We aim to identify factors that are critical in determining whether or not blockchain adoption arises in various market structures, and give guidance for addressing the challenges of blockchain implementation. In Chapter 2, we construct an economic framework for understanding the incentives of the firms in a supply chain to form a blockchain consortium. We find that blockchain reduces information asymmetry for consumers, thereby enhancing consumer welfare. Consumer welfare gains can be sufficiently large that blockchain adoption is socially beneficial; nonetheless, we find that blockchain adoption does not arise in equilibrium. This situation arises because blockchain adoption costs are borne by manufacturers, and manufacturers cannot extract consumer gains through prices due to the competitive nature of the manufacturing sector. We offer a system of transfers to generate blockchain adoption in equilibrium when it is socially beneficial. In Chapter 3, we investigate a variation of the model described in Chapter 2. Our analysis incorporates the blockchain’s ability to trace shipments and generate cost savings for the manufacturers who join the blockchain. Although the blockchain enables early recalls of defective goods with higher probability, and thus, reduces expected unit costs for all the manufacturers on the blockchain, such gains are still competed away and blockchain adoption does not arise in equilibrium. This result strengthens our earlier findings on the incentive misalignment in a perfectly competitive setting. The associated welfare implications of this model are similar to those in Chapter 2. In Chapter 4, we study a setting in which the consumer prices are determined exogenously. With this setting of sticky price, there exists a certain level of competition but it is not perfect. As a result, the manufacturer gains from blockchain adoption may be strictly positive, in contrast to two results in Chapters 2 and 3 where the gains are always competed away. We find that blockchain unequivocally benefits consumers but has an ambiguous effect upon the welfare of manufacturers. There exist conditions under which, although the blockchain improves global welfare, blockchain adoption does not arise in equilibrium. We refer to such a scenario as an adoption failure, and again a system of transfers is proposed to resolve that failure. In Chapter 5, we examine whether blockchain adoption arises in equilibrium for a supply chain in which a single risk-averse manufacturer sells directly to consumers; thus, the manufacturer possesses market power. In this setting, we find that blockchain adoption always enhances manufacturer welfare when the adoption cost is zero. While two results in Chapters 2 and 3 demonstrate that blockchain adoption does not arise when the manufacturing sector is perfectly competitive, our findings clarify that the failure of blockchain adoption is not generic across all market structures. Rather, blockchain adoption arises in equilibrium for supply chains when the manufacturer possesses market power and when the adoption cost is sufficiently small.

No description available.

In 1990, the U.S. Congress approved an increase in the federal excise tax on beer from $9 to $18 per barrel. This tax was required to be paid by all brewers and importers, on all produced units as of January 1991. The hike, which was equivalent to an additional 65 cents in federal taxes per 288 ounces (a 24 pack), represented the largest federal tax increase for beer in U.S history. Interestingly, retail prices increased by an average of $1.40 per pack; that is, the tax pass-through was “over-shifted” by approximately 115% (i.e. 75 cents above the 65 cent increase). Economic theory raises questions about the standard assumption that the pass-through rate of alcohol taxes to consumer prices is equal to 100%, but does not provide exact predictions. This study analyzes the determinants of tax over-shifting observed as a result of the 1991 federal tax increase on U.S. beer production. This thesis reports cross-sectional OLS regressions where several variables at the market, firm and brand level are used to explain the change in the nominal price of beer between the last quarter of 1990 and the first quarter of 1991. After controlling for as many factors as the available dataset permits, a robust result across specifications is that non–price vertical restraints (exclusive territory and exclusive dealing contract between beer manufacturers and beer distributors), advertising expenditures (a proxy for product differentiation) and the number of brands are important determinants of pass-through rate. While the three determinants appear to be statistically significant, it is the first two that seem to be of greater economic importance. The fact that vertical restraints are associated with a smaller pass-through rate is consistent with the idea that vertical restraints can serve to mitigate the double marginalization problem; the reason for this interpretation is that theoretical work suggests that a more severe double-marginalization problem can magnify the pass-through rate. Conversely, the effect of advertising is consistent with the theoretical notion that less price-elastic (i.e. more heavily advertised) products will experience a higher pass-through rate. Together, advertising expenditures (evaluated at the mean of the data) and the absence of vertical restraints, can account for $1.075 out of the $1.40 price increase (i.e. 76.8% of the pass-through rate).

No description available.

