Technical Competition Research Articles

Auctioning Incentive Contracts

This paper draws a remarkably simple bridge between auction theory and incentive theory. It considers the auctioning of an indivisible project among several fi rms. The firms have private information about their future cost at th e bidding stage, and the selected firm ex post invests in cost reduct ion. The authors show that (1) the optimal auction can be implemented by a dominant strategy auction that uses information about both the first bid and the second bid; (2) the winner faces a (linear) incenti ve contract; (3) the fixed transfer to the winner decreases with his announced expected cost and increases with the second lowest announce d expected cost; and (4) the share of cost overruns borne by the winn er decreases with the winner's announced expected cost. Copyright 1987 by University of Chicago Press.

Recent Trends in Norwegian Higher Education

In the late 1960s and early 1970s, two new universities and more than ten regional colleges were founded in Norway. In addition, more than 100 schools and colleges have been upgraded to higher education institutions in recent years, signifying a strong emphasis on decentralisation. Lately, however, this emphasis has shown signs of weakening while at the same time the classical universities have come back into the limelight. Recent constraints on public spending have obviously influenced these changes. Though rich in oil and energy, Norway has increasingly been unable to remain immune from international economic difficulties. Besides curtailing further expansion of higher education, this climate of concern has led to a renewed interest in the contribution of higher education to national economic well-being. A recent government commission pointed to education and research at the universities as important instruments for improving Norway's technical and industrial capabilities and international competitiveness. No major planning document or White Paper on higher education has been published since the early 1970s, and in the last few years the sector, has attracted little public attention or controversy, though the Social Democrats' recent proposals for extended access to higher education as well as for more expensive student loans are notable exceptions. In the last Long-Term Programme, the previous government announced the publication of a White Paper on higher education in the next fouryear planning period (1982-85). With the Social Democrats losing the 1981 parliamentary election, however, and a conservative government taking office for the first time in 50 years, some policy changes in this area are perhaps to be expected. Since 1975, enrolment figures have increased in the non-university part of higher education while remaining at a virtually constant level in the universities. An increase in the percentage of female students as well as a greater influx of older students-many with substantial work experience-have considerably changed the composition of the student body in most institutions. Furthermore, the degree structure has been revised, most significantly at graduate level where an AngloAmerican type of doctorate has been introduced in several fields of study. (Career opportunities at the universities have often been limited, and 'aging without newcomers' has been the rule in many university departments (Skoie, 1976). Even so, there are shortages of qualified applicants for academic posts in

Development of the Production Apparatus

In developed socialist society the material and technical base of communism is created directly, and more and more attention is devoted to the general progress of technology and to the qualitative development of the means of labor. The party and the government are taking substantial measures to raise the level of the technical base of socialist production, as attested to by the July 1978 decree of the Central Committee of the Communist Party of the Soviet Union and the USSR Council of Ministers "On the Further Development of Machine Building in 1978-80" and the early 1980 decree "On the Significant Rise in the Technical Level and Competitiveness of Metalworking, Foundry, and Woodworking Equipment and Tools."

Competition in the Defense Industry: An Economic Paradox

Recent public attention of government activities have centered around issues of inflation, the size of the federal budget allocated to defense, ecology and social reform. However, some of the most fundamental problems encountered by the government are the determination of its defense policies and its effectiveness in carrying them out. The United States being a major world power has no choice but to keep a strong military position and since most Americans believe in maintaining an adequate defense system, there is a continual debate concerning the government's level of efficiency in sustaining an efficient military-industrial complex. Judging from some recent literature,' the old question of how to accomplish an effective defense procurement program has not been dealt with decisively. The purpose of this paper is to show that the federal government in striving for procurement efficiency of defense products has created a situation of inadequate competition and industrial concentration by overregulation and inefficient administration. In order to explore these competition ambiguities further, perhaps a cursory examination of the present environment will give the reader cognizance of the current level of competition in the government-industry relationship. There are two phases of competition that must be noted in the government defense market. The first is the lack of technical competition created by an inadequate government selection process

Research Coöoperation in the Rubber Industry

Abstract One of the outstanding observations which one may make of the rubber industry of today is the high degree of technical competition. Research laboratories are large and their members are well trained and resourceful. The achievements of these groups of competing technologists find their way to the public as patented articles or methods and scientific articles in the literature. In the majority of cases the new products or methods are promptly studied by competing laboratories and ways are found to accomplish the same end by means which do not infringe a given patent. Therefore, much of the energy of research is expended merely in the effort to keep pace with competitors. Because of this price competition and the narrow margin of total profits, there is a constant pressure upon technical groups to apply their energies to the solution of immediate needs. The physical proximity of the laboratories to the factories and the force of competition usually lead these men to appraise new ideas in the light of practicability. Can the trick be turned within one or two years? If not, efforts should be expended in apparently more fruitful fields.