Multiple In‐Cycle Transshipments with Positive Delivery Times

We study a centralized inventory sharing system of two retailers that are replenished periodically. Between two replenishments, a unit can be transshipped to a stocked‐out retailer from the other. It arrives a transshipment time later, during which the stocked‐out retailer incurs backorder cost. Without transshipment, backorder cost is incurred until the next replenishment. Since the transshipment time is shorter than the time between two replenishments, transshipments can reduce the backorder cost at the stocked‐out retailer and the holding costs at the other retailer. The system is directed by a centralized inventory manager, who minimizes the long‐run average cost consisting of replenishment, holding, backorder, and transshipment costs. The transshipment policy is characterized by hold‐back inventory levels, which are nonincreasing in the remaining time until the next replenishment. The transshipment policy differs from those in the literature because we allow for multiple transshipments between replenishments, positive transshipment times, and backorder costs. We also discuss the challenges associated with positive replenishment time and develop upper and lower bounds of average cost in this case. Bounds are numerically shown to have an average gap of 1.1%. A heuristic solution is based on the upper bound and differs from the optimal cost by at most this gap.     

Impacts of off‐farm employment on welfare,food security and poverty: Evidence from rural Vietnam

How off‐farm employment can enhance welfare in terms of food consumption and poverty alleviation is a critical question facing many developing countries. This study addressed that question by pursuing two objectives: (i) to quantify the impact of off‐farm employment on rural households’ welfare, food security and poverty; and (ii) to examine the factors that affect their decision to work off‐farm. Using panel data, we estimated a difference‐in‐difference combined with a propensity score matching model. The findings show that off‐farm employment improves income, ensures food security and contributes to poverty alleviation. The results also show that age, marital status, education, labour, financial capital, land, location, market access and losses from natural disasters are significant contributing factors to the decision to participate in off‐farm employment. The findings suggest that to improve the welfare of rural households, the Vietnamese government should proceed with policies that enhance their opportunities for participation in off‐farm employment.     

Impossibility Results for Nondifferentiable Functionals

We examine challenges to estimation and inference when the objects of interest are nondifferentiable functionals of the underlying data distribution. This situation arises in a number of applications of bounds analysis and moment inequality models, and in recent work on estimating optimal dynamic treatment regimes. Drawing on earlier work relating differentiability to the existence of unbiased and regular estimators, we show that if the target object is not differentiable in the parameters of the data distribution, there exist no estimator sequences that are locally asymptotically unbiased or α‐quantile unbiased. This places strong limits on estimators, bias correction methods, and inference procedures, and provides motivation for considering other criteria for evaluating estimators and inference procedures, such as local asymptotic minimaxity and one‐sided quantile unbiasedness.     

Supply Chain Management of Fresh Products with Producer Transportation*

This article considers a class of fresh‐product supply chains in which products need to be transported by the upstream producer from a production base to a distant retail market. Due to high perishablility a portion of the products being shipped may decay during transportation, and therefore, become unsaleable. We consider a supply chain consisting of a single producer and a single distributor, and investigate two commonly adopted business models: (i) In the “pull” model, the distributor places an order, then the producer determines the shipping quantity, taking into account potential product decay during transportation, and transports the products to the destination market of the distributor; (ii) In the “push” model, the producer ships a batch of products to a distant wholesale market, and then the distributor purchases and resells to end customers. By considering a price‐sensitive end‐customer demand, we investigate the optimal decisions for supply chain members, including order quantity, shipping quantity, and retail price. Our research shows that both the producer and distributor (and thus the supply chain) will perform better if the pull model is adopted. To improve the supply chain performance, we propose a fixed inventory‐plus factor (FIPF) strategy, in which the producer announces a pre‐determined inventory‐plus factor and the distributor compensates the producer for any surplus inventory that would otherwise be wasted. We show that this strategy is a Pareto improvement over the pull and push models for both parties. Finally, numerical experiments are conducted, which reveal some interesting managerial insights on the comparison between different business models.     

Net Neutrality,Broadband Market Coverage,and Innovation at the Edge*

Net neutrality (NN) is a widely debated policy issue that has the potential to alter the dynamics of accessing online content. The focal point of the debate lies in whether broadband service providers (BSPs) should be allowed to charge content providers for the preferential delivery of their digital content. This decision will affect broadband market coverage for end consumers as well as the issues of long‐term competition and innovation in the market of digital content. Our research aims to analyze and address these issues. We propose a game theoretical model with three players—the BSP, the content providers, and the consumers—where the BSP, in its capacity as a gatekeeper between the content providers and the consumers, is modeled as a two‐sided market platform. We find that while abandoning the principle of NN might sometimes result in increased consumer surplus and broadband market coverage, it can also hinder the ability of startups to compete against established rivals and thus reduce innovation at the edge. The results should be of great interest to policymakers as they debate on this very crucial issue.     

