French Arms Exports and Intrastate Conflicts: An Empirical Investigation

The aim of this article is to evaluate how French Major Conventional Weapons (MCW) exports impact on the conflict intensity of recipient countries. The recent increase in French arms exports seems to contradict the French political discourse on the promotion of regional stability. We run zero-inflated ordered probit model in order to analyze the role of the arms trade on the intensity of civil conflicts in 144 countries from 1992 to 2014, using SIPRI and UCDP/PRIO data. Our results suggest that French MCW exports tended not to exacerbate intrastate conflicts during this period. This finding is robust to changes in the empirical framework. We propose two lines of explanations: France seems to be prone to choosing partners that respect human rights and selling more ‘defense-oriented’ MCW than the rest of the world.     

Inventory control and periodic price discounting campaigns

This paper develops an inventory model that determines replenishment strategies for buyers facing situations in which sellers offer price‐discounting campaigns at random times as a way to drive sales or clear excess inventory. Specifically, the model deals with the inventory of a single item that is maintained to meet a constant demand over time. The item can be purchased at two different prices denoted high and low. We assume that the low price goes into effect at random points in time following an exponential distribution and lasts for a random length of time following another exponential distribution. We highlight a replenishment strategy that will lead to the lowest inventory holding and ordering costs possible. This strategy is to replenish inventory only when current levels are below a certain threshold when the low price is offered and the replenishment is to a higher order‐up‐to level than the one currently in use when inventory depletes to zero and the price is high. Our analysis provides new insight into the behavior of the optimal replenishment strategy in response to changes in the ratio of purchase prices together with changes in the ratio of the duration of a low‐price period to that of a high‐price period. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2007.     

“Made in China”: an emerging brand in the global arms market

Possession of a brand is a sine qua non for economic success, not least because it connotes trust in delivering the value promised. Although Western arms exporters offer branded systems whose sales are influenced by price, there is a plethora of other economic variables, such as offset requirements and life-cycle support. Entrants to the international arms market will struggle without such arms “packages.” China’s entry, however, goes beyond the traditional economic paradigm. A four-stage historical model offers the backdrop for identifying the drivers that have forged its market entry into 55 countries worldwide. The strategy initially focused on sales of rudimentary military equipment for political purposes, but recently it has begun to commercialize exports, repositioning them from a low- to a high-tech sales trajectory. A Sino “brand” is thus emerging, reflecting both competitiveness and diplomatic considerations, especially non-interference in client state domestic affairs.     

Arms export controls and emerging domestic producers†

The possibility of domestic production raises a difficulty for arms export control measures, since embargoes, by raising the effective price of imports, increase the incentive for domestic production. We address this issue by developing a partial equilibrium model of the international arms market We compare three arms export regimes involving the exporters of high‐technology arms, with a particular focus on the effect of emerging domestic production: laissez‐faire trade, the uncoordinated regulation of exports and a producer cartel consisting of coordinated regulation. The main conclusion is that the possibility of domestic production significantly changes the nature of these stylized export regimes.     

Callable products for an implicit time model with dependent demands

Capacity providers such as airlines and hotels have traditionally increased revenues by practicing market segmentation and revenue management, enabling them to sell the same capacity pool to different consumers at different prices. Callable products can enhance profits and improve consumers' welfare by allowing the firm to broker capacity between consumers with different willingness to pay. A consumer who buys a callable product gives the capacity provider the right to recall capacity at a prespecified recall price. This article studies callable products in the context of the model most commonly used in industry, which handles time implicitly imposing fewer restrictions on the nature of randomness compared to the Poisson arrival process favored in academia. In the implicit time model, capacity providers set booking limits to protect capacity for future high-fare demand. Our numerical study identifies conditions where callable products result in significant gains in profits.     

A neural network measurement of relative military security ‐ the case of Greece and Cyprus

I demonstrate the existence of two sources of contestability in the military aerospace market, within producing and export countries, through the State’s triple role as unique buyer, regulator and seller. For the producing countries, I introduce the new concept, ‘sovereignty price’; that is, the profit a State agrees to grant to its defence firms to perpetuate their domestic activities. This subjective, evolutionary concept provides a dynamic character to the theory of contestable markets. Moreover, I show that contestability is more effective than antitrust policies and a solution of the cost disease. Empirical cases are shown to confirm the theoretical analysis.     

Resale price maintenance contracts with retailer sales effort: Effect of flexibility and competition

In Resale Price Maintenance (RPM) contracts, the manufacturer specifies the resale price that retailers must charge to consumers. We study the role of using a RPM contract in a market where demand is influenced by retailer sales effort. First, it is well known that RPM alone does not provide incentive for the retailer to use adequate sales effort and some form of quantity fixing may be needed to achieve channel coordination. However, when the market potential of the product is uncertain, RPM with quantity fixing is a rigid contract form. We propose and study a variety of RPM contracts with quantity fixing that offer different forms of flexibility including pricing flexibility and quantity flexibility. Second, we address a long‐time debate in both academia and practice on whether RPM is anti‐competitive in a market when two retailers compete on both price and sales effort. We show that depending on the relative intensity of price competition and sales effort competition, RPM may lead to higher or lower retail prices compared to a two‐part tariff contract, which specifies a wholesale price and a fixed fee. Further, the impact of RPM on price competition and sales effort competition is always opposite to each other. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2006     