In many markets, efficiency depends on the quality of information that participants have. However, participants may face frictions in accessing information, which could result in significant welfare losses. My dissertation studies the causes and consequences of information frictions, focusing on the security analyst market and the public cloud market. The first two chapters investigate how information frictions are generated in the security analyst market. Security analysts observe signals and compete to make forecasts on securities’ earnings, which serve as public information to investors. Here I study how analysts’ incentives affect the quality of information they provide. In Chapter 1, I consider security analysts’ incentives as a whole and estimate them using revealed preference. Security analysts are rewarded for being more accurate than their peers. This reward for relative accuracy leads analysts to distort their forecasts to differentiate themselves, but also disciplines them from being overoptimistic. I structurally estimate a contest model with incomplete information to capture both effects, disentangling the payoffs for relative accuracy, optimism and absolute accuracy. Using the model, I conduct counterfactuals to evaluate policies that reduce analysts’ payoff for relative accuracy. I simulate the effect of these policies on the quality of information in terms of forecast errors and variances. The reward for relative accuracy reduces errors by 33 - 58%, but increases variances by 4%. It is optimal to have moderate competition between the covering analysts of each security. In Chapter 2, I ask where these incentives come from. Are analysts motivated by dynamic incentives of reputation, or by short-term compensation such as bonuses? I show with reduced form evidence that low-reputation analysts may face more incentive to outperform their rivals than high reputation analysts. Building on this, I develop and estimate a dynamic model where analysts compete to build reputation and earn compensation. I find that analysts face a strong reputation-building incentive because high reputation is associated with a much higher fixed wage. Meanwhile, their forecasts have an insignificant impact on their immediate compensation. Chapter 3 studies the consequences of information frictions in the public cloud market. Firms need information about available technologies to make good adoption decisions. Inattentiveness to such information may create stickiness to outdated technology. In a joint project with Sida Peng and Peichun Wang, we study the welfare benefits of firms’ public cloud adoption and the consequence of consumer inertia in this market. We develop a novel demand model that allows for both multiple product choices and continuous quantities on each product. We estimate the model using a proprietary dataset on individual firms’ cloud usage history from a major public cloud provider. The estimated average return on investment in cloud is 2.2 times the cost of investment, which is driven by smaller firms disproportionately benefiting from access to computing resources on the cloud. On the other hand, inertia on the cloud leads to sub-optimal product choices for all firms and reduces welfare from cloud usage by almost 62%. We show that introductory discounts incentivizing firms to try new products can improve both consumer welfare and provider revenue.

This dissertation investigates the question of whether political influence in the business sector is distributed disproportionately among firms in a manner which favors large economic units. The factors which are likely to be sources of variation in the market for political influence faced by economic units of different sizes are isolated and studied. Relying upon pre-existing research by scholars in the area of public choice, a production cost function for legislative political influence is developed. It is demonstrated that supply conditions are likely to vary between corporate units of different sizes favoring small firms. An analysis of the demand for political influence is then presented in which government is treated as an intermediate input in the firm's production function. It is argued that forms of influence may not only serve to alter a firm's cost and demand conditions, but that the economic unit may also enjoy a reduction in the bounded rationality problems which it faces.These internal transactions costs are not generally reduced to a significant degree when influence is produced for the large firm because of the non-durable nature of legislation created for conspicuous corporate units. Thus, the value of the marginal product of political influence is inversely related to firm size. The analysis is then subjected to empirical testing. The results suggest that political influence and regulated firm size are positive and disproportionately related. Across unregulated firms a proportional relationship appears to exist. Finally, the policy implication of the results are explored. The conclusions suggest that policy implemented to reduce the extent of special interest legislation for business by limiting the growth of firms may not only be unsuccessful, but will likely lead to serious market distortions. / Ph. D.

In light of greater emphasis on horizontal management and team-oriented approaches to product development/management, there is a growing need to better understand interdepartmental integration. To meet this need, this dissertation proposed a model of interdepartmental integration, which distinguished integration as a composite of interaction and collaboration. Incorporating contingency and sociotechnical theories, two main research propositions were developed and served as the foundation for the proposed model: 1) an individual department's attributes will influence its interaction behavior and 2) attribute differences between departments will influence departments' collaboration. A mail survey of marketing, manufacturing, and R&D managers in 860 electronics firms was undertaken to investigate these two propositions and the hypotheses associated with the proposed model. While study results did not convincingly support the given propositions nor a majority of hypotheses, results did indicate that collaboration has a primary influence on performance. Conversely, interaction was shown to have minimal influence on performance, and in certain cases, was shown to even reduce performance. Among other significant findings, interdependence and cooperative goals were identified as two key antecedents to collaboration. This dissertation therefore highlights the need for departments to work together (collaborate) versus simply forcing communication through meetings and documented information exchange (interaction). Collaboration appears to be a key means by which all departments and the entire company can achieve and maintain performance success. / Ph. D.

