This paper considers a Cournot duopoly game with endogenous organization structures. There are two firms A and B who compete in the retail market, where A is more efficient than B. Prior to competition in the retail stage, firms simultaneously choose their orga- nization structures which can be either ‘centralized’ (one central unit chooses quantity to maximize firm’s profit) or ‘decentralized’ (the retail unit chooses quantity to maximize firm’s revenue while the production unit supplies the required quantity). Identifying the (unique) Nash Equilibrium for every retail-stage subgame, we show that the reduced form game of organization choices is a potential game. The main result is that with endogenous organiza- tion structures, situations could arise where the less efficient firm B obtains a higherprofit than its more efficient rival A.
We show that provided B is not too inefficient compared to A, then for intermediate sizes of the market there are Nash equilibria (both pure and mixed) under which the inefficient firm B obtains a higherprofit than its more efficient rival A. To the best of our knowledge, the result that a cost disadvantage can lead to a higherprofit has never appeared before in the literature of industrial economics.
The Average of 3 Iowa Grass Milk® Market Farms Even though it may not be the most profitable method to milk cows, a few producers are proving it can be done, and pretty profitably. Three Grass Milk® Market farms receiving a $5 per cwt. milk price premium were analyzed and compared with the other groups. They received an average milk price in 2015 of $41.11 with total production costs of $32.85 for a net income per cwt. equivalent of $8.25. Unpaid labor earnings were $29.40 per hour with returns to assets of 9.02%. All three of these farms made the HigherProfit group in the Iowa organic dairy study and would have also earned that ranking in the study of the 44 farms analyzed nationally.
managerial and supervisory numbers, as well as chief officer numbers, are negatively correlated with ROA and ROE measurements, which are two benchmarks that are often used by investors and analysts to determine whether a company or industry is performing well enough to warrant further investment. However, greater management and supervisory numbers do seem to somewhat positively impact productivity measurements (S/E is positively associated with a greater number of chief officers but not management and supervisors) and definitely profitability measurements (PM and Pr/E). On average, a greater number of managers and supervisors appear to be able to extract greater profitability per dollar but not returns to investors or owners of asserts. This would indicate possibly that many industries have invested heavily in assets and have a great deal of equity financing since even high profit margins and high profit margins per employee cannot raise ROA and ROE. The other possibility is that these industries have low sales volumes and few employees, and therefore high profit margins and high profits per employee are not enough to raise ROA and ROE. The industries with the greatest number of managers, chief officers and supervisors tended to be those in the F/I/RE industries, and their returns tended to be lower than those of most of other industries. At the same time, their after- tax profit margins were larger on average than other industries. This appears to be the case before and after the Great Recession, although slightly higherprofit margins existed before the Great Recession. When one looks at the impact of the salaries of managers and supervisors and chief officers on the performance measurements, there is no impact on ROA and ROE, a
Theoretically, the effect of rate regulation (RATEREG) depends on whether the state political environment favors insurers or consumers. If the insurance industry lobby is more powerful, Stigler’s (1971) “capture theory” implies that regulators will be pressured to set rates at levels that favor the industry, indicating higherprofit margins. Alternatively, if com- mercial insurance purchasers have greater legislative clout, Peltzman’s (1976) “political support theory” suggests that rates would be set at lower levels and insurer profit margins would be lower. Although previous research on personal auto lines did not find rate regulation to have a significant impact on profitability (Bajtelsmit and Bouzouita, 1998), the analogy to commercial lines is not clear. Purchasers of commercial insur- ance are generally better informed and more likely to shop for the best rates than are individuals. Thus, since pricing is of critical importance in a more competitive market, insurers may have more to gain by lobbying for rate increases in those lines.
relevant outcomes (Team A wins, draw, Team B wins, called “three-outcome” gambles here). More “complex” tasks include forecasting the first goalscorer (at least 20 players could score the first goal), or the final match scoreline (an indefinite but large number, e.g., Team A wins 4-3). An economic consideration is that complex soccer gambles have higher bookmaker profit margins than simple gambles (Ayton, 1997; Dixon & Pope, 2004; Forrest & Simmons, 2001; Newall, 2015). The bookmaker profit margin can be calculated by summing the implied probabilities from quoted odds for a complete set of events (Kuypers, 2000). 1 The higher these odds sum to above probability = 1, the higher the bookmaker profit margin is. For example, a study of bookmaker odds over the 2014 soccer World Cup found average bookmaker profit margins of 4.6% for simple three-outcome gambles but much higherprofit margins for more complex first goalscorer (32.3%) and scoreline (21.9%) gambles (Newall, 2015).
