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Research Summary: This research develops a multilevel framework to study optimal distinctiveness (OD) at two levels. We distinguish between within‐organization distinctiveness and between‐organization distinctiveness of product design and examine how they independently and interactively influence performance. Analyzing a unique data set of 2,203 model‐year observations for automobiles sold in the U.S. market from 2001 to 2016, we found that while within‐organization distinctiveness of product design hurts market performance, between‐organization distinctiveness of product design increases market performance. Moreover, when between‐organization distinctiveness of product design is high, the negative impact of within‐organization distinctiveness of product design on performance is weakened. These findings contribute to OD research by improving the understanding of OD as a multilevel construct and elaborating on its contextual contingency. Managerial Summary: How should multiproduct organizations design their products to achieve better performance? This article provides a multilevel perspective that encourages managers of multiproduct organizations to consider different frames of references when designing products. We suggest that a product's design should be consistent with the prototypical design of its organization, whereas the prototypical design of this organization should be different from the average design in the industry. We also found that an atypical design is more desirable if it is from an organization known for distinctive designs in its industry. Our findings help managers of multiproduct organizations achieve the optimal levels of design distinctiveness at both the product and organizational levels. [ABSTRACT FROM AUTHOR]

The supply of credit to agriculture in the United States has been affected by a variety of financial regulations over time. One recent regulatory change is the Dodd‐Frank Act in 2010 that includes the Ability‐to‐Repay rule increasing the operating costs of banks. Although the rule increases the safety of the bank's portfolio, it requires more compliance costs to verify borrower's income status. Given that the verification of the ability to repay increases the costs of lending to all banks, this study examines the effects of bank regulations adding the compliance costs on small or community‐oriented banks. From the framework of multiproduct firm, we estimate the differential input demand and output supply systems to identify the banks' behavioral changes due to the compliance costs. The results indicate that changes in lending and input use have occurred due to the imposition of the compliance costs. [ABSTRACT FROM AUTHOR]

Measures of strategy made at the product and business level were compared using data from a large multiproduct U.S. firm. The business-level results were not found to be good indicators of product-level strategies. Also, contrary to previous research, no evidence of the use of combined cost-leadership and differentiation strategies was found at the product level. [ABSTRACT FROM AUTHOR]

This paper is critical of both the financial and marketing approaches to resource allocation problems within the multiproduct, multimarket firm. It is suggested that the financial approach is helpful on the issue of shareholder risk but that the marketing strategy approaches, using box classifications, are ill defined and based on dubious empirical assumptions. Neither approach is the key to identifying sustainable competitive advantage. More emphasis is required on project based assessment of such factors as imitability, flexibility, and positional advantages, as well as specific cost effects. [ABSTRACT FROM AUTHOR]

The minimum cost output configuration for a firm may change as the result of a variety of factors, including changes in market structure. In this paper we test this structural change hypothesis with savings and loan data. We find support for the hypothesis that separable, constant returns to scale production functions characterize the average savings and loan in our sample in 1983. This is in contrast to the cost complementarities found in 1978. We argue that this result may be the result of regulatory changes that allowed savings and loans to alter their production mix to fully capture the benefits of joint production. [ABSTRACT FROM AUTHOR]

The article discusses the usefulness of the U.S. Census Bureau's Standard Industrial Classification (SIC) as a source of marketing data in its application to the economic activities inherent in manufacturing. The article discusses the ways in which a classification system could be established, by product or by industry. The article notes the difficulties of classifying multiproduct manufacturers, where the data from one product may skew the data in another classification. Other difficulties in the marketing use of SIC data are highlighted. The author suggests that users of the data do so with an understanding of the possible inaccuracies and advocates for the continual development of measures of statistical quality.