This thesis uses the historical relationship between Venezuela and petroleum to identify areas of resource rent waste mismanagement in the Venezuelan oil sector. Low oil prices are also more strongly bringing PDVSA’s mismanagement, corruption, and politicized agenda to light because of the high social cost of these inefficiencies. This thesis also explores industry-level best practices and applies them to the distinct case of PDVSA, with the objective of aiding Venezuela in navigating its way back to solid economic ground. The current economic and humanitarian crises in Venezuela elevate the need for conversations centered on reform options. This analysis concludes that the preferred policy option should be partial privatization because it is the most politically palatable option that also brings the most solvency to PDVSA’s inefficiencies. Partial privatization will allow Venezuela to reinsert itself into international financial markets and will open the country to desperately needed foreign investments. The elimination of market-distorting subsidies, the creation of a sovereign wealth fund, and the development of a regulatory structure that promotes transparency, accountability, and participation will also be critical.

Matrix Management has been applied in various large organisations with varying degrees of success in order to carry out their projects. The effectiveness or lack thereof, in applying the principles of matrix structures, is believed to be the area of focus in these organisations. Project management in large organisations can be a complex process if a sound strategy of matrix organisation is absent. Organisations normally use the matrix approach to combine the advantages of traditional functional and product structures to increase the ability of managers and other employees to process information. The matrix structure is generally used to basically permit the flexible sharing of employee resources across service or product lines. However, the disadvantages associated with the matrix structure, which include the maintenance of two hierarchies does provide challenges to employees and managers. By reducing duplication of key functional activities of product lines, matrix design could reduce costs in organisations. The matrix manager's function is therefore designed to achieve an overall balance by coordinating the organisation's functional and product / service activities to ensure delivery on time and within budget. It therefore becomes incumbent on the functional and product / service managers to work closely with each other to make the matrix design work well. Matrix organisation requires that managers demonstrate high levels of trust and communication, teamwork and negotiating skills. Co-ordination is achieved through extensive formal and informal meetings or in one-to-one conversations and problem solving. Teams consists of both functional and product or service managers and other employees. Matrix organisation is intended to permit the flexible sharing of employees across product or service lines. The matrix manager obtains the resources and integrates the efforts of functional and product or services personnel. However, the maintenance of two management structures could be expensive. Employees have to report to two superiors, which can be frustrating and confusing. Matrix management would therefore require people to develop good interpersonal skills and requires management to accept this type of management. Furthermore, it would require the matrix manager to maintain a balance between the functional and the product or services interests. In the light of the above, it is apparent that a matrix organisation will not take place naturally (Brown, 1999: p22). There will be resistance to change, also from top management, to do things in the traditional way through the functional structures. In many organisations team cultures are absent. This could lead to a failure to work together and take orders from people outside their functional division. In order to be successful, matrix organisations are thus required to make a number of mind shifts regarding their structures. This research project aims to test the successful or unsuccessful application of the dimensions of matrix management in Sanlam Personal Finance (SPF). Many projects of varying sizes and differing natures are implemented within this company on an ongoing basis both with and without the use of consultants. / Sanlam

In response to the millennial job-hopping fad and increasingly low retention rates organizations are facing, it is more important than ever that the best-fit candidate is chosen for the position and the organization. There are two common ways fit is typically defined: person-organization (P-O) fit is the congruence between an employee and the characteristics of a company; person-job (P-J) fit is the match between an employee’s knowledge, skills, and abilities (KSAs) and the requirements of the job in the organization (Edwards, 1991; Kristof, 1996). A large pharmaceutical company developed a quality of new hire criterion measure as a function of both P-O fit and P-J fit; that measure is examined in the current study. Results were limited because there were only six quality of hire ratings for managers included in the data set. Furthermore, no significant differences were found in quality of hire ratings for individual contributors based on their division (i.e., human health, support function, scientist, manufacturing, or animal health). Because of limitations (e.g., small sample size) many ideas for future research are discussed.