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.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.