The hypothetical monopolist of the U.S. Horizontal Merger Guidelines not only is supposed to be the sole producer of the products inside the candidate market, but also is not supposed to produce any products outside that market. As most real-world firms produce multiple products, the transition from the prevailing situation to hypothetical monopoly implies both a hypothetical merger of all firms that produce inside products and a hypothetical spin-off of all outside products produced by those firms. Such a spin-off has a number of effects, which we discuss in detail for both substitute and complementary outside companions. We argue that these effects do not bring market definition any closer to its ultimate goal—that is, the assessment of market power. In our view, it is preferable to consider the hypothetical monopolist as an inclusive monopolist, resulting from the merger of all firms producing inside products but without any spin-off of companions. Such a monopolist captures the idea of the hypothetical cartel referred to in the 2010 version of the Guidelines, but is better suited to describe the issues at stake. [ABSTRACT FROM PUBLISHER]

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I examine excise taxes levied on multiproduct retailers. Excise taxes reduce equilibrium output and decrease equilibrium product variety in the short run, but taxes can raise output per product in the long run and induce entry. Excise taxes are overshifted into prices in a wide range of cases, including under linear and concave demand conditions, and excise taxes shift less than one-for-one into prices only when demand is highly convex. Multiproduct transactions substantively alter the efficiency of ad valorem and specific forms of excise taxes and affect the comparison of relative tax performance over short-run and long-run time horizons. ( JEL H25, H32, L11, L13, L81) [ABSTRACT FROM AUTHOR]

The article discusses the evolution of empirical patterns of patenting by the biggest industrial firms from the U.S., Japan and Europe. Technological diversification has emerged as an important phenomenon in which industries are developing and patenting new generic technologies that are unrelated to their primary line of business. The impact of this multi-technology trend on intellectual property offices and small- and medium-sized firms in catching-up economies are also discussed.

Pooling diversified and specialized firm data to analyze multiproduct cost technologies raises two issues in applied research: (1) a functional form must be specified that accommodates zero outputs, and (2) assumptions must be made regarding the structure of the multiproduct technology when some outputs are not produced. This article introduces a methodology to estimate the translog multiproduct cost function in the presence of zero outputs. The method adds flexibility to allow for and test competing structural assumptions. The added flexibility can improve measurement of the global properties of multiproduct cost structures. An application to a cross section of U.S. railway firms demonstrates this key advantage. [ABSTRACT FROM AUTHOR]

Discusses the papers presented at the sixth annual conference on financial services in Washington, D.C. in October 2002. Information on why stock prices of multiproduct firms sell at discount relative to firms with more product or service lines; Views of speaker Arnoud Boot on the condition of the financial services industry in the U.S. and Europe; Challenge for regulators in emerging financial service markets; Solutions to problems encountered with the use of the silo approach to industry regulation.

Presents an economic appraisal on predation pricing of multiproduct firms in the U.S. Information of the relationship between prices and economic costs; Concepts of predation presented by Mark Sievers and Brooks Albery; Implications of the covering of overhead costs by dominant firms to less competitive market segments.

This paper evaluates competing models of input use for two inputs, surface water and land, in central California agriculture. Applying a model of the multiproduct firm, a variable input model is compared to a fixed input model using model specification tests. Test results support the fixed input model for both surface water and land. The finding that surface water is a quantity-rationed input addresses an important water policy issue, implementation of the Central Valley Project Improvement Act. Water rationing has implications for three key provisions of the act involving water price increases, water marketing, and water supply restrictions. [ABSTRACT FROM AUTHOR]

Measuring performance in a multiproduct firm is difficult because of the complex nature of the firm's output. We present an approach to measuring performance. called operating efficiency which is the ratio of aggregate output to aggregate resource use. We describe how to calculate operating efficiency for a multiproduct organization and demonstrate how it can he used to understand why performance varies across plants and/or through time. Our application of operating efficiency to the U S. Postal Service is discussed along with the reactions of potential users. [ABSTRACT FROM AUTHOR]

This article focuses on the aspects of economic efficiency in pricing with multiproduct firms and intermodal competition in the U.S. The regulation of multiproduct enterprises has created some difficult problems for regulators, particularly where common costs of production are present and where entry may be allowed in one or more of the markets served by such a firm. A set of rules is developed, showing how second best prices deviate from marginal cost when economies of scale are present. The paper shows why these rules may be difficult to implement in some cases, with a direct application to the case of surface freight transport, and then suggests a variation in the theory of second best which may be useful given those difficulties.