Abstract. The transport sector has a significant impact on the performance of the Czech economy. Transport companies, of course, have their own specificities, whether they deal with ecology or the financial and economic situation. It is precisely the economic position of a transport company that needs to be analysed in order to identify the need for change, to predict the further development of such company. For analysis, a variety of methods is used, of which artificial neural networks are a very interesting and effective tool. The aim of this paper is to make a cluster analysis of transport companies operating in the Czech Republic based on this tool. The data of the financial statements of transport companies in the Czech Republic in 2016 are taken into account. Only some items from the financial statements are selected for analysis. The file is then subjected to a cluster analysis, specifically using the Kohonen networks – Statistica software. In accordance with the methodology of the contribution, the data is divided into three sets - training, testing and validation. Companies were divided into clusters in the 10x10 Kohonen Map. Some clusters are significant in terms of number of companies. These clusters are further analysed. Specific conclusions are made: A larger company generates, on average, a higher operating profit, larger companies achieve higher ROE and, in the case of a larger company, the financial leverage acts more positively.
(ii) Accrual concept – A fundamental accounting concept often referred to as the ‘matching concept’, which means that profit is the difference between revenue and expenses. The accrual concept requires a business to show in its final accounts for the accounting period all expenditure that has been incurred in that period – whether it has been paid or not. Also, all revenue earned for the period should be shown, whether it has been received or not. (Refer to text, Section 12.5.)
Study on Small Scale Enterprises (SSEs) has been recognized as one of the means by which accelerated economic growth and rapid industrialization can be achieved (Sauser, 2005). In view of this, the study examined determinants of source of credit by small scale entrepreneurs in Oyo state, Nigeria. Questionnaire was adopted for the collection of data from 350 respondents through stratified sampling techniques, while multinomial model was used to analyze the data. The results of the estimated multinomial logit model with personal savings as chosen base are that: entrepreneurial choice of credit from various sources revealed that, education and value of assets were positively correlated to banks, while education was positively significant to relatives/friends and profit plough back had positive sign to multiple sources. It was concluded that, the use of specific credit sources, either formal or informal, was justified as the only source available. It was against this background that small- scale enterprises must be profitable in order to grow and be able to attract more external finance. It is therefore necessary to provide a policy environment that affords the necessary incentives for enterprise growth.
The results are presented in Table 4, columns 1 through 4. The top panel displays results for the sample of FI plans; the bottom panel displays the same for SI plans. We weight each observation by the corresponding mean plan-level enrollment and cluster standard errors by plan. The coefficient estimates show that for-profit ownership is associated with premiums that are 4-5 percent higher for FI plans, and 2-2.5 percent higher for SI plans. All estimates are significant at p < 0.01. There is modest evidence of favorable selection into FP plans that is correlated with the second-order interaction terms. For example, the FP coefficient increases upon inclusion of employer-market interactions, suggesting employer-market groups with heavy FP reliance have other characteristics associated with lower premiums, even controlling for employer and market fixed effects. When all three sets of second-order interactions are included, the coefficient on FP increases by 0.8 percent and 0.6 percent for the FI and SI plans, respectively, and this difference is statistically significant in the FI sample. These results provide further motivation for an empirical strategy that goes beyond estimating correlations between premiums and ownership status, as there are clearly unobservable factors correlated with both.
With the debate about the value of for-proﬁ t higher education occurring at the national level, for-proﬁ t colleges and universities are being closely evaluated regarding student outcomes, graduation rates, placement rates, and student debt loads (Epstein, 2010a; Hentschke, Lechuga, & Tierney, 2010b; Irons & Wright, 2010). However, there is little empirical research on the for-proﬁ t sector; most of the literature is descriptive or historical in nature. This study contributes to the current body of literature regarding student satisfaction and the student experience in the for-proﬁ t sector. The ﬁ ndings from this study also provide relevant information to the administrators of for-proﬁ t colleges and universities about how student satisfaction can be used to enhance the student experience and gauge a student’s intent to persist. Additionally, the results inform administrators and provide direction for programs and policies that support student persistence within the for-proﬁ t environment.
exhausting crop and proper replenishment of soil with adequate amounts of nutrients is required for getting sustained higher yield. The present study indicates that even in the absence of chemical fertilizers, higher yield can be obtained by proper supplementation of nutrients through cheaper and easily available organic sources, based on soil testing. The yield increase observed in this study conducted for five consecutive years is contrary to some of the reports that crop yields under organic management are 20 – 40% lower than for comparable conventional systems (Stockdale et al. 2001). However, the present study indicates that there is great scope for organic farming in tropical tuber crops, especially elephant foot yam.
In this model the basic ensemble consists of a source and a sink, three basic ensembles constitute an organism or company (both an ensemble of ensembles) and nine organisms/companies form a population or a branch of industry. Each organism is composed of either connected or unconnected ensembles. Linear cost-functions and saturating benefit- functions create superadditivity (better net profit) through a rational and peaceful transfer of substrate within a basic ensemble. Transfers by force and deception are not jet considered. All ensembles have an identical and limited concentration range and all concentrations are of the same probability. Random mutations change cost factors (cf), Michaelis-Menten constants (Km) and the maximal reaction velocities (Vmax) in source and sink of the basic ensemble. Km and Vmax shape a saturating benefit-function in Michaelis-Menten type enzyme kinetics resembling the utility function in economics. The result of mutations in the basic ensemble is a higher or lower cumulative superadditivity of an organism/company and its master if installed. The most effective organisms or masters prevail within the population. Recombination of ensembles between organisms accelerates evolution. Independent of the starting point and with or without a fix cost I observe the evolution towards strong asymmetry and inequality with a division of labour resulting in the development of a collector and a manufacturer. Although I observe a win-win situation reciprocity will become a necessity.
