The ‘unobjectionable’ service: A legislative history of childminding

SUMMARY. This paper is a survey of state involvement in childminding, the legislation which has arisen from it and the legislative changes for which child care workers are now campaigning. After a century of legislation to protect young children, day care is still seen as no more than ‘unobjectionable’ with the major reforms of the 1987 White Paper omitted from the current Children Bill. A review of legislative discussions alerts us to contradictions which have caused problems for the registration and support of childminders to date. The debate on new law can he informed by the organised experiences and opinions of childminders themselves.     

DO SUNK COSTS MATTER?

That sunk costs are not relevant to rational decision making is often presented as one of the basic principles of economics. When people are influenced by sunk costs in their decision making, they are said to be committing the “sunk cost fallacy.” Contrary to conventional wisdom, we argue that in a broad range of situations, it is rational for people to condition behavior on sunk costs because of informational content, reputational concerns, or financial and time constraints. Once all the elements of the decision‐making environment are taken into account, reacting to sunk costs can often be understood as rational behavior. (JEL D0, D01, D8, D81, D83, D9, D90)     

PRODUCT BUNDLING AND INCENTIVES FOR MERGERS AND STRATEGIC ALLIANCES

This paper analyzes firms' choice of a merger or a strategic alliance in bundling their products with other complementary products. Tying two products of unequal value makes them equally valuable as they become inseparable for purchase. Consequently, firms can charge a higher price for the bundled products than before. If foreclosure is not the main purpose of bundling, firms would prefer strategic alliances to mergers because mergers only intensify competition by internalizing the complementarities of two products. In equilibrium, bundling occurs only through strategic alliances. (JEL L4, L11, L13, L23)