Evaluating communication strategies for public agencies: transparency, opacity, and secrecy
This paper analyses in a simple global games framework welfare eﬀects stemming
from diﬀerent communication strategies of public agencies if strategies of agents are complementary to each other: communication can either be fully transparent, or the agency opaquely publishes only its overall assessment of the economy, or it keeps information completely secret. It is shown that private agents put more weight to their private information in the transparent case than in case of opacity. Thus, in many cases, the appropriate measure against overreliance on public information is giving more details to the public instead of denying access to public information.
Local Public Utilities' Profits and Municipal Expenses in Germany: An Empirical Analysis
Proceedings of the 99th Annual Conference on Taxation (November 16-18), Washington DC,
The article offers information on profits and municipal expenses of local public utilities in Germany. It reveals that cities and municipalities faced rising expenses over the last years and the only way for local governments to avoid budgetary bottlenecks is to postpone infrastructure investment and increase short-term borrowing. The countries municipalities tried to overcome such difficulties by increasing local public utilities' profits.
A Game Theoretic Analysis of the Conditions of Knowledge Transfer by New Employees in Companies
The availability of knowledge is an essential factor for an economy in global competition. Companies realise innovations by creating and implementing new knowledge. Sources of innovative ideas are partners in the production network but also new employees coming from another company or academia. Based on a model by HECKATHORN (1996) the conditions of efficient knowledge transfer in a team are analysed. Offering knowledge to a colleague can not be controlled directly by the company due to information asymmetries. Thus the management has to provide incentives which motivate the employees to act in favour of the company by providing their knowledge to the rest of the team and likewise to learn from colleagues. The game theoretic analysis aims at investigating how to arrange these incentives efficiently. Several factors are relevant, especially the individual costs of participating in the transfer. These consist mainly of the existing absorptive capacity and the working atmosphere. The model is a 2x2 game but is at least partly generalised on more players. The relevance of the adequate team size is shown: more developers may increase the total profit of an innovation
(before paying the involved people) but when additional wages are paid to each person a greater team decreases the remaining company profit. A further result is
that depending on the cost structure perfect knowledge transfer is not always best for the profit of the company. These formal results are consistent with empirical studies to the absorptive capacity and the working atmosphere.
Non-market Allocation in Transport: A Reassessment of its Justification and the Challenge of Institutional Transition
50 Years of Transport Research: Experiences Gained and Major Challenges Ahead,
Economic theory knows two systems of coordination: through public choice or through the market principle. If the market is chosen, then it may either be regulated, or it may be fully competitive (or be in between these two extremes). This paper first inquires into the reasons for regulation, it analyses the reasons for the important role of government in the transportation sector, especially in the procurement of infrastructure. Historical reasons are seen as important reasons for bureaucratic objections to deregulation. Fundamental economic concepts are forwarded that suggest market failure and justify a regulatory environment. The reasons for regulation cited above, however, may be challenged; we forward theoretical concepts from industrial organization theory and from institutional economics which suggest that competition is even possible on the level of infrastructure. The transition from a strongly regulated to a competitive environment poses problems that have given lieu to numerous failures in privatization and deregulation. Structural inertia plays an important role, and the incentive-compatible management of infrastructure is seen as the key element of any liberal transportation policy. It requires that the setting of rules on the meta level satisfies both local and global efficiency ends. We conclude that, in market economies, competition and regulation should not be substitutes but complements. General rules, an "ethic of competition" have to be set that guarantee a level playing field to agents; it is complimented by institutions that provide arbitration in case of misconduct.