Short-Term versus Long-Term Incentives
Since mid-seventies the «hold-up» problem caused the underinvestment in specific assets has been remaining a key issue in neo-institutional economics. The traditional theoretical analysis of «hold-up» problem was based on consideration of so-called «selfish» relation-specific investments. Another type of relation-specific investments called «cooperative» investments (or cross investments) was nearly absent in economic analysis up to the very end of the twentieth century despite of the fact that such investments are widespread.
The distinction between selfish and cooperative relation-specific investments introduced in (Che and Hausch, 1999) based on the direction of specific investments effects in the internal trade (i.e. trade between main partners). The paper proposes an alternative approach to the classification of relation-specific investments, which is relied on the directions of these effects in the external trade (i.e. trade with alternative partners). This approach can be fruitful not only for theoretical modelling, but also for the antitrust regulation.
In the first part author proposes the approach to stimulate cost-reduction R&D with price rigidities. Then author describes the requirements for the stimulation scheme to move to a better location. The second section is about the model of innovation based on a new theory of consumption proposed by K. Lancaster.
High risk of informal behavior during the Olympic Games bid procedure requires some changes in the current system since the subjectivity in choosing the Olympic Games capital, risk of double selling of the votes and other informal behavior still exist.
The paper considers monitoring of environmental change as the central element of environmental regulation. Monitoring, as each kind of principal-agent relations, easily gives rise to corruptive behavior. In the paper we analyze economic models of environmental monitoring with high costs, incomplete information and corruption. These models should be the elements of environmental economics and are needed to create an effective system of nature protection measures.
Smoking is a problem, bringing signifi cant social and economic costs to Russiansociety. However, ratifi cation of the World health organization Framework conventionon tobacco control makes it possible to improve Russian legislation accordingto the international standards. So, I describe some measures that should be taken bythe Russian authorities in the nearest future, and I examine their effi ciency. By studyingthe international evidence I analyze the impact of the smoke-free areas, advertisementand sponsorship bans, tax increases, etc. on the prevalence of smoking, cigaretteconsumption and some other indicators. I also investigate the obstacles confrontingthe Russian authorities when they introduce new policy measures and the public attitudetowards these measures. I conclude that there is a number of easy-to-implementanti-smoking activities that need no fi nancial resources but only a political will.
One of the most important indicators of company's success is the increase of its value. The article investigates traditional methods of company's value assessment and the evidence that the application of these methods is incorrect in the new stage of economy. So it is necessary to create a new method of valuation based on the new main sources of company's success that is its intellectual capital.