An alliance between Cyprus and Greece: assessing its partners’ relative security contribution

The issue that this paper tackles is the assessment of the relative security benefits that Cyprus and Greece derive in the context of their cooperation on defence matters. This form of cooperation, known as the ‘Integrated Defence Space Doctrine’, aims at defending their interests in the Aegean Sea and the broader East Mediterranean theatre. The paper relies heavily on earlier research on this topic, which deals with the Greek–Cypriot alliance facing an arms race against Turkey, and uses a coefficient especially designed to assess the optimal levels of security and the associated defence expenditure of the two allies. A comparison of the relative security coefficient values for the two allies suggests that the security benefit that Greece derives thanks to its alliance with Cyprus exceeds the corresponding Cypriot benefit by far. Given the importance assigned to human resources by this index, in conjunction with the demographic problems of Greece, this conclusion justifies the recent Greek defence policy revision, emphasizing quality, capital equipment and flexibility of forces. This revision aims at satisfying the security requirements of the alliance and the increasing demands of an arms race against Turkey.     

Optimal control of price through restricted production

Consider a regulated monopolist whose current profits would be maximized if they could charge a price p?, where p? exceeds the current market price. By reducing production below current consumer demand the monopolist can create an illusion of a shortage and induce the regulator to allow a price increase. Conditions are given for which the production rate that maximizes the monopolist's expected discounted profits over an infinite horizon will have the property that the amount of unsatisfied consumer demand will be a non-increasing function of current market price.     

Supply chain coordination with shelf‐space and retail price dependent demand and heterogeneous retailers

We consider supply chain coordination in which a manufacturer supplies some product to multiple heterogeneous retailers and wishes to coordinate the supply chain via wholesale price and holding cost subsidy. The retail price is either exogenous or endogenous. The market demand is described by the market share attraction model based on all retailers'shelf‐spaces and retail prices. We obtain optimal solutions for the centralized supply chain, where the optimal retail pricing is a modified version of the well‐known cost plus pricing strategy. We further get feasible contracts for the manufacturer to coordinate the hybrid and decentralized supply chains. The manufacturer can allocate the total profit free to himself and the retail market via the wholesale price when the retail price is exogenous, but otherwise he cannot. Finally, we point out that different characteristics of the retail market are due to different powers of the manufacturer, and the more power the manufacturer has, the simpler the contract to coordinate the chain will be. © 2010 Wiley Periodicals, Inc. Naval Research Logistics, 2010     

Stability in a general oligopoly model

We analyze a general but parsimonious price competition model for an oligopoly in which each firm offers any number of products. The demand volumes are general piecewise affine functions of the full price vector, generated as the “regular” extension of a base set of affine functions. The model specifies a product assortment, along with their prices and demand volumes, in contrast to most commonly used demand models. We identify a fully best response operator which is monotonically increasing so that the market converges to a Nash equilibrium, when firms dynamically adjust their prices, as best responses to their competitors' prices, at least when starting in one of two price regions. Moreover, geometrically fast convergence to a common equilibrium can be guaranteed for an arbitrary starting point, under an additional condition for the price sensitivity matrix.     

The financing factor in military trade

Available sources value transfers of weapons irrespective of whether they are paid for and how. Data from the U.S. indicates that the shares of arms given for free or on credit are high. If other arms exporters, all military aid and all credits used for military purposes are considered, which is done here on the basis of rough estimates and an opportunity cost model, the true cash costs of weapons in the year of the actual transfer are small. On the other hand, the financial burden of earlier arms imports via debt service has grown over time. It most probably exceeded the true cash cost of imports of arms in the late 1980s. Large differences between arms transfer data and the actual true costs of arms transfers means that analysis of the economic effects of arms imports without considering these financial aspects makes little sense.     

业主延期条件下FIDIC施工合同条件调价公式研究

调价公式作为FIDIC合同中最重要的风险分配方式之一,通过对可调价要素价格指数或价格的调整,把合同中的隐性风险在业主和承包商之间的分配比例作了明确规定.从承包商的角度,并基于业主的原因造成工期延长的条件下,对调价公式中各个组成因子及其权重对调价结果的影响进行了研究,探索把调价公式同成本管理有机结合起来,以期达到降低成本...     

Book reviews

Nuclear Non-Proliferation and Global Order. By Harald Muller, David Fischer, and Wolfgang Kotter. SIPRI, Oxford, Oxford University Press, (1994) ISBN 0-19-329155-8, hardback, £25.00

Conventional Arms Control: Perspectives on Verification By Sergey Koulik and Richard Kokoski, SIPRI, Oxford University Press, (1994) ISBN 0-19-829149-3 and

Implementing the Comprehensive Test Ban: New Aspects of Definition, Organisation and Verification Edited by Eric Arnett, SIPRI Research Report No. 8, Oxford University Press, (1994) ISBN 019-829188-4

Military Technological Innovation and Stability in a Changing World: Politically assessing and Influencing Weapons Innovation and Military Research and Development, By Wim A. Smit, John Grin and Lev Voronkov (eds.) VU University Press, Amsterdam, Netherlands (1992), ISBN 90-5383-158-4.

