
mystery of excess trade (balances)
trade balances are an important
source of frictions in international trade relations, so it is important
to understand their provenance. In this papers, the author
provide an empirical examination of two key theories - one based
on macroeconomic balances and the other based on triangular trade.
theories perform poorly in explaining bilateral trade balances.
Actual bilateral trade balance are vastly larger than those predicted
by the theory, a result that may be termed the "mystery of
the excess trade balances".
trade data for 99 countries
Regional differences in public health quality management systems
short essay presents a review of the various approaches applied
by the different Italian Regions with regard to Quality Management
in health care policy.
for the "national resource curse": should we distribute
oil revenues to the citizens directly instead that to governments?
Countries with an abundance of natural resources
have on average lower economic growth than resource-poor countries.
They also have more poverty and
are more likely to suffer from violent conflict. These negative
outcomes in resource-rich countries are called the ‘curse
of natural resources.’ Dr. Martin
E. Sandbu proposes a policy of revenue distributions from taxable
resources to individuals as a way of addressing the curse. Instead
of paying resource rents in to the government treasury, they would
be distributed equally to all indviduals, but the government would
then be allowed to tax it back.
with bi-directional product differentiation, bounded rational consumers,
innovation, advertising, and finance
paper explains and offers you a powerful software tool for understanding
the introduction of product and process innovation
in a competitive market. Consumers are individual agents with different
tastes and personal income. In terms of industrial dynamics, you'll
see how product life cycles arise by personally playing the software
model or by observing how artificial agents perform.
and software automatic download [2400 KB]
Essay: A new
approach to business fluctuations: heterogeneous interacting agents,
scaling laws and financial fragility
fluctuations in GDP, investment, etc. can be explained in a new
micro-founded way. The authors
present a simple agent-based model, whose core is the interaction
of heterogeneous financially fragile firms and a banking sector.
In their framework, the origin of business fluctuations can be
traced back to the ever changing configuration of the network of
heterogeneous interacting firms.
Simulations of the model
replicate surprisingly well an impressive set of stylized facts,
particularly two well known universal laws.
Essay [300 KB]
Fragility, asset bubbles, capital structure and real rate of growth
- A study of the Indian Economy during 1970-2000
Global value chain: governance and typologies
Do We Define Value Chains and Production Networks
Governance of Global Value Chains
Chains: An Economist's Perspective
site for Global Value Chains
and Growth: A Schumpeterian model of innovation
creation of a positive feedback
loop is what makes the difference between sustained growth
and gradual (or sudden) decline. A Positive Feedback Loop
Innovation System (POLIS) is here modelled along Schumpeterian lines
and applied to the actual economy of Taiwan.
innovation system in Australia
The papers identifies eleven broad categories
of agents taking part to the innovation system. The kind of innovation
and the goals of innovation are explored and ranked by an empirical
of delayed feedback on learning, performance and strategy search
Economic agents live in an uncertain environment,
where they have to learn how to behave and which is the performance
of their actions. Strategy is not given: they have to search for
the "right one", if exists at all. Feedback
is a crucial mechanism linking the past with the future, possibly
helping the agents in their tasks. In particular, the timing
of feedback signals can deeply influence their effects.
Is immediate feedback always superior to delayed
feedback? Are the features of the environment irrelevant? This paper
offer original experimental results on the influence of delayed
feedback on learning, performance and strategy search.
decisions and pro-social behavior: a field experiment on blood donation
In this paper, Alois Stutzer, Lorenz Goette
and Michael Zehnder propose a decision framework where people are
individually asked to either actively consent or dissent to some
pro-social behavior. The authors hypothesize that confronting individuals
with the choice of engaging in a specific pro-social behavior contributes
to the formation of issue-specific altruistic preferences while
simultaneously involving a commitment. The hypothesis is tested
in a large-scale field experiment on blood donation. This "active-decision"
intervention substantially increases the stated willingness to donate
blood, as well as the actual donation behavior of people who have
not fully formed preferences beforehand.
Essay: Does innovation
policy matter in a transition country?
Havas demonstrates in this paper the simultaneous
need for systemic institutional changes and macroeconomic
stabilisation in order to improve microeconomic performance.