The profit and loss account for Frying Tonite (a takeaway) for the year 2013–14 is shown to the right. It is normal practice for profit and loss accounts to be produced for 12 months trading. However, the 12 months do not have to run from January to December – they can cover any 12 consecutive months.
Next, consider the case where …rst and second-period productivities are independent, i.e. = 0. When the agent is risk neutral (Example 2), second-period e¤ort does not depend on the productivity realization and is equal to the …rst-best level. As explained in the previous subsection, the reason is that, when types are independent, distorting e¤ort in the second period does not have any e¤ect on rent extraction. Things are di¤erent under risk aversion. In this case, the agent’s responsiveness to second-period incentives is in‡uenced by the level of compensation he received (or was promised) in period one as an informational rent to induce him to truthfully reveal his productivity (as captured by the integral term in (19)). Because agents with a higher period-1 productivity receive higher information rents, this in turn implies that incentivizing period-2 e¤ort from them is more costly than incentivizing the same level of e¤ort from less productive agents. As a result, the optimal period-2 e¤ort policy is decreasing in 1 when types are independent, as shown in the second graph
In 2013, outstanding student loan balances in the United States exceeded $994 billion. This growing volume of student debt has had far-reaching consequences for both individual borrowers and society as a whole. In many ways, the federal student loan program, available to students under the Higher Education Act (HEA), has achieved its goal of making higher education more accessible. Undergraduate college enrollment increased from 10.5 million students in 1980 to 17.6 million students in 2009. Despite the benefit of increased enrollment, however, the federal loan program has been criticized for increasing student loan debt and contributing to the “student loan crisis.” This student loan crisis threatens to undermine the purpose of the HEA by making higher education less accessible to Americans.
the optimal procurement time is independent of the expected demand. In the pre-season order case, the optimal procurement time is independent of the realization of pre-season orders (but the optimal quantity is not.) We characterize the optimal procurement time and quantity in both cases and analytically establish the directional effect of many important supply and market attributes. While, one might expect that, all else being equal, a firm with pre-season orders would procure closer to the selling season (to take advantage of increasing demand- forecast accuracy) than would a firm without pre-season orders, this is not necessarily true. We prove that this intuition is correct in the case of a deterministic leadtime. However, in a stochastic-leadtime setting, the firm with pre-season orders may procure earlier than the no pre-season order firm. The reason lies in the interplay of the demand and supply risk. One might also expect that a firm should benefit from a decrease in the leadtime delay probability, that is, the firm’s expected cost should decrease as the probability of delay decreases. We prove that this intuition is only partially correct. While the firm prefers a perfectly reliable leadtime to an unreliable leadtime, it does not necessarily prefer a leadtime with lower delay probability to a leadtime with higher delay probability. In fact it may strictly prefer a leadtime with higher delay probability. We prove that the firm’s optimal expected cost decreases as the demand mix shifts towards pre-season orders. We show that the marginal value of pre-season orders increases as the demand-mix shifts from in- to pre-season orders. That is, the firm realizes increasingly significant cost savings as it encourages more pre-season orders. We show that pre-season orders makes the firm less sensitive to the variance of the leadtime delay.
The results of this paper have certain limitations, which points out several re- levant topics in further research. Firstly, we assume the degree of relative per- formance is common knowledge for both retailers, but in reality the retailers may not see his rival’s emphasis on relative performance, so the game between retailers is more likely to be incomplete information game. Precisely speaking, if the enterprise has no idea how the rival emphasis on relative performance, or he only knows the probability distribution of rival’s degree of relative performance, what the final equilibrium would be? Secondly, we only concern about the com- petition between retailers, which is the end of a supply chain. However, there is no doubt that retailers’ choices will make a big influence on manufacture’s prof- it, thus the manufacture may participate in the retailers’ game by controlling the wholesale price, so that the situation of tripartite game may take place, which means there should be a three-stage game. In the first stage, manufacture decides his wholesale price, then retailers choose their profit strategy and in the third stage, they compete on quantity. Finally, only homogeneous goods are taken into consideration in our study, so what the equilibrium strategy profile will be if we add substitutability into our basic model. How does the substitutability of goods influence retailers’ choices? It is also worth further research.
manufacturers must produce and sell the tests to the hospitals that allow them to make a profit and still be within the reimbursement schedule. Coupled with China’s lower cost of manufacture, and the added cost of transportation for foreign products, this tends to favor “Made-in-China” products.