Competitive Capabilities among Manufacturing Plants in Developing,Emerging, and Industrialized Countries: A Comparative Analysis

Competitive capabilities have been defined as a plant's actual performance relative to its competitors, with the most commonly investigated capabilities being quality, delivery, flexibility, and cost. However, most research in this realm has investigated capabilities within developed countries, and neglected the context of developing and emerging nations, which are increasingly becoming viable economic entities in global supply chains in their own right. The present study fills this gap and carries out a comparative analysis of competitive capabilities among plants in developing, emerging, and industrialized countries. Basing our arguments on the resource‐based view of the firm, we suggest that the influence of competitive capabilities on each other varies among plants in differentially industrialized regions. Specifically, we suggest that, on average, competitive capabilities tend to influence each other to a greater degree in plants in emerging and developing countries compared to industrialized countries. Along similar lines, we suggest that the influence of the four competitive capabilities on performance improvement is manifested more strongly among plants in emerging and developing countries than among plants in industrialized nations. We investigate these contentions with data from 1,211 plants in 21 countries. The results are particularly important for decision makers as they decide on the increasingly global location of their manufacturing operations or the configuration of their global supply chains.     

A Study of Online Auction Sellers’ Intention to Switch Platform: The Case of Yahoo!Kimo Versus Ruten_eBay*

The study of consumers’ switching from one service provider to another has a long tradition in economics, information systems, and marketing. The emergence of electronic commerce presents new challenges in understanding consumers’ switching intentions in the context of e‐commerce in general and online auctions in particular. With the abundance of literature on online auctions, there is a surprising lack of research on auction sellers’ intentions to switch from one online auction platform to another. Using the competition between Yahoo!Kimo and Ruten_eBay, two leading auction platforms in Taiwan, as the backdrop, we developed a research model and collected empirical data based on this real case to study what factors influence auction sellers to switch to a competing service provider. We find that the higher the procedural switching costs, financial switching costs, relational switching costs, site design quality, or interaction quality, the lower the intention of an auction seller to switch to a competing auction service provider. A higher perceived transaction fee, however, leads to a higher switching intention.     

Dynamic Competition With Random Demand and Costless Search: A Theory of Price Posting

This paper studies a dynamic model of perfectly competitive price posting under demand uncertainty. Firms must produce output in advance. After observing aggregate sales in prior periods, firms post prices for their unsold output. In each period, the demand of a new batch of consumers is randomly activated. Existing customers who have not yet bought and then new customers arrive at the market in random order, observe the posted prices, and either purchase at the lowest available price or delay their purchase decision. We construct a sequential equilibrium in which the output produced and its allocation across consumers is efficient. Thus consumers endogenously sort themselves efficiently, with the highest valuations purchasing first. Transaction prices in each period rise continuously, as firms become more optimistic about demand, followed by a market correction. By the last period, prices are market clearing.     

Stability and Preference Alignment in Matching and Coalition Formation

We study matching and coalition formation environments allowing complementarities and peer effects. Agents have preferences over coalitions, and these preferences vary with an underlying, and commonly known, state of nature. Assuming that there is substantial variability of preferences across states of nature, we show that there exists a core stable coalition structure in every state if and only if agents' preferences are pairwise‐aligned in every state. This implies that there is a stable coalition structure if agents' preferences are generated by Nash bargaining over coalitional outputs. We further show that all stability‐inducing rules for sharing outputs can be represented by a profile of agents' bargaining functions and that agents match assortatively with respect to these bargaining functions. This framework allows us to show how complementarities and peer effects overturn well known comparative statics of many‐to‐one matching.     

The sustainability of China’s Urban Employees’ Pension Programme: A case of getting old before getting rich?

This article examines the sustainability of China’s Urban Employees’ Pension Programme – the main component in China’s overall old‐age support system. It looks at the sustainability of the programme generally and, in particular, at case studies of two areas (Tianjin municipality and Guangxi province) to highlight both the extent of regional variations and the common challenges facing Chinese policy‐makers. It discusses a number of key issues that should assist policy‐makers to address the challenge of population ageing. It concludes that the challenge facing China is no more severe than that already faced by other countries in Europe and Asia. Moreover, the ageing of the population is not uniform across the regions of China. Consequently, those areas where the demographic shift is more advanced will provide some opportunity for policy experimentation. Given the experience to date of slow progress on various aspects of pension policy reform, the article suggests that it seems unlikely that paradigmatic change will be significant. Nonetheless, the study suggests a range of parametric policy measures that China should consider. The challenge facing China’s policy‐makers is to ensure that China gets old and rich at the same time.