BEYOND KEYNESIANISM AND MONETARISM

Though there is consensus among economists about microeconomic theory, neither the Keynesian nor the Monetarist theory of macroeconomics has attracted a consensus, presumably because neither is compelling enough to persuade the skeptical. A new approach to the subject that combines insights from each of the familiar schools with considerations that both schools have overlooked is accordingly offered here. This argument accepts the evidence that involuntary unemployment and depressions sometimes occur and thus rejects the finding of the new classical or equilibrium macroeconomics, that markets always clear and that all individuals and firms are in equilibrium. It also rejects the Keynesian assumption of wages or prices arbitrarily fixed at disequilibrium levels, and insists that any adequate theory must show what interests are served by the existence of involuntary unemployment. The theory offered here shows that an institutional or organizational arrangement common in all societies which have experienced widespread unemployment and deep recessions entails that many firms and individuals will be in disequilibrium. This disequilibrium becomes more severe when there is unexpected deflation or disinflation. The disequilibrium is of precisely the type commonplace in recessions and entails involuntary unemployment. The theory also shows how groups of individuals and firms can gain from practices that entail involuntary unemployment and underutilization of resources for others.     

DRIVERS OF INTERNET PURCHASING SUCCESS

The development of the Internet as a business tool over the past 5 years has been phenomenal, causing a period of chaos and creative destruction. E‐commerce has been hyped as a catalyst for vast streamlining of the supply chain. Yet, in a time of such phenomenal change, the focus tends to be on the large picture. Many details of how a new technology should be or is employed tend to be unknown or ignored. However, as the technology matures and stabilizes, one of the primary factors that separate winners from losers is the way in which the technology is implemented and operated on a daily basis. This study examines the ways in which companies utilize the Internet to streamline their purchasing process. A survey of 416 customers of a major Internet retailer of commodity office supplies reveals important relationships between web site design, employee work environments, Internet strategy, and purchasing performance. Our sample of companies consists of firms that have ordered office supplies at least once using the Internet. Our data indicate that companies do realize performance benefits from utilizing the Internet as a purchasing tool. Furthermore, the data suggest factors that facilitate purchasing process improvements. These factors can be utilized by both buying and selling companies to improve their proprietary processes to maximize the benefits of e‐commerce as a purchasing tool.     

EXPERIMENTAL COMPARISONS OF AUCTIONS UNDER SINGLE-AND MULTI-UNIT DEMAND

An English clock auction and a sealed-bid auction with lowest accepted-bid pricing are studied in a controlled laboratory setting. Buyers bid for either a single unit or two units of the good. The sealed-bid auction generates more revenue than the English clock auction in both cases. The revenue from the English clock auction is lower in the two-unit demand environment than in the single-unit demand environment, due to strategic demand reduction on the part of bidders. (JEL C92, D44)