6,341 research outputs found

    The Effect of Vertical Structure on Exchange Rate Pass-through

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    We introduce an explicit incorporation of local distributors in an analysis of pricing behavior of exporting firms in the pricing-to-market literature. We examine pricing behaviors of exporting firms under four different cases of vertical structure; in the case of an independent local distributor and in the cases of local distributors vertically restricted in three forms. From our theoretical model we find that the form of vertical structure for exporting firms has a significant effects on exchange rate pass-through. Since the measure of pass-through has not been distinguished between wholesale price and consumer price in previous researches, we conclude that the reported values of pass-through from previous researches only capture the partial pricing behavior of traded goods. We suggest that further empirical investigation in pass-through associated with consumer price is necessary for complete understanding of the pricing behavior of traded goods.exchange rate pass-through; pricing-to-market; vertical integration

    Quantifying the reversibility phenomenon for the repeat-sales index

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    The reversibility phenomenon in the repeat-sales index is a serious obstacle for derivatives products. This article provides a solution for this problem, using an informational reformulation of the RSI framework. We present first a theoretical formula (simple, easy to interpret, and easy to handle) and then implement it. For the derivatives our technique has strong implications for the choice of underlying index and contract settlement. Even if reversibility of the RSI is probably higher compared with the hedonic approach, this index remains a challenger because of the predictability and quantifiability of its revisions.

    Improved energy detector for random signals in Gaussian noise

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    New and improved energy detector for random signals in Gaussian noise is proposed by replacing the squaring operation of the signal amplitude in the conventional energy detector with an arbitrary positive power operation. Numerical results show that the best power operation depends on the probability of false alarm, the probability of detection, the average signal-to-noise ratio or the sample size. By choosing the optimum power operation according to different system settings, new energy detectors with better detection performances can be derived. These results give useful guidance on how to improve the performances of current wireless systems using the energy detector. It also confirms that the conventional energy detector based on the generalized likelihood ratio test using the generalized likelihood function is not optimum in terms of the detection performance

    Economics and Politics: Perspectives on the Goals and Future of Antitrust

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    This Article examines the roles of economics and politics in U.S. antitrust from several perspectives. It explains why the modern debate over the economic welfare standard that enforcers and courts should pursue is unsatisfying. It connects economics with politics by describing antitrust’s economic goals as the product of a mid-twentieth century political understanding about the nature of economic regulation that continues to be accepted. To protect that understanding, it explains, antitrust rules should now be implemented using a qualified consumer welfare standard. It identifies contemporary political tensions that threaten to create regulatory gridlock or even to undermine that political understanding and uses that framework to sketch several possible futures for competition policy. Notwithstanding these political tensions, the Article concludes, economics plays an indispensable role in shaping and applying modern antitrust

    Competing Auction Houses

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    We consider a model where sellers make repeated attempts to sell an object via two competing auction houses. An auction house that attracts a seller runs a Vickrey auction among a random sample of buyers and collects two fees: a listing fee and, if the object is sold, a closing fee. We characterize equilibria and show that two equilibrium outcomes are possible: a (contestable) monopoly, and a market segmentation between the two competitors.Competing auctions, mediator, listing fee, closing fee

    Lost in Transaction: Individual-Level Welfare Loss in Quickly-Circulating Durable Goods Markets with Planned Temporary Ownership

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    A new style of durable goods consumption through a large scale online redistribution marketplace (e.g. eBay and Yahoo! Auction), characterized by a relatively small degree of usage and a short-term ownership, is becoming increasingly popular these days. Yet, the welfare structures of such emerging markets have not been investigated. By using a unique dataset of quickly-circulating multi-use train ticket resale markets, and by investigating perfectly-substitutable goods, this short article models, estimates, and analyzes individual-level welfare loss in such rapidly-growing market sectors. Our analysis shows that individual-level welfare losses caused by search and resale costs are non-negligibly large, ranging from 3% to 15% of the new good price. We also find that such individual-level welfare losses, which could be considered as hidden charges, are largely heterogeneous across buyers with differing degrees of intended use. These losses are described as disadvantageous to users who demand light degrees of usage

    Investment Reluctance: Irreversibility or Imperfect Capital Markets? Evidence from German Farm Panel Data

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    Investment behavior at the firm level is characterized by lumpy adjustments and frequent periods of inactivity. Low investment rates are particularly puzzling in transition economies where an urgent need of modernization exists. The literature offers two explanations for. Firstly, neo-institutional finance theory focuses on the impacts of imperfect capital markets on investment decisions showing that the limited availability of financial funds may confine firms investments. Secondly, real options theory asserts that the interaction of irreversibility, uncertainty and flexibility may also result in investment reluctance. In this paper we suggest a generalized model that combines imperfect capital markets and real options effects. We also offer an econometric implementation that has the structure of a generalized tobit model. This model is applied to German farm panel data. We demonstrate that ignoring real options effects may lead to erroneous results when estimating the impact of imperfect capital markets on investment decisions.investment decision, irreversibility, uncertainty, q-model, capital market imperfections, generalized tobit model, transition, Financial Economics, D81, D92, O12,
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