Whithin an evolutionary economics framework,
innovation policy is examined
both theoretically and empirically in the case of a country currently
undergoing deep structural changes: Hungary.
of a dynamic discrete choice model of irreversible investment
of Spanish manufacturing firms provides an important empirical evidence
that business investment - at
micro level - is infrequent and lumpy.There are periods in which
firms decide not to invest and periods of large investment episodes.
Rocío Sánchez-Mangas develops and tests consider
a dynamic discrete choice model of irreversible investment with
a general specification of adjustment costs including convex and
Essay: An example
of information set for the export manager
often approach new markets just by participating to trade fairs,
meeting there potential importers and building business relationships
with them by trial and error. But a systematic overview of
foreing markets can offer a more structured approach. In this report
by U.N. Bhati,
you'll find a good instance of what an export manager can find in
such documents to orient its actions and business plans.
A Statistical Profile
of Forest Product Market in South Korea [362 KB]
Foreign Aid, Development Expenditures and Taxation: econometric
results from a bounded rationality model of fiscal behaviour
path-breaking methodology for assessing the behaviour of
foreign aid receivers. Investment
in human and physical capital has been a significant factor in Malaysian
GDP growth. Both internal and external
sources of finance have been used in promoting investments
as well as development expenditures.
foreign aid could have been used, by a bounded rational bureaucratic
policymaker, in many different ways, not all conducive to development.
Hierarchy structures in world trade
A new technique of analysis of trade values reveals the asymmetric
structure of relationships among countries. The structure of world
trade is characterised by bilateral absence of relations
(82%) and dominance (40% in non-absent relationships), weak
dominance (of two types: 24% and 22% respectively), whereas
symmetric integration is just the 6% of non-absent relationships.
concentration of Turkish exports and imports over time
Through international trade, countries develop
their own net of privileged partners. Turkey is an extremely interesting
example of a fast changing developing country. In this paper, Prof.
Erlat shows not only data analysis but also a methodology
to address the issue of concentration and diversification of exports.
The Product Cycle Theory of international trade is given further
base in developing countries
to increase the tax revenue in
developing countries? By enlarging the tax base the fiscal burden
would be better distributed, comprehending the large informal economy
which is so present in these countries. Unlike in rich countries
where informality is largely a result of the tax burden, the informal
economy in developing countries is largely a result of high fixed
costs of entry into the formal sector. The tax burden is lower
in developing countries and the barriers to entry into the formal
economy are higher. Empirical analysis supports the results of this
paper by prof. Emmanuelle
Auriol and Michael Warlters.
new conceptual limits of laisser-faire
Sergio Bruno presents his standpoint in terms of a wide and
modern critique of laisser-fairism. General economic equilibrium
is put into question on the basis of new conceptions of time, uncertainty
and complementarities in production processes. Thus, "well
targeted policies may be of much help. [...] What these different
forms of intervention have in common is that they are based neither
on coercion nor on traditional incentives, but rather upon suasion
representation of a basic macroeconomic scheme: the IS-LM model
of the first year of economics usually learn the basic functioning
of the economy thanks to the IS-LM model. Here we present an original
representation that concentrates the entire model in just one sheet.
researcher will find many innovative features to the model. To a
creative economist, this representation offers the immediate
possibility of adding further variables and outlining new
or different linkages between variables.
If you have
never heard of IS-LM model, click here.
and health system: two worlds apart?
Quality Management tools and principles, adapted to the peculiar
features of the public health sector, help to solve the main challenges
this system is presenting? Cost effectiveness, suitable solutions
to people's needs and requests, the full account of human and professional
relations could be better targeted using a Quality approach. This
essay sets the stage for a discussion on the subject.
risk: a general scheme in a banking perspective
are the issues banks evaluate for assessing credit risk when they
are going to give a credit facility to a borrower? This essay proposes
a general synoptic scheme in order to answer to this question. The
problem is crucial not only for the bank but also for the economy
at large, since overall investment
and consumption are affected by
micro-decisions of this kind.
Other papers available at the Economics
Web Institute in separate pages, for instance evolutionary economics
downloadable papers are here.
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tool to find where or navigate through the left top page menus.