Abstract--Recent theoretical developments on multiproduct firm costs have increased our understanding of these firms. Yet, to date, empirical analysis of the relationship between multiproduct firm costs and industry structure has been limited. In this paper the multiproduct nature of U.S. energy producers is explicitly recognized, and a multiproduct cost function estimated for the industry. The empirical results indicate that the multiproduct structure of large energy firms has, at least in part, been motivated by economies of scope between petroleum and coal operations. [ABSTRACT FROM AUTHOR]

The article presents information on the testing efficiency hypotheses in joint production. The main purpose of this article is to develop a model of the multiproduct firm in which the possibilities of both technical and allocative inefficiency are incorporated in an econometrically useful way. The first model includes a nonneutral type of technical inefficiency and three distinguishable types of allocative inefficiency-output mix, input mix, and scale. Each type of inefficiency is costly to the firm, in the sense that each causes a reduction in profit beneath the maximum value attainable under full efficiency. The cost of each type of inefficiency depends on the magnitude of the in efficiency and the structure of the underlying production technology. In the second model the authors have developed, technical inefficiency remains nonneutral, but allocative inefficiency is not generally decomposable into output mix, input mix and scale components. However, both technical and allocative inefficiency remain costly to the firm, the cost of each type of inefficiency depending on its magnitude and the structure of the underlying production technology. Finally, both full and partial allocative efficiency, as well as consistent allocative inefficiency, are testable restrictions on the general model of technical and inconsistent allocative inefficiency.

This articles investigates the determination of the market structure of an industry, whether it will operate under pure competition, oligopoly or monopoly in the U.S. The authors emphasized the multiproduct industry. In some industries the minimum point may occur at a very high level of output, well outside the range relevant for current or prospective demands. The analysis of the article begins by determining for any given industry output vector whether the cost-minimizing number of firms would make it a "natural monoploy" a 'natural oligoploy' or 'naturally competitive." Among the results emerging from the analysis is the conclusion that an abundant industry demand will tend to increase the degree of competition that is "natural" for the industry.

We develop and test a model that predicts (1) whether a multiproduct firm will brand a new product with the established company name and (2) where the new product will be "located" in relation to the reputation established by the firm in other markets. Hotelling's (1929) model of spatial location serves as the basis for our theoretical investigation. However, we extend Hotelling's model to the case of "experience goods" whose qualities can only be known with certainty after the product is purchased and consumed. The logic that underlies our model is tested on a sample of firms from the U.S. liquor industry. We employ a mixed logit approach to capture the simultaneous decisions that are made by the firms in our sample. [ABSTRACT FROM AUTHOR]

Recently, there has been a surge of interest in analysing scale economies in US railroad firms. The analysis of scale economies in existing studies is, however, limited in view of recent advances in the theory of the multiproduct firm. In this paper, the previous work is extended to address the issue of scale and scope economies in multiproduct firms. The findings show that US railroads experience mild overall economies of scale, but rather marked product-specific economies of scale with respect to both freight and passenger services. However, there appear to be diseconomies of scope associated with the joint production of the two services. Based on these results, this study indicates that US railroad firms would have no tendency to behave as a natural monopoly in the absence of regulation. [ABSTRACT FROM AUTHOR]

As normally employed, multioutput cost functions impose a bias against a finding of economies of scale, because a firm's optimal expansion path generally does not entail constant proportions over the various outputs. This bias can be overcome using a cost function defined in terms of a scalar aggregate output. An empirical example using New York commercial banks bears out the argument. As a sidelight, it is also argued that the traditional concept of scale economies is appropriate for policy purposes even when it conflicts with the more recently developed condition of natural monopoly (subadditivity of the cost function). [ABSTRACT FROM AUTHOR]

Focuses on the impact of price-fixing activities on the economic viewpoint of defendant costs charges in the United States. Scheme of price-fixing ring; Estimation of damages relative to price-fixing ring arrangement; Effect of the economic activity on the rate of investment returns accumulated by multi-product companies.

Focuses on the theory of monopolistic-monopsonistic competition, multi-product and multi-factor firm in the U.S. Strategies for profit maximization of the firm; Derivatives of the price functions; Economic interpretation of marginal revenue.