James A. Dearden

The University Rankings Game : Modeling the Competition Among Universities for Ranking

With university rankings gaining both in popularity and influence, university administrators develop strategies to improve their rankings. To better understand this competition for ranking, we present an adjacent category logit model to address the localized nature of ranking competition and include lagged rank as an independent variable to account for stickiness of ranking. Calibrating our model with data from U.S. News and World Report from 1999–2006 shows persistence in ranking and identifies important interactions among university attributes and lagged rank. The model provides (lagged) rank-specific elasticities of ranks with respect to changes in university characteristics, thereby offering insight about the effect of a universitys strategy on its rank.

On optimal salesforce compensation in the presence of production learning effects

Abstract This paper presents a theory of multi-period salesforce compensation in which a firm experiences a production learning effect. Firm management uses the salesforce compensation plan to promote current period sales (and production) in order to lower future period production costs. The firm management (principal)-salesperson (agent) relationship is modeled as an agency relationship. The model is a two-period extension of the Basu, Lal, Srinivasan and Staelin (1985) one-period agency model of salesforce compensation. We demonstrate that (relative to the results for the one-period model) firm management should, in the first period, decrease the salary portion of the compensation plan and increase the commission rate (as a percentage of sales). Such changes in the compensation plan motivate the salesperson to increase first period sales effort. The firm is able to increase discounted two-period expected profit by considering production dynamics in this compensation plan. We discuss managerial implications of our model.

Do Governors Get What They Want?: An Alternative Examination of the Line-Item Veto

This paper reconsiders the impact of the governors line-item veto on the state budget process. The governors ability to obtain his or her most desired budget measures item veto effectiveness, rather than a smaller expenditure budget. The percentage difference between the final state budget and the governors original budget request over fiscal years 1983–1989 is examined. The empirical results indicate that under certain political situations the line-item veto authority enhances the governors ability to obtain his or her desired budget.

Marketing and production capacity strategy for non-differentiated products: Winning and losing at the capacity cycle game

Abstract Customer satisfaction and supplier loyalty in markets where products are mainly undifferentiated are heavily affected by assurance of supply. Marketers manage production capacity in such markets to assure supply, but the resulting capacity competition leads to cycles of over-capacity followed by capacity deletions, which lead to under-capacity. We investigate some of the possible causes of this form of industry behavior in two ways. First, we report on an exploratory empirical investigation, motivated by in-depth interviews with industry executives, and develop a set of structural principles. We formalize those principles in a set of statistical models. Next, we review some related theory and identify a number of possible reasons that may combine to cause this phenomenon. We develop some simple, game theoretic models that focus on the issues of strategic interaction with demand uncertainty and different values of capacity change. We use the theory results to illustrate how over- and under-capacity situations arise. We compare our theoretical and empirical results and find an encouraging degree of convergence. We discuss the implications of these findings for individual firm strategies.

Advertising coopetition: Who pays? Who gains?

We develop a competitive advertising model, where a firms advertising spending can be divided into two parts. One part, which we call generic advertising, affects only total market demand. The second component of that spending, brand advertising, affects market share directly, but may also have an effect on total market demand. We investigate how the profit margins of the firms, the advertising elasticities, the base market shares of the firms, and the market demand effect of brand advertising interact to determine the total amount of advertising spending in the market, who pays and how they pay (the ratio of generic to brand advertising). We also show that, in general, a market where generic advertising expenditures are set cooperatively will see higher expenditures of generic advertising than will a purely competitive market.

A Benchmark Profile of Economics Departments in 15 Private Universities

Abstract During the spring of 1999, the authors completed a benchmarking survey of 15 economics departments in private universities as part of a strategic planning exercise. All are selective medium-sized institutions that experience roughly the same types of market pressures and compete for the same types of students. The authors report the information gleaned from the survey concerning such items as departmental resources, teaching loads, class sizes, departmental research expectations, and weights given to research, teaching, and service in salary determination and promotion. The authors believe that their results and methods might be useful to other economics departments engaging in bench-marking exercises.

The first word and the last word in the budgetary process: A comparative institutional analysis of proposal and veto authorities

This study examines the role of proposal authority and executive veto in the budgetary process. A five stage sequential model of the budgetary process with three institutional actors — a legislature, an appropriations committee, and an executive — is presented. We examine: (i) the factors that affect the executives power in shaping the final budget when the executive is granted proposal authority; (ii) how increased veto authority, in combination with executive proposal authority, affects the executives power in forming the final budget; and (iii) the effects of different types of proposal authority and veto rules on the efficiency of the budgetary process.

Efficiency in spatial negotiations

Abstract We examine two-party spatial negotiations with single-peaked preferences and two-sided uncertainty about those preferences. A classical ex post efficient dominant strategy incentive-compatible individually-rational mechanism exists if and only if there is either complete information or one-sided incomplete information about the gains from agreement. If there is two-sided uncertainty about gains from agreement, a classical ex post efficient Bayesian incentive-compatible individually-rational mechanism does not exist.

Contracting, Gatekeepers, and Unverifiable Performance

A group of diverse principals who represent an institution contract with an agent for the production of a two-dimensional commodity. One dimension of the agents production is verifiable, while the other is unverifiable. The principals can employ two strategic tools to motivate the agent---a minimum requirement on the verifiable dimension and a tough gatekeeper. A gatekeeper is a principal who is elected and granted authority to determine whether the full group considers the agents production. A tough gatekeeper can be used to motivate production in the unverifiable dimension. We characterize conditions for which the principals use these two strategic tools, and we examine the economic consequences of partial verifiability.

Voice-over-PowerPoint Recordings

The first recording in this contribution offers instructions and tips for making voice-over-PowerPoint recordings. The second recording – an answer to an industrial organization homework assignment about the lemons problem – shows how these recordings can be used to complement classroom teaching.