Security, democracy, and development in US - Latin American relations. By Lars Schoultz, William C. Smith and Augusto Varas (eds.) Transaction Publishers, New Brunswick (USA), and London (UK) (1994). ISBN 1-56000-760-5     

利用灰色理论与时间序列探讨我国物价指数的发展变化

本文根据装备建设的需要,对物价指数的变化进行了研究,首先依据原始数据利用灰色理论建立预测模型,在分析模型精度基础上,提出了灰色时间序列模型,使模型精度得到提高。并根据我国物价指数变化的特点,进一步建立了上包络线模型．使本文更具实际意义。     

Arms Racing and the Costs of Arms Imports: A Stochastic Model

The paper draws on the demand for arms imports model of Levine and Smith (1995, 1997) using stochastic processes of the birth-death type in steady state. It assumes two antagonistic regional players engaged in an armaments race satisfying their demand for military hardware through imports from the international market. The paper examines the effects that arms imports have on the military balance between the two recipient countries. It constructs a state space of possible outcomes in terms of the military balance/imbalance between the two countries involved. A new variable is introduced which tries to encapsulate the absolute difference in their respective security functions at any moment in time. This variable affects the transition from one state of affairs to the other.     

Economic and environmental impacts of vertical and horizontal competition and integration

We explore the economic and environmental impacts of market structures (competition or integration at vertical and horizontal levels). We consider a bilateral duopoly consisting of two manufacturers and two retailers in which each manufacturer offers a wholesale price contract to the respective retailer. The manufacturers decide on wholesale prices and abatement efforts concerning pollution emissions related to manufacturing processes, whereas the retailers compete in quantities in the consumer market. To understand the comprehensive effects of market structures on economic competitiveness and environmental sustainability, we examine a measure of eco‐friendly social welfare, which is the ratio of social welfare and environmental pollution. Interestingly, we find that the market structures that have been believed to be more efficient are less efficient from a broader perspective: (1) double marginalization can generate higher eco‐friendly social welfare, and (2) horizontal competition between firms can result in lower eco‐friendly social welfare. Although vertical integration and horizontal competition yield greater social welfare by facilitating more production activities, these market structures often fail to induce sufficient abatement efforts to balance the polluting effect of the large volume, resulting in more significant environmental degradation. We also show that, despite the pollution‐curbing effect, higher emission penalties can result in less eco‐friendly social welfare. They can even curtail the abatement efforts of firms under particular circumstances. When products become more substitutable, the eco‐friendly social welfare can decrease depending upon the market structure.     

Newsvendor problems with sequentially revealed demand information

This article analyzes a capacity/inventory planning problem with a one‐time uncertain demand. There is a long procurement leadtime, but as some partial demand information is revealed, the firm is allowed to cancel some of the original capacity reservation at a certain fee or sell off some inventory at a lower price. The problem can be viewed as a generalization of the classic newsvendor problem and can be found in many applications. One key observation of the analysis is that the dynamic programming formulation of the problem is closely related to a recursion that arises in the study of a far more complex system, a series inventory system with stochastic demand over an infinite horizon. Using this equivalence, we characterize the optimal policy and assess the value of the additional demand information. We also extend the analysis to a richer model of information. Here, demand is driven by an underlying Markov process, representing economic conditions, weather, market competition, and other environmental factors. Interestingly, under this more general model, the connection to the series inventory system is different. © 2012 Wiley Periodicals, Inc. Naval Research Logistics 2012     

倒向随机微分方程在欧式期权中的应用

假设市场为无套利市场,而且市场上只有两种证券:一种是无风险债券;一种是有风险的股票。通过自筹资策略,得到期权价格所满足的倒向随机微分方程(BSDE),利用倒向随机微分方程给出欧式期权价格概率表示;并证明欧式期权的完全套期保值性。     

Dynamic pricing in a trade-in program with replacement and new customers

Trade-in programs have been widely adopted to enhance repeat purchase from replacement customers. Considering that a market consists of replacement and new segments, we study the joint and dynamic decisions on the selling price of new product (hereafter, “selling price”) and the trade-in price involved in the program. By adopting a vertical product differentiation choice model, we investigate two scenarios in this paper. In the base model, the manufacturer has sufficiently large production capacity to fulfill the customer demand. We characterize the structural properties of the joint pricing decisions and compare them with the optimal pricing policy under regular selling. We further propose a semi-dynamic trade-in program, under which the new product is sold at a fixed price and the trade-in price can be adjusted dynamically. Numerical experiments are conducted to evaluate the performance of the dynamic and semi-dynamic trade-in programs. In an extended model, we consider the scenario in which the manufacturer stocks a batch of new products in the beginning of the selling horizon and the inventory cannot be replenished. Following a revenue management framework, we characterize the structural properties with respect to time period and inventory level of new products.