Publications of Baniak, A.
Industry Self-Regulation, Subversion of Justice, and Social Control of Torts
We characterize the comparative efficiency of industry self-regulation as means of social control of torts. Industry self-regulation is, unlike liability, which is imposed by courts ex post, similar to government regulation in that self-regulation acts before the harm is done. However, the industry, as compared to government regulators, possesses better information about the regulatory issue at stake. Furthermore, a pro-industry bias inherent to self-regulation will also arise under alternative legal arrangements when adjudicators are vulnerable to pressure by industry members. We show how social desirability of delegating regulatory authority to the industry varies with ease of subversion of courts and regulators, tightness of extralegal constraints under self-regulation, status quo legal regime, and industry hazardness. Our findings clarify when industry self-regulation could be an attractive institutional arrangement for developing and transition countries.Keywords: industry self-regulation, social control of torts, subversion of justice, strict liability, government regulation, industry hazardness
Does Demand Uncertainty Influence Location of Industry?
The analysis presented in this paper shows that in countries with relatively high wages risk-averse firms operating in perfectly competitive markets will reduce production of commodities with high uncertainty of demand. Such commodities will be produced mainly in countries having sufficiently lower labor costs. Thus, an increase in demand uncertainty may shift the production from developed to developing countries even though additional per unit transaction and transportation costs in the latter offset the advantage of lower wages. The predictions of the model are then checked through an analysis of the toy industry concerning the level of demand uncertainty and location of outsourced production activities.
On the Determinants of Foreign Direct Investment in Transition Economies
Foreign direct investment (FDI) brings host countries capital, productive facilities, and technology transfer as well as new jobs and management expertise. Thus, it is important to understand why in many transition countries FDI inflow is lower than expected. The goal of this study is to explore some important factors determining flow of FDI into transition countries. In particular, we analyze the legal environment for FDI in some transition economies. Then we model the impact of stability of the economic and legal environment on the pattern of FDI. Our analysis shows that (1) higher variability of basic macroeconomic fundamentals reduces the flow of FDI, (2) high volatility of fiscal and business regulations makes the inflow of FDI smaller, and (3) macroeconomic and legal instability leads to adverse selection of the investors. Based on theoretical findings we formulate a clear message to policy makers stating that in order to attract significant inflows of long-term and nonspeculative foreign capital, first of all, a stable economic and institutional environment is needed. ABSTRACT FROM AUTHORCopyright of Problems of Economic Transition is the property of M.E. Sharpe Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
The volatility of prices in the English and Welsh electricity pool
The volatility of spot prices has been a notable feature of the English and Welsh Electricity Pool since its formation in 1990. This study investigates the possibility that the volatility of spot prices is strongly affected by the functioning of the contract market for electricity. This paper suggest that generators with market power may have an incentive to create volatility in the spot market in order to benefit from higher risk premia in the contract market. A simple theoretical model is used to illustrate this argument. Nonparametric techniques are used to test for changes in volatility after the expiry of the coal contracts in 1993 and during the price cap of 1994-1996. Strongly significant increases in volatility are found in the latter period.
A note on comparative statics for a labor-managed firm engaged in exporting
The behavior of a labor-managed firm (LMF) producing both for the domestic market and for export is analyzed assuming that it competes with a foreign profit-maximizing firm (PMF) in the export market. Conventional wisdom suggests that a LMF facing an increase of demand in the foreign market will cut sales in this market. We show that, with high enough sales in the domestic market, the LMF will sell less at home and more abroad after an introduction of an export subsidy. We also show that, under the same condition, the LMF will increase foreign sales after a devaluation of the domestic currency. Thus, the LMF reacts in a manner similar to that of a PMF.
Organizational restructuring in response to changes in information-processing technology
<div class="Abstract"><a name="Abs1"></a><span class="AbstractHeading">Abstract. </span> This paper examines the effects of changes in information-processing technology on the efficient organizational forms of data-processing in decision-making systems. Data-processing is modelled in the framework of the dynamic parallel processing model of associative computation with an endogenous set-up costs of the processors. In such a model, the conditions for efficient organization of information-processing are defined and the architecture of the efficient structures is considered. It is shown that decreasing returns to scale of the function describing data- processing technology and the information overload of the system are necessary and sufficient conditions for the hierarchical information- processing, respectively. Moreover, the size of the efficient structures is determined exclusively by their information workload and the current state of information-processing